The Coca-Cola Company The 2005 statement of cash flows for The Coca-Cola Company is given on page 662. Use the statement to answer the following questions:

1. Compute Coca-Cola’s “Net cash provided by operations after reinvestment.” This amount is computed by subtracting “Net cash used in investing activities” from “Net cash provided by operating activities.” Interpret the results of the calculation for Coca-

Cola for the period 2003–2005.

2. In its operating activities section, Coca-Cola subtracts gains on sales of assets in computing net cash provided by operating activities. Why are these gains subtracted?

3. Think of the dealings that The Coca-Cola Company has with its shareholders. The shareholders give money to the company by purchasing new shares of stock. In turn, the company returns cash to shareholders by paying cash dividends and by repurchasing shares of stock. For the three-year period 2003–2005, did The Coca-Cola Company receive more cash from its shareholders than it paid back to them, or did it pay more cash to its shareholders than it received? Show your calculations.

4. Look carefully at the statement of cash flows. Did the U.S. dollar get stronger or weaker during the three-year period 2003–2005?

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The Coca-Cola Company and Subsidiaries Consolidated Statements of Cash Flows For the Years Ended December 31, 2003, 2004, 2005 (in millions) Operating activities: Net income Depreciation and amortization Stock-based compensation expense Deferred income taxes Equity income or loss, net of dividends Foreign currency adjustments Gain on issuances of stock by equity investees Gains on sales of assets, including bottling interests Other operating changes Other items Net change in operating assets and liabilities Net cash provided by operating activities Investing activities: Acquisitions and investments, principally trademarks and bottling companies Purchases of investments and other assets Proceeds from disposals of investments and other assets Purchases of property, plant and equipment Proceeds from disposals of property, plant and equipment Other investing activities Net cash used in investing activities 2005 2004 2003 $ 4,872 $ 4,847 $ 4,347 932 893 850 324 345 422 (88) 162 (188) (446) (476) (294) 47 (59) (79) (23) (24) (8) (9) (20) 85 480 330 299 437 249 430 (617) (168) $ 6,423 $ 5,968 $ 5,456 $ (637) $ (267) $ (359) (53) (46) (177) 33 161 147 (899) (755) (812) 88 341 87 (28) 63 178 $(1,496) $ (503) $ (936)