Financial statements for 2016-2017
Coca-cola
Pepsi
(11) * Your answer is incorrect. Compute both companies' (1) current cash debt coverage, (2) cash debt coverage, and (3) free cash flow. (Enter amount in millions. Round ratio values to 2 decimal places, eg. 52.75:1.) Coca-Cola Company PepsiCo, Inc. Current cash debt coverage 26.04 1 48.01 1 Cash debt coverage 10.52 :1 15.24 :1 Free cash flow TA 4610 ta 7025 eTextbook and Media Assistance Used Save for Later Attempts: 3 of 4 used Submit Answer Appendix C Specimen Financial Statements: The Coca-Cola Company The Coca-Cola Company is the world's largest beverage company. It owns or licenses and markets more than 500 nonalcoholic beverage brands, primarily sparkling beverages, but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to- drink teas and coffees, and energy and sports drinks. Finished beverage products bearing Coca- Cola trademarks, sold in the United States since 1886, are now available in more than 200 countries. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, 2017 2016 2015 (In millions except per share data) NET OPERATING REVENUES $ 35,410 $ 41,863 $ 44.294 Cost of goods sold 13,256 16,465 17.482 GROSS PROFIT 22,154 25.398 26,812 Selling, general and administrative expenses 12,496 15,262 16,427 Other operating charges 2,157 1,510 1,657 OPERATING INCOME 7:501 8,626 8,728 Interest income 677 642 613 Interest expense 841 733 856 Equity income (loss) - net 1,071 Other income (loss) - net (1,666) (1,234) 631 INCOME FROM CONTINUING OPERATIONS 6,742 8,136 9,605 BEFORE INCOME TAXES Income taxes from continuing operations 5,560 1,586 2,239 NET INCOME FROM CONTINUING OPERATIONS 1,182 6,550 7.366 Income from discontinued operations (net of income taxes of $47, $o and $o, respectively) CONSOLIDATED NET INCOME 1,283 7.366 Less: Net income attributable to noncontrolling interests 35 23 15 NET INCOME ATTRIBUTABLE TO $ 1,248 $ 6.527 $ 7,351 SHAREOWNERS OF THE COCA-COLA COMPANY 835 489 101 6,550 $ 0.28 $ 1.51 $ 1.69 0.02 Basic net income per share from continuing operations Basic net income per share from discontinued operations BASIC NET INCOME PER SHARE Diluted net income per share from continuing operations? $ 0.29 $ 1-51S 1.49 $ 1.69 1.67 $ 0.27 $ 1 1 0.02 - - $ Danted net income per share from discontinued operations DILUTED NET INCOME PER SHARE 0.29 $ 1.49 $ 1.67 AVERAGE SHARES OUTSTANDING - BASIC 4,272 4,317 4.352 Effect of dilutive securities 52 50 53 AVERAGE SHARES OUTSTANDING - DILUTED 4.324 4.367 4.405 Calculated based on net income from continuing operations less net income from continuing operations attributable to noneontrolling interests. 2 Calculated based on net income from discontinued operations less net income from discontinued operations attributable to noncontrolling interests. 3 Per share amounts do not acel due to rounding, Refer to Notes to Consolidated Financial Statements. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, 2017 2016 2015 (In millions) CONSOLIDATED NET INCOME $ 1,283 $ 6,550 $ 7.366 Other comprehensive income: Net foreign currency translation adjustment 861 (626) (3.959) Net gain (loss) on derivatives (433) (382) 142 Net unrealized gain (Loss) on available-for-sale securities 188 17 (684) Net change in pension and other benefit liabilities 322 (53) 86 TOTAL COMPREHENSIVE INCOME (LOSS) 2,221 5.506 2,951 Less: Comprehensive income (loss) attributable to 73 10 (3) noncontrolling interests TOTAL COMPREHENSIVE INCOME (LOSS) $ 2,148 $ 5.496 $ 2.954 ATTRIBUTABLE TO SHAREOWNERS OF THE COCA- COLA COMPANY THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2017 2016 (In millions except par value) ASSETS CURRENT ASSETS Cash and cash equivalents 6,006 $ 8.555 Short-term investments 9,352 9,595 TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM 15.358 18,150 INVESTMENTS Marketable securities 5,317 4,051 8 3,667 3.856 2,655 2,675 2,000 2,481 219 2,797 7,329 36,545 34,010 20,856 16,260 1,096 989 4.560 4.248 8,203 10,635 6,729 6,097 138 3.676 9,401 10,629 368 726 $ 87,896 $ 87,270 Trade accounts receivable, less allowances of $477 and $466, respectively Inventories Prepaid expenses and other assets Assets held for sale Assets held for sale - discontinued operations TOTAL CURRENT ASSETS EQUITY METHOD INVESTMENTS OTHER INVESTMENTS OTHER ASSETS PROPERTY, PLANT AND EQUIPMENT - net TRADEMARKS WITH INDEFINITE LIVES BOTTLERS' FRANCHISE RIGHTS WITH INDEFINITE LIVES GOODWILL OTHER INTANGIBLE ASSETS TOTAL ASSETS LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses Loans and notes payable Current maturities of long-term debt Accrued income taxes Liabilities held for sale Liabilities held for sale - discontinued operations TOTAL CURRENT LIABILITIES LONG-TERM DEBT OTHER LIABILITIES DEFEREED INCOME TAXES THE COCA-COLA COMPANY SHAREOWNERS' EQUITY Common stock, $0.25 par value; Authorized 11,200 shares; Issued 7,040 and 7,040 shares, respectively Capital surplus Reinvested earnings Accumulated other comprehensive income (loss) Treasury stock, at cost - 2,781 and 2.752 shares, respectively EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA- COLA COMPANY EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS TOTAL EQUITY $ 8,748 S 9.490 13,205 12.498 3,298 3,527 410 307 37 710 1,496 27,194 26,532 31,182 29,684 8,021 4.081 2,522 3.753 - 1,760 1.760 15,864 14.993 60,430 65.502 (10,305) (11,205) (50,677) (47.988) 17,072 23.062 1,905 18,977 158 23,220 TIN WAT TOTAL LIABILITIES AND EQUITY $ 87,896 $ 87,270 Refer to Notes to Consolidated Financial Statements. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2017 2016 2015 (In millions) OPERATING ACTIVITIES Consolidated net income 1,283 $ 6,550 $ 7,366 (Income) loss from discontinued operations (101) Net income from continuing operations 1,182 6,550 7.366 Depreciation and amortization 1,260 1,787 1,970 Stock-based compensation expense 219 258 236 Deferred income taxes (1,256) (856) 73 Equity (income) loss-net of dividends (628) (449) (122) Foreign currency adjustments 281 158 (137) Significant (gains) losses on sales of assets net 1,459 1,146 (374) Other operating charges 1,218 647 929 Other items (269) (224) 744 Net change in operating assets and liabilities 3,529 (221) (157) Net cash provided by operating activities 6,995 8.796 10,528 INVESTING ACTIVITIES Purchases of investments (16,520) (15.499) (15.831) Proceeds from disposals of investments 15,911 16,624 14,079 Acquisitions of businesses, equity method investments and (3.900) (838) (2.491) nonmarketable securities Proceeds from disposals of businesses, equity method 3,821 1,035 565 investments and nonmarketable securities Purchases of property, plant and equipment (1,675) (2.262) (2.553) Proceeds from disposals of property, plant and equipment 104 150 85 Other investing activities (126) (209) (40) Net cash provided by (used in) investing activities (2.385) (999) (6,186) FINANCING ACTIVITIES Issuances of debt 29,857 27,281 40,434 Payments of debt (28,768) (25,615) (37.738) Issuances of stock 1,595 1.434 1,245 Purchases of stock for treasury (3,682) (3,681) (3.564) Dividends (6,320) (6,043) (5741) Other financing activities (91) 251 79 111 - - - - $ 2016 Net cash provided by used in) financing activities (7.409) (6.545) (5,113) CASH FLOWS FROM DISCONTINUED OPERATIONS Net cash provided by (used in) operating activities from discontinued operations Net cash provided by (used in) investing activities from (65) discontinued operations Net cash provided by (used in) nancing activities from (38) discontinued operations Net cash provided by (used in) discontinued operations 8 EFFECT OF EXCHANGE RATE CHANGES ON 242 (6) (878) CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS Net increase (decrease) during the year (2,549) 1.246 (1,649) Balance at beginning of year 8.555 7,309 8,958 Balance at end of year 6,006 $ 8.555 $ 7309 Refer to Notes to Consolidated Financial Statements. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY Year Ended December 31, 2017 2015 (In millions except per share data) EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY NUMBER OF COMMON SHARES OUTSTANDING Balance at beginning of year 4.324 4.366 Treasury stock issued to employees related to stock 53 50 44 compensation plans Purchases of stock for treasury (82) (86) (86) Balance at end of year 4,259 4.288 4.324 COMMON STOCK $ 1,760 $ 1,760 $ 1,760 CAPITAL SURPLUS Balance at beginning of year 14.993 14,016 13,154 Stock issued to employees related to stock 655 589 532 compensation plans Tax benefit (charge) from stock compensation plans 130 94 Stock-based compensation expense 219 258 236 Other activities Balance at end of year 15,864 14.993 REINVESTED EARNINGS Balance at beginning of year 65-502 65,018 63.408 4,288 (3) 14.016 1,248 6.527 7-351 (6.320) (6,043) (5.741) 60.430 65,502 65.018 (11,205) (10,174) (5.777) 900 (1.031) (4-397) (10,305) (11,205) (10,174) (47,988) (45,066) (42,225) 909 811 696 Net income attributable to shareowners of The Coca- Cola Company Dividends (per share - $1.48, $1.40 and $1.32 in 2017, 2016 and 2015, respectively) Balance at end of year ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Balance at beginning of year Net other comprehensive income (loss) Balance at end of year TREASURY STOCK Balance at beginning of year Treasury stock issued to employees related to stock compensation plans Purchases of stock for treasury Balance at end of year TOTAL EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS Balance at beginning of year Net income attributable to noncontrolling interests Net foreign currency translation adjustment Dividends paid to noncontrolling interests Contributions by noncontrolling interests Business combinations Deconsolidation of certain entities Other activities TOTAL EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS (3.598) (3.733) (3.537) (50,677) (47,988) (45,066) $ 17,072 $ 23,062 $ 25.554 158 $ 35 38 (15) 210 S 23 (13) (25) 1 241 15 (18) (31) (3) (34) 1,805 (157) 41 $ 1,905 $ (4) 6 158 $ 210 Refer to Notes to Consolidated Financial Statements. Consolidated Statement of Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 27, 2017, December 28, 2016 and December 29, 2015 (in millions except per share amounts) 2017 $ 63,525 $ 28,785 34,740 24,231 2016 62,799 $ 28,209 34,590 24,805 2015 63,056 28,731 34,325 24,613 1,359 8,353 (970) 59 Net Revenue Cost of sales Gross profit Selling, general and administrative expenses Venezuela impairment charges Operating Profit Interest expense Interest income and other Income before income taxes Provision for income taxes (See Note 5) Net income Less: Net income attributable to noncontrolling interests Net Income Attributable to PepsiCo Net Income Attributable to PepsiCo per Common Share Basic Diluted Weighted average common shares outstanding Basic Diluted Cash dividends declared per common share 10,509 (1,151) 244 9,602 4,694 4,908 51 4,857 $ 9,785 (1.342) 110 8,553 2,174 6,379 50 6,329 $ 7.442 1,941 5,501 49 5,452 3.40 $ 3-38 $ 4.39 $ 4.36 $ 3.71 3.67 1,425 1,438 3.1675 $ 1,439 1,452 2.96 $ 1,469 1,485 2.7625 Consolidated Statement of Comprehensive Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 30, 2017, December 31, 2016 and December 26, 2015 (in millions) 2016 2015 2017 4,908 $ 6,379 $ 5,501 Net income Other comprehensive income/loss), net of taxes: Net currency translation adjustment Net change on cash flow hedges Net pension and retiree medical adjustments Net change on securities Other 1,109 (36) (159) (68) 16 862 (302) 46 (316) (24) (2,827) 3 171 1 5,770 (51) Comprehensive income Comprehensive income attributable to noncontrolling interests Comprehensive Income Attributable to PepsiCo See accompanying notes to the consolidated financial statements. (596) 5.783 (54) 5,729 $ (2,652) 2,849 (47) 2,802 5,719 $ Consolidated Statement of Cash Flows PepsiCo, Inc. and Subsidiaries Fiscal years ended December 30, 2017, December 31, 2016 and December 26, 2015 (in millions) 2017 2016 2015 4,908 $ 2,369 5,501 2,416 292 295 6,379 $ 2,368 284 160 (125) 373 295 (113) 230 (208) 73 1,359 467 221 (220) 619 2,451 501 (695) 452 Operating Activities Net income Depreciation and amortization Share-based compensation expense Restructuring and impairment charges Cash payments for restructuring charges Charges related to the transaction with Tingyi Venezuela impairment charges Pension and retiree medical plan expenses Pension and retiree medical plan contributions Deferred income taxes and other tax charges and credits Provisional net tax expense related to the TCJ Act Change in assets and liabilities: Accounts and notes receivable Inventories Prepaid expenses and other current assets Accounts payable and other current liabilities Income taxes payable Other, net Net Cash Provided by Operating Activities Investing Activities Capital spending Sales of property, plant and equipment (205) 78 - (202) (168) (349) (75) 10 20 201 (338) (341) 9,994 997 329 64 10,673 (461) (244) (50) 1,692 55 (134) 10,864 (2,969) (3.040) 99 (2,758) 86 180 9.994 10,673 10,864 (2,969) 180 (61) (3,040) 99 (212) (2,758) 86 (86) (568) 267 85 76 (18,385) (12,504) 8.399 (4,428) 4,111 15,744 790 2 16 29 9 (7,148) 3 (5) (3,569) (4,403) Net Cash Provided by Operating Activities Investing Activities Capital spending Sales of property, plant and equipment Acquisitions and investments in noncontrolled affiliates Reduction of cash due to Venezuela deconsolidation Divestitures Short-term investments, by original maturity: More than three months - purchases More than three months - maturities More than three months - sales Three months or less, net Other investing, net Net Cash Used for Investing Activities Financing Activities Proceeds from issuances of long-term debt Payments of long-term debt Debt redemptions Short-term borrowings, by original maturity: More than three months - proceeds More than three months - payments Three months or less, net Cash dividends paid Share repurchases - common Share repurchases - preferred Proceeds from exercises of stock options Withholding tax payments on RSUS, PSUs and PEPunits converted Other financing Net Cash Used for Financing Activities 7,509 (4,406) 7,818 (3,105) (2,504) 8,702 (4,095) 59 91 (128) (1,016) (4,472) (2,000) (5) 462 (145) (76) (4,186) (27) 1,505 (4,227) (3,000) (7) 465 (130) (58) (3,211) (262 15 (43) 53 (4,040) (5,000) (5) 504 (151) (52) (4,112) Effect of exchange rate changes on cash and cash equivalents 47 (291) 62 Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year See accompanying notes to the consolidated financial statements. 1,452 9,158 10,610 $ 9,096 9,158 $ 2,962 6,134 9,096 $ Consolidated Balance Sheet PepsiCo, Inc. and Subsidiaries December 30, 2017 and December 31, 2016 (in millions except per share amounts) 2017 2016 ASSETS Current Assets Cash and cash equivalents Short-term investments Accounts and notes receivable, net Inventories Prepaid expenses and other current assets Total Current Assets Property, Plant and Equipment, net Amortizable Intangible Assets, net Goodwill Other nonamortizable intangible assets Nonamortizable Intangible Assets Investments in Noncontrolled Affiliates Other Assets Total Assets 10,610 $ 8,900 7,024 2,947 1,546 31,027 17,240 9,158 6,967 6,694 2,723 908 26,450 16,591 1,237 14,430 12,196 26,626 1,950 636 1,268 14,744 12,570 27,314 2,042 913 79,804 $ $ 73,490 $ 6,892 14,243 5,485 15,017 20,502 33,796 11,283 3,242 68,823 21,135 30,053 6,669 4,434 62,291 41 (197) 41 (192) LIABILITIES AND EQUITY Current Liabilities Short-term debt obligations Accounts payable and other current liabilities Total Current Liabilities Long-Term Debt Obligations Other Liabilities Deferred Income Taxes Total Liabilities Commitments and contingencies Preferred Stock, no par value Repurchased Preferred Stock PepsiCo Common Shareholders' Equity Common stock, par value 14 per share (authorized 3,600 shares, issued, net of repurchased common stock at par value: 1,420 and 1,428 shares, respectively) Capital in excess of par value Retained earnings Accumulated other comprehensive loss Repurchased common stock, in excess of par value (446 and 438 shares, respectively) Total PepsiCo Common Shareholders' Equity Noncontrolling interests Total Equity Total Liabilities and Equity See accompanying notes to the consolidated financial statements. 24 3,996 52,839 (13,057) (32,757) 11,045 92 10,981 79,804 $ 24 4,091 52,518 (13,919) (31,468) 11,246 104 11,199 $ 73,490 Consolidated Statement of Equity PepsiCo, Inc. and Subsidiaries Fiscal years ended December 30, 2017, December 31, 2016 and December 26, 2015 (in millions) 2017 2016 2015 Shares Amount Shares Amount Shares Amount 0.8 $ 41 0.8 41 0.8 41 (0.7) (192) (0.7) (186) (0.7) (181) 6) (6) (5) (0.7) (197) (0.7) (192) (0.7) (186) 1,428 24 1,448 (20) 24 1,428 (8) 1,420 24 1,488 (40) 24 1,448 25 (1) 24 4,091 4,115 299 290 Preferred Stock Balance, beginning of year Redemptions Balance, end of year Common Stock Balance, beginning of year Change in repurchased common stock Balance, end of year Capital in Excess of Par Value Balance, beginning of year Share-based compensation expense Stock option exercises, RSUS, PSUs and PEPunits converted (a) Withholding tax on RSUS, PSUs and PEPunits converted Other Balance, end of year Retained Earnings Balance, beginning of year Net income attributable to PepsiCo Cash dividends declared - common Cash dividends declared - preferred Balance, end of year Accumulated Other Comprehensive Loss (236) (145) (4) 3,996 4,076 289 (138) (130) (6) 4,091 (182) (151) (5) 4,076 49,092 52,518 4,857 (4,536) 50,472 6,329 (4,282) (1) 52,518 5,452 (4,071) (1) 52,839 50,472 Other 15) (42 3,996 4,091 4,076 49,092 52,518 4,857 (4,536) 50,472 6,329 (4,282) (1) 52,518 5,452 (4,071) (1) 50,472 52,839 (13,919) 862 (13,057) (13,319) (600) (13,919) (10,669) (2,650) (13.319) Balance, end of year Retained Earnings Balance, beginning of year Net income attributable to PepsiCo Cash dividends declared - common Cash dividends declared - preferred Balance, end of year Accumulated Other Comprehensive Loss Balance, beginning of year Other comprehensive income/(loss) attributable to PepsiCo Balance, end of year Repurchased Common Stock Balance, beginning of year Share repurchases Stock option exercises, RSUS, PSUs and PEPunits converted Other Balance, end of year Total PepsiCo Common Shareholders' Equity Noncontrolling Interests Balance, beginning of year Net income attributable to noncontrolling interests Distributions to noncontrolling interests Currency translation adjustment Other, net Balance, end of year Total Equity (a) Includes total tax benefits of $110 million in 2016 and $107 million in 2015. See accompanying notes to the consolidated financial statements. (438) (18) 10 12 (31,468) (418) (2,000) (29) 708 9 3 (32,757) (438) 11,045 (29,185) (378) (3,000) (52) 712 5 (31,468) (418) 11,246 (24.985) (4.999) 794 5 (29,185) 12,068 (446) 110 104 51 (62) 107 50 (55) 4 (2) 49 (48) (2) (1) 92 10,981 104 107 $ 11,199 $ 12,030
