Create a 10- to 12-slide presentation that addresses each question within the Comparative
Analysis Case, pp. 824-825.
The Coca-Cola Company and PepsiCo, Inc.
Use the companies' financial information to answer the following questions.
(a) What is the par or stated value of Coca-Cola's and PepsiCo's common or capital
stock?
(b) What percentage of authorized shares was issued by Coca-Cola at December
31, 2014, and by PepsiCo at December 31, 2014?
(c) How many shares are held as treasury stock by Coca-Cola at December 31, 2014,
and by PepsiCo at December 31, 2014?
(d) How many Coca-Cola common shares are outstanding at December 31, 2014?
How many PepsiCo shares of capital stock are outstanding at December 31, 2014?
(e) What amounts of cash dividends per share were declared by Coca-Cola and
PepsiCo in 2014? What were the dollar amount effects of the cash dividends on each
company's stockholders' equity?
(f) What are Coca-Cola's and PepsiCo's return on common/capital stockholders'
equity for 2014 and 2013? Which company gets the higher return on the equity of its
shareholders?
(g) What are Coca-Cola's and PepsiCo's payout ratios for 2014?
(h) What was the market price range (high/low) for Coca-Cola's common stock and
PepsiCo's capital stock during the fourth quarter of 2014? Which company's (CocaCola's or PepsiCo's) stock price increased more (%) during 2014?
C Specimen Financial Statements: The CocaCola 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.
To access Coca-Cola's complete annual report, including notes to the financial statements, follow
these steps:
1. Go to http://www.coca-colacompany.com/investors/.
2. Select Financial Reports and Information and then click on 2014 Annual Report on Form
10-K.
3. The Notes to Consolidated Financial Statements begin on page 78.
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF INCOME
Year Ended December 31,
2014
2013
2012
(In millions except per share data)
$
$
$
NET OPERATING REVENUES
45,998 46,854 48,017
Cost of goods sold
17,889 18,421 19,053
GROSS PROFIT
28,109 28,433 28,964
Selling, general and administrative expenses
17,218 17,310 17,738
Other operating charges
1,183 895
447
OPERATING INCOME
9,708 10,228 10,779
Interest income
594
534
471
Interest expense
483
463
397
Equity income (loss) — net
769
602
819
Other income (loss) — net
(1,263) 576
137
INCOME BEFORE INCOME TAXES
9,325 11,477 11,809
Income taxes
2,201 2,851 2,723
CONSOLIDATED NET INCOME
7,124 8,626 9,086
Less: Net income attributable to noncontrolling interests
26
42
67
NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF
$
$
$
THE COCA-COLA COMPANY
7,098 8,584 9,019
$
$
$
BASIC NET INCOME PER SHARE1
1.62
1.94
2.00
$
$
$
DILUTED NET INCOME PER SHARE1
1.60
1.90
1.97
AVERAGE SHARES OUTSTANDING
4,387 4,434 4,504
Effect of dilutive securities
63
75
80
AVERAGE SHARES OUTSTANDING ASSUMING
4,450 4,509 4,584
DILUTION
1
Calculated based on net income attributable to shareowners of The Coca-Cola Company.
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
Year Ended December 31,
2014 2013 2012
(In millions)
$
$
$
CONSOLIDATED NET INCOME
7,124 8,626 9,086
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
Other comprehensive income:
Net foreign currency translation adjustment
(2,382) (1,187) (182)
Net gain (loss) on derivatives
357
151
99
Net unrealized gain (loss) on available-for-sale securities
714
(80)
178
Net change in pension and other benefit liabilities
(1,039) 1,066 (668)
TOTAL COMPREHENSIVE INCOME
4,774 8,576 8,513
Less: Comprehensive income (loss) attributable to noncontrolling
21
39
105
interests
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO
$
$
$
SHAREOWNERS OF THE COCA-COLA COMPANY
4,753 8,537 8,408
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS
December 31,
2014
2013
(In millions except par value)
ASSETS
CURRENT ASSETS
$
$
Cash and cash equivalents
8,958
10,414
Short-term investments
9,052
6,707
TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM
18,010 17,121
INVESTMENTS
Marketable securities
3,665
3,147
Trade accounts receivable, less allowances of $331 and $61, respectively 4,466
4,873
Inventories
3,100
3,277
Prepaid expenses and other assets
3,066
2,886
Assets held for sale
679
—
TOTAL CURRENT ASSETS
32,986 31,304
EQUITY METHOD INVESTMENTS
9,947
10,393
OTHER INVESTMENTS
3,678
1,119
OTHER ASSETS
4,407
4,661
PROPERTY, PLANT AND EQUIPMENT — net
14,633 14,967
TRADEMARKS WITH INDEFINITE LIVES
6,533
6,744
BOTTLERS' FRANCHISE RIGHTS WITH INDEFINITE LIVES
6,689
7,415
GOODWILL
12,100 12,312
OTHER INTANGIBLE ASSETS
1,050
1,140
$
$
TOTAL ASSETS
92,023 90,055
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS
LIABILITIES AND EQUITY
CURRENT LIABILITIES
$
$
Accounts payable and accrued expenses
9,234
9,577
Loans and notes payable
19,130 16,901
Current maturities of long-term debt
3,552
1,024
Accrued income taxes
400
309
Liabilities held for sale
58
—
TOTAL CURRENT LIABILITIES
32,374 27,811
LONG-TERM DEBT
19,063 19,154
OTHER LIABILITIES
4,389
3,498
DEFERRED INCOME TAXES
5,636
6,152
THE COCA-COLA COMPANY SHAREOWNERS' EQUITY
Common stock, $0.25 par value; Authorized — 11,200 shares;
Issued — 7,040 and 7,040 shares, respectively
1,760
1,760
Capital surplus
13,154 12,276
Reinvested earnings
63,408 61,660
Accumulated other comprehensive income (loss)
(5,777) (3,432)
Treasury stock, at cost — 2,674 and 2,638 shares, respectively
(42,225) (39,091)
EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA30,320 33,173
COLA COMPANY
EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS
241
267
TOTAL EQUITY
30,561 33,440
$
$
TOTAL LIABILITIES AND EQUITY
92,023 90,055
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF CASH FLOWS
Year Ended December 31,
2014
2013
2012
(In millions)
OPERATING ACTIVITIES
$
$
$
Consolidated net income
7,124
8,626
9,086
Depreciation and amortization
1,976
1,977
1,982
Stock-based compensation expense
209
227
259
Deferred income taxes
(40)
648
632
Equity (income) loss — net of dividends
(371)
(201)
(426)
Foreign currency adjustments
415
168
(130)
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF CASH FLOWS
Significant (gains) losses on sales of assets — net
831
(670)
(98)
Other operating charges
761
465
166
Other items
149
234
254
Net change in operating assets and liabilities
(439)
(932)
(1,080)
Net cash provided by operating activities
10,615 10,542 10,645
INVESTING ACTIVITIES
Purchases of investments
(17,800) (14,782) (14,824)
Proceeds from disposals of investments
12,986 12,791 7,791
Acquisitions of businesses, equity method investments and
(389)
(353)
(1,486)
nonmarketable securities
Proceeds from disposals of businesses, equity method investments
148
872
20
and nonmarketable securities
Purchases of property, plant and equipment
(2,406) (2,550) (2,780)
Proceeds from disposals of property, plant and equipment
223
111
143
Other investing activities
(268)
(303)
(268)
Net cash provided by (used in) investing activities
(7,506) (4,214) (11,404)
FINANCING ACTIVITIES
Issuances of debt
41,674 43,425 42,791
Payments of debt
(36,962) (38,714) (38,573)
Issuances of stock
1,532
1,328
1,489
Purchases of stock for treasury
(4,162) (4,832) (4,559)
Dividends
(5,350) (4,969) (4,595)
Other financing activities
(363)
17
100
Net cash provided by (used in) financing activities
(3,631) (3,745) (3,347)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
(934)
(611)
(255)
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS
Net increase (decrease) during the year
(1,456) 1,972
(4,361)
Balance at beginning of year
10,414 8,442
12,803
$
$
$
Balance at end of year
8,958
10,414 8,442
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF SHAREOWNERS' EQUITY
Year Ended December 31,
2014
2013
2012
(In millions except per share data)
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF SHAREOWNERS' EQUITY
EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE
COCA-COLA COMPANY NUMBER OF COMMON
SHARES OUTSTANDING
Balance at beginning of year
4,402
4,469
4,526
Purchases of treasury stock
(98)
(121)
(121)
Treasury stock issued to employees related to stock
62
54
64
compensation plans
Balance at end of year
4,366
4,402
4,469
$
$
$
COMMON STOCK
1,760
1,760
1,760
CAPITAL SURPLUS
Balance at beginning of year
12,276 11,379 10,332
Stock issued to employees related to stock compensation plans 526
569
640
Tax benefit (charge) from stock compensation plans
169
144
144
Stock-based compensation
209
227
259
Other activities
(26)
(43)
4
Balance at end of year
13,154 12,276 11,379
REINVESTED EARNINGS
Balance at beginning of year
61,660 58,045 53,621
Net income attributable to shareowners of The Coca-Cola
7,098
8,584
9,019
Company
Dividends (per share — $1.22, $1.12 and $1.02 in 2014, 2013
(5,350) (4,969) (4,595)
and 2012, respectively)
Balance at end of year
63,408 61,660 58,045
ACCUMULATED OTHER COMPREHENSIVE INCOME
(LOSS)
Balance at beginning of year
(3,432) (3,385) (2,774)
Net other comprehensive income (loss)
(2,345) (47)
(611)
Balance at end of year
(5,777) (3,432) (3,385)
TREASURY STOCK
Balance at beginning of year
(39,091) (35,009) (31,304)
Stock issued to employees related to stock compensation plans 891
745
786
Purchases of treasury stock
(4,025) (4,827) (4,491)
Balance at end of year
(42,225) (39,091) (35,009)
TOTAL EQUITY ATTRIBUTABLE TO SHAREOWNERS
$
$
$
OF THE COCA-COLA COMPANY
30,320 33,173 32,790
EQUITY ATTRIBUTABLE TO NONCONTROLLING
INTERESTS
THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF SHAREOWNERS' EQUITY
$
Balance at beginning of year
$
378 $ 286
267
Net income attributable to noncontrolling interests
26
42
67
Net foreign currency translation adjustment
(5)
(3)
38
Dividends paid to noncontrolling interests
(25)
(58)
(48)
Acquisition of interests held by noncontrolling owners
—
(34)
(15)
Contributions by noncontrolling interests
—
6
—
Business combinations
(22)
25
50
Deconsolidation of certain entities
—
(89)
—
TOTAL EQUITY ATTRIBUTABLE TO
$
241 $
267 $ 378
NONCONTROLLING INTERESTS
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. To access PepsiCo's complete
annual report, including notes to the financial statements, follow these steps:
1. Go to http://www.pepsico.com/Investors.
2. Select SEC Filings and then the 10K, dated 2/12/2015 (select the pdf version).
3. Select Entire document.
4. The Notes to Consolidated Financial Statements begin on page 73.
1. Consolidated Statement of Income
2. PepsiCo, Inc. and Subsidiaries
3. Fiscal years ended December 27, 2014, December 28, 2013 and December 29, 2012
4. (in millions except per share amounts
1. Consolidated Statement of Comprehensive Income
2. PepsiCo, Inc. and Subsidiaries
3. Fiscal years ended December 27, 2014, December 28, 2013 and December 29, 2012
4. (in millions)
1. Consolidated Statement of Cash Flows
2. PepsiCo, Inc. and Subsidiaries
3. Fiscal years ended December 27, 2014, December 28, 2013 and December 29, 2012
4. (in millions)
1. Consolidated Balance Sheet
2. PepsiCo, Inc. and Subsidiaries
3. December 27, 2014 and December 28, 2013
4. (in millions except per share amounts)
1. Consolidated Statement of Equity
2. PepsiCo, Inc. and Subsidiaries
3. Fiscal years ended December 27, 2014, December 28, 2013 and December 29, 2012
4. (in millions)
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