6-K 1 form6k.txt FORM 6K TOTAL NUMBER OF SEQUENTIAL PAGES 59 EXHIBIT INDEX ON SEQUENTIAL PAGE NUMBER 3 File No:333-10702 --------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 6-K Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the nine-month period ending September 30, 2002. COCA-COLA EMBONOR S.A. ---------------------- (translation of registrant's name into English) Avenida Apoquindo 3721, Piso 10 Las Condes, Santiago, Chile --------------------------- (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover of form 20-F or 40-F: Form 20-F x - Form 40-F --- --- Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g 3-2(b) under the Securities Exchange Act of 1934: Yes No --- --- FORM 6-K FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2002 -1- ITEM 1. Filing of financial results with the Superintendencia de Valores y Seguros. On November 14, 2002, Registrant filed with the Superintendencia de Valores y Seguros, Santiago, Chile, its Ficha Estadistica Codificada Uniforme containing its results of financial operations for the period ended September 30, 2002. Registrant has caused an English translation of such filing to be prepared, a copy of which is annexed hereto as Exhibit 99.1 FORM 6-K FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2002 -2- ITEM 2. Exhibits Exhibit No. Description ----------------- ----------- Page Number ----------- 99.1 Translation of Ficha Estadistica Codificada -5- FORM 6-K FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2002 -3- SIGNATURES 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. COCA-COLA EMBONOR S.A. ---------------------- (Registrant) Date: December 6, 2002. By: Roger Ford Chief Financial Officer FORM 6-K FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2002 -4- Coca-Cola Embonor S.A and Subsidiaries Consolidated General Balance Sheets as of September 30,

The attached notes 1 to 38 form an integral part of these financial statements 5 Coca-Cola Embonor S.A and Subsidiaries Consolidated General Balance Sheets as of September 30,

The attached notes 1 to 38 form an integral part of these financial statements 6 Coca-Cola Embonor S.A. and Subsidiaries Consolidated Statements of Income for the nine months ending September 30,

The attached notes 1 to 38 form an integral part of these financial statements 7 Coca-Cola Embonor S.A. and Subsidiaries Statements of Consolidated Cash Flow for the nine months ending September 30,

The attached notes 1 to 38 form an integral part of these financial statements 8 Coca-Cola Embonor S.A. and Subsidiaries Statements of Consolidated Cash Flow for the nine months ending September 30,

The attached notes 1 to 38 form an integral part of these financial statements 9 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 1. Registration in the Securities Registry: The Parent Company, Coca-Cola Embonor S.A., is an open corporation registered under No. 622 in the Securities Registry, together with its financial statements as of December 31, 1996; therefore, it is regulated by the Superintendency of Securities and Insurance. The Company's shares were registered on September 25, 1997 and listed on the Santiago Stock Exchange on December 1, 1997, where they are currently traded. The Special Shareholders Meeting approved a change in the corporate name on April 27, 2000 from Embotelladora Arica S.A. to Coca-Cola Embonor S.A. 2. Accounting Principles: a) Accounting period: The consolidated financial statements cover the period from January 1 to September 30, 2002 and 2001. b) Basis for preparation: The financial statements of the Parent Company and its Subsidiaries were prepared as of September 30, 2002 and 2001 according to generally accepted accounting principles of Chile and instructions issued by the Superintendency of Securities and Insurance. There are no discrepancies between either. The specific provisions on corporations contained in Law 18.046 and the regulations thereto have also been taken into account. c) Basis for presentation: The financial statements and amounts indicated in the notes as of September 30, 2001 have been adjusted for comparison purposes by the percentage change of 2.2% in the Consumer Price Index. Certain reclassifications have been made to the 2002 and 2001 financial statements to conform to the current year presentation. d) Basis for consolidation: The consolidation of the financial statements includes Coca-Cola Embonor S.A. and its Subsidiaries where the shareholdings and/or interests are greater than or equal to 50% of equity, either directly or indirectly. For consolidation purposes, as of September 30, 2002, the financial statements of Inversora Los Andes S.A., Sociedad de Cartera del Pacifico S.R.L. and Embotelladora Arica Overseas have been expressed in Chilean pesos according to the rules in Technical Bulletin No. 64 of the Chilean Accountants Association, which determined that the financial statements of foreign companies must be adjusted to generally accepted accounting principles of Chile and converted into Chilean pesos. 10 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements All intercompany transactions and balances have been eliminated in the consolidation. The consolidated financial statements as of September 30, 2002 and 2001 include the following subsidiaries:

e) Price-level restatement: The financial statements of the Company have been price-level restated to reflect the effects of changes in the purchasing power of the currency during each year (note 24). The restatements were calculated using the official indexes of the National Statistics Bureau that show a change of 1.3% for the period December 1, 2001 to August 31, 2002 (2.2% for the same period in the previous year). Furthermore, balances in income and expense accounts have been adjusted for inflation to express them at closing values. f) Basis for conversion: Balances in U.S. dollars and in Unidades de Fomento ("UF") are converted to pesos at the exchange rate in effect at the close of each period, as indicated below:

g) Time deposits: Time deposits are presented at investment values plus interest accrued through the close of the period, which have been credited against income. h) Marketable securities: Marketable securities consist of investments in mutual funds, which are shown at their redemption value at the close of the period. 11 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements i) Allowance for doubtful accounts: As of September 30, 2002 and 2001, the Parent Company and its Subsidiaries established provisions for estimated uncollectible accounts which encompass all debt more than 360 days past-due and are shown deducted from the balance of sales receivable, documents receivable and miscellaneous receivables. They total TCH$ 2.878.564 (TCH$ 2.818.239 in 2001). j) Inventory: Inventories of raw materials and finished products are recorded at the purchase price or at the production cost, and are price-level restated. Inventories do not exceed their estimated net realizable value. k) Other current assets: Other current assets include materials and spare parts at their adjusted cost. l) Property, Plant and Equipment: Property, plant and equipment are stated at their acquisition cost plus legal revaluations accumulated as of September 30, 2002 and 2001. The higher value on the technical revaluation of fixed assets recorded in 1979 and 1994 is shown adjusted at the closing date. Depreciation is calculated on the adjusted value in terms of the useful life remaining of the revalued goods, using the straight-line method. m) Depreciation of property, plant and equipment: The depreciation of machinery and transport equipment has been calculated according to the real times of use of the assets. The debit due to depreciation for the fiscal year was determined by multiplying the rate in pesos, for each hour of use, by the real hours during the exercise. Depreciation of all other assets was calculated according to the straight-line method, based on the useful life of goods. The debit against income for depreciation was TCH$18.657.194 in 2002 (TCH$18.987.569 in 2001). n) Bottles and cases: Glass bottles and refillable plastic bottles and cases held in plants, warehouses and in the possession of third parties are presented in other fixed assets at cost plus price-level restatement at their cost price. The corresponding depreciation is shown under accumulated depreciation. Bottles and cases that are broken or obsolete at the plants and warehouses are charged to expenses during the period, forming part of the fiscal year depreciation. Depreciation of the bottles and cases has been calculated under the straight-line method, based on their estimated useful life. 12 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements o) Deposits for bottles and cases: The estimated liability for returnable bottles and cases deposits is assessed on an annual stock basis of bottles and cases in the possession of customers. They are valued at the average value of deposits received during the last five years for each type of bottle or case. This liability is shown under the heading "Other long-term liabilities", considering that the bottles and cases placed in the market during a given operating period have historically exceeded the bottles and cases returned by customers during the same period. p) Investments in Other Companies: Investments in shares of other companies in which the Company does not have significant influence have been stated at cost plus price-level restatement. q) Investments in related companies: This balance includes the investments in Envases Central S.A. and Comptec S.A., valued in accordance with the proportional equity method. The share in results of these related companies is included in the line "loss on investment in related companies." r) Goodwill and negative goodwill: The lower value resulting from differences between the proportional equity value of investment and the value paid on the investment acquisition date has been charged to the goodwill account and is shown under the line other assets, net of the related amortization. Goodwill is amortized over twenty years, as provided by Circular No. 1358 of the SVS. The Company has classified the proportion of the net equity of companies acquired in purchase transactions in excess of the acquisition cost as negative goodwill, which is presented net of amortization. Negative goodwill generated on acquisitions is amortized on a straight-line basis over five years, in accordance with Circular N(degree) 368 of de Superintendency of Securities and Insurance. s) Intangibles: Intangibles refer to trademarks that have been acquired, which are shown at the adjusted cost, net of amortization, determined using the straight-line method on the basis of a useful life of 20 years. t) Income Taxes and Deferred Taxes: Income taxes are charged to results in the same period in which the income and expenses are recorded, and are calculated in accordance with current tax laws. 13 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements Pursuant to Technical Bulletins No. 71 and 60 of the Chilean Accountants Association and Circular No. 1466 of the Superintendency of Securities and Insurance, the Company records the effects of deferred taxes originating in temporary differences, tax losses that imply a tax benefit and other events that create differences between the financial accounting and the tax basis. Deferred taxes originating in these temporary differences that had accumulated at the beginning of the fiscal year were recorded as assets and liabilities with a credit or debit, respectively, in complementary accounts. These latter are amortized against expenses for the year's income tax in a weighted average term for reversing. Such complementary accounts are presented deducting the corresponding assets and liabilities generated by such deferred taxes. u) Bonds: Bonds correspond to bonds to the order on the U.S. and Chilean markets that are appraised at the actual issue rate. The difference between the actual issue rate and the actual placement rate is recorded as a deferred asset and higher obligation. This asset is being amortized on a straight-line basis over the term of the obligation. v) Staff Severance Indemnities: The Parent Company and its subsidiary Embotelladora Iquique S.A. have not recorded any provision for severance indemnities because they have not stipulated all-events severance payment with their employees. However, in those cases where such payments have been made to employees, they are charged to results in the year the payment is made. As of September 30, 2002 and 2001, Inversora Los Andes S.A. and Embonor S.A. established a provision for severance indemnities in accordance with their collective agreements with their employees. This liability is recorded at the present value of the accrued benefits, which were calculated by applying an annual rate of 11.5% (Inversora Los Andes) and 7.0% (Embonor S.A.) over an average remaining service period of 15 years. Sociedad de Cartera del Pacifico S.R.L. and its subsidiary and Industrial Iquitos S.A. make advance severance indemnity payments every 6 months according to the laws of Peru. The provision is recorded against income as it accrues for the amount payable if the employee were to resign as of the date of the Financial Statements. w) Operating income Income is recognized when products are delivered and invoiced to customers. Costs and expenses are recognized as they accrue, regardless of the time of payment, and are registered in the periods to which they relate. 14 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements x) Vacation Provision: The Parent Company and its subsidiaries provide for vacation benefits on an accrual basis. y) Statement of cash flow: For purposes of preparation of the statement of cash flow, the Parent Company and Subsidiaries consider investments in time deposits and in fixed-income mutual fund units which expire within 90 days to be cash equivalent. The cash flows relating to the business of the Company, interest paid, interest income received, dividends received and all others not defined as investment or finance are recorded under "inflow originating in operating activities." z) Financial risk hedging: The financial risk hedging transactions conform with the stipulations in Technical Bulletin N(degree) 57 of the Chilean Accountants Associations. 3. Changes in Accounting Principles There were no changes in the accounting principles applied for the nine months ending September 30, 2002. 15 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 4. Time Deposits This line includes deposits in the following financial institutions, appraised as described in Note 2(g), as follows:

5. Marketable Securities Marketable securities are valued as described in Note 2(h) and are as follows: Instruments Account value 2002 2001 TCH$ TCH$ Mutual fund units 11.512.897 3.932.954 ---------------------------------- Totals 11.512.897 3.932.954 ---------------------------------- 16 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements Breakdown of mutual fund units as of September 30 is as follows:

6. Short- and long-term receivables Short- and long-term receivables are broken down as follows, including estimates of uncollectibles: In thousands chilean pesos

17 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 7. Balances and transactions with related companies: The intercompany receivable and payable balances as of September 30, 2002 and 2001 are summarized below: a) Documents and accounts receivable: Taxpayer ID No. Company Short-Term Long-Term 2002 2001 2002 2001 TCH$ TCH$ TCH$ TCH$ 96.714.870-9 Coca Cola de Chile S.A. 774.043 92.954 - - 96.648.500-0 Vital S.A. 3.496 8.182 - - 78.826.600-6 Inversiones Eudocia - 2.890 - - Foreign Coca Cola Peru 71.963 242.816 - - 81.752.100-2 Distribuidora Direnor 43.976 - - - Foreign Comptec S.A. 126.210 148.337 - - 96.705.990-0 Envases Central S.A. - 239.496 ----------------------------- ---------------------------- Totals 1.019.688 734.675 - - ----------------------------- ----------------------------

b) Documents and accounts payable:

18 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements c) Transactions with related companies: The commercial account corresponds to the purchase and sale of raw materials, products, bottles and cases, which were made at market prices and relate to the business of the related companies. Purchases are debited against operating costs and sales are credited to income. The terms of payment and collection of these transactions are similar to those stipulated with suppliers or customers in the business. The principal transactions with related parties were as follows during the 2002 and 2001 fiscal years:

19 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 8. Inventories Inventories, as described in Note 2(j), break down as follows as of September 30, 2002 and 2001:

9. Income tax and deferred taxes: In accordance with Circular No. 1466 of the SVS related to income taxes and deferred taxes, the Parent Company and its subsidiaries have recorded the following information as of September 30, 2002 and 2001: a) Income tax provision: The Parent Company did not establish a income tax provision as it reported a loss for tax purposes. The balance of recoverable taxes, in the Parent Company and its subsidiaries amounting to TCH$7.366.701 in 2002 (TCH$11.649.401 in 2001) corresponds to provisional monthly payments made in excess of income tax, training expenses and tax benefits due to tax losses. The Parent Company did not have taxable retained earnings from previous fiscal years pending distribution with respect to which it had not provisioned for the respective income tax. The balance of recoverable taxes amounting to TCH$5.452 in 2002 (TCH$5.412 in 2001) corresponds to fiscal credits and training expenses. The subsidiary Embonor S.A. did not establish a first category income tax provision. The balance of recoverable taxes amounting to TCH$4.728.117 in 2002 (TCH$9.046.956 in 2001) corresponds to tax benefits for tax losses and training expenses. The subsidiary Embotelladora Iquique did not establish a income tax provision as it reported a loss for tax purposes. The balance of recoverable taxes in the amount of TCH$48.971 in 2002 (TCH$6.557 in 2001) corresponds to provisional monthly payments made in excess of income tax and training expenses. 20 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements For Inversora Los Andes S.A. and its subsidiary, according to Bolivian Law, the corporate profit tax is considered payment on account of transaction tax (calculated on net revenue) for the following fiscal year. In the case of Inversora Los Andes S.A. and its subsidiary, the transaction tax exceeds the profit tax, so no deferred tax must be recorded for the temporary differences existing between the book base and the tax base. The subsidiaries Sociedad de Cartera del Pacifico S.R.L. and its subsidiary, and Industrial Iquitos S.A., have not established any first-category income tax provision since they recorded a negative net taxable income for the period. The recoverable taxes of these subsidiaries amount to TCH$2.584.161 in 2002 (TCH$2.590.476 in 2001) and correspond to fiscal credits. b) Taxable retained earnings: The Parent Company has negative taxable retained earnings as of September 30, 2002 in the amount of TCH$38.645.449 that break down as follows: 2002 TCH$ Without a credit (38.933.938) With a 15% credit 288.489 ------------------ Total (38.645.449) ------------------ c) Deferred Taxes: Pursuant to Circular No. 1450 of the Superintendency of Securities and Insurance, as of September 30, 2002 and 2001 deferred taxes shall be recorded in the manner established in Technical Bulletins No. 60 and No. 71 of the Chilean Accountants Association (except for differences already recorded according to Technical Bulletin No. 41). As stipulated in Law No. 19,753 of September 28, 2001, an increase in the first category income tax was established from the current rate of 15% to 16% for 2002, 16.5% for 2003 and 17% as from 2004. As of September 30, 2002 and 2001, the accumulated balances of the temporary differences caused by deferred taxes are as follows: 21 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements

d) Neither the Parent Company nor its subsidiaries have made a provision for the recorded value of deferred tax assets and liabilities as of December 31, 1999, except for the severance indemnities provision of Embonor S.A. Deferred taxes began to be recorded beginning January 1, 2000. e) The income tax account as of September 30, 2002 and 2001 and the effect on fiscal year income due to the recognition of deferred taxes and income tax are broken down as follows:

22 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 10. Other Current Assets Other current assets as of September 30, 2002 and 2001, as valued according to Note 2(k), include the following: 2002 2001 TCH$ TCH$ Spare parts and supplies 4.654.163 4.807.566 ------------- ------------ Total other current assets 4.654.163 4.807.566 ------------- ------------ 11. Property, plant and equipment a) Principal Concepts Included in Property, Plant and Equipment Property, plant and equipment are composed principally of land, buildings and infrastructure, machinery and equipment, bottles and cases, advertising equipment and furniture and fixtures located at plants in Chile, Bolivia and Peru. The machinery and equipment are comprised principally of production lines, carbonators, mixers, fillers, and sugar blending and treatment equipment, transportation vehicles, and computer equipment and systems. Other fixed assets include furniture and fixtures, tools and advertising equipment and bottles and cases. These latter include returnable glass and plastic bottles and plastic cases. 23 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements b) Property, plant and equipment as of September 30, 2002 and 2001 are as follows:

c) The balance in "higher value resulting from technical reappraisal of property, plant and equipment pertains to the following:

d) The debit against income for fiscal year depreciation amounted to TCH$18.657.194 (TCH$18.987.569 in 2001). TCH$14.263.302 (TCH$14.515.872 in 2001) of this amount is recorded in operating costs and TCH$4.393.892 (TCH$4.471.697 in 2001) in selling and administration expenses. 24 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 12. Investments in Related Companies Investments in related companies and the corresponding interest in equity and profits recorded as described in Note 2(q), are as follows: a) As of September 30, 2002:

b) As of September 30, 2001:

13. Goodwill and negative goodwill A. Goodwill: Goodwill as of September 30, 2002 and 2001, amounting to TCH$296.795.701 and TCH$310.168.633, respectively, is valued according to the accounting criteria described in Note 2(r) and was generated by the acquisition of operations in Bolivia, Chile and Peru. The charge to consolidated income for amortization totaled TCH$13.542.064 in 2002 and TCH$13.327.718 in 2001. Goodwill and the effect on income is broken down as follows:

25 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements Goodwill is comprised mainly as follows: BOLIVIA a) On July 3, 1995, the subsidiary, Inversora Los Andes S.A., acquired 99.9% of the shares in Embotelladoras Bolivianas Unidas S.A., a productive company. This transaction generated goodwill of TCH$8.244.542 before amortization as compared to the proportional equity value of the investment. The amortization period pending at the close of the financial statements is 12.75 years. b) On January 8, 1996, Embotelladoras Bolivianas Unidas S.A. took over assets of Sociedad Boliviana Cotoca S.A., which gave Inversora Los Andes S.A. control of 81.7% of the shares in Embotelladoras Bolivianas Unidas S.A. The valuation of this additional investment generated goodwill of TCH$7.160.586 before amortization. The amortization period pending at the close of financial statements is 13.25 years. c) On December 24 and 30, 1997, Inversora Los Andes S.A. acquired 18.3% of the shares in Embotelladoras Bolivianas Unidas S.A. and took over control of 99.99% of the shares in the latter company. The valuation of the additional investment resulted in goodwill of TCH$10.065.320, which corresponds to the difference between the value paid and the proportional equity value. The amortization period pending at the close of the financial statements is 15.25 years. Goodwill also includes trademark royalties, which correspond to the following: - The right to use the fame, prestige and clientele of Vascal S.A. and Embotelladora Cotoca S.A. in relation to the operation of the industrial plants in La Paz, Oruro, Cochabamba, Santa Cruz, Sucre and Tarija and their products for a period of 50 years. - The definitive rights to the "Mineragua", "Vital" and "Cotoca" trademarks. The goodwill is amortized over a period of 20 years in accordance with Circular No. 1358 of the Superintendency of Securities and Insurance. The debit against fiscal year income amounted to TCH$879.506 in 2002 (TCH$834.376 in 2001). 26 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements PERU (a) Embotelladora Latinoamericana S.A. The goodwill as of September 30, 2002, amounting to TCH$12.424.337 (TCH$12.566.086 in 2001), corresponds to firstly the unamortized balance generated by the takeover of the subsidiaries Industrial Tisco S.A. and Compania de Transporte Cural S.A. (January 1997) amounting to TCH$2.074.066 in 2002 (TCH$2.100.236 in 2001), and secondly to the merger of operations as of January 1, 1998 with: Negociacion Sur Peruana S.A., Compania Industrial Nor Peruana S.A., Empresa Productora de Plasticos S.A., Transportadora and Comercializadora Lambayeque S.A. and Costos y Margenes S.A. (January 1998) amounting to TCH$8.459.910 in 2002 (TCH$8.562.923 in 2001); as well as the acquisition of Industrial Iquitos S.A. (April 11, 2001) from its parent company for the price of TCH$1.890.261 in 2002 (TCH$1.902.927 in 2001). The debit against fiscal year income amounted to TCH$616.069 (TCH$557.042 in 2001). (b) Sociedad de Cartera del Pacifico S.R.L. The goodwill as of September 30, 2002, amounting to TCH$57.431.581 (TCH$57.734.148 in 2001), corresponds to the unamortized balance generated in the acquisition of Embotelladora Latinoamericana S.A. from Inchcape Bottling, which occurred in June 1999. The debit against fiscal year income was TCH$2.568.987 in 2002 (TCH$2.437.163 in 2001). CHILE (a) Embonor S.A. The goodwill as of September 30, 2002 amounting to TCH$210.611.152 (TCH$223.265.136 in 2001), corresponds to the unamortized balance generated by the acquisition of the Chilean bottling operations of Inchcape Bottling Chile S.A. which occurred in May 1999. The debit against fiscal year income was TCH$9.477.502 in 2002 (TCH$9.478.237 in 2001). (b) Coca-Cola Embonor S.A. The debit against fiscal year income amounted to TCH$0 in 2002 (TCH$20.900 in 2001). This debit corresponds to the amortization of its investment in Industrial Iquitos S.A. through the date of its sale. This subsidiary was sold on April 11, 2001 to its subsidiary Embotelladora Latinoamericana S.A.. 27 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements B. Negative goodwill: The negative goodwill as of September 30, 2002, amounting to ThCH$908.920 (TCH$ 0 in 2001), corresponds to the unamortized balance generated in the acquisition of 13.424.542 shares of Embotelladora Latinoamericana S.A. that occurred in May 2002. The credit against fiscal year income was ThCh$15.405 for this concept. The Negative Goodwill and the effect on income is broken down as follows:

14. Intangibles Intangibles held by the Company as of September 30, 2002 and 2001 are as follows:

As of September 30, 2002 and 2001, the trademarks are being amortized over a period of 20 years. The debit due to amortization in the fiscal year amounts to TCH$913.022 (TCH$866.172 in 2001). 15. Other Assets: Other assets, totaling TCH$6.599.659 as of September 30, 2002 (TCH$8.111.913 in 2001) corresponds to the following:

28 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 16. Short-term bank debt Short-term bank debt was as follows as at September 30, 2002 and 2001:

29 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 17. Long-term bank debt: Long-term bank debt as of September 30, 2002 and 2001 is broken down as follows:

30 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 18. Notes and Bonds payable At the period end, long-term debt from the bonds to the order issued by the Parent company amounted to TCH$184.789.451 in 2002 (TCH$178.994.337 in 2001), with accrued interest of TCH$1.188.682 in 2002 (TCH$1.301.345 in 2001), and is detailed below:

19. Provisions and write-offs Short-term and long-term provisions were comprised as follows as at September 30, 2002 and 2001: a) Current liabilities

b) Long-term liabilities

31 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 20. Other long-term liabilities This line includes the following liabilities without any specific expiration date:

21. Minority Interest As of September 30, 2002 the effect of minority interest on liabilities and income is as follows:

32 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 22. Changes in equity: The following were the changes in equity accounts from January 1 to September 30, 2002 and 2001, in currency as of each date:

According to Law 18,046, the revaluation of paid-in capital must be added to paid-in capital at the annual close of the respective fiscal years. The capital is represented by 244,420,704 Series A shares and 266,432,526 Series B shares at a paid-in value of $424.89 each. The Company's shares have no par value. 33 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements a) Number of shares No. of No. of paid-in No. of voting Series subscribed shares shares shares A 244.420.704 244.420.704 244.420.704 B 266.432.526 266.432.526 266.432.526 ----------------------------------------------------- Total 510.853.230 510.853.230 510.853.230 ----------------------------------------------------- b) Capital Series Subscribed capital Paid-in capital TCH$ TCH$ A 105.922.821 105.922.821 B 111.132.141 111.132.141 --------------------------------------- Total 217.054.962 217.054.962 --------------------------------------- c) Other reserves: According to Official Circular No. 5294 of October 20, 1998 and Technical Bulletin No. 64 on the registration of permanent investments abroad, the following can be reported as of September 30, 2002: 1) Liabilities of Coca-Cola Embonor S.A. abroad amounted to TCH$119.796.800 (US$160.000.000) and correspond to the bonds issued on the US market. This liability is allocated as follows: Acquisition Amount US$ Embotelladoras Bolivianas Unidas S.A. 10.000.000 Embotelladora Latinoamericana S.A. 150.000.000 ------------ Total 160.000.000 ------------ 2) The reserve account called "Cumulative adjustment for exchange differential", due to the conversion of investments abroad, is comprised as follows:

34 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements e) Shareholder Distribution Shareholders in the Parent Company were as follows at the close of the financial statements, according to Circular No. 792 of the Superintendency of Securities and Insurance:

f) Dividends The Company has not distributed dividends to its shareholders during the 2002 and 2001 fiscal years. 35 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 23. Other Non-Operating Income and Disbursements: As of September 30, 2002 and 2001 the details are as follows:

(1) As of December 31, 2000, a provision was recorded in the accounts of Embonor S.A. for the adjustment of its administrative structure as well as changes to the computer systems and other items in order to adapt it to its new reality and to the requirements of information from The Coca-Cola Company. Within the provisioned items, the most important amount referred to the implementation of the SAP computer information and management system, at a cost to the Company fluctuating from ThUS$3.500 to ThUS$ 4.000. As a result of the world recession that was predicted and considering that the growth of the bottling companies was lower than projected, the application of SAP in the short term was postponed and it was decided to reverse the restructuring provision in order to credit other non-operating income in the amount of TCH$2.400.009 as of September 30, 2001. 36 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 24. Price-level Restatement Application of price-level restatement as described in Note 2e) caused a net debit of TCH$582.273 against income in 2002 (a net debit of TCH$3.649.861 in 2001), as follows:

25. Exchange Differential The application of price-level restatement as described in Note 2e) and f) caused a net credit of TCH$726.339 in 2002 for the exchange differential (a net credit of TCH$2.033.213 in 2001), as follows:

37 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 26. Extraordinary Items As of September 30, 2002, the subsidiary Embonor S.A. accounted for TCH$1.171.600 (TCH$2.712.069 in 2001) as tax refund due to tax losses, from the Internal Revenue Service. 27. Expenses of issuance and placement of bonds: The expenses of issuance and placement of Bonds in the U.S. and Chilean market are as follows: 2002 Deferred Expenses Increase Amortization Balance TCH$ TCH$ TCH$ TCH$ U.S. Bonds 3.088.017 - (530.125) 2.557.892 Chile Bonds 4.713.446 - (581.163) 4.132.283 --------------------------------------------------------------- Total 7.801.463 - (1.111.288) 6.690.175 --------------------------------------------------------------- 2001 Deferred Expenses Increase Amortization Balance TCH$ TCH$ TCH$ TCH$ U.S. Bonds 3.812.482 - (547.468) 3.265.014 Chile Bonds 4.737.127 615.417 (543.936) 4.808.608 --------------------------------------------------------------- Total 8.549.609 615.417 (1.091.404) 8.073.622 --------------------------------------------------------------- 28. Cash flow statement (a) Composition of cash and cash equivalent: As of September 30, 2002 and 2001, the Company has considered the following items as cash and cash equivalent: 2002 2001 TCH$ TCH$ Cash and Bank balances 3.613.715 4.273.151 Time Deposits 6.543.601 4.096.097 Marketable securities 11.512.897 3.932.954 ------------------------------- Total 21.670.213 12.302.202 ------------------------------- (b) Investment activities relating to future cash flows are as follows: Amount Remaining TCH$ Months Incorporation of assets in leasing 2.154.210 107 ------------------------------ Total 2.154.210 107 ------------------------------ 38 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements (c) Other income received breaks down as follows: 2002 2001 TCH$ TCH$ Net collection of guarantee deposits 216.329 1.176.399 Sale of broken glass and others not in use 76.537 148.883 Share in advertising 1.764.641 2.258.188 Recovery of other income 280.399 - Sale of promotional articles 587.691 605.767 Miscellaneous services (processing) 468.746 257.931 Sale of investments 73.325 432.662 Sales of assets and other products 415.387 1.099.833 Other 531.227 408.800 --------------------------- Total 4.414.282 6.388.463 --------------------------- (d) Other paid-in expenses as follows: 2002 2001 TCH$ TCH$ Repurchase of bottles and cases - 775.950 Investors commissions - 615.417 Remuneration of Board of Directors 236.504 255.217 Tax previous years 136.484 230.445 Previous years expenses 260.785 - Central administration expenses 407.336 355.417 Other miscellaneous 609.510 511.292 --------------------------- Total 1.650.619 2.743.738 --------------------------- (e) Other funding disbursements as follows: 2002 2001 TCH$ TCH$ Dividends - 295.063 Return of received guarantees 183.333 - Other disbursements 236.052 30.277 --------------------------- Total 419.385 325.340 --------------------------- 39 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 29. Derivative Agreements: On June 20, 2002, the Company signed an interest rate swap agreement with a foreign bank with a notional principal amount of US$ 160,000,000 to hedge the interest rate of the 144-A bonds issued on the U.S. market. On August 7, 2002, the Subsidiary, Embotelladora Latinoamericana S.A., entered into a forward contract to hedge cash flow risk involved in the payment of foreign currency denominated raw materials and supplies. The details are as follows:

30. Contingencies and commitments As of September 30, 2002 and 2001, there were no liens or guarantees of the Parent Company or subsidiaries nor mortgages nor were their assets given in guarantee, except as shown in Note 30 c). (a) Direct commitments As of September 30, 2002 and 2001, there were no direct commitments. (b) Indirect commitments: As of September 30, 2002 and 2001, there were no indirect commitments. (c) Lawsuits or other legal actions Sociedad de Cartera del Pacifico S.R.L. and Embotelladora Latinoamericana S.A. (ELSA) are parties to various legal, labor and tax lawsuits relating to their operations in Peru. In the opinion of the Management and legal counsel, the outcome of these processes will not result in significant expense for the Company. 40 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements The principal processes in relation to these matters are: i) The tax authorities have required that ELSA pay a General Sales Tax (IGV) on the value of the Kola Inglesa and San Luis trademarks acquired in March 1997 by Porvent S.A. According to Peruvian tax laws, intangible assets are assessable by the IGV only if they are contained on tangible objects and, in the case of imports, if the seller is a Peruvian entity. The Management of the Company and its legal counsel consider that the above requirements do not apply to this transaction. The IGV and the fines set by the tax authorities total approximately TCH$ 11.170.827. If the Company must pay the IGV, it could be used as a credit against future payments of that tax. As of May 31, 2002, Embotelladora Latinoamericana S.A. invoked the Law for Reactivation through Exoneration of Tax Debt (RESIT) with regard to the fines. This invocation was formalized on July 12, 2002. ii) The Company did not pay the Minimum Income Tax (IMR) for the year ending December 31, 1996 based on a resolution issued by the Constitutional Court of Peru in October 1996 in favor of two other entities, which provided that the IMR did not apply to those companies because they had tax losses during that period. The tax totaled TCH$1.118.694 as of September 30, 2002. The Company has filed legal actions to prevent any attempt by the tax authorities to demand that tax. In the opinion of the Company's Management and its legal counsel, those actions will be adjudged in favor of the Company. iii) The tax authorities have made comments to the fiscal credit used in the period from April 1997 to March 1998. Those comments relate to the write-off of returnable plastic and glass bottles that was made, in their opinion, before two years had passed since the date of acquisition. According to governing law, the General Sales Tax used as a fiscal credit that is assessed on purchases of those bottles must be reimbursed if the related assets have been sold or written-off before two years have passed since the date of their acquisition. The amount claimed by the tax authorities in relation to this period of audit totals approximately TCH$ 2.003.479. There would also be an unquantified contingent liability related to this matter for the years open to fiscal audit (1997 to 2001). As to fines, the subsidiary invoked the Law for Reactivation through Exoneration of Tax Debt (RESIT) as of May 31, 2002. That invocation was formalized on July 12, 2002. ELSA is at this time gathering supporting documentation to show that the bottles written-off related to purchases made more than two years earlier. In the opinion of Management and its legal counsel, the resolution of this issue will not be of significant expense to the Company. 41 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements iv) The tax authorities have audited the 1999 period. That work was done between October 18, 2000 and March 20, 2001. As a result of this audit, it noted 737 voided invoices, not exhibited to the tax auditors, for which ISC (Selective Excise Tax) and the IGV (General Sales Tax) were due. The Company invoked the Law for Reactivation through the Exoneration of Tax Debt (RESIT) effective May 31, 2002, in regard to these taxes and paid the sum of TCH$ 136.684. d) Restrictions: U.S. Bonds The placement of Bonds for US$160.000.000 by Coca-Cola Embonor S.A. on the U.S. market is not subject to obligations, limitations and prohibitions. Chile Bonds The placement of Bonds for UF 4.400.000 by Coca-Cola Embonor S.A. on the Chilean market is subject to the following obligations, limitations and prohibitions: (i) The debt/equity ratio in its individual and consolidated quarterly financial statements must be no more than 1.20 at all times. (ii) The ebitda/financial expense ratio in consolidated quarterly financial statements must be no less than 2.1 as of December 31, 2000, 2.2 through March 30, 2001 and 2.5 from December 31, 2001 onward. This ratio must be calculated for the last twelve months as of the date of the corresponding Uniform Codified Statistical Record (FECU). Chilean Syndicated Loan The Syndicated Loan received by Coca-Cola Embonor S.A. on the Chilean market amounting to UF 3.460.000 is subject to the following obligations, limitations and prohibitions: (i) The debt/equity ratio in its consolidated quarterly financial statements must be no more than 1.20 at all times. (ii) The ebitda/financial expense ratio as measured in consolidated quarterly financial statements must be no less than 2.5 times. This ratio must be calculated for the last twelve months as of the date of the corresponding Uniform Codified Statistical Record (FECU). (iii) Equity must be no less than UF 14.233.000 at December 31 each year. 42 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 31. Third-party guarantees There are no guarantees or securities received from third parties in favor of the Parent Company and its subsidiaries as of September 30, 2002 and 2001. 32. Local and Foreign Currency: Balances of assets and liabilities in foreign currency, included in the financial statements as of September 30, 2002 and 2001, are summarized as follows: a) Assets:

45 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements b) Liabilities:

49 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 33. Sanctions: No sanctions have been applied to the Parent Company, its subsidiaries, their directors or managers by the Superintendency of Securities and Insurance or other administrative authorities. 34. Research and Development Expenses: As of September 30, 2002 and 2001, neither the Parent Company nor its Subsidiaries had made disbursements for research and development as defined in Circular No. 981 of the Superintendency of Securities and Insurance. 35. Board Compensation: The Parent Company and its subsidiaries made payments of allowances and compensation to Directors amounting to TCH$236.504 for the 2002 fiscal year and TCH$255.217 for the 2001 fiscal year. 36. Material Events 1. Regular General Shareholders Meeting A Regular General Shareholders Meeting was held of Coca-Cola Embonor S.A. on April 29, 2002. The purpose was: a) to approve the Annual Report, General Balance Sheet and Financial Statements for the fiscal year running from January 1, 2001 to December 31, 2001; b) to discuss the results in the 2001 fiscal year; c) to appoint the external auditors for the 2002 fiscal year; d) to decide on the compensation of the Board of Directors for the 2002 fiscal year; e) to report on Board resolutions relative to the transactions listed in Article 44 of the Companies Law occurring after the last Shareholders Meeting; f) to decide on the newspaper in which notices will be published of upcoming Regular or Special General Shareholders Meetings, if pertinent; g) to decide on the 2002 dividend policy; h) to set the compensation of the Directors Committee and its expense budget; i) to hear and analyze, in general, any matter relating to the management and administration of the corporate business and to adopt the resolutions deemed convenient that are within the purview of the Regular General Shareholders Meeting according to the By-Laws and Governing Law. 50 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements 37. Subsequent events The Chilean Syndicated Loan Agreement was amended October 21, 2002 as follows: a) The minimum required Equity of the Company was reduced from UF 14.233.000 to UF 11.000.000. b) A new obligation was established where the Company undertook to maintain a ratio of funded debt to EBITDA below 5.5 times as of December 2003. There are no other material subsequent events as of September 30, 2002 to the date of preparation of these financial statements that affect or will affect the assets, liabilities and/or results of the Parent Company and its Subsidiaries. 38. The Environment The Parent Company and its Subsidiaries have developed the following environmental protection projects. The expenses of those projects are shown below: Concept Budgeted Spent TCH$ TCH$ Effluent Treatment 221.759 198.956 Operating Cost 140.422 - ---------------- -------------- Total 362.181 198.956 ---------------- -------------- 51 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements EXPLANATORY ANALYSIS I) Third Quarter 2002 vs. 2001 The consolidated sales volume was 125.7 million unit cases, which represents a 1.9% increase compared to the previous year. Broken down by country, the sales volume decreased 0.4% in Chile, increased 4.2% in Peru and 1.3% in Bolivia. Operating revenue rose 1.2% on a consolidated level to a total of TCH$174.027.052 (MUS$232.429,6). Operating profit declined 14.3% to a total of TCH$18.371.070 on a consolidated level (MUS$24.536,3), which represents 10.6% of revenues compared to 12.5% in the previous year. During the nine months ending September 2002, the operating cash flow was TCH$37.028.264 (MUS$49.454,8) (operating profit (loss) + depreciation), a decrease of 8.4% compared to the previous year, which accounts for 21.2% of consolidated revenues. There was a non-operating loss of TCH$25.988.535 (MUS$34.710,2) compared to a loss of TCH$25.083.740 in the previous year. The increase in the non-operating loss is due primarily to the decline in other non-operating income compared to the previous year. The non-operating loss in 2002 included a goodwill amortization of TCH$13.542.064, which represents no cash flow. There was a net loss of TCH$10.022.914, which compares to the net loss of TCH$6.400.761 in the first semester of 2001. Chilean Operation In Chile, the physical sales volume decreased by 0.4%. This impact was also transferred to sales revenue, which totaled TCH$80.039.744 (MUS$106.900,7), or a decline of 3.3% compared to the previous year. Operating profit totaled TCH$9.518.631 (MUS$12.713,0), which is a decrease of 16.1% compared to the previous year. The operating profit accounts for 11.89% of revenues from this operation. Operating cash flow (operating profit + depreciation) in the Chilean operation totaled TCH$15.186.288 (MUS$20.282,7), which represents 18.9% of revenues compared to 22.5% in the previous year. Peruvian Operation In Peru, physical sales rose 4.2% compared to the previous year. Net revenues totaled TCH$69.153.432 (MUS$92.361,0), which represents a 10.4% increase in relation to 2001. The operating profit was TCH$6.289.712 (MUS$8.400,5) and the operating cash flow (operating profit + depreciation) was TCH$16.063.754 (MUS$21.454,7), which accounts for 23.2% of revenues compared to 25.5% in the previous year. 52 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements Bolivian Operation In Bolivia, physical sales rose 1.3% with respect to the previous year. Net revenues totaled TCH$24.833.876 (MUS$33.168,1), which represents a 6.7% decrease in relation to 2001. Operating profit totaled TCH$2.562.727 (MUS$3.422,8) and the operating cash flow (operating profit + depreciation) was TCH$5.778.222 (MUS$7.717,4), which accounts for 23.3% of revenues in comparison to 22.1% in the previous year. Financial economic indicators The principal financial-economic indicators related to the consolidated financial statements as of September 30, 2002 and 2001 are shown below:

55 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements II. Analysis of Balance Sheet As of December 31,

Current assets increased by TCH$5.943.059 due mainly to the increase in time deposits and marketable securities. Moreover, there was a rise of TCH$55.344.922 in current liabilities. This increase in current liabilities is explained by the transfer to short term of part of the principal under the syndicated loan and Chilean bonds serie A owed by the Company, which must be paid during 2002 and 2003. This change results in a decrease in the Company's liquidity ratio, which went from 1.70 to 0.77. There was also an improvement in operating ratios. Inventory turnover went from 8.85 to 9.34 and there was a drop in days in inventory from 31 to 29. The ratio of consolidated existing US debt to equity plus minority interest rose from 0.99 to 1.02 given the increase, in pesos, of dollar debt and the drop in equity due to the fiscal year loss. 56 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements III. Analysis of Book Values and the Economic Value of Assets The following is noted regarding the principal assets of the company and its subsidiaries: (a) Given the high turnover of items, the book values of working capital represent their market prices. (b) The fixed assets of domestic companies are shown at their acquisition price, after price-level restatement. The book values of the property plant and equipment of Embonor S.A. (formerly Embotelladoras Williamson Balfour S.A.) which were acquired during 1999 do not differ from their market values. The property plant and equipment of foreign companies are appraised according to the provisions in Technical Bulletin No. 64 of the Chilean Accountants Association. It was determined at the time of acquisition that the book values were distorted in comparison to a reasonable market price, so the property plant and equipment were adjusted to their market price based on external appraisals. The book values do not at this time differ from market prices. All property plant and equipment considered dispensable are valued at the respective sale prices. The capacity of these fixed assets to generate flows has also been evaluated, and cover the cost of depreciation during their remaining useful life. (c) The stock investments by the Company in companies in which it has a significant influence have been valued according to the proportional equity value method (VPP). The Company's equity income was recognized on an accrual basis. Unrealized income on transactions between related companies was eliminated. (d) The goodwill arising from the differences between the proportional equity value of the investment and the value paid on the date of purchase of the investments is shown at the acquisition price, after price-level restatement, and amortized in a period of 20 years according to Circular No. 1.358 of the Superintendency of Securities and Insurance. In summary, the assets are shown according to generally accepted accounting principles and instructions issued by the Superintendency of Securities and Insurance. Therefore, these amounts do not exceed their net market values. 57 Coca-Cola Embonor S.A. and Subsidiaries Notes to Consolidated Financial Statements IV. Analysis of the Principal Components of Cash Flow. Summary Consolidated Statements of Cash Flow For the nine months ending September 30,

The Company and its subsidiaries reported a negative net cash flow of TCH$7.069.660 during the first nine months of 2002, which implied a negative variation of TCH$14.818.397 compared to the previous year. This net cash flow can be broken down as follows: Operating activities generated a positive flow of TCH$8.019.042, which is lower by TCH$6.731.686 than the one generated in the same period in the previous year. The difference is due mainly to increased payments to suppliers and employees and taxes. Financing generated a negative flow of TCH$5.719.541, which meant a negative change of TCH$5.410.122 compared to the previous year. The difference stems principally from the payment of bank loans. Investment activities resulted in a negative flow of TCH$9.369.161, which is TCH$2.676.589 greater than the investment flow in 2001. This variation is principally the result of recording collection of loans to related companies in 2001. 58 V. Analysis of Market Risk (a) Debt Risk Interest-bearing debt dropped during 2001, to the equivalent to US$365 million as of September 30. There was a significant restructuring of interest-bearing liabilities through the issue of long-and short-term bonds on the Chilean market for a total of UF 4.400.000 and a syndicated loan for close to UF 3.460.000. The principal benefits from this restructuring were the significant reduction in exposure to exchange rate fluctuations since approximately 60% of the consolidated debt is in UF. The interest rate on interest-bearing debt was also reduced. As of September 30, 2002, US$160 million was owed to third parties, recognized in foreign currency. The exchange rate risk has been minimized for this debt because these monies are invested in assets abroad which are controlled in dollars. Therefore, there is a natural hedging according to Technical Bulletin No. 64 of the Chilean Accountants Association. 50% of total operating revenue of the company and its subsidiaries corresponds to sales in Chilean pesos and 50% to income that is treated according to Technical Bulletin No. 64 of the Chilean Accountants Association because the sales are made abroad. (b) Commodities Risk The Company faces the risk of price fluctuations on the international sugar, carbonic gas, plastic bottles and other markets. Significant progress was made at the level of centralized purchasing through medium-term contracts in order to minimize and/or stabilize this risk during 2002. The company did not use any hedging instruments for commodities. 59

COCA COLA EMBONOR CO 6-K