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Pepsico 10k 2014

16/12/2020 Client: saad24vbs Deadline: 14 Days

Create a 10- to 12-slide presentation that addresses each question within the Comparative Analysis Case, pp. 824-825.

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. Stock price data can be found in the company's annual 10K, filed at the SEC.

Instructions

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 (Coca-Cola's or PepsiCo's) stock price increased more (%) during 2014?

Appendice C

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

NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY

$ 7,098

$ 8,584

$ 9,019

BASIC NET INCOME PER SHARE 1

$ 1.62

$ 1.94

$ 2.00

DILUTED NET INCOME PER SHARE 1

$ 1.60

$ 1.90

$ 1.97

AVERAGE SHARES OUTSTANDING

4,387

4,434

4,504

Effect of dilutive securities

AVERAGE SHARES OUTSTANDING ASSUMING DILUTION

4,450

4,509

4,584

1Calculated 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

Other comprehensive income:

Net foreign currency translation adjustment

(2,382)

(1,187)

(182)

Net gain (loss) on derivatives

357

151

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 interests

105

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 INVESTMENTS

18,010

17,121

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

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

—

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

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 COCA-COLA COMPANY

30,320

33,173

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)

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 nonmarketable securities

(389)

(353)

(1,486)

Proceeds from disposals of businesses, equity method investments and nonmarketable securities

148

872

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)

100

Net cash provided by (used in) financing activities

(3,631)

(3,745)

(3,347)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

(934)

(611)

(255)

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)

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)

Treasury stock issued to employees related to stock compensation plans

Balance at end of year

4,366

4,402

4,469

COMMON STOCK

$ 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

Stock-based compensation

209

227

259

Other activities

(26)

(43)

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 Company

7,098

8,584

9,019

Dividends (per share — $1.22, $1.12 and $1.02 in 2014, 2013 and 2012, respectively)

(5,350)

(4,969)

(4,595)

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

Balance at beginning of year

$ 267

$ 378

$ 286

Net income attributable to noncontrolling interests

Net foreign currency translation adjustment

(5)

(3)

Dividends paid to noncontrolling interests

(25)

(58)

(48)

Acquisition of interests held by noncontrolling owners

—

(34)

(15)

Contributions by noncontrolling interests

—

Business combinations

(22)

Deconsolidation of certain entities

—

(89)

—

TOTAL EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS

$ 241

$ 267

$ 378

Appendice D

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.

· Consolidated Statement of Income