The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies' complete annual reports, including the notes to the financial statements, are available online. Click here to view Appendix C Click here to view Appendix D Use the companies' financial information to answer the following questions. Based on the information contained in these financial statements, determine each of the following for each company. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Enter amounts in million.) Coca-Cola PepsiCo $ $ (1) Cash used in investing activities during 2017 (from the statement of cash flows) (2) The total other comprehensive income for the year 2017 $ $ (3) The unrealized gains or losses reported as part of other comprehensive income $ $ e Textbook and Media Identify from Coca-Cola's December 31, 2017, balance sheet the investments it reported as being accounted for under the equity method. (Enter amounts in million.) Investments reported $ million e Textbook and Media 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 2017 2016 2015 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 from discontinued operations (net of income taxes of $47, $0 and $o, respectively) CONSOLIDATED NET INCOME $ 35,410 13,256 22,154 12,496 2,157 7,501 677 841 1,071 (1,666) 6,742 5,560 1,182 $ 41,863 $ 44,294 16,465 17,482 25,398 26,812 15,262 16,427 1,510 1,657 8,626 8,728 642 613 733 856 835 489 (1,234) 631 8,136 9,605 1,586 2,239 6,550 7,366 101 1,283 6,550 7,366 35 23 15 Less: Net income attributable to noncontrolling interests NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY $ 1,248 $ 6,527 $ 7,351 $ 0.28 $ 1.51 $ 1.69 0.02 $ 0.293 $ 1.51 $ 1.69 $ 0.27 $ 1.49 $ 1.67 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 Diluted net income per share from discontinued operations DILUTED NET INCOME PER SHARE AVERAGE SHARES OUTSTANDING - BASIC Effect of dilutive securities AVERAGE SHARES OUTSTANDING - DILUTED 0.02 $ 0.29 $ 1.49 $ 1.67 4,352 4,317 4,272 52 50 53 4,324 4,367 4,405 Calculated based on net income from continuing operations less net income from continuing operations attributable to noncontrolling 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 add 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 Net change in pension and other benefit liabilities TOTAL COMPREHENSIVE INCOME (LOSS) Less: Comprehensive income (loss) attributable to noncontrolling interests TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY 188 17 (684) 322 (53) 86 2,221 5,506 2,951 73 10 (3) $ 2,148 $ 5,496 $ 2,954 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS 2017 2016 $ 6,006 9,352 15,358 December 31, (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 $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 5,317 3,667 2,655 2,000 219 7,329 36,545 20,856 1,096 8,555 9,595 18,150 4,051 3,856 2,675 2,481 2,797 34,010 16,260 989 4,248 10,635 4,560 8,203 6,729 138 TRADEMARKS WITH INDEFINITE LIVES BOTTLERS' FRANCHISE RIGHTS WITH INDEFINITE LIVES GOODWILL OTHER INTANGIBLE ASSETS TOTAL ASSETS 9,401 368 6,097 3,676 10,629 726 $ 87,270 $ 87,896 $ $ 8,748 13,205 3,298 9,490 12,498 3,527 307 710 410 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 37 1,496 27,194 31,182 8,021 2,522 26,532 29,684 4,081 3,753 1,760 15,864 60,430 (10,305) (50,677) 17,072 1,905 1,760 14,993 65,502 (11,205) (47,988) 23,062 158 TOTAL EQUITY TOTAL LIABILITIES AND EQUITY 18,977 $ 87,896 23,220 $ 87,270 Refer to Notes to Consolidated Financial Statements. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS 2017 2016 2015 6,550 S 7,366 $ 1,283 $ (101) 1,182 7,366 1,260 1,970 236 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 219 (1,256) (628) 281 6,550 1,787 258 (856) (449) 158 1,146 647 (224) (221) 8,796 73 (122) (137) (374) 929 1,459 1,218 (269) 3,529 6,995 744 (157) 10,528 (16,520) 15,911 (3,900) (15,499) 16,624 (838) (15,831) 14,079 (2,491) 3,821 (1,675) 104 (126) (2,385) 1,035 (2,262) 150 (209) (999) 565 (2,553) 85 (40) (6,186) 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) nancing activities from discontinued operations Net cash provided by (used in) discontinued operations EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS Net increase (decrease) during the year Balance at beginning of year Balance at end of year 29,857 (28,768) 1,595 (3,682) (6,320) (91) (7,409) 27,281 (25,615) 1,434 (3,681) (6,043) 79 (6,545) 40,434 (37.738) 1,245 (3,564) (5,741) 251 (5,113) 111 (65) (38) 8 242 (6) (878) (2,549) 1,246 8,555 7,309 6,006 $ 8,555 $ (1,649) 8,958 $ 7,309 Refer to Notes to Consolidated Financial Statements. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY 2017 2016 2015 4,288 4,366 53 44 4,324 50 (86) 4,288 (82) (86) 4,259 4,324 1,760 $ 1,760 $ 1,760 14,016 13,154 14,993 655 589 532 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 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) 94 130 258 219 236 15,864 14,993 14,016 65,502 1,248 (6,320) 60,430 65,018 6,527 (6,043) 65,502 63,408 7,351 (5,741) 65,018 (11,205) 900 (10,174) (1,031) (5,777) (4,397) (10,305) (11,205) (10,174) (47,988) (45,066) (42,225) 909 811 696 (3,598) (3,733) (3,537) (50,677) (47,988) (45,066) $ 17,072 $ 23,062 $ 25,554 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 158 $ 210 $ 241 35 38 (15) 23 (13) (25) 15 (18) (31) 1 (3) 1,805 (157) 41 (34) (4) 158 $ 6 $ 1,905 $ 210 Refer to Notes to Consolidated Financial Statements. Appendix D Specimen Financial Statements: PepsiCo, Inc. Pepsico, Inc. is a leading global food and beverage company with a complementary portfolio of enjoyable brands, including Frito-Lay, Gatorade, Pepsi-Cola, Quaker, and Tropicana. Through its operations, authorized bottlers, contract manufacturers, and other third parties, PepsiCo makes, markets, distributes, and sells a wide variety of convenient and enjoyable beverages, foods, and snacks, serving customers and consumers in more than 200 countries and territories. 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 2016 62,799 $ 28,209 34,740 34,590 24,805 2015 63,056 28,731 34,325 24,613 1,359 8,353 (970) 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 24,231 9,785 (1,342) 10,509 (1,151) 244 9,602 4,694 110 59 7,442 8,553 2,174 6,379 1,941 4,908 5,501 50 49 51 4,857 $ 6,329 $ 5,452 $ 3.40 $ 3.38 $ 4.39 $ 4.36 $ 3.71 3.67 $ Net Income Attributable to PepsiCo per Common Share Basic Diluted Weighted average common shares outstanding Basic Diluted Cash dividends declared per common share 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 (2,827) 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 3 1,109 (36) (159) (68) 16 862 (302) 46 (316) (24) 171 1 Comprehensive income Comprehensive income attributable to noncontrolling interests Comprehensive Income Attributable to PepsiCo 5,770 (51) 5,719 $ (596) 5,783 (54) 5,729 $ (2,652) 2,849 (47) 2,802 $ See accompanying notes to the consolidated financial statements. 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 $ 6,379 $ 2,368 4,908 $ 2,369 292 295 (113) 284 160 (125) 373 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 5,501 2,416 295 230 (208) 73 1,359 467 (205) 78 501 221 (220) 619 (695) 452 2,451 (202) (168) (349) (75) 20 10 997 201 (338) (341) (461) (244) (50) 1,692 55 (134) 10,864 329 64 10,673 9,994 (2,969) 180 (61) (3,040) 99 (212) (2,758) 86 (86) (568) 76 267 85 (18,385) 15,744 (12,504) 8,399 (4,428) 4,111 790 2 16 29 9 3 (5) (3,569) (4,403) (7,148) 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 7,509 (4,406) 7,818 (3,105) (2,504) 8,702 (4,095) 91 (128) (1,016) (4,472) (2,000) (5) 462 (145) (76) 59 (27) 1,505 (4,227) (3,000) (7) 465 (130) (58) 15 (43) 53 (4,040) (5,000) (5) 504 (151) (52) Net Cash Used for Financing Activities Effect of exchange rate changes on cash and cash equivalents 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. (4,186) 47 1,452 9,158 10,610 $ (3,211) (252) 62 9,096 9,158 $ (4,112) (221) 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 $ 10,610 8,900 7,024 2,947 1,546 31,027 17,240 1,268 $ 9,158 6,967 6,694 2,723 908 26,450 16,591 1,237 14,430 12,196 14,744 12,570 26,626 Nonamortizable Intangible Assets Investments in Noncontrolled Affiliates Other Assets Total Assets 27,314 2,042 913 $ 79,804 1,950 636 $ 73,490 LIABILITIES AND EQUITY Current Liabilities Short-term debt obligations $ 5,485 15,017 20,502 33,796 11,283 3,242 68,823 $ 6,892 14,243 21,135 30,053 6,669 4,434 62,291 41 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 123 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) 41 (197) (192) 24 3,996 52,839 (13,057) (32,757) 24 4,091 52,518 (13,919) (31,468) 11,045 11,246 104 Total PepsiCo Common Shareholders' Equity Noncontrolling interests Total Equity Total Liabilities and Equity 92 10,981 11,199 79,804 $ 73,490 See accompanying notes to the consolidated financial statements. 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) (5) (6) (5) (0.7) (197) (0.7) (192) (0.7) (186) 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) 1,428 (8) 1,420 24 1,448 (20) 24 1,428 24 1,488 (40) 24 1,448 25 (1) 24 4,091 290 (236) 4,076 289 (138) 4,115 299 (182) (145) (4) 3,996 (130) (6) (151) (5) 4,076 4,091 52,518 4,857 (4,536) 50,472 6,329 (4,282) (1) 52,518 49,092 5,452 (4,071) (1) 52,839 50,472 (13,919) 862 (13,319) (600) (10,669) (2,650) (13,057) (13,919) (13,319) 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 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 (438) (31,468) (18) (2,000) 10 708 (418) (29,185) (29) (3,000) 9 712 (378) (24,985) (52) (4,999) 794 12 3 (446) (32,757) 5 (438) (31,468) 11,246 5 (418) (29,185) 11,045 12,068 104 107 110 50 51 (62) (55) 49 (48) (2) (2) 4 (2) (1) 92 104 107 Balance, end of year Total Equity $ 11,199 10,981 12,030 (a) Includes total tax benefits of $110 million in 2016 and $107 million in 2015. See accompanying notes to the consolidated financial statements