PepsiCo's financial statements are presented in Appendix B. Click here to view Appendix B. Financial statements of The Coca-Cola Company are presented in Appendix C. Click here to view Appendix C. The complete annual reports of PepsiCo and Coca-Cola, including the notes to the financial statements, are available at each company's respective website, Based on the information contained in these financial statements, determine each of the following for each company: (a 1) The percentage increase (decrease) in (i) net sales and (ii) net income from 2017 to 2018. (Round answers to 1 decimal places, eg. 15.2%. Enter negative amounts using either a negative sign preceding the number e.g.-15.2% or parentheses e.g. (15.2)%.) PepsiCo Coca-Cola Company Percentage increase (decrease) in net sales % % Percentage increase (decrease) in net income % % (a2) The percentage increase in (i) total assets and (ii) total common stockholders' (shareholders') equity from 2017 to 2018. (Round answers to 1 decimal place, e.g. 15.2%. Enter negative amounts using either a negative sign preceding the number e.g.-15.2% or parentheses e.g. (15.2)%.) PepsiCo Coca-Cola Company Percentage increase (decrease) in total assets % % Percentage increase (decrease) in total stockholders' equity % % (a3) The basic earnings per share and price-earnings ratio for 2018. (For both PepsiCo and Coca-Cola, use the basic earnings per share.) Coca-Cola's common stock had a market price of $47.35 at the end of fiscal-year 2018, and PepsiCo's common stock had a market price of $110.48. (Round basic earnings per share to 2 decimal places, eg. 15.25 and price-earning ratio to 1 decimal place, e.g. 15.2.) PepsiCo Coca-Cola Company Basic earnings per share $ $ Price-earnings ratio times times e Textbook and Media Save for Later Attempts: 0 of 5 used Submit Answer Specimen Financial Statements: PepsiCo, Inc. PepsiCo, Inc. is a world leader in convenient snacks, foods, and beverages. The following are PepsiCo's financial statements as presented in its 2018 annual report. The complete annual report, including notes to the financial statements, is available at the company's website. 25.170 Consolidated Statement of Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 29, 2018, December 30, 2017 and December 31, 2016 (in millions except per share amounts) 2018 2017 2016 Net Revenue $64,661 $63,525 $62,799 Cost of sales 29,381 28,796 28.222 Gross profit 24 35,280 34,729 34,577 Selling, general and administrative expenses 24,453 24,773 Operating Profit 10.110 10,276 9,804 Other pension and retiree medical benefits income/expense) 298 233 (19) Interest expense (1,525) (1,151) (1.342) Interest income and other 306 244 110 Income before income taxes 9,189 9,602 8,553 (Benefit from provision for income taxes (See Note 5) (3.370 4.694 2.174 Net income 12.559 4,908 2010 6,379 Less: Net income attributable to no controlling interests 44 51 So Net Income Attributable to PepsiCo $12,515 $ 4,857 $ 6.329 Net Income Attributable to PepsiCo per Common Share Basic $ 8.84 $ 3.40 $ 4.39 Diluted $ 8.78 $ 3.38 Weighted average common shares outstanding Basic 1,415 1425 1,439 Diluted 1.425 1,438 1,452 See accompanying notes to the consolidated financial statements. B-1 B-2 APPENDIX B Specimen Financial Statements: PepsiCo, Inc 2016 2017 $4.908 $ $6.379 Consolidated Statement of Comprehensive Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 29, 2018, December 30, 2017 and December 31, 2016 (in millions) 2018 Net income $12.559 Other comprehensive income/(loss), net of taxes Net currency translation adjustment (1.641) Net change on cash flow hedges 40 Net pension and retiree medical adjustments (467) Net change on available-for-sale securities Other 1,100 (302) 46 (36) (316) (24) 6 (159) (68) 16 862 5,770 (51) $5,719 (596) ) 5.783 (2,062 10,497 (44) $10.453 Comprehensive income Comprehensive income attributable to noncontrolling interests Comprehensive Income Attributable to PepsiCo $5.729 See accompanying notes to the consolidated financial statements. Consolidated Statement of Cash Flows PepsiCo, Inc. and Subsidiaries Fiscal years ended December 29, 2018, December 30, 2017 and December 31, 2016 (in millions) 2018 2017 2016 $12.559 $ 4.904 $ 2.369 $ 6,379 2,368 2.399 284 256 308 (255) 295 160 (125) - (113) - 221 373 501 (220) (695) 221 (1.708) (531) (4,347) (28) 619 Operating Activities Net income Depreciation and amortization Share-based compensation expense Restructuring and impairment charges Cash payments for restructuring charges Charge related to the transaction with Tingyi Pension and retiree medical plan expenses Pension and retiree medical plan contributions Deferred income taxes and other tax charges and credits Other net tax benefits related to international reorganizations Net tax (benefit)/expense related to the TCT 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 452 2,451 (202) (253) (174) 9 (349) ( (75) (168) 20 10 882 201 981 329 333 (256) 9.415 (338) (305) 10.039 70 10.66 PepsiCo, Inc. and Subsidiaries December 29, 2018 and December 30, 2017 (in millions except per share amounts) 2018 2017 $ 8,721 272 $10,610 8.900 1.997 7.142 ASSETS Current Assets Cash and cash equivalents Short-term investments Restricted cash 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 indefinite-lived intangible assets Indefinite-Lived Intangible Assets Investments in Noncontrolled Afiliates Deferred Income Taxes Other Assets Total Assets 3.128 633 21,893 17.589 1.644 7,024 2,947 1.546 31.027 17.240 1.268 14.744 12.570 27,314 2042 14,80N 14,181 28.989 2.409 4364 760 $77,648 913 $79.804 $ 4,026 18.112 22.138 $ 5.485 15.012 28, 295 3,499 20.502 33,796 3.242 11 283 68,823 9,114 63,046 41 LIABILITIES AND EQUITY Current Liabilities Short-term debt obligations Accounts payable and other current liabilities Total Current Liabilities Long Term Debt Obligations Deferred Income Taxes Other Liabilities Total Liabilities Commitments and contingencies Preferred Stock, no par value Repurchased Preferred Stock PepsiCo Common Shareholders' Equity Common stock, par value 19 per share (authorized 3,600 shares, issued, net of repurchased common stock at par value: 1,409 and 1,420 shares, respectively) Capital in excess of par value Retained earings Accumulated other comprehensive loss Repurchased common stock, in excess of par value (458 and 446 shares, respectively) Total PepsiCo Common Shareholders' Equity Noncontrolling interests Total Equity Total Liabilities and Equity (197) 23 3,953 59,947 (15.119) (34,286) 14,518 24 3,996 52.839 (13,057) (32.757) 11.045 84 14.602 92 10,981 $79.804 $77,648 See accompanying notes to the consolidated financial statements, APPENDIX B Specimen Financial Statements: PepsiCo, Inc. B-5 2016 Shares Amount 0.8 S 41 0.8 (0.7) (186) (6) (0.7) (192) 1.448 24 (20) 1,428 24 Consolidated Statement of Equity PepsiCo, Inc. and Subsidiaries Fiscal years ended December 29, 2018, December 30, 2017 and December 31, 2016 (in millions) 2018 2017 Shares Amount Shares Amount Preferred Stock Balance, beginning of year 0.8 $ 41 0.8 S 41 Conversion to common stock (0.1) (6) Retirement of preferred stock (0.7) (35) Balance, end of year 0.8 Repurchased Preferred Stock Balance, beginning of year (0.7) (197) (0.7) (192) Redemptions (2) (5) Retirement of preferred stock 0.7 199 Balance, end of year --- (0.7 (197) Common Stock Balance, beginning of year 1,420 24 1.429 24 Share issued in connection with preferred stock conversion to 1 common stock Change in repurchased common stock ( (12) (1) (8) Balance, end of year 1,409 23 1,420 24 Capital in Excess of Par Value Balance, beginning of year 3,996 4,091 Share-based compensation expense 250 290 Equity issued in connection with preferred stock conversion to 6 common stock Stock option exercises, RSUS, PSUs and PEPunits convertedal (193) (236) Withholding tax on RSUS, PSUs and PEPunits comerted (103) (145) Other (3) (4) Balance, end of year 3,953 3,996 Retained larnings Balance, beginning of year 52,839 52.518 Cumulative effect of accounting changes (145) Net income attributable to PepsiCo 12,515 4,857 Cash dividends declared.common) (5,098) (4,536) Cash dividends declared. preferred Retirement of preferred stock (164) Balance, end of year 59,947 52.839 Accumulated Other Comprehensive Loss Balance, beginning of year (13,057) (13,919) Other comprehensive Class)/income attributable to PepsiCo (2,062) 862 Balance, end of year (15,119) (13,057) || :38 IS15|| | || 11:' || ! ! ! 11:1171 11 21 1:4914 984" *' 111 1419'41'1100 5' 11 2 9 * 11 58' 1991 1'9'' 4,076 289 (138) (130) (6) 4,091 50,472 6,329 (4,282) (1) (1 52,518 (13,319) (600) (13,919) APPENDIX B Specimen Financial Statements: PepsiCo, Inc. B-5 2016 Shares Amount 0.8 41 0.8 41 (0.7) (186) (6) 0.7 (0.7) (192) 1.448 24 (20) 1,428 Consolidated Statement of Equity PepsiCo, Inc. and Subsidiaries Fiscal years ended December 29, 2018, December 30, 2017 and December 31, 2016 (in millions) 2018 2017 Shares Amount Shares Amount Preferred Stock Balance, beginning of year 0.8 $ 41 0.8 $ 41 Conversion to common stock (0.1) (6) Retirement of preferred to (0.7) (35) Balance, end of year 0.8 41 Repurchased Preferred Stock Balance, beginning of year (0.7) (197) (0.7) (192) Redemptions (2) (5) Retirement of preferred stock 199 Balance, end of year (0.2 (197) Common Stock Balance, beginning of year 1,420 24 1,428 24 Share issued in connection with preferred stock conversion to 1 common stock Change in repurchased common stock (12) (1) (8) Balance, end of year 1,409 23 1,420 24 Capital in Excess of Par Value Balance, beginning of year 3,996 4,091 Share-based compensation expense 250 290 Equity issued in connection with preferred stock conversion to 6 common stock Stock option exercises, RSUS, PSUs and PEPunits converted (193) (236) Withholding tax on RSUS, PSUs and PEPunits converted (103) (145) Other (3) Balance, end of year 3.953 3,996 Retained Earnings Balance, beginning of year 52,839 52,518 Cumulative effect of accounting changes (145) Net income attributable to PepsiCo 12,515 4,857 Cash dividends declared.common) (5,098) (4,536) Cash dividends declared preferred - Retirement of preferred stock (164) Balance, end of year 59,947 52,839 Accumulated Other Comprehensive Loss Balance, beginning of year (13,057) (13,919) Other comprehensive (loss]/income attributable to PepsiCo (2,062) 862 Balance, end of year (15,119) (13,057) || :38 | 15|| ! " 891 MI:!|!119 1201 [. | ' / 4,076 289 (138) (130) (6) 4,091 50.472 6,329 (4,282) (1) 52.518 (13,319) (600) (13,919) (continues B-6 APPENDIX B Specimen Financial Statements: PepsiCo, Inc. 2017 2016 2018 Shares Amount Shares Amount Shares Amount (446) $(32,757) (18) (2.000) (438) (18) 10 (418) (29) 9 S[29,185) (3.000) 712 469 (31,468) (2.000) 708 3 (32,757) 11.045 (458) 2 (34,286 14,518 (446) (438 (31.46) 11.246 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: Othernet Balance, end of year Total Equity 92 44 104 51 (62) (49) 107 50 (55) ) 4 (2) (3) 84 (1) 92 $ 10,981 104 $ 14,602 S 11,199 (A) Includes total tax benefits of $110 million in 2016 (b) Cash dividends declared per common share were $3.5875, 63.1675 and $2.96 for 2018, 2017 and 2016, respectively See accompanying notes to the consolidated financial statements. Appendix C Specimen Financial Statements: The Coca-Cola Company The Coca-Cola Company is a global leader in the beverage industry. It offers hundreds of brands, including soft drinks, fruitjuices, sports drinks, and other beverages, in more than 200 countries. The following are Coca-Cola's financial statements as presented in its 2018 annual report. The complete annual report, including notes to the financial statements, is available at the company's website 2018 2017 2016 $35,410 13,255 22,155 12,654 1,902 7,599 The Coca-Cola Company and Subsidiaries Consolidated Statements of Income Year Ended December 31 (in millions except per share data) NET OPERATING REVENUES Cost of goods sold GROSS PROFIT Selling, general and administrative expenses Other operating charges OPERATING INCOME Interest income Interest expense Equity income (loss) net Other income (loss)-net INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES Income taxes from continuing operations NET INCOME FROM CONTINUING OPERATIONS Income (los) from discontinued operations (net of income taxes of $126, 547 and 80, respectively) CONSOLIDATED NET INCOME Less: Net income attributable to noncontrolling interests NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY Basic net income per share from continuing operations! Basic net income (loss) per share from discontinued operations BASIC NET INCOME PER SHARE Diluted net income per share from continuing operations Diluted net income (Loss) per share from discontinued operations DILUTED NET INCOME PER SHARE AVERAGE SHARES OUTSTANDING-BASIC Effect of dilutive securities AVERAGE SHARES OUTSTANDING-DILUTED $31,856 11,770 20,086 10,307 1,079 8,700 682 919 1,008 (1.121) 8,350 1,623 6,727 (251) 6,476 42 $41,863 16,465 25,398 15,370 1.371 8.657 642 733 835 (1.265) 8.136 1,586 6,550 841 1,071 (1.764) 6,742 5,560 1,182 101 1,283 35 $ 1,248 $ 0.28 0.02 $ 0.29 $ 0.27 0.02 6,550 23 $ 6,527 $ 1.51 $ 6,434 $ 1.58 (0.07) $ 1.51 $ 1.51 $ 149 $ 0.29 $ 1.49 $ 1.57 (0.07) $ 1.50 4.259 40 4.299 4,272 52 4.324 4,317 50 Calculated based on net income from continuing operations less net income from continuing operations attributable to noncontrolling interests. Calculated based on net income (Loss) from discontinued operations less net income from discontinued operations attributable to noncontrolling interests. Per share amounts do not add due to rounding Refer to Notes to Consolidated Financial Statements. C-1 C-2 APPENDIXC Specimen Financial Statements: The Coca-Cola Company The Coca-Cola Company and Subsidiaries Consolidated Statements of Comprehensive Income 2018 2017 2016 Year Ended December 31, in millions) $6,476 $1,283 $6,550 CONSOLIDATED NET INCOME Other comprehensive income: Net foreign currency translation adjustments Net gains (lasses) an derivatives Net unrealized gains (losses) on available for sale securities Net change in pension and other benefit liabilities TOTAL COMPREHENSIVE INCOME Less Comprehensive income attributable to noncontrolling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY (2,035) (7) (34) 29 4,429 95 861 (433) 188 322 2.221 73 (626) (382) 17 (53) 5.506 10 $4,334 $2,148 $5,496 Refer to Notes to Consolidated Financial Statements APPENDIX C Specimen Financial Statements: The Coca-Cola Company C-3 The Coca-Cola Company and Subsidiaries Consolidated Balance Sheets December 31, 2018 2017 $ 8,926 2,025 $ 6,006 9,352 10,951 5,013 3,396 2,766 1,962 15,358 5,317 3,667 2,655 2,000 219 7,329 6,546 30,634 36,545 19,407 867 4,139 2,667 8,232 6,682 51 10,263 274 $83,216 20,856 1,096 4,230 330 8,203 6,729 138 9,401 368 $87,896 (in millions except par value) ASSETS CURRENT ASSETS Cash and cash equivalents Short-term investments TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Marketable securities Trade accounts receivable, less allowances of $489 and $477, 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 DEFERRED INCOME TAX 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 DEFERRED INCOME TAX LIABILITIES THE COCA-COLA COMPANY SHAREOWNERS' EQUITY Common stock, $0.25 par value; Authorized11,200 shares; Issued-7,040 and 7,040 shares, respectively Capital surplus Reinvested earnings Accumulated other comprehensive income (loss) Treasury stock, at cost-2,772 and 2,781 shares, respectively EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS TOTAL EQUITY TOTAL LIABILITIES AND EQUITY $ 8,748 $ 8,932 13,194 4,997 378 13,205 3,298 410 37 1,496 27,194 1,722 29,223 25,364 7,638 1,933 31,182 8,021 2,522 1,760 1,760 16,520 63,234 (12,814) (51,719) 16,981 2,077 15,864 60,430 (10,305) (50,677) 17,072 1,905 19,058 $83,216 18,977 $87,896 Refer to Notes to Consolidated Financial Statements. C-4 APPENDIXC Specimen Financial Statements: The Coca-Cola Company 2018 2017 2016 $ 6,550 $ 6,476 251 $ 1,283 (101) 6,727 1,086 225 (450) (457) (38) 189 558 682 (1,202) 7,320 1,182 1,260 219 (1,256) (628) 281 1,459 1,218 (269) 3,464 6,550 1,787 258 (856) (449) 158 1,146 647 (224) (225) 8,792 6.930 The Coca-Cola Company and Subsidiaries Consolidated Statements of Cash Flows Year Ended December 31, (In millions) OPERATING ACTIVITIES Consolidated net income (Income) loss from discontinued operations Net income from continuing operations Depreciation and amortization Stock-based compensation expense Deferred income taxes Equity (income) loss-net of dividends Foreign currency adjustments Significant (gains) losses on sales of assets-net Other operating charges Other items Net change in operating assets and liabilities Net cash provided by operating activities INVESTING ACTIVITIES Purchases of investments Proceeds from disposals of investments Acquisitions of businesses, equity method investments and nonmarketable securities Proceeds from disposals of businesses, equity method investments and nonmarketable securities Purchases of property, plant and equipment Proceeds from disposals of property, plant and equipment Other investing activities Net cash provided by (used in) investing activities FINANCING ACTIVITIES Issuances of debt Payments of debt Issuances of stock Purchases of stock for treasury Dividends Other financing activities Net cash provided by (used in) financing activities 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 discontinued operations Net cash provided by (used in) financing activities from discontinued operations Net cash provided by (used in) discontinued operations EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the year Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year Cash, cash equivalents, restricted cash and restricted cash equivalents at end of year Less: Restricted cash and restricted cash equivalents at end of year Cash and cash equivalents at end of year Refer to Notes to Consolidated Financial Statements. (7,789) 14,977 (1,040) 1,362 (1,347) 245 (60) 6,348 (17,296) 16,694 (3,809) 3,821 (1,675) 104 (93) (16,626) 17,842 (838) 1,035 (2,262) 150 (305) (1,004) (2,254) 27,339 (30,568) 1,476 29,857 (28,768) 1,595 (3,682) (6,320) (91) 27,281 (25,615) 1,434 (3,681) (6,043) 79 (1,912) (6,644) (243) (10,552) (7,409) (6,545) 307 (421) 205 111 (58) (38) 91 15 (262) 241 (5) 2,945 6,373 (2,477) 8,850 1,238 7,612 8,850 295 9,318 392 6,373 367 $ 8,926 $ 6,006 $ 8,555 APPENDIX C Specimen Financial Statements: The Coca-Cola Company C-5 2018 2017 2016 4,259 48 (39) 4,268 4,288 53 (82) 4,324 50 (86) 4,259 4,288 $ 1,760 $ 1,760 $ 1,760 15,864 467 14,993 655 14,016 589 130 258 225 (36) 16,520 219 (3) ( 15,864 14,993 65,502 65,018 The Coca-Cola Company and Subsidiaries Consolidated Statements of Shareowners' Equity Year Ended December 31, (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 Treasury stock issued to employees related to stock compensation plans Purchases of stock for treasury Balance at end of year COMMON STOCK CAPITAL SURPLUS Balance at beginning of year Stock issued to employees related to stock compensation plans Tax benefit (charge) from stock compensation plans Stock-based compensation expense Other activities Balance at end of year REINVESTED EARNINGS Balance at beginning of year Adoption of accounting standards! Net income attributable to shareowners of The Coca-Cola Company Dividends (per share-$1.56, $1.48 and $1.40 in 2018, 2017 and 2016, respectively) Balance at end of year ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Balance at beginning of year Adoption of accounting standards 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 adjustments Dividends paid to noncontrolling interests Contributions by noncontrolling interests Business combinations Deconsolidation of certain entities Other activities TOTAL EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS 60,430 3,014 6,434 (6,644) 1,248 (6,320) 60,430 6,527 (6,043) 65,502 63,234 (11,205) (10,174) (10,305) (409) (2,100) (12,814) (1,031) 900 ( (10,305) (11,205) (50,677) 704 (1,746) (51,719) $16,981 (47,988) 909 (3,598) (50,677) $17,072 (45,066) 811 (3,733) (47,988) $23.062 $ $ $ 1,905 42 53 (31) 158 35 38 (15) 210 23 (13) (25) 1 1 101 101 1,805 (157) 41 7 (34) (4) 158 $ 2,077 $ 1,905 S Refer to Note 1, Note 3, Note 4 and Note 15. Refer to Notes to Consolidated Financial Statements