Coca-Cola Tackles Currency Risk With Derivatives Coca-Cola Co. uses derivatives to help manage currency risks from fluctuating foreign exchange rates, the beverage giant said in its 2022 anniual report. In the report filed with the Securities and Exchange Commission, the Atlanta-based company said it hedges exposures from forecasted that may result from foreign exchange fluctuations. The company said it is exposed to currency risks as a result of transactions and balances in currencies other than the U "Due to our global operations, we are exposecirto foreign currency exchange rate fluctuations," the company said the report. "fluctuations could result in significant earnings impacts and can occur quickly." Coca-Cola uses a variety of hedging instruments, including foreign currency forwards, options, and swaps, as well as commodity derivatives to manage price risks. The company also has a financial risk management team, which is respons associated with changes in commodity prices, interest rates, and foreign exchange rates. The comp hy's hedging program is not without risks, however. The program's costs may exceed the benefits if exchange rates move against t z company's hedging positions, the company said. In addition, the program may expose Coca-Cola to counterparty risk ounter arties default on their obligations. Dca- Sla is not alone in using derivatives to manage currency risks. Other multinational compan st 'SA also use derivatives to help reduce the impact of currency fluctuations on their financial results. all, the use of derivatives is an important tool for multinational companies in managing their.currency risks, experts say. Com operate in multiple countries need to be mindful of how currency fluctuations can affect their earnings, and they need to tal anage those risks effectively