Embotelladora Andina S.A.(AKO_A) - 2019 Q4 - Annual Report

Cash Flow Analysis - Cash flows from operating activities in 2019 amounted to Ch$255,148 million, an increase of 8.5$235,279 million in 2018, primarily due to higher customer collections [466]. - Cash flows from investing activities in 2019 totaled Ch$110,048 million, a decrease of 6.9$118,086 million in 2018, attributed to lower investments in property, plant, and equipment [468]. - Financing activities generated a negative cash flow of Ch$127,112 million in 2019, a decrease of 9.8$139,589 million in 2018, mainly due to increased financial expenses in Chile [469]. Liabilities and Obligations - Total liabilities as of December 31, 2019, were Ch$1,422,044 million, reflecting a 5.3$8,204 million, or 2.0%, compared to December 2018, primarily due to a reduction in other current financial liabilities [473]. - Non-current liabilities increased by Ch$79,458 million, or 8.5$1,183,162 million, with debt to financial institutions at Ch$3,039 million and bonds at Ch$1,024,782 million [516]. - As of December 31, 2019, total long-term liabilities amount to Ch$77,124 million, with provisions at Ch$67,039 million [518]. Financial Resources and Policies - As of December 31, 2019, the company had 17 short-term credit lines available totaling Ch$201,163 million, with Ch$201,155 million remaining unused [470]. - The weighted average interest rate for bond obligations was 3.8% in UF and 5% in USD as of December 31, 2019 [476]. - The company is required by Chilean Corporate Law to distribute at least 30% of any profits generated each year as dividends [460]. - The board of directors has the authority to define financing and investment policies, with a preference for using internal resources for investments [461]. - The company maintains Consolidated Assets free of any pledge, mortgage, or other lien by an amount at least equal to 1.3 times its unsecured consolidated current liabilities [500]. Corporate Actions - The company issued US$300 million in a 30-year corporate bond due 2050, with an annual coupon rate of 3.950$210 million, leaving a remaining outstanding amount of US$365 million [507]. Market Risks and Challenges - The company faces potential price increases in principal raw materials, such as sugar and resin, which may impact results if costs cannot be passed on to consumers [511]. - The company is subject to risks from increased competition from low-price brands and exchange rate fluctuations, particularly against the U.S. dollar [512]. Research and Development - The company’s research and development expenses are not significant due to the nature of its business and support from The Coca-Cola Company [510]. Financial Instruments - The company has contracted derivatives (Cross Currency Swaps) that cover 100% of US dollar-denominated financial obligations, converting them to UF [509]. Operational Flow - Adjusted Consolidated Operating Flow includes Gross Income, Distribution Costs, Administrative Expenses, and other factors, with territories accounting for over 40% of this flow being protected from loss or transfer [497].