-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q7wiE0jcT+A17lVMyZqWegWa6nmD9zwi8l4YmWYejzuOogrx8eiRYnWZLsxWJsRp Jj3XFD9tJrhHei1TOi3tAg== 0001047469-04-032333.txt : 20041028 0001047469-04-032333.hdr.sgml : 20041028 20041028103717 ACCESSION NUMBER: 0001047469-04-032333 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20040930 FILED AS OF DATE: 20041028 DATE AS OF CHANGE: 20041028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COCA COLA CO CENTRAL INDEX KEY: 0000021344 STANDARD INDUSTRIAL CLASSIFICATION: BEVERAGES [2080] IRS NUMBER: 580628465 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02217 FILM NUMBER: 041101275 BUSINESS ADDRESS: STREET 1: ONE COCA COLA PLAZA CITY: ATLANTA STATE: GA ZIP: 30313 BUSINESS PHONE: 4046762121 MAIL ADDRESS: STREET 1: ONE COCA COLA PLAZA ZIP: 30313 10-Q 1 a2144977z10-q.htm 10-Q
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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2004

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 1-2217

(Exact name of Registrant as specified in its Charter)

Delaware (State or other jurisdiction of incorporation or organization)		58-0628465 (IRS Employer Identification No.)
One Coca-Cola Plaza Atlanta, Georgia (Address of principal executive offices)		30313 (Zip Code)

Registrant's telephone number, including area code (404) 676-2121

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes ý No o

Indicate the number of shares outstanding of each of the Registrant's classes of Common Stock as of the latest practicable date.

Class of Common Stock		Outstanding at October 22, 2004
$0.25 Par Value		2,419,435,517 Shares

THE COCA-COLA COMPANY AND SUBSIDIARIES

Index

Part I. Financial Information

		*Page Number*
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Income Three and nine months ended September 30, 2004 and 2003	3
	Condensed Consolidated Balance Sheets September 30, 2004 and December 31, 2003	4
	Condensed Consolidated Statements of Cash Flows Nine months ended September 30, 2004 and 2003	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
Part II. Other Information
Item 1.	Legal Proceedings	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 6.	Exhibits	30

Part I. Financial Information

Item 1. Financial Statements (Unaudited)

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In millions except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
		2004			2003			2004			2003

NET OPERATING REVENUES	$	5,662		$	5,671		$	16,705		$	15,868
Cost of goods sold		2,052			2,168			5,835			5,912

GROSS PROFIT		3,610			3,503			10,870			9,956
Selling, general and administrative expenses		2,121			1,997			6,039			5,543
Other operating charges		392			55			480			284

OPERATING INCOME		1,097			1,451			4,351			4,129
Interest income		39			37			106			138
Interest expense		47			42			138			130
Equity income — net		180			86			496			325
Other loss — net		(34	)		(42	)		(64	)		(99	)
Gain on issuances of stock by equity investee		—			8			49			8

INCOME BEFORE INCOME TAXES		1,235			1,498			4,800			4,371
Income taxes		300			275			1,154			951

NET INCOME	$	935		$	1,223		$	3,646		$	3,420

BASIC NET INCOME PER SHARE	$	0.39		$	0.50		$	1.50		$	1.39

DILUTED NET INCOME PER SHARE	$	0.39		$	0.50		$	1.50		$	1.39

DIVIDENDS PER SHARE	$	0.25		$	0.22		$	0.75		$	0.66

AVERAGE SHARES OUTSTANDING		2,421			2,455			2,431			2,462
Effect of dilutive securities		3			3			3			3

AVERAGE SHARES OUTSTANDING ASSUMING DILUTION		2,424			2,458			2,434			2,465

Refer to Notes to Condensed Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions)

ASSETS

		September 30, 2004		December 31, 2003

CURRENT
Cash and cash equivalents		$ 5,365		$ 3,362
Marketable securities		155		120

		5,520		3,482
Trade accounts receivable, less allowances of $59 at September 30 and $61 at December 31		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
Buildings 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

TOTAL ASSETS		$ 29,300		$ 27,342

Refer to Notes to Condensed Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions except share data)

LIABILITIES AND SHARE-OWNERS' EQUITY

		September 30, 2004		December 31, 2003

CURRENT
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 at September 30 and 3,494,799,258 shares at December 31	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 at September 30; 1,053,267,474 shares at December 31)	(17,304	)	(15,871	)

		14,954		14,090

TOTAL LIABILITIES AND SHARE-OWNERS' EQUITY		$ 29,300		$ 27,342

Refer to Notes to Condensed Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONDENSED 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 issuances of stock by equity investee			(49	)		(8	)
(Gains) losses on sale of assets, including bottling interests			(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
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
Purchases of property, plant and equipment			(520	)		(565	)
Proceeds from disposals of property, plant and equipment			56			54
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 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

Refer to Notes to Condensed Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note A — Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in the Annual Report on Form 10-K of The Coca-Cola Company for the year ended December 31, 2003. When used in these notes, the terms "Company," "we," "us" or "our" mean The Coca-Cola Company and all entities included in our financial statements. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004.

Certain amounts in our prior period financial statements and notes have been reclassified to conform to the current period presentation.

Refer to Note B for a discussion of variable interest entities.

Note B — Accounting Pronouncements

In December 2003, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 46 (revised December 2003) ("Interpretation 46"), "Consolidation of Variable Interest Entities." Application of this interpretation was required in our financial statements for the year ended December 31, 2003 for interests in variable interest entities that were considered to be special-purpose entities. Our Company determined that we did not have any arrangements or relationships with special-purpose entities. Application of Interpretation 46 for all other types of variable interest entities was required for our Company effective March 31, 2004.

Interpretation 46 addresses the consolidation of business enterprises to which the usual condition (ownership of a majority voting interest) of consolidation does not apply. This interpretation focuses on controlling financial interests that may be achieved through arrangements that do not involve voting interests. It concludes that in the absence of clear control through voting interests, a company's exposure (variable interest) to the economic risks and potential rewards from the variable interest entity's assets and activities are the best evidence of control. If an enterprise holds a majority of the variable interests of an entity, it would be considered the primary beneficiary. Upon consolidation, the primary beneficiary is generally required to include assets, liabilities and noncontrolling interests at fair value and subsequently account for the variable interest as if it were consolidated based on majority voting interest.

In our financial statements as of December 31, 2003 and prior to December 31, 2003, we consolidated all entities that we controlled by ownership of a majority of voting interests. As a result of Interpretation 46, effective as of March 31, 2004, our balance sheet includes the assets and liabilities of:

•: all entities in which The Coca-Cola Company or its subsidiaries have ownership of a majority of voting interests; and additionally,
•: all variable interest entities for which we are the primary beneficiary.

Our Company holds interests in certain entities, primarily bottlers, previously accounted for under the equity method of accounting that are considered variable interest entities. These variable interests relate to profit guarantees or subordinated financial support for these entities. Upon adoption of Interpretation 46 as of March 31, 2004, we consolidated assets of approximately $383 million and liabilities of approximately $383 million that were previously not recorded on our balance sheet. We did not record a cumulative effect of an accounting change, and prior periods were not restated. The results of operations of these variable interest entities were included in our consolidated results beginning April 1, 2004 and did not have a material impact for the three months and nine months ended September 30, 2004. Our Company's investment, plus any loans and guarantees, related to these variable interest entities total approximately $319 million as of September 30, 2004, representing our maximum exposure to loss. Any creditors of the variable interest entities do not have recourse to the general credit of the Company as a result of including these variable interest entities in our financial statements.

Using appropriate actuarial methods and assumptions, our Company accounts for defined benefit pension plans in accordance with Statement of Financial Accounting Standards ("SFAS") No. 87, "Employers' Accounting for Pensions." We account for our nonpension postretirement benefits in accordance with SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." In 2003, we adopted SFAS No. 132 (revised 2003), "Employers' Disclosures about Pensions and Other Postretirement Benefits," for all U.S. plans. As permitted by this standard, we will adopt the annual disclosure provisions for all foreign plans for the year ending December 31, 2004. SFAS No. 132, as revised, requires additional disclosures in interim and year-end reports about assets, obligations, cash flows and net periodic benefit cost of defined benefit pension plans and other postretirement benefit plans. Refer to Note G for the required disclosures in interim financial reports. This statement did not change the measurement or recognition of those plans required by SFAS No. 87, SFAS No. 88, "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits," or SFAS No. 106.

On May 19, 2004, the FASB issued FASB Staff Position 106-2 ("FSP 106-2"), "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003." FSP 106-2 relates to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Act") signed into law on December 8, 2003. The Act introduced a prescription drug benefit under Medicare, as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare. During the second quarter of 2004, our Company adopted the provisions of FSP 106-2. The adoption of FSP 106-2 did not have a material impact on our financial statements.

Note C — Seasonality

Sales of nonalcoholic beverages are somewhat seasonal, with the second and third calendar quarters accounting for the highest sales volumes in the Northern Hemisphere. The volume of sales in the beverages business may be affected by weather conditions.

Note D — Issuances of Stock by Equity Investee

During the nine months ended September 30, 2004, our Company recorded approximately $49 million of non-cash pretax gains on issuances of stock by Coca-Cola Enterprises Inc. ("CCE"). The issuances primarily related to the exercise of CCE stock options by CCE employees at amounts greater than the book value per share of our investment in CCE. These issuances of stock reduced our ownership interest in the total outstanding shares of CCE common stock by approximately 1 percent to approximately 36 percent.

For the quarter ended September 30, 2003, our Company recorded approximately $8 million for gains on issuances of stock by equity investees. These gains primarily related to the issuance by CCE of common stock valued at an amount greater than the book value per share of our investment in Coca-Cola Enterprises. As a result, the issuance of these shares resulted in a one-time non-cash pretax gain for our Company. This transaction reduced our ownership interest in the total outstanding shares of Coca-Cola Enterprises common stock by less than 1 percent.

Note E — Comprehensive Income

The following tables summarize total comprehensive income for the applicable periods (in millions):

For the three months ended September 30,		2004			2003

Net income	$	935		$	1,223
Net foreign currency translation adjustment		(50	)		(369	)
Net gain (loss) on derivatives		12			(20	)
Net change in unrealized gain on available-for-sale securities		8			14
Net change in minimum pension liability		11			—

Total comprehensive income	$	916		$	848

For the nine months ended September 30,		2004			2003

Net income	$	3,646		$	3,420
Net foreign currency translation adjustment		18			501
Net gain (loss) on derivatives		19			(39	)
Net change in unrealized gain on available-for-sale securities		23			29
Net change in minimum pension liability		(28	)		(18	)

Total comprehensive income	$	3,678		$	3,893

Note F — Commitments and Contingencies

On September 30, 2004, we were contingently liable for guarantees of indebtedness owed by third parties in the amount of $270 million. These guarantees are related to third-party customers, bottlers and vendors and have arisen through the normal course of business. These guarantees have various terms, and none of these guarantees is individually significant. The amount represents the maximum potential future payments we could be required to make under the guarantees; however, we do not consider it probable that we will be required to satisfy these guarantees.

In December 2003, we granted a $250 million stand-by line of credit to one of our Company's equity investees, Coca-Cola FEMSA, S.A. de C.V. ("Coca-Cola FEMSA") with normal market terms.

We believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas covered by our operations.

The Company is also involved in various legal proceedings and tax matters. Management believes that any liability to the Company that may arise as a result of currently pending legal proceedings and tax matters, including those discussed below, will not have a material adverse effect on the financial condition of the Company taken as a whole.

In 2003, the Securities and Exchange Commission began conducting an investigation into whether the Company or certain persons associated with our Company violated federal securities laws in connection with the conduct alleged by a

former employee of the Company. Additionally, in 2003 the United States Attorney's Office for the Northern District of Georgia commenced a criminal investigation of the allegations raised by the same former employee. These investigations are ongoing, and to the Company's knowledge no criminal prosecutions or civil enforcement actions have been filed. While the Company cannot predict whether any such actions will be filed in the future, the Company will continue to cooperate fully with the governmental investigations.

During the period from 1970 to 1981, our Company owned Aqua-Chem, Inc. ("Aqua-Chem"). A division of Aqua-Chem manufactured certain boilers that contained gaskets that Aqua-Chem purchased from outside suppliers. Several years after our Company sold this entity, Aqua-Chem received its first lawsuit relating to asbestos, a component of some of the gaskets. Aqua-Chem has notified our Company that it believes we are obligated to them for certain costs and expenses associated with the litigation. Aqua-Chem has demanded that our Company reimburse it for approximately $10 million for out-of-pocket litigation-related expenses incurred over the last 18 years and indemnify Aqua-Chem against any future liabilities and expenses for which there is no insurance. Our Company disputes Aqua-Chem's claims, and we believe we have no obligation to Aqua-Chem for any of its past, present or future liabilities, costs or expenses. Furthermore, we believe we have substantial legal and factual defenses to Aqua-Chem's claims. The parties entered into litigation to resolve this dispute and have now agreed to stay that litigation pending resolution of insurance coverage issues, as discussed below.

The Company believes Aqua-Chem has substantial insurance coverage to pay Aqua-Chem's asbestos claimants. In connection with such insurance coverage, however, five plaintiff insurance companies have filed an action against our Company, Aqua-Chem and sixteen insurance companies. Several of the policies that are the subject of this action were issued to the Company during the period when our Company owned Aqua-Chem. The complaint seeks a determination of the respective rights and obligations under the insurance policies issued by the insurance companies with regard to asbestos-related claims against Aqua-Chem. The five plaintiffs issued insurance policies with aggregate remaining limits of coverage of approximately $145 million. The action also seeks a monetary judgment reimbursing any amounts paid by the plaintiffs in excess of their obligations. The Company believes that there are substantial legal and factual arguments supporting the position that the insurance policies at issue provide coverage for the asbestos-related claims against Aqua-Chem, and both the Company and Aqua-Chem have asserted these arguments in response to the complaint.

An estimate of possible losses, if any, related to the Aqua-Chem matters cannot be made at this time.

Since 1999, the Competition Directorate of the European Commission has been conducting an investigation of various commercial and market practices of the Company and its bottlers in Austria, Belgium, Denmark, Germany and Great Britain. In parallel with the investigation, during the past several months our Company and the Commission have been engaged in a dialogue to identify and address the commercial practices under review by the Commission. On October 19, 2004, our Company and certain of our bottlers submitted a formal Undertaking to the Commission, and the Commission accepted the Undertaking. The Undertaking will potentially apply in 27 countries and in all channels of distribution where our carbonated soft drinks account for over 40 percent of national sales and twice the nearest competitor's share. It will take more than 12 months to fully implement the Undertaking and for the market to react to any resulting changes. The commitments we made in the Undertaking relate broadly to exclusivity, percentage-based purchasing commitments, transparency, target rebates, tying, assortment or range commitments and agreements concerning products of other suppliers. The Undertaking will also apply to shelf space commitments in agreements with take-home customers and to financing and availability agreements in the on-premise channel. In addition, the Undertaking includes commitments that will be applicable to commercial arrangements concerning the installation and use of technical equipment (i.e., coolers, fountain equipment, and vending machines). The commitments set forth in the Undertaking will be published for third-party comments before

becoming final. The Company anticipates that the formal Undertaking will form the basis of a Commission decision pursuant to Article 9, paragraph 1 of Council Regulation 1/2003, bringing an end to the investigation. The submission of the Undertaking does not imply any recognition on the Company's or the bottlers' part of any infringement of European Commission competition rules. We believe that the Undertaking, while imposing restrictions, clarifies the application of competition rules to our practices in Europe and will allow our system to be able to compete vigorously while adhering to the provisions.

In 2000, the Spanish competition service commenced an investigation of our Company and certain bottlers in Spain. In December 2003, the Spanish competition service suspended its investigation pending notice from the European Commission as to how the European Commission will proceed in its aforementioned investigation.

The French competition directorate has also initiated an inquiry into commercial practices related to the soft drinks sector in France; however, no conclusions have been communicated to the Company by the directorate.

At the time of divesting our interest in a consolidated entity, we sometimes agree to indemnify the buyer for specific liabilities related to the period we owned the entity. Management believes that any liability to the Company that may arise as a result of any such indemnification agreements will not have a material adverse effect on the financial condition of the Company taken as a whole.

Note G — Pension and Other Postretirement Benefit Plans

The following tables summarize net periodic benefit cost for our pension and other postretirement benefit plans for the applicable periods (in millions):

	Pension Benefits						Other Benefits
For the three months ended September 30,		2004			2003			2004		2003

Service cost	$	20		$	20		$	7	$	5
Interest cost		36			35			11		12
Expected return on plan assets		(38	)		(32	)		—		—
Amortization of prior service cost		2			1			—		—
Recognized net actuarial loss		10			6			—		2

Net periodic benefit cost	$	30		$	30		$	18	$	19

	Pension Benefits						Other Benefits
For the nine months ended September 30,		2004			2003			2004		2003

Service cost	$	62		$	57		$	20	$	17
Interest cost		109			106			33		34
Expected return on plan assets		(113	)		(97	)		—		—
Amortization of prior service cost		6			5			—		1
Recognized net actuarial loss		25			20			2		4

Net periodic benefit cost	$	89		$	91		$	55	$	56

We contributed $139 million to the primary qualified U.S. pension plan and $8 million to the U.S. postretirement benefit plan during the nine months ended September 30, 2004. We do not expect to contribute any additional amounts to either plan during the remainder of 2004.

Refer to Note B for discussion of the adoption of FSP 106-2.

Note H — Significant Operating and Nonoperating Items

During the third quarter of 2004, our Company recorded an income tax benefit of approximately $39 million related to the reversal of previously accrued taxes resulting from favorable resolution of tax matters.

During the third quarter of 2004, our Company recorded an income tax expense of approximately $75 million related to the recognition of a valuation allowance on certain deferred tax assets of Coca-Cola Erfrischungsgetraenke AG ("CCEAG").

During the second quarter of 2004, our Company's equity income benefited by approximately $37 million for our proportionate share of a favorable tax settlement related to Coca-Cola FEMSA.

In the first quarter of 2003, the Company reached a settlement with certain defendants in a vitamin antitrust litigation matter. In that litigation, the Company alleged that certain vitamin manufacturers participated in a global conspiracy to fix the price of some vitamins, including vitamins used in the manufacture of some of the Company's products. During the first quarter of 2003, the Company received a settlement relating to this litigation of approximately $52 million on a pretax basis, or $0.01 per share on an after-tax basis. The amount was recorded as a reduction to cost of goods sold.

Note I — Other Operating Charges

Impairment Charges

In the third quarter of 2004, our Company recorded impairment charges totaling approximately $392 million primarily related to franchise rights at CCEAG. The CCEAG impairment was the result of our revised outlook for the German market that has been unfavorably impacted by volume declines resulting from market shifts related to the deposit law on non-returnable beverage packages and the corresponding lack of availability for our products in the discount retail channel. The deposit laws in Germany have led discount chains to begin selling proprietary packages that can only be returned to their own stores. These proprietary packages are continuing to gain sales share and customer acceptance. At the same time, no actions have been taken by any governmental agency on the ever-expanding introduction of proprietary packaging for discounters.

We determined the amount of the third quarter impairment by comparing the fair value of the intangible assets to the current carrying value. Fair values were derived using discounted cash flow analyses with a number of scenarios that were weighted based on the probability of different outcomes. Because the fair value was less than the carrying value of the assets, we recorded an impairment charge to reduce the carrying value of the assets to fair value. These impairment charges are recorded in the line item other operating charges in the condensed consolidated statements of income for the quarter ended September 30, 2004. Our Company is evaluating our strategies for the German operations, including addressing significant structural issues that limit the system's ability to respond effectively to the evolving retail and consumer landscape, assessing market changes and determining our expectations related to the political environment. Further unexpected changes in the political environment or market shifts could result in future charges. Management will continue to monitor these factors.

In the second quarter of 2004, our Company recorded impairment charges totaling approximately $88 million. These impairments primarily related to the write-downs of certain manufacturing investments. They also included a write-down of an intangible asset. As a result of recent operating losses, management prepared analyses of cash flows expected to result from the use of the assets and their eventual disposition. Because the sum of the undiscounted cash flows was less than the carrying value of such assets, we recorded an impairment charge to reduce the carrying value of the assets to fair value.

Streamlining Costs

During 2003, the Company took steps to streamline and simplify its operations, primarily in North America and Germany. In North America, the Company integrated the operations of three formerly separate North American business units — Coca-Cola North America, Minute Maid and Fountain. Our Company-owned bottler in Germany, CCEAG, took steps to improve its efficiency in sales, distribution and manufacturing, and our German Division office also implemented streamlining initiatives. Selected other operations also took steps to streamline their operations to improve overall efficiency and effectiveness. In accordance with SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities," a liability is accrued only when certain criteria are met. All of the Company's streamlining initiatives met these criteria as of December 31, 2003, and all related costs were incurred on or before December 31, 2003.

Employees separated from the Company as a result of these streamlining initiatives were offered severance or early retirement packages, as appropriate, that included both financial and nonfinancial components. The expenses recorded for the three and nine months ended September 30, 2003 and for the year ended December 31, 2003 included costs associated with involuntary terminations and other direct costs associated with implementing these initiatives. As of December 31, 2003, approximately 3,700 associates had been separated pursuant to these streamlining initiatives. Other direct costs included the relocation of employees; contract termination costs; costs associated with the development, communication and administration of these initiatives; and asset write-offs. During 2003, the Company incurred total pretax expenses related to these streamlining initiatives of approximately $561 million, or $0.15 per share after tax. For the three and nine months ended September 30, 2003, the Company incurred total pretax expenses related to these streamlining initiatives of approximately $43 million and $272 million, respectively. These expenses were recorded in the line item other operating charges.

The table below summarizes the balance of accrued streamlining expenses and the movement in that accrual as of and for the nine months ended September 30, 2004 (in millions):

Cost Summary		Accrued Balance December 31, 2003	Payments		Non-cash and Exchange		Accrued Balance September 30, 2004

Severance pay and benefits		$ 138	$ (102	)	$ (1	)	$ 35
Retirement related benefits		29	—		(7	)	22
Outside services — legal, outplacement, consulting		11	(10	)	—		1
Other direct costs		51	(24	)	2		29

Total¹		$ 229	$ (136	)	$ (6	)	$ 87

¹	As of September 30, 2004 and December 31, 2003, $64 million and $206 million, respectively, were included in the balance sheet line item accounts payable and accrued expenses. As of September 30, 2004 and December 31, 2003, $23 million was included in the balance sheet line item other liabilities.

Note J — Acquisition and Investment

In March 2003, our Company acquired a 100 percent ownership interest in Truesdale Packaging Company LLC ("Truesdale") from CCE for cash consideration of approximately $58 million. Truesdale owns a noncarbonated beverage production facility. The purchase price was primarily allocated to the property, plant and equipment acquired. No amount was allocated to intangible assets. Truesdale is included in our North America operating segment.

Effective May 6, 2003, Coca-Cola FEMSA consummated a merger with another of the Company's equity method investees, Panamerican Beverages, Inc. ("Panamco"). Our Company received new Coca-Cola FEMSA shares in exchange for all Panamco shares previously held by the Company. Our Company's ownership interest in Coca-Cola FEMSA increased from 30 percent to approximately 40 percent as a result of this merger. This exchange of shares was treated as a nonmonetary exchange of similar productive assets, and no gain was recorded by our Company as a result of this merger.

In connection with the merger, Coca-Cola FEMSA management initiated steps to streamline and integrate the operations. This process includes the closing of various distribution centers and manufacturing plants. Furthermore, due to the challenging economic conditions and an uncertain political situation in Venezuela, certain intangible assets were determined to be impaired and written down to their fair market value. During the third quarter of 2003, our Company recorded a non-cash charge of $95 million primarily related to these matters. This charge is included in the line item equity income (loss) — net.

Note K — Operating Segments

Our Company's operating structure includes the following operating segments: North America; Africa; Asia; Europe, Eurasia and Middle East; Latin America; and Corporate. North America includes the United States, Canada and Puerto Rico.

Information about our Company's operations as of and for the three months ended September 30, 2004 and 2003, by operating segment, is as follows (in millions):

	North America	Africa	Asia	Europe, Eurasia & Middle East	Latin America		Corporate		Consolidated

2004
Net operating revenues	$ 1,683	$ 279	$ 1,265	$ 1,847	$ 522		$ 66		$ 5,662
Operating income¹	377	83	451	160	266		(240	)	1,097
Income before income taxes¹	379	79	462	193	310		(188	)	1,235
Identifiable operating assets	4,811	764	1,914	4,946	1,318		9,657		23,410
Investments	114	140	1,283	1,288	1,442		1,623		5,890

2003
Net operating revenues	$ 1,699	$ 197	$ 1,382	$ 1,820	$ 522		$ 51		$ 5,671
Operating income²	361	65	410	589	250		(224	)	1,451
Income before income taxes²	370	67	417	617	168	³	(141	)	1,498
Identifiable operating assets	5,186	731	2,233	4,790	1,252		7,719		21,911
Investments	111	141	1,241	1,288	1,312		1,298		5,391

Intercompany transfers between operating segments are not material.

¹: Operating income and income before income taxes were reduced by $15 million for Asia, $371 million for Europe, Eurasia and Middle East and $6 million for Corporate related to impairment charges. Refer to Note I.
²: Operating income and income before income taxes were reduced by $13 million for North America, $1 million for Africa, $23 million for Europe, Eurasia and Middle East, $13 million for Latin America and $5 million for Corporate as a result of other operating charges. Refer to Note I.
³: Income before income taxes was reduced by $95 million in the third quarter of 2003 related to the write down of assets recorded by one of our equity method investees, Coca-Cola FEMSA, related to the streamlining and integration of their operations following a merger with Panamerican Beverages, Inc.

Information about our Company's operations for the nine months ended September 30, 2004 and 2003, by operating segment, is as follows (in millions):

North
America

Africa

Asia

Europe,
Eurasia &
Middle East

Latin
America

Corporate

Consolidated

2004

Net operating revenues

$ 5,081

$ 736

$ 3,642

$ 5,527

$ 1,544

$ 175

$ 16,705

Operating income¹

1,248

239

1,411

1,422

781

(750

)

4,351

Income before income
taxes¹

1,256

232

1,463

1,469

922

(542

)

4,800

2003

Net operating revenues

$ 4,827

$ 553

$ 3,912

$ 4,947

$ 1,490

$ 139

$ 15,868

Operating income⁴

1,017

183

1,244

1,531

725

(571

)

⁵

4,129

Income before income
taxes⁴

1,051

179

1,279

1,562

695

⁶

(395

)

⁵

4,371

Intercompany transfers between operating segments are not material.

¹: Operating income and income before income taxes were reduced by $18 million for North America, $15 million for Asia, $377 million for Europe, Eurasia and Middle East, $6 million for Latin America and $64 million for Corporate related to impairment charges. Refer to Note I.
²: Income before income taxes benefited by approximately $37 million for our proportionate share of a favorable tax settlement related to Coca-Cola FEMSA. Refer to Note H.
³: Income before income taxes benefited by approximately $49 million due to the issuances of stock by CCE. Refer to Note D.
⁴: Operating income and income before income taxes were reduced by $147 million for North America, $1 million for Africa, $92 million for Europe, Eurasia and Middle East, $16 million for Latin America and $28 million for Corporate as a result of other operating charges. Refer to Note I.
⁵: Operating income and income before income taxes were increased by $52 million as a result of a settlement related to a vitamin antitrust litigation matter. Refer to Note H.
⁶: Income before income taxes was reduced by $95 million in the third quarter of 2003 related to the write down of assets recorded by one of our equity method investees, Coca-Cola FEMSA, related to the streamlining and integration of their operations following a merger with Panamerican Beverages, Inc.

Note L — Restricted Stock, Stock Options and Other Stock Plans

In connection with Douglas N. Daft's retirement, the Compensation Committee of the Board of Directors released to Mr. Daft, 200,000 shares of restricted stock previously granted to him during the period from April 1992 to October 1998. The terms of these grants provided that the restricted shares be released upon retirement after age 62 but not earlier than five years from the date of grant. The Compensation Committee determined to release the shares in recognition of Mr. Daft's 27 years of service to the Company and the fact that he turns 62 in March 2005. Mr. Daft forfeited 500,000 shares of restricted stock granted to him in November of 2000 since as of the date of his retirement he had not held these shares for five years from the date of grant. In addition, Mr. Daft forfeited 1,000,000 shares of performance-based restricted stock since Mr. Daft retired prior to the completion of the performance period.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

As a result of our Company's normal quarterly closing calendar, a shift in the number of shipping days occurred between the first quarter and the fourth quarter of 2004, when compared to the prior year periods. The four additional shipping days in the first quarter of 2004 compared to the first quarter of 2003 had the effect of increasing our net operating revenues and expenses for the nine months ended September 30, 2004 compared to the nine months ended September 30, 2003, and provided a benefit to earnings per share for the nine months ended September 30, 2004. Accordingly, our fourth quarter of 2004 will have three fewer shipping days compared to the fourth quarter of 2003. The number of shipping days in the third quarter of 2004 was the same as the number of shipping days in the third quarter of 2003.

Net Operating Revenues

Net operating revenues were $5,662 million in the third quarter of 2004, compared to $5,671 million in the third quarter of 2003, a decrease of $9 million. The following table indicates, on a percentage basis, the estimated impact of key factors resulting in significant increases (decreases) in net operating revenues for the three months ended September 30, 2004 versus the comparable period in 2003:

Three Months Ended September 30,	2004 vs. 2003

Decrease in gallon sales, including acquisitions	(1	)%
Structural changes	(4	)
Price and product/geographic mix	1
Impact of currency fluctuations versus the U.S. dollar	4

Total percentage change	0	%

Net operating revenues were $16,705 million for the nine months ended September 30, 2004, compared to $15,868 million for the nine months ended September 30, 2003, an increase of $837 million or 5 percent. The following table indicates, on a percentage basis, the estimated impact of key factors resulting in significant increases (decreases) in net operating revenues for the nine months ended September 30, 2004 versus the comparable period in 2003:

Nine Months Ended September 30,	2004 vs. 2003

Increase in gallon sales, including acquisitions	3	%
Structural changes	(4	)
Price and product/geographic mix	1
Impact of currency fluctuations versus the U.S. dollar	5

Total percentage increase	5	%

For the three months ended September 30, 2004, our gallon sales decreased by 1 percent due to challenging conditions in several key business units, including North America, Germany, and the Northern Europe region. Refer to heading "Other Operating Charges" for additional discussion regarding Germany. Refer to heading "Beverage Volume" for additional discussions regarding North America and Europe. Within these markets, we expect the environment to remain difficult throughout the remainder of this year, while we focus on improving our short-term performance and strengthening our system's long-term capabilities.

For the nine months ended September 30, 2004, the increase in gallon sales of 3 percent was partially attributable to the four additional shipping days in the first quarter of 2004 as compared to the first quarter of 2003. Since the number of shipping days in the third quarter of 2004 was the same as the number of shipping days in the third quarter of 2003, this item did not impact the third quarter results. 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.

Structural changes have had a negative effect on our 2004 net operating revenues compared to 2003 for both the three and nine months ended September 30, 2004. Effective October 1, 2003, the Company and all of our 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. As a result, a portion of our 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 reductions in our 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. The decreases in net revenues attributable to Japan for the three and nine months ended September 30, 2004 were offset in part by the consolidation as of March 31, 2004 of certain bottling operations that are considered variable interest entities. Refer to Note B.

The impact of currency fluctuations resulted from the strength of most key currencies versus the U.S. dollar, especially a stronger euro that favorably impacted the Europe, Eurasia and Middle East operating segment and a stronger Japanese yen that favorably impacted our Asia operating segment, partially offset by a weaker Mexican peso that unfavorably impacted our Latin America operating segment. Refer to heading "Exchange."

The contribution to net operating revenues from Company operations is as follows (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
		2004		2003		2004		2003

Company operations, excluding bottling operations	$	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

Gross Profit

Our gross profit margin increased to 63.8 percent in the third quarter of 2004 from 61.8 percent in the third quarter of 2003. The creation of the nationally integrated supply chain company in Japan contributed significantly to this improvement. Generally, bottling and finished product operations, such as our Japan tea business that was integrated into the supply chain company, produce higher net operating revenues but lower gross profit margins compared to concentrate and syrup operations.

Our gross profit margin increased to 65.1 percent in the first nine months of 2004 from 62.7 percent in the first nine months of 2003. As discussed above, the creation of the nationally integrated supply chain company in Japan also contributed to the improvement in our gross profit margin for the nine months ended September 30, 2004 compared to the same period of 2003. Our receipt during the first quarter of 2003 of a settlement of approximately $52 million from certain defendants in a vitamin antitrust litigation positively impacted our 2003 gross profit for the nine months ended September 30, 2003. This amount was recorded as a reduction to cost of goods sold and impacted the Corporate segment. Refer to Note H.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $124 million or 6 percent for the third quarter of 2004, as compared to the third quarter of 2003. Approximately 2 percentage points of this increase was due to an overall weaker U.S. dollar (especially compared to the euro and the Japanese yen). Additionally, strong investments in marketing activities, increased costs in the finished products business and structural changes contributed to this increase.

Selling, general and administrative expenses increased $496 million or 9 percent for the nine months ended September 30, 2004, as compared to the same period of 2003. Approximately 4 percentage points of this increase was due to an overall weaker U.S. dollar (especially compared to the euro and the Japanese yen). Increased selling expenses were largely responsible for the remaining increase due to strong investments in marketing programs in 2004, increased costs in the finished products business, structural changes and the four additional shipping days in the first nine months of 2004.

The Company has requested reimbursement in certain legal proceedings. Although none of these reimbursements have been realized at this time, the Company expects final resolution of these matters in the next twelve months. Management believes that any gains to the Company that may arise as a result of the final resolutions will not have a material effect on the financial condition of the Company taken as a whole.

Other Operating Charges

In the second quarter of 2004, we recorded impairment charges totaling approximately $88 million. These impairments primarily relate to the write-downs of certain manufacturing investments. They also included a write-down of an intangible asset. As a result of recent operating losses, management prepared analyses of cash flows expected to result from the use of the assets and their eventual disposition. Because the sum of the undiscounted cash flows was less than the carrying value of such assets, we recorded an impairment charge to reduce the carrying value of the assets to fair value.

In the third quarter of 2003, the Company recorded charges of approximately $43 million, or $0.01 per share after tax, related to streamlining initiatives, primarily in North America and Germany. Of these charges, approximately $13 million impacted the North America operating segment, approximately $1 million impacted the Africa segment, approximately $23 million impacted the Europe, Eurasia and Middle East operating segment, approximately $1 million impacted the Latin America operating segment and approximately $5 million impacted the Corporate segment. Additionally, we recorded a $12 million write-down of assets in Latin America.

For the first nine months of 2003, the Company recorded charges of approximately $272 million, or $0.07 per share after tax, related to streamlining initiatives, primarily in North America and Germany. Of these charges, approximately $147 million impacted the North America operating segment, approximately $1 million impacted the Africa segment, approximately $92 million impacted the Europe, Eurasia and Middle East operating segment, approximately $28 million impacted the Corporate segment and approximately $4 million impacted the Latin America operating segment. Approximately 1,600 associates had been separated as of September 30, 2003. Refer to Note I. Additionally, we recorded a $12 million write-down of assets in Latin America.

Operating Income and Operating Margin

Operating income was $1,097 million in the third quarter of 2004, compared to $1,451 million in the third quarter of 2003, a decrease of $354 million or 24 percent. Our operating margin for the third quarter of 2004 was 19.4 percent, compared to 25.6 percent for the comparable period in 2003. The decrease in operating income and operating margin in this year's third quarter reflected the impact of other operating charges, challenging conditions in certain key business units, particularly North America, Germany and Northern Europe and strong investments in marketing activities, offset by the positive impact of currency.

Currencies positively impacted operating income in the third quarter of 2004 by approximately 6 percent versus the comparable prior year period as a result of the strength of most key currencies versus the U.S. dollar, especially a stronger euro and a stronger Japanese yen. During the fourth quarter of 2004, we expect currency benefits to be substantially less as compared to the third quarter of 2004. Refer to heading "Exchange."

Operating income was $4,351 million in the first nine months of 2004, compared to $4,129 million in the first nine months of 2003, an increase of $222 million or 5 percent. Our operating margin was 26.0 percent for this period in 2003 and 2004. Operating income and operating margin in this year's period reflected the impact of other operating charges, challenging conditions in certain key business units, particularly North America, Germany and Northern Europe and strong investments in marketing activities, offset by the positive impact of currency.

Currencies positively impacted operating income in the first nine months of 2004 by approximately 8 percent versus the comparable prior year period as a result of the strength of most key currencies versus the U.S. dollar, especially a stronger euro and a stronger Japanese yen. Refer to heading "Exchange."

The creation of the supply chain management company in Japan helped to improve our year-to-date 2004 operating margins compared to our 2003 operating margins for the comparable period, for the reasons explained under the heading "Gross Profit."

Interest Income

Interest income decreased to $106 million for the first nine months of 2004 from $138 million for the first nine months of 2003. This decrease was primarily due to lower interest rates in 2004 earned on short-term investments and interest in 2003 related to certain tax receivables.

Equity Income — Net

Our Company's share of income from equity method investments for the third quarter of 2004 totaled $180 million, compared to $86 million in the third quarter of 2003, an increase of $94 million or 109 percent. The primary cause for this increase was a $95 million non-cash charge that our Company recorded in the third quarter of 2003 related to our portion of charges recorded by one of our equity method investees, Coca-Cola FEMSA. This charge related to the streamlining and integration of their operations following a merger with Panamerican Beverages, Inc. and to their write-down of intangible assets.

Our Company's share of income from equity method investments for the first nine months of 2004 totaled $496 million, compared to $325 million in the first nine months of 2003, an increase of $171 million or 53 percent. Comparing the 2004 period to the 2003 period, our equity income benefited from favorable pricing at key bottling operations and from the positive impact of the strength of most key currencies versus the U.S. dollar, especially a stronger euro. The $37 million increase to equity income for the Coca-Cola FEMSA favorable tax settlement also positively impacted our equity income for the nine months ended September 30, 2004. Finally, the $95 million non-cash charge in the third quarter of 2003, discussed above, negatively impacted equity income in 2003.

Other Income (Loss) — Net

Other income (loss) — net was a net loss of $34 million for the third quarter of 2004 compared to a net loss of $42 million for the third quarter of 2003, a difference of $8 million. Other income (loss) — net was a net loss of $64 million for the first nine months of 2004 compared to a net loss of $99 million for the first nine months of 2003, a difference of $35 million. This line item included the impact of foreign exchange losses, accretion of the discounted value of the CCEAG liability and minority interests. Comparing the 2004 periods to the 2003 periods, no individually significant changes occurred for these items.

Issuances of Stock by Equity Investee

If and when an equity investee issues its stock to third parties at a price in excess of our book value, our Company's equity in the underlying net assets of that investee increases. We generally record an increase to our investment account and a corresponding gain for these transactions.

During the nine months ended September 30, 2004, our Company recorded approximately $49 million of non-cash pretax gains due to the issuances of stock by CCE. The issuances primarily related to the exercise of CCE stock options by CCE employees at amounts greater than the book value per share of our investment in CCE. These issuances of stock reduced our ownership interest in the total outstanding shares of CCE common stock by approximately 1 percent to approximately 36 percent.

For the quarter ended September 30, 2003, our Company recorded approximately $8 million for gains on issuances of stock by equity investees. These gains primarily related to the issuance by CCE of common stock valued at an amount greater than the book value per share of our investment in CCE. As a result, the issuance of these shares resulted in a one-time non-cash pretax gain for our Company. This transaction reduced our ownership interest in the total outstanding shares of CCE common stock by less than 1 percent. Refer to Note D.

Income Taxes

Our effective tax rate was 24.3 percent for the third quarter of 2004 compared to 18.4 percent for the third quarter of 2003. For the third quarter of 2004, our effective tax rate includes the following:

•: an income tax benefit of approximately $39 million related to the reversal of previously accrued taxes resulting from favorable resolution of tax matters;
•: an income tax benefit on "Other Operating Charges" discussed above at a rate of approximately 36 percent;
•: an income tax expense of approximately $75 million related to the recording of a valuation allowance on deferred tax assets in CCEAG;
•: an effective tax rate for all other pretax income of approximately 25 percent.

Our effective tax rate for the quarter ended September 30, 2003 was 18.4 percent and included the following:

•: an income tax benefit related to the costs associated with the streamlining initiatives at a rate of approximately 28 percent;
•: an income tax expense on our proportionate share of the favorable tax settlement related to Coca-Cola FEMSA at a rate of approximately 35 percent;
•: an effective tax rate for all other pretax income of approximately 18 percent resulting from the reduction in the estimated full year underlying effective tax rate from 24 percent at June 30, 2003 to 22 percent at September 30, 2003.

Our effective tax rate was 24.0 percent for the nine months ended September 30, 2004 compared to 21.8 percent for the nine months ended September 30, 2003. For the nine months ended September 30, 2004, our effective tax rate includes the following:

•: an income tax benefit of approximately $80 million related to the reversal of previously accrued taxes resulting from favorable tax settlements;
•: an income tax benefit on "Other Operating Charges" discussed above at a rate of approximately 36 percent;
•: an income tax expense on "Issuances of Stock by Equity Investee" discussed above at a rate of approximately 39 percent;
•: an income tax expense on our proportionate share of the favorable tax settlement related to Coca-Cola FEMSA at a rate of approximately 35 percent;
•: an income tax expense of approximately $75 million related to the recording of a valuation allowance on deferred tax assets in CCEAG;
•: an effective tax rate for all other pretax income of approximately 25 percent.

Our effective tax rate for the nine months ended September 30, 2003 was 21.8 percent and included the following:

•: an income tax benefit related to the costs associated with the streamlining initiatives at a rate of approximately 35 percent;
•: an income tax expense related to the proceeds received from the vitamin antitrust litigation matter at a rate of approximately 35 percent;
•: an income tax benefit associated with the charge related to a Latin America equity investee at a rate of approximately 3 percent;

•: an effective tax rate for all other pretax income of approximately 22 percent.

Our effective tax rates reflect tax benefits derived from significant operations outside the United States that are taxed at rates lower than the U.S. statutory rate of 35 percent. In determining the quarterly provision for income taxes, the Company uses an annual effective tax rate that is based on expected annual income, statutory tax rates and tax planning opportunities available in various jurisdictions in which the Company operates. The impacts of significant or unusual items are separately recognized in the quarter in which they occur. For the full year of 2004, based on current tax laws, the Company's effective underlying tax rate on operations is expected to be approximately 25 percent. Additionally, our Company is currently considering the effects of the new United States tax legislation that was signed into law by the President on October 22, 2004, that offers certain one time tax benefits, a potential for ongoing tax rate reduction, and also allows companies to repatriate accumulated foreign earnings at preferential tax rates. Our Company is currently evaluating the details of this legislation and any impact it may have on our income tax expense in the fourth quarter of 2004.

Beverage Volume

We measure our sales volume in two ways: (1) gallons and (2) unit cases of finished products. "Gallons" is a unit of measurement for 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 gallon sales. We also measure volume in unit cases. As used in this report, "unit case" means a unit of measurement equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce servings); and "unit case volume" of the Company 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 bottling system or by the Company to customers. This 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 Coca-Cola system bottlers, for which our Company provides marketing support and derives profit from sales. Such products licensed to our Company or owned by Coca-Cola system bottlers 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 business system because it measures trends at the consumer level.

Gallon sales and unit case volume are not necessarily equal during any given period. Items such as seasonality, bottlers' inventory practices, extra shipping days/consumption days, supply point changes, timing of price increases, and new product introductions can create differences between gallon sales and unit case volume.

Comparing unit case volume for 2004 to volume for 2003, approximate unit case volume growth results are as follows:

		Unit Case Volume Growth (Based on Average Daily Sales) 2004 versus 2003 Percentage Change				Reported Unit Case Volume Growth 2004 versus 2003 Percentage Change
		Third Quarter		Year-to- Date		Third Quarter		Year-to- Date

Worldwide		1		2		1		4
	North America Operations	(3	)	Even		(3	)	2
	International Operations — Total	3		2		3		4
	Africa	6		2		6		5
	Asia	9		6		9		8
	Europe, Eurasia & Middle East	(3	)	(1	)	(3	)	1
	Latin America	5		3		5		5

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 period are the unit cases sold during the period divided by the number of consumption days in the period.

Reported unit case volume growth is computed by comparing the unit cases sold in the three and nine month periods ended September 30, 2004 to the unit cases sold in the three and nine month periods ended September 30, 2003. In the first nine months of 2004, these amounts are greater than the amounts computed on an average daily sales basis because of six extra consumption days in the first quarter of 2004 as compared to the first quarter of 2003. The difference in consumption days will be largely offset in the fourth quarter of 2004.

In the North America operating segment, unit case volume for the third quarter of 2004 decreased by three percent, compared to the third quarter of 2003, primarily as a result of soft retail traffic, poor weather in key regions and increases in wholesale and retail pricing. The Retail Division had a four percent decrease in unit case volume in the third quarter of this year versus the prior year period, as retail pricing of the Company's brands in measured channels increased six percent to the consumer. The Food Service and Hospitality Division's unit case volume decreased one percent in the quarter due to slowing restaurant industry traffic compared to the prior year.

Unit case volume in the Europe, Eurasia and Middle East operating segment declined three percent in the third quarter of 2004 versus the prior year period, primarily due to increased competition in the retail discounter channel in Germany and poor weather conditions across Europe, partially offset by successful promotions and continued positive economic trends in Turkey, Russia and the Middle East.

In the Asia operating segment, unit case volume grew by nine percent in the third quarter of 2004 versus the prior year period, primarily led by 20 percent growth in China and eight percent growth in Japan.

Unit case volume for the Latin America operating segment increased five percent in the third quarter of 2004 versus the prior year period, primarily reflecting strong growth in Brazil, Argentina and Venezuela. In Mexico, unit case volume increased one percent in the quarter.

In the Africa operating segment, unit case volume increased six percent in the third quarter of 2004 compared to the prior year period, primarily as a result of the growth of core brands in South Africa, where unit case volume increased by 14 percent, partially offset by volume declines in Nigeria and Egypt.

FINANCIAL CONDITION

Net Cash Provided by Operating Activities

Net cash provided by operating activities in the first nine months of 2004 amounted to $4,590 million versus $4,121 million for the comparable period in 2003, an increase of $469 million. Net income of $3,646 million for the first nine months of 2004, compared to net income of $3,420 million for the comparable period of 2003, as well as efficient management of working capital in 2004, contributed to this increased cash flow.

Investing Activities

Net cash used in investing activities totaled $627 million for the first nine months of 2004, compared to $883 million for the comparable period in 2003, a decrease of $256 million. During the 2004 period, cash outlays for investing activities included purchases of property, plant and equipment of $520 million.

During the first nine months of 2003, cash outlays for investing activities included purchases of property, plant and equipment of $565 million and the acquisition of Truesdale Packaging Company LLC from CCE for approximately $58 million (refer to Note J).

Financing Activities

Our financing activities include net borrowings, dividend payments, share issuances and share repurchases. Net cash used in financing activities totaled $1,977 million for the first nine months of 2004 compared to net cash used in financing activities of $1,862 million for the first nine months of 2003.

In the first nine months of 2004, the Company had issuances of debt of $2,380 million and payments of debt of $1,247 million. The issuances of debt primarily included $1,544 million of net issuances of commercial paper with maturities of 90 days or less and $787 million in issuances of commercial paper with maturities of more than 90 days. The payments of debt included $873 million related to commercial paper with maturities of more than 90 days. Furthermore, during the nine months ended September 30, 2004, we paid $353 million of current maturities of long-term debt. In the first nine months of 2003, the Company had issuances of debt of $1,121 million and payments of debt of $1,007 million. The issuances of debt primarily included $515 million of net issuances of commercial paper with maturities of 90 days or less and $604 million in issuances of commercial paper with maturities of greater than 90 days. The payments of debt during the first nine months of 2003 primarily included $832 million related to commercial paper with maturities of greater than 90 days.

During the first nine months of 2004 and 2003, the Company repurchased common stock under the stock repurchase plan authorized by our Board of Directors in October 1996. During the first nine months of 2004, the Company repurchased approximately 29.8 million shares of common stock at an average cost of $47.86 per share under the 1996 plan. During the first nine months of 2003, the Company repurchased approximately 21.5 million shares of common stock at an average cost of $42.48 per share under the 1996 plan. The cost to purchase these shares of common stock for treasury was $1,425 million for the first nine months of 2004 compared to $915 million for the first nine months of 2003. As strong cash flows are expected to continue in the future, the Company currently expects its 2004 share repurchase levels to be at least $2 billion, including the purchases during the first nine months of 2004 described above.

For the nine months ended September 30, 2004, our Company paid dividends of $1,809 million, compared to $1,086 million for the comparable 2003 period. This increase is related in part to the timing of dividend payments in 2003 versus 2004. As of September 30, 2003, dividends of approximately $540 million were accrued but were not paid until the beginning of the fourth quarter of 2003. Further, the quarterly dividend was increased from $0.22 per common share in 2003 to $0.25 per common share in 2004.

Financial Position

Our balance sheet as of September 30, 2004, as compared to our balance sheet as of December 31, 2003, was impacted by the following:

•: The increase in cash and cash equivalents of $2,003 million was due primarily to net cash provided by operating activities of $4,590 million in the first nine months of 2004. This cash has primarily been generated in locations outside of the United States and the majority of this cash is held in assets outside the United States.
•: The increase in loans and notes payable of $1,363 million was due to the issuance of commercial paper during the first nine months of 2004 to meet short-term cash needs in the United States, including the quarterly dividend payment and repurchases of common stock.

The overall increase in total assets as of September 30, 2004, compared to December 31, 2003, was primarily related to the increase in cash and cash equivalents mentioned above, which impacted the Corporate operating segment; the impact of the strength in most key currencies versus the U.S. dollar, especially a stronger euro (that impacted our Europe, Eurasia and Middle East operating segment) and a stronger Japanese yen (that impacted our Asia operating segment); and the consolidation of certain entities in accordance with FASB Interpretation No. 46 (Refer to Note B), partially offset by $392 million of impairment charges primarily related to franchise rights at CCEAG. The consolidation of such entities specifically accounted for an increase of approximately $270 million to our property, plant and equipment as of the date of consolidation, March 31, 2004.

Update to Application of Critical Accounting Policies

In Part II, Item 7, under the heading "Application of Critical Accounting Policies — Recoverability of Noncurrent Assets" included our Annual Report on Form 10-K for the year ended December 31, 2003, we included a discussion about the uncertainty related to the deposit law on certain nonreturnable beverage packages enacted by the German government. We stated that unexpected political matters or market shifts could impact our industry or our Company, and certain assets in Germany might be at risk for impairment. We further stated that we would continue to monitor the situation. As discussed above, in the third quarter of 2004, our Company recorded impairment charges totaling approximately $392 million primarily related to certain franchise rights primarily within CCEAG.

Exchange

Our international operations are subject to certain opportunities and risks, including currency fluctuations and government actions. We closely monitor our operations in each country and seek to adopt appropriate strategies that are responsive to changing economic and political environments and to fluctuations in foreign currencies.

We use approximately 50 functional currencies. Due to our global operations, weaknesses in some of these currencies are often offset by strengths in others. Our foreign currency management program is designed to mitigate, over time, a portion of the impact of exchange on net income and earnings per share. Taking into account the effects of our hedging activities, the impact of a weaker U.S. dollar increased our reported operating income by approximately 6 percent in the third quarter of 2004 compared to the third quarter of 2003, and by approximately 8 percent in the first nine months of 2004 compared to the same period in 2003. For the fourth quarter of 2004, the Company expects currency benefits to be substantially less as compared to the third quarter of 2004.

The Company will continue to manage its foreign currency exposures to mitigate over time a portion of the impact of exchange on net income and earnings per share. Our Company conducts business in more than 200 countries around the world, and we manage foreign currency exposures through the portfolio effect of the basket of functional currencies in which we do business.

FORWARD-LOOKING STATEMENTS

Certain written and oral statements made by our Company and subsidiaries or with the approval of an authorized executive officer of our Company may constitute "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995, including statements made in this report and other filings with the Securities and Exchange Commission. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to volume growth, share of sales and earnings per share growth and statements expressing general optimism about future operating results — are forward-looking statements. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our Company's historical experience and our present expectations or projections. As and when made, management believes that these forward-looking statements are reasonable. However, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The following are some of the factors that could cause our Company's actual results to differ materially from the expected results described in or underlying our Company's forward-looking statements:

•: Economic and political conditions, especially in international markets, including civil unrest, product boycotts, governmental changes and restrictions on the ability to transfer capital across borders. Without limiting the preceding sentence, the current unstable economic and political conditions and civil unrest in the Middle East, North Korea or elsewhere, the unstable situation in Iraq, or the continuation or escalation of terrorism, could have adverse impacts on our Company's business results or financial condition.
•: Changes in the nonalcoholic beverages business environment. These include, without limitation, changes in consumer preferences, including changes based on health or nutrition considerations; competitive product and pricing pressures; and our ability to gain or maintain share of sales in the global market as a result of actions by competitors. Factors such as these could impact our earnings, share of sales and volume growth.
•: Foreign currency rate fluctuations, interest rate fluctuations and other capital market conditions. Most of our exposures to capital markets, including foreign currency and interest rates, are managed on a consolidated basis, which allows us to net certain exposures and, thus, take advantage of any natural offsets. We use derivative financial instruments to reduce our net exposure to financial risks. There can be no assurance, however, that our financial risk management program will be successful in reducing capital market exposures.
•: Adverse weather conditions, which could reduce demand for Company products.
•: The effectiveness of our advertising, marketing and promotional programs.
•: Fluctuations in the cost and availability of raw materials including water, the cost of energy, transportation and other necessary services; our ability to maintain favorable supplier arrangements and relationships; our ability to avoid product recalls; and our ability to avoid disruptions in production output caused by events such as natural disasters, power outages, labor strikes, or the like.

•: Our ability to achieve earnings goals, which are generated based on projected volumes and sales of many product types, some of which are more profitable than others. There can be no assurance that we will achieve the expected level or mix of product sales.
•: Our ability to effectively align ourselves with our bottling system as we focus on increasing the investment in our brands; seeking efficiencies throughout the supply chain; delivering more value for our customers; and better meeting the needs of our consumers.
•: Our ability to protect against data corruption, cyber-based attacks or information security breaches.
•: Changes in laws and regulations, including changes in accounting standards, taxation requirements (including tax rate changes, new tax laws and revised tax law interpretations), laws concerning food and beverages, competition laws, employment laws and environmental laws in domestic or foreign jurisdictions.
•: Our ability to penetrate developing and emerging markets, which also depends on economic and political conditions, and how well we are able to acquire or form strategic business alliances with local bottlers and make necessary infrastructure enhancements to production facilities, distribution networks, sales equipment and technology. Moreover, the supply of products in developing markets must match the customers' demand for those products, and due to product price and cultural differences, there can be no assurance of product acceptance in any particular market.
•: The uncertainties of litigation, as well as other risks and uncertainties detailed from time to time in our Company's Securities and Exchange Commission filings.

The foregoing list of important factors is not exclusive.

Other Matters

The Company's independent auditor, Ernst & Young LLP ("E&Y"), recently informed the Securities and Exchange Commission, the Public Company Accounting Oversight Board and our Audit Committee that certain foreign affiliates of E&Y performed tax-related non-audit services that have raised questions regarding E&Y's independence with respect to E&Y's performance of audit services.

During fiscal years 2001 and 2002, certain E&Y foreign affiliates, in connection with the preparation of local tax returns, made payments of taxes to local tax authorities with respect to individual employee and corporate tax liabilities. As a result, E&Y's foreign affiliates had temporary custody of inconsequential amounts of Company tax related funds. These payment services were discontinued in 2002. In 2003 and 2004, certain E&Y foreign affiliates provided other limited administrative services relating to making tax payments to local tax authorities. These services no longer included custody of any Company funds and were discontinued in 2004.

The fees paid by the Company to E&Y foreign affiliates in the impacted countries for the preparation of these tax returns, including the services mentioned above, were approximately $28,000, $20,000, $9,000 and $3,000 for the years 2001, 2002, 2003 and 2004, respectively.

Our Audit Committee and E&Y have discussed E&Y's independence with respect to its audit of the consolidated financial statements of the Company in light of the foregoing. E&Y has informed the Audit Committee that it does not believe that the provision of the tax services described above has impaired E&Y's independence with respect to the Company as the services are ministerial in nature and have been discontinued.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We have no material changes to the disclosure on this matter made in our Annual Report on Form 10-K for the year ended December 31, 2003.

Item 4. Controls and Procedures

The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company's "disclosure controls and procedures" (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely making known to them material information relating to the Company and the Company's consolidated subsidiaries required to be disclosed in the Company's reports filed or submitted under the Exchange Act. There has been no change in the Company's internal control over financial reporting during the quarter ended September 30, 2004 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

As reported in our Annual Report on Form 10-K for the year ended December 31, 2003, since 1999, the Competition Directorate of the European Commission has been conducting an investigation of various commercial and market practices of the Company and bottlers in Austria, Belgium, Denmark, Germany and Great Britain. In parallel with the investigation, during the past several months our Company and the Commission have been engaged in a dialogue to identify and address the commercial practices under review by the Commission. On October 19, 2004, our Company and certain of our bottlers submitted a formal Undertaking to the Commission and the Commission accepted the Undertaking. The Undertaking will potentially apply in 27 countries and in all channels of distribution where our carbonated soft drinks account for over 40 percent of national sales and twice the nearest competitor's share. It will take more than 12 months to fully implement the Undertaking and for the market to react to any resulting changes. The commitments we made in the Undertaking relate broadly to exclusivity, percentage-based purchasing commitments, transparency, target rebates, tying, assortment or range commitments and agreements concerning products of other suppliers. The Undertaking will also apply to shelf space commitments in agreements with take-home customers and to financing and availability agreements in the on-premise channel. In addition, the Undertaking includes commitments that will be applicable to commercial arrangements concerning the installation and use of technical equipment (i.e., coolers, fountain equipment, and vending machines). The commitments set forth in the Undertaking will be published for third-party comments before becoming final. The Company anticipates that the formal Undertaking will form the basis of a Commission decision pursuant to Article 9, paragraph 1 of Council Regulation 1/2003, bringing an end to the investigation. The submission of the Undertaking does not imply any recognition on the Company's or the bottlers' part of any infringement of European Commission competition rules. We believe that the Undertaking, while imposing restrictions, clarifies the application of competition rules to our practices in Europe and will allow our system to be able to compete vigorously while adhering to the provisions.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information with respect to purchases of common stock of the Company made during the three months ended September 30, 2004 by The Coca-Cola Company or any "affiliated purchaser" of The Coca-Cola Company, as defined in Rule 10b-18(a)(3) under the Exchange Act.

Period	(a) Total Number of Shares Purchased	¹	(b) Average Price Paid Per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	²	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs

July 1, 2004 through July 31, 2004	2,835,352		$ 45.03	2,825,000		124,560,940

August 1, 2004 through August 31, 2004	4,612,275		$ 44.15	4,560,000		120,000,940

September 1, 2004 through September 30, 2004	3,147,935		$ 42.43	3,075,000		116,925,940

Total	10,595,562		$ 43.87	10,460,000		116,925,940

¹: The total number of shares purchased includes: (i) shares purchased pursuant to the 1996 Plan described in footnote (2) below; and (ii) shares surrendered or deemed surrendered to the Company to pay the exercise price and/or to satisfy tax withholding obligations in connection with so-called "stock swap exercises" of employee stock options and/or the vesting of restricted stock issued to employees, totaling 10,352 shares, 52,275 shares and 72,935 shares, respectively, for the months of July, August and September 2004.
²: On October 17, 1996, we publicly announced that our Board of Directors had authorized a plan (the "1996 Plan") for the Company to purchase up to 206 million shares of the Company's common stock prior to October 31, 2006. This was in addition to approximately 44 million shares, previously authorized for purchase prior to December 31, 2000, that had not been purchased by the Company as of October 16, 1996 but that were purchased by the Company prior to the commencement of purchases under the 1996 Plan in 1998. This column discloses the number of shares purchased pursuant to the 1996 Plan during the indicated time periods.

This table excludes restricted stock forfeitures and shares withheld in connection with so-called "cashless exercises" of employee stock options.

Item 6. Exhibits

10.1	—	Letter, dated September 16, 2004, from The Coca-Cola Company to E. Neville Isdell — incorporated herein by reference to Exhibit 99.1 of the Company's Form 8-K Current Report filed on September 17, 2004.
10.2	—	Stock Award Agreement for E. Neville Isdell, dated September 14, 2004, under the 1989 Restricted Stock Award Plan of the Company — incorporated herein by reference to Exhibit 99.2 of the Company's Form 8-K Current Report filed on September 17, 2004.
10.3	—	Stock Option Agreement for E. Neville Isdell, dated July 22, 2004, under the 2002 Stock Option Plan of the Company, as amended.
10.4	—	Amendment Number Seven to the Key Executive Retirement Plan of the Company, dated July 28, 2004, effective as of June 1, 2004.
10.5	—	Letter, dated August 6, 2004, from the Chairman of the Compensation Committee of the Board of Directors of The Coca-Cola Company to Douglas N. Daft.
10.6	—	Undertaking from The Coca-Cola Company and certain of its bottlers, dated October 19, 2004, relating to various commercial practices that have been under investigation by the European Commission — incorporated herein by reference to Exhibit 99.1 of the Company's Form 8-K Current Report filed on October 19, 2004.
12	—	Computation of Ratios of Earnings to Fixed Charges.
31.1	—	Rule 13a-14(a)/15d-14(a) Certification, executed by E. Neville Isdell, Chairman, Board of Directors, and Chief Executive Officer of The Coca-Cola Company.
31.2	—	Rule 13a-14(a)/15d-14(a) Certification, executed by Gary P. Fayard, Executive Vice President and Chief Financial Officer of The Coca-Cola Company.
32	—	Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), executed by E. Neville Isdell, Chairman, Board of Directors, and Chief Executive Officer of The Coca-Cola Company and by Gary P. Fayard, Executive Vice President and Chief Financial Officer of The Coca-Cola Company.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		THE COCA-COLA COMPANY (REGISTRANT)
Date: October 27, 2004		By:		/s/ CONNIE D. McDANIEL Connie D. McDaniel Vice President and Controller (On behalf of the Registrant and as Chief Accounting Officer)

Exhibit Index

Exhibit Number and Description

Exhibits

10.1	—	Letter, dated September 16, 2004, from The Coca-Cola Company to E. Neville Isdell — incorporated herein by reference to Exhibit 99.1 of the Company's Form 8-K Current Report filed on September 17, 2004.
10.2	—	Stock Award Agreement for E. Neville Isdell, dated September 14, 2004, under the 1989 Restricted Stock Award Plan of the Company — incorporated herein by reference to Exhibit 99.2 of the Company's Form 8-K Current Report filed on September 17, 2004.
10.3	—	Stock Option Agreement for E. Neville Isdell, dated July 22, 2004, under the 2002 Stock Option Plan of the Company, as amended.
10.4	—	Amendment Number Seven to the Key Executive Retirement Plan of the Company, dated July 28, 2004, effective as of June 1, 2004.
10.5	—	Letter, dated August 6, 2004, from the Chairman of the Compensation Committee of the Board of Directors of The Coca-Cola Company to Douglas N. Daft.
10.6	—	Undertaking from The Coca-Cola Company and certain of its bottlers, dated October 19, 2004, relating to various commercial practices that have been under investigation by the European Commission — incorporated herein by reference to Exhibit 99.1 of the Company's Form 8-K Current Report filed on October 19, 2004.
12	—	Computation of Ratios of Earnings to Fixed Charges.
31.1	—	Rule 13a-14(a)/15d-14(a) Certification, executed by E. Neville Isdell, Chairman, Board of Directors, and Chief Executive Officer of The Coca-Cola Company.
31.2	—	Rule 13a-14(a)/15d-14(a) Certification, executed by Gary P. Fayard, Executive Vice President and Chief Financial Officer of The Coca-Cola Company.
32	—	Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), executed by E. Neville Isdell, Chairman, Board of Directors, and Chief Executive Officer of The Coca-Cola Company and by Gary P. Fayard, Executive Vice President and Chief Financial Officer of The Coca-Cola Company.

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Index

Part I. Financial Information

Item 1. Financial Statements (Unaudited)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

Part II. Other Information

Item 1. Legal Proceedings

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 6. Exhibits

SIGNATURE
Exhibit Index
EX-10.3 2 a2144977zex-10_3.htm EXHIBIT 10.3
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Exhibit 10.3

THE COCA-COLA COMPANY
2002 STOCK OPTION PLAN
STOCK OPTION AGREEMENT

Merrill Lynch Account Number: XXXXXX

The Coca-Cola Company ("KO") hereby grants to the optionee named below options to purchase KO common stock at the price per share set forth below, subject to the provisions of this Agreement together with the provisions of The Coca-Cola Company 2002 Stock Option Plan (the "Plan"):

optionee's name: E. Neville Isdell

number of options granted, each for one share of KO common stock: 450,000

option exercise price per share: $48.89000

option grant date: July 22, 2004

option expiration date: July 21, 2014

vesting period: 48 months

Capitalized terms not otherwise defined in this Agreement shall have the meaning provided in the Plan. The Plan is incorporated into, and made a part of, this Agreement.

1.

When options can be exercised.

(a)

General provisions.

(i): No option may be exercised until it has vested.
(ii): No option shall vest for a period of twelve months from the date on which the option was granted, except in the event of a Change in Control, death or Disability.
(iii): Once an option has vested, it may be exercised until it expires. Options expire on the option expiration date noted above, except in the events of death, termination of employment with KO and/or a Related Company, or a change in KO's investment in the optionee's employer which results in the employer no longer meeting the definition of a Related Company under the Plan, in which cases the options will expire as set forth in the Plan. For individuals located in France, the options will expire on the earlier of: a) six months after the date of the optionee's death, and b) the expiration date noted in the option.
(iv): The Plan describes the impact upon vesting and the expiration of options of the following events: death, Disability, Retirement, Change in Control, various types of leaves of absence, termination of employment, change in KO's investment in the optionee's employer which results in the employer no longer meeting the definition of a Related Company under the Plan, and transfer of employment to a Related Company.

(b)

Specific provisions. Except as otherwise provided in the Plan or in this Agreement, one fourth of the number of options covered by this Agreement shall vest on the first, second, third and fourth anniversaries of the grant date.

2.

How to exercise the options. In order to exercise an option, it must be vested and not have expired and the optionee must do the following:

(a): Pay the option exercise price. The optionee must pay the option exercise price in cash, cashless exercise, or by delivery, through attestation, of shares of KO common stock owned by the optionee. The value of the shares delivered to pay the option price shall be computed on the basis of the most recent reported market price at which a share of KO common stock shall have been sold prior to the time of processing the optionee's election to deliver

shares in payment of the option price, as reported on the New York Stock Exchange Composite Transaction listing.

(b): Complete all paperwork. The optionee must complete, sign and return any paperwork required by KO or by Merrill Lynch, Pierce, Fenner & Smith ("Merrill Lynch"), the current agent administering the option program on behalf of KO.
(c): Pay applicable taxes and fees. The options are not intended to be, and shall not be treated as, an incentive stock option, as defined in Section 422 of the Internal Revenue Code of 1986, as amended.
: The optionee must satisfy any tax withholding requirements regarding any applicable taxes. If the optionee is a U.S. taxpayer, he or she may elect to satisfy Federal, state and local income tax liabilities due by reason of the exercise by having shares of KO common stock withheld. The value of withheld shares shall be computed as described in paragraph 2(a) above.
: The optionee agrees that, should KO in its reasonable judgment determine that tax withholding is required upon exercise of the options, and if the optionee has not satisfied such tax obligation(s), then KO may instruct Merrill Lynch to withhold and/or sell shares of KO common stock acquired by the optionee upon exercise of his or her options or KO may deduct funds equal to the amount of withholding tax (such amount to be determined by KO) from the optionee's salary or other funds due to the optionee from KO.
: The optionee agrees to pay to Merrill Lynch any costs associated with the sale of shares of KO common stock acquired upon exercise of the options (whether such shares are sold to pay the option exercise price, to satisfy tax withholding requirements or for other reasons).
: For employees in Switzerland, the optionee agrees that the taxation of the options will occur at the time the options are exercised.

3.

Options are not transferable. The optionee may not transfer the options; provided that upon the optionee's death the options may be transferred by will or by the laws of descent and distribution. During the lifetime of the optionee, the options shall be exercisable only by the optionee personally or, in the event of the optionee's Disability if a legal representative has been appointed to act on behalf of the optionee, then by the optionee's legal representative.

4.

Non-competition. In the event optionee shall cease to be employed by the Company, prior to, or during one year after, any grant or exercise of an option, the optionee shall not render services for any organization or engage directly or indirectly in any business which, in the judgment of the chief executive officer of the Company or other senior officer designated by the Committee, is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company. Failure to comply with this provision shall cause all such options to be rescinded and, if applicable, any gain associated with any exercise of any option to be forfeited. Accordingly, if the optionee fails to comply with this provision, then:

(a): all unexercised options immediately and automatically shall terminate, be forfeited, and shall cease to be exercisable at any time; and
(b): within ten days after receiving from the Company written notice of the rescission of the options, if after the date of the exercise of any options, the optionee shall pay to the Company the gain associated with the exercise of any options, plus interest calculated through the date of repayment to the Company. The gain associated with the exercise of any options shall be the closing price per share on the date of the exercise of the options, as reported on the New York Stock Exchange Composite Transactions listing, less the option exercise price per share shown above, multiplied by the number of options exercised. Interest shall be calculated using the weighted prime rate at SunTrust Bank, Atlanta.

5.: Notices. Each notice relating to the option or its exercise shall be in writing. Requests and other notices regarding the exercise of options shall be delivered (whether by overnight delivery or by mail) as follows:

Merrill Lynch, Pierce, Fenner & Smith at Merrill Lynch Group Employee Services
Attention: The Coca-Cola Company Stock Option Plan Unit
1400 Merrill Lynch Drive
Mail Stop 04-BS-PRO
Pennington, New Jersey 08534, USA

All notices to KO shall be addressed as follows:

Director, Executive Compensation
The Coca-Cola Company
One Coca-Cola Plaza
Atlanta, Georgia 30313, USA

All notices to the optionee shall be addressed to the principal address of the optionee on file with KO. Either KO or the optionee may designate a different address by written notice to the other. Written notice to these addresses shall be effective to bind KO, the optionee and the optionee's successors and assigns.

6.

Administrative matters. The optionee hereby agrees that the Committee may, subject to the provisions of the Plan, establish such rules and regulations as it deems necessary or advisable for the proper administration of the Plan, and may make determinations and may take such other action in connection with or in relation to the Plan as it deems necessary or advisable. Each determination or other action made or taken pursuant to the Plan, including interpretation of the Plan and the specific conditions and provisions of this Agreement and the options shall be final and conclusive for all purposes and upon all persons including, but without limitation, KO, the Related Companies, the Committee, the KO Board of Directors, officers and the affected employees of KO, the Related Companies and/or the optionees and their respective successors in interest.

When the issuance or transfer of KO common stock pursuant to the exercise of an option may, in the opinion of KO, conflict or be inconsistent with any applicable law or regulation of any governmental agency having jurisdiction, KO reserves the right to refuse to issue or transfer that KO common stock.

7.

Consent for accumulation and transfer of data. The optionee consents to the accumulation and transfer of data concerning him or her and the options to and from KO and Merrill Lynch. In addition, the optionee understands that KO holds certain personal information about the optionee, including but not limited to his or her name, home address, telephone number, date of birth, social security number, salary, nationality, job title, and details of all options awarded, vested, unvested, or expired (the "personal data"). Certain personal data may also constitute "sensitive personal data" within the meaning of applicable local law. Such data include but are not limited to the information provided above and any changes thereto and other appropriate personal and financial data about the optionee. The optionee hereby provides explicit consent to KO to process any such personal data and sensitive personal data. The optionee also hereby provides explicit consent to KO to transfer any such personal data and sensitive personal data outside the country in which the optionee is employed, and to the United States. The legal persons for whom such personal data are intended are KO, Merrill Lynch and any company providing services to KO in connection with the administration of the Plan.

8.

Additional consents. The optionee consents and acknowledges that:

(a): the Plan is discretionary in nature and that KO can amend, cancel or terminate it at any time;
(b): the grant of options under the Plan is voluntary and occasional and does not create any contractual or other right to receive future grants of any options, or benefits in lieu of any options even if options have been granted repeatedly in the past;

(c): all determinations with respect to any such future awards, including, but not limited to, the times when options shall be granted, the option price, and the time or times when each right shall be exercisable, will be at the sole discretion of KO and/or the Committee;
(d): participation in the Plan is voluntary and may be occasional;
(e): the value of the options is an extraordinary item of compensation, which is outside the scope of the optionee's employment contract, if any;
(f): the options or any income derived therefrom are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any termination, severance, resignation, redundancy, end of service payments, bonuses, long-service awards, life or accident insurance benefits, pension or retirement benefits or similar payments;
(g): except as is otherwise explicitly provided in this Agreement and the Plan, non-vested options are forfeited immediately following termination of employment for any reason and vested options expire the earlier of: a) six months following termination of employment for any reason, and b) the expiration date noted in the option;
(h): in the event of involuntary termination of the optionee's employment, the optionee's eligibility to receive options under the Plan, if any, will terminate effective as of the date that the optionee is no longer actively employed regardless of any reasonable notice period mandated under local law; furthermore, in the event of involuntary termination of employment, the optionee's ability to exercise options under the Plan will be measured by the date of termination of the optionee's active employment pursuant to the terms of the Plan and will not be extended by any reasonable notice period mandated under local law;
(i): the future value of the shares purchased under the Plan is unknown and cannot be predicted with certainty;
(j): (for individuals other than employees of KO) the options have been granted to the optionee in his or her status as an employee of his or her employer and can in no event be understood or interpreted to mean that KO is his or her employer or that he or she has an employment relationship with KO;
(k): no claim or entitlement to compensation or damages arises from the termination of the options or diminution in value of the options or shares purchased under the Plan and the optionee irrevocably releases KO and his or her employer, if different from KO, from any such claim that may arise;
(l): participation in the Plan shall not create a right to further employment with the optionee's employer and shall not interfere with the ability of the optionee's employer to terminate the optionee's employment relationship at any time, with or without cause; and
(m): the terms of the optionee's employment with KO do not include the grant of stock options.

9.: Governing law. This Agreement has been made in and shall be construed under and in accordance with the laws of the State of Georgia, USA.
10.: Headings. Paragraph headings are included for convenience and shall not affect the meaning or interpretation of this Agreement.

		THE COCA-COLA COMPANY By: The Committee
		/s/ PAT M. O'NEIL Authorized Signature

Using the Merrill Lynch voice response system or other available means, the optionee must accept the above options to purchase shares of KO common stock in accordance with and subject to the terms and conditions of this Agreement and the Plan, acknowledge that he or she has read this Agreement and the Plan, and agree to be bound by this Agreement, the Plan and the actions of the Committee. If he or she does not do so prior to September 30, 2004, then KO may declare the option grant null and void. Also, in the unfortunate event that death occurs before this Agreement has been accepted then this option grant will be voided, which means the options cannot be transferred to the optionee's heirs pursuant to the optionee's will or the laws of descent and distribution.

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Exhibit 10.3

THE COCA-COLA COMPANY 2002 STOCK OPTION PLAN STOCK OPTION AGREEMENT
EX-10.4 3 a2144977zex-10_4.htm EXHIBIT 10.4
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Exhibit 10.4

AMENDMENT SEVEN TO THE COCA-COLA COMPANY KEY EXECUTIVE RETIREMENT PLAN
AS AMENDED AND RESTATED MARCH 11, 1991
EFFECTIVE JANUARY 1, 1990

THIS AMENDMENT to The Coca-Cola Key Executive Retirement Plan, as amended and restated effective January 1, 1990 by indenture dated March 11, 1991 (the "Plan") [Company Supplemental Benefit Plan (the "Plan") (sic)] is adopted by The Coca-Cola Company Benefits Committee (the "Committee").

W I T N E S S E T H:

WHEREAS, Section 7.5 of the Plan provides that the Committee may amend the Plan at any time;

WHEREAS, the Committee wishes to amend the Plan to suspend Plan benefits upon reemployment of a participant;

NOW, THEREFORE, the Committee hereby amends the Plan as follows:

Effective June 1, 2004, a new section 4.7 shall be added as follows:

4.7: Reemployment of a Participant After Commencing Benefits.

If a Participant is reemployed by the Company or any subsidiary of the Company in which the Company owns, directly or indirectly, an ownership interest of 80% or more, benefit payments will be suspended. Notwithstanding any other provision of the Plan, the Participant shall not participate in, be credited with any Benefit Service, or accrue any additional benefits under this Plan during the period of reemployment. Any Pay received during reemployment shall not be considered Pay and shall not be taken into account in determining Final Average Pay.

IN WITNESS WHEREOF, the Committee has adopted this Amendment Seven on the date shown below, but effective as of the dates indicated above.

		The Coca-Cola Company Benefits Committee
		By		/s/ BARBARA S. GILBREATH
		Date		7/28/2004

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Exhibit 10.4

AMENDMENT SEVEN TO THE COCA-COLA COMPANY KEY EXECUTIVE RETIREMENT PLAN AS AMENDED AND RESTATED MARCH 11, 1991 EFFECTIVE JANUARY 1, 1990
EX-10.5 4 a2144977zex-10_5.htm EXHIBIT 10.5
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Exhibit 10.5

[LETTERHEAD OF CATHLEEN BLACK]

CONFIDENTIAL

August 6, 2004

Mr. Douglas N. Daft
The Coca-Cola Company
1 Coca-Cola Plaza
Atlanta, Georgia 30313

Dear Doug:

It was good to talk with you last week, and I truly appreciated the conversation. As we discussed, the following outlines the compensation and benefits you will receive as part of your retirement as Chairman and CEO from The Coca-Cola Company.

•: Your retirement from the Company will be effective December 30, 2004 and you may begin receiving benefits at any time thereafter based on your elections and the terms of the retirement plans. You will receive a summary of benefits under the plan shortly as well as information related to your election choices. I have asked Vicki and her team to prepare an entire package for you.
•: Per our discussion, the Compensation Committee and the Board agreed to release the restrictions on the 200,000 restricted shares that would have been releasable to you in April of 2005. These shares will be released upon your retirement, subject to applicable taxes, and delivered to you as soon as possible according to the terms of the 1989 Restricted Stock Plan. No other restricted shares will be released.
•: You will be eligible for payment of an Annual Incentive bonus in 2004, based on Company and personal performance, in accordance with the terms of the Executive Performance Program and Executive Incentive Plan. This final award will be made when such bonuses are paid to other executives in the Company.
•: All stock options you hold in the Company will, according to their terms, become fully vested upon your retirement and will remain exercisable as provided in the terms of each option grant.
•: You will be eligible for prorated payments for performance periods in progress (2002-2004 and 2003-2005) under the Long Term Incentive Plan, in accordance with the terms of the Plan. These awards will be determined and paid when such payments are made to other executives in the Company.

[LETTERHEAD OF CATHLEEN BLACK]

CONFIDENTIAL

•: Any payments made to you under the Executive Performance Incentive Plan, the Executive Incentive Plan or the Long Term Incentive Plan will be made subject to applicable withholding taxes.
•: Your Thrift and Investment Plan (TIP) and Supplemental Thrift plan benefits, and Deferred Compensation Plan balances will be distributed according to the terms of the plan and the elections you have made.
•: You will become eligible to participate in the Company's retiree medical, dental, vision and prescription drug coverage plans and all other benefits opportunities available to retirees from the Company.
•: For a period of one year after your retirement, through December 30, 2005, the Company will provide secretarial services to support you in any services or activities on behalf of the Company and in any external Board activities in which you engage.
•: The Company will reimburse you for fees incurred related to providing security for your primary residence for a period of five years after your retirement.

Additional information will be forwarded to you from the Company, and will cover further details on the benefits and plans noted above.

Doug, we all want to thank you for your commitment and service to the Company. We wish you and Delphine health and happiness in your retirement.

Sincerely yours,

/s/ CATHIE

Cathleen P. Black
Chairman of the Compensation Committee

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Exhibit 10.5

EX-12 5 a2144977zex-12.htm EXHIBIT 12
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Exhibit 12

THE COCA-COLA COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(In millions except ratios)

			Nine Months Ended September 30,		Year Ended December 31,
			2004			2003			2002			2001			2000			1999

EARNINGS:
	Income before income taxes and changes in accounting principles		$ 4,800		$	5,495		$	5,499		$	5,670		$	3,399		$	3,819
	Fixed charges		169			220			236			327			489			386
	Adjustments:
		Capitalized interest, net	—			(1	)		(1	)		(8	)		(11	)		(18	)
		Equity income or loss, net of dividends	(359	)		(294	)		(256	)		(54	)		380			292

	Adjusted earnings		$ 4,610		$	5,420		$	5,478		$	5,935		$	4,257		$	4,479

FIXED CHARGES:
	Gross interest incurred		$ 138		$	179		$	200		$	297		$	458		$	355
	Interest portion of rent expense		31			41			36			30			31			31

	Total fixed charges		$ 169		$	220		$	236		$	327		$	489		$	386

	Ratios of earnings to fixed charges		27.3			24.6			23.2			18.1			8.7			11.6

At September 30, 2004, our Company is contingently liable for guarantees of indebtedness owed by third parties in the amount of $270 million. Fixed charges for these contingent liabilities have not been included in the computations of the above ratios as the amounts are immaterial and, in the opinion of management, it is not probable that our Company will be required to satisfy the guarantees.

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Exhibit 12

THE COCA-COLA COMPANY AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES (In millions except ratios)
EX-31.1 6 a2144977zex-31_1.htm EXHIBIT 31.1
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Exhibit 31.1

CERTIFICATIONS

I, E. Neville Isdell, Chairman, Board of Directors, and Chief Executive Officer of The Coca-Cola Company, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of The Coca-Cola Company;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a): Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b): [Reserved.]
(c): Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d): Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a): All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b): Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

		Date: October 27, 2004
		/s/ E. NEVILLE ISDELL
		E. Neville Isdell Chairman, Board of Directors, and Chief Executive Officer

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Exhibit 31.1

CERTIFICATIONS
EX-31.2 7 a2144977zex-31_2.htm EXHIBIT 31.2
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Exhibit 31.2

CERTIFICATIONS

I, Gary P. Fayard, Executive Vice President and Chief Financial Officer of The Coca-Cola Company, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of The Coca-Cola Company;

2.

3.

4.

(a): Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b): [Reserved.]
(c): Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d): Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

(a): All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b): Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

		Date: October 27, 2004
		/s/ GARY P. FAYARD
		Gary P. Fayard Executive Vice President and Chief Financial Officer

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Exhibit 31.2

CERTIFICATIONS
EX-32 8 a2144977zex-32.htm EXHIBIT 32
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Exhibit 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Coca-Cola Company (the "Company") on Form 10-Q for the period ended September 30, 2004 (the "Report"), I, E. Neville Isdell, Chairman, Board of Directors, and Chief Executive Officer of the Company and I, Gary P. Fayard, Executive Vice President and Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1): to my knowledge, the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2): the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

		/s/ E. NEVILLE ISDELL
		E. Neville Isdell Chairman, Board of Directors, and Chief Executive Officer October 27, 2004
		/s/ GARY P. FAYARD
		Gary P. Fayard Executive Vice President and Chief Financial Officer October 27, 2004

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Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
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