Appendix D Specimen Financial Statements: PepsiCo, Inc. PepsiCo, Inc. is a leading global food and beverage...

Transcribed Image Text:

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. The following are PepsiCo's financial statements as presented in its 2020 10-K report. The complete report, including notes to the financial statements, is available at the company's website. Consolidated Statement of Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 26, 2020, December 28, 2019 and December 29, 2018 (in millions except per share amounts) Net Revenue Cost of sales Gross profit Selling, general and administrative expenses Operating Profit Other pension and retiree medical benefits income/(expense) Net interest expense and other Income before income taxes Provision for/(benefit from) 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 Consolidated Statement of Comprehensive Income PepsiCo, Inc. and Subsidiaries 2020 2019 2018 $ 70,372 $67,161 $64,661 31,797 30,132 38,575 29,381 37,029 35,280 28,495 26,738 25,170 10,080 10,291 10,110 117 (44) 298 (1,128) (935) (1,219) 9,069 9,312 9,189 1,894 1,959 (3,370) 7,175 7,353 12,559 55 39 44 $7,120 $ 7,314 $ 12,515 $ 5.14 $5.23 $ 8.84 $ 5.12 $5.20 $8.78 1,385 1,399 1,415 1,392 1,407 1,425 Consolidated Statement of Comprehensive Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 26, 2020, December 28, 2019 and December 29, 2018 (in millions) Net income Other comprehensive (loss)/income, net of taxes: Net currency translation adjustment Net change on cash flow hedges Net pension and retiree medical adjustments Other Comprehensive income Less: Comprehensive income attributable to noncontrolling interests Comprehensive Income Attributable to PepsiCo Consolidated Statement of Cash Flows PepsiCo, Inc. and Subsidiaries Fiscal years ended December 26, 2020, December 28, 2019 and December 29, 2018 (in millions) Operating Activities Net income Depreciation and amortization Share-based compensation expense Restructuring and impairment charges Cash payments for restructuring charges Inventory fair value adjustments and merger and integration charges Cash payments for merger and integration charges Pension and retiree medical plan expenses Pension and retiree medical plan contributions Deferred income taxes and other tax charges and credits 2020 2019 2018 $7,175 $ 7,353 $12,559 (650) 628 (1,641) 7 (90) 40 (532) 283 (467) (1) (2) 6 (1,176) 819 (2,062) 5,999 8,172 10,497 55 39 44 $5,944 $ 8,133 $10,453 2020 2019 2018 $ 7,175 $ 7,353 $12,559 2,548 2,432 2,399 264 237 256 289 370 308 (255) (350) (255) 255 55 75 (131) (10) (73) 408 519 221 (562) (716) (1,708) 361 453 (531) Operating Activities Net income Depreciation and amortization Share-based compensation expense Restructuring and impairment charges Cash payments for restructuring charges Inventory fair value adjustments and merger and integration charges Cash payments for merger and integration charges Pension and retiree medical plan expenses Pension and retiree medical plan contributions Deferred income taxes and other tax charges and credits Net tax related to the TCJ Act Tax payments related to the TCJ Act Other net tax benefits related to international reorganizations 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 Acquisitions, net of cash acquired, and investments in noncontrolled affiliates Divestitures Short-term investments, by original maturity: More than three months - purchases More than three months - maturities More than three months - sales $ 7,175 $ 7,353 $12,559 2,548 2,432 2,399 264 237 256 289 370 308 (255) (350) (255) 255 55 75 (131) (10) (73) 408 519 221 (562) (716) (1,708) 361 453 (531) (8) (28) (78) (423) (115) | (2) (4,347) (420) (650) (253) (516) (190) (174) 26 (87) 9 766 735 882 (159) (287) 448 642 10,613 218 (258) 9,649 9,415 (4,240) 55 (4,232) 170 (3,282) 134 (6,372) (2,717) 253 (1,496) 505 (1,135) (5,637) 25 16 12,824 62 1,498 Net Cash Provided by Operating Activities Investing Activities Capital spending Sales of property, plant and equipment Acquisitions, net of cash acquired, and investments in noncontrolled affiliates 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)/Provided by Investing Activities Financing Activities Proceeds from issuances of long-term debt Payments of long-term debt Debt redemption/cash tender and exchange offers 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 Proceeds from exercises of stock options Withholding tax payments on restricted stock units (RSUs), performance stock units (PSUs) and PepsiCo equity performance units (PEPunits) converted Other financing Net Cash Provided by/(Used for) Financing Activities Effect of exchange rate changes on cash and cash equivalents and restricted cash Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash Cash and Cash Equivalents and Restricted Cash, Beginning of Year 10,613 9,649 9,415 (4,240) (4,232) 55 170 (3,282) 134 (6,372) (2,717) (1,496) 4 253 505 (1,135) (5,637) 16 12,824 62 1,498 27 19 16 42 (8) 2 (11,619) (6,437) 4,564 2020 2019 2018 $13,809 $ 4,621 (1,830) (3,970) (4,007) (1,100) (1,007) (1,589) 4,077 (3,554) (17) (109) (3) (1,352) (5,509) (5,304) (4,930) (2,000) (3,000) (2,000) 179 329 281 (96) (114) (103) (48) (45) (55) 3,819 (8,489) (13,769) (129) 78 (98) 2,684 (5,199) 112 5,570 10,769 10,657 Withholding tax payments on restricted stock units (RSUs), performance stock units (PSUs) and PepsiCo equity performance units (PEPunits) converted Other financing Net Cash Provided by/(Used for) Financing Activities Effect of exchange rate changes on cash and cash equivalents and restricted cash Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash Cash and Cash Equivalents and Restricted Cash, Beginning of Year Cash and Cash Equivalents and Restricted Cash, End of Year Consolidated Balance Sheet PepsiCo, Inc. and Subsidiaries December 26, 2020 and December 28, 2019 (in millions except per share amounts) 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 Indefinite-Lived Intangible Assets Investments in Noncontrolled Affiliates Deferred Income Taxes Other Assets Total Assets LIABILITIES AND EQUITY (96) (114) (103) (48) (45) (55) 3,819 (8,489) (13,769) (129) 78 (98) 2,684 (5,199) 112 5,570 10,769 $ 8,254 $ 5,570 10,657 $ 10,769 2020 2019 $ 8,185 $ 5,509 1,366 229 8,404 7,822 4,172 3,338 874 747 23,001 17,645 21,369 19,305 1,703 1,433 18,757 15,501 17,612 14,610 2,792 2,683 4,372 4,359 3,312 3,011 $92,918 $ 78,547 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 PepsiCo Common Shareholders' Equity Common stock, par value 12/3 per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,380 and 1,391 shares, respectively) Capital in excess of par value Retained earnings Accumulated other comprehensive loss Repurchased common stock, in excess of par value (487 and 476 shares, respectively) Total PepsiCo Common Shareholders' Equity Noncontrolling interests Total Equity Total Liabilities and Equity Consolidated Statement of Equity PepsiCo, Inc. and Subsidiaries Fiscal years ended December 26, 2020, December 28, 2019 and December 29, 2018 (in millions except per share amounts) Preferred Stock $ 3,780 $ 2,920 19,592 17,541 23,372 20,461 40,370 29,148 4,284 4,091 11,340 9,979 79,366 63,679 23 23 3,910 3,886 63,443 61,946 (15,476) (14,300) (38,446) (36,769) 13,454 98 14,786 13,552 $92,918 82 14,868 $ 78,547 2020 2019 2018 Shares Amount Shares Amount Shares Amount Preferred Stock Balance, beginning of year Conversion to common stock Retirement of preferred stock Balance, end of year Repurchased Preferred Stock Balance, beginning of year Redemptions Retirement of preferred stock Balance, end of year Common Stock Balance, beginning of year Shares issued in connection with preferred stock conversion to common stock Change in repurchased common stock Balance, end of year Capital in Excess of Par Value Balance, beginning of year Share-based compensation expense Equity issued in connection with preferred stock conversion to common stock Stock option exercises, RSUs, PSUs and PEPunits converted Withholding tax on RSUs, PSUs and PEPunits converted Other Balance, end of year Retained Earnings Balance, beginning of year Cumulative effect of accounting changes Net income attributable to PepsiCo Cash dividends declared - commona Retirement of preferred stock Balance, end of year Shares 2020 1,391 (11) 1,380 2019 2018 Amount Shares Amount Shares Amount | | 0.8 $ 41 (0.1) (6) (0.7) (35) (0.7) (197) (2) 0.7 199 1,409 23 1,420 24 | (18) (12) (1) 1,391 23 1,409 23 3,886 263 3,953 235 3,996 250 6 (143) (188) (193) (96) (114) (103) (3) 3,910 3,886 3,953 61,946 59,947 52,839 (34) 8 (145) 7,120 7,314 12,515 (5,589) (5,323) (5,098) (164) 63,443 61,946 59,947 Balance, end of year Retained Earnings Balance, beginning of year Cumulative effect of accounting changes Net income attributable to PepsiCo Cash dividends declared - common Retirement of preferred stock Balance, end of year 3,910 3,886 3,953 61,946 59,947 52,839 (34) (145) 7,120 7,314 12,515 (5,589) (5,323) (5,098) (164) 63,443 61,946 59,947 Accumulated Other Comprehensive Loss Balance, beginning of year (14,300) (15,119) (13,057) Other comprehensive (loss)/income attributable to PepsiCo (1,176) 819 (2,062) Balance, end of year (15,476) (14,300) (15,119) Repurchased Common Stock Balance, beginning of year (476) (36,769) (458) (34,286) (446) (32,757) Share repurchases (15) (2,000) (24) (3,000) (18) (2,000) Stock option exercises, RSUs, PSUs and PEPunits converted 322 6 516 469 Other 1 1 2 Balance, end of year (487) (38,446) (476) (36,769) (458) (34,286) Total PepsiCo Common Shareholders' Equity 13,454 14,786 14,518 Noncontrolling Interests Balance, beginning of year Net income attributable to noncontrolling interests Distributions to noncontrolling interests Acquisitions Other, net Balance, end of year Total Equity 98 82 84 92 55 39 44 (44) (42) (49) 5 (3) 84 1 82 $13,552 $14,868 $ 14,602 aCash dividends declared per common share were $4.0225, $3.7925 and $3.5875 for 2020, 2019 and 2018, respectively. 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 following are Coca-Cola's financial statements as presented in its 2020 10-K report. The complete report, including notes to the financial statements, is available at the company's website. Year Ended December 31, Net Operating Revenues Cost of goods sold Gross Profit Selling, general and administrative expenses THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In millions except per share data) 2020 2019 2018 $33,014 $37,266 $34,300 13,433 14,619 13,067 19,581 22,647 21,233 9,731 12,103 11,002 853 458 1,079 8,997 10,086 9,152 370 563 689 1,437 946 950 978 1,049 1,008 841 34 (1,674) 9,749 10,786 8,225 1,981 1,801 1,749 7,768 8,985 6,476 21 65 42 $7,747 $ 8,920 $ 6,434 $ 2.09 $ 1.51 $ 2.07 $ 1.50 4,276 4,259 Other operating charges Operating Income Interest income Interest expense Equity income (loss)net Other income (loss)-net Income Before Income Taxes Income taxes Consolidated Net Income Less: Net income (loss) attributable to noncontrolling interests Net Income Attributable to Shareowners of The Coca-Cola Company Basic Net Income Per Share $ 1.80 $ 1.79 Diluted Net Income Per Share Average Shares Outstanding-Basic Effect of dilutive securities Average Shares OutstandingDiluted Calculated based on net income attributable to shareowners of The Coca-Cola Company. 4,295 28 4,323 4,314 38 40 4,299 Calculated based on net income attributable to shareowners of The Coca-Cola Company. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31, Consolidated Net Income Other Comprehensive Income: Net foreign currency translation adjustments Net gains (losses) on derivatives Net change in unrealized gains (losses) on available-for-sale debt securities Net change in pension and other postretirement benefit liabilities Total Comprehensive Income Less: Comprehensive income attributable to noncontrolling interests Total Comprehensive Income Attributable to Shareowners of The Coca-Cola Company December 31, 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 $526 and $524, respectively Inventories Prepaid expenses and other assets Total Current Assets Equity method investments Other investments Other assets Deferred income tax assets 2020 2019 2018 $ 7,768 $8,985 $6,476 (911) 74 (2,035) 15 (54) (7) (47) 18 (34) (267) (159) 29 6,558 8,864 4,429 (132) 110 $6,690 $8,754 95 $4,334 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions except par value) ASSETS 2020 2019 $ 6,795 $ 6,480 1,771 1,467 8,566 7,947 2,348 3,228 3,144 3,971 3,266 3,379 1,916 1,886 19,240 20,411 19,273 19,025 812 854 6,184 6,075 2,460 2,412 Essels Deferred income tax assets Property, plant and equipmentnet Trademarks with indefinite lives Goodwill Other intangible assets Total Assets Current Liabilities Accounts payable and accrued expenses Loans and notes payable Current maturities of long-term debt Accrued income taxes Total Current Liabilities Long-term debt Other liabilities Deferred income tax liabilities The Coca-Cola Company Shareowners' Equity Common stock, $0.25 par value; authorized-11,200 shares; issued-7,040 shares Capital surplus Reinvested earnings Accumulated other comprehensive income (loss) Treasury stock, at cost2,738 and 2,760 shares, respectively Equity Attributable to Shareowners of The Coca-Cola Company Equity attributable to noncontrolling interests Total Equity Total Liabilities and Equity 2,460 2,412 10,777 10,838 10,395 9,266 17,506 16,764 649 736 $87,296 $86,381 LIABILITIES AND EQUITY $11,145 2,183 $11,312 10,994 485 4,253 788 414 14,601 26,973 40,125 27,516 9,453 8,510 1,833 2,284 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) 1,760 1,760 17,601 17,154 66,555 65,855 (14,601) (13,544) (52,016) (52,244) 19,299 18,981 1,985 2,117 21,284 21,098 $87,296 $86,381 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31, Operating Activities Consolidated net income Depreciation and amortization Stock-based compensation expense Deferred income taxes Equity (income) loss-net of dividends Foreign currency adjustments Significant (gains) losses-net Other operating charges Other items Net change in operating assets and liabilities Net Cash Provided by Operating Activities Investing Activities Purchases of investments 2020 2019 2018 $ 7,768 $ 8,985 $ 6,476 1,536 1,365 1,086 126 201 225 (18) (280) (413) (511) (421) (457) (88) 91 (50) (914) (467) 743 556 127 558 699 504 699 690 366 (1,240) 9,844 10,471 7,627 (13,583) (4,704) (7,789) Proceeds from disposals of investments 13,835 6,973 14,977 Acquisitions of businesses, equity method investments and nonmarketable securities (1,052) (5,542) (1,263) Proceeds from disposals of businesses, equity method investments and nonmarketable securities Purchases of property, plant and equipment 189 429 1,362 (1,177) (2,054) (1,548) Proceeds from disposals of property, plant and equipment 189 978 248 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 122 (56) (60) (1,477) (3,976) 5,927 26,934 23,009 27,605 (28,796) (24,850) (30,600) 647 1,012 1,476 (118) (1,103) (1,912) (7,047) (6,845) (6,644) 310 (227) (272) Other financing activities Net Cash Provided by (Used in) Financing Activities 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 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY (In millions except per share data) Year Ended December 31, 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-based compensation plans Purchases of stock for treasury Balance at end of year Common Stock 310 (227) (272) (8,070) (9,004) (10,347) 76 (72) (262) 373 (2,581) 2,945 6,737 9,318 6,373 7,110 6,737 9,318 315 257 241 $ 6,795 $ 6,480 $ 9,077 2020 2019 2018 4,280 22 4,268 33 4,259 48 (21) 4,302 4,280 (39) 4,268 $ 1,760 $1,760 $ 1,760 Capital Surplus Balance at beginning of year Stock issued to employees related to stock-based compensation plans Stock-based compensation expense Other activities Balance at end of year Reinvested Earnings 17,154 16,520 15,864 307 433 467 141 201 225 (1) (36) 17,601 17,154 16,520 Balance at beginning of year 65,855 63,234 60,430 Adoption of accounting standards_ 546 3,014 Net income attributable to shareowners of The Coca-Cola Company 7,747 8,920 6,434 Dividends (per share$1.64, $1.60 and $1.56 in 2020, 2019 and 2018, respectively) (7,047) (6,845) (6,644) Balance at end of year 66,555 65,855 63,234 Net income attributable to shareowners of The Coca-Cola Company 7,747 8,920 6,434 Dividends (per share $1.64, $1.60 and $1.56 in 2020, 2019 and 2018, respectively) (7,047) (6,845) (6,644) Balance at end of year 66,555 65,855 63,234 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-based 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 Acquisition of interests held by noncontrolling owners Contributions by noncontrolling interests Business combinations Other activities Total Equity Attributable to Noncontrolling Interests (13,544) (12,814) (10,305) (564) (409) (1,057) (166) (2,100) (14,601) (13,544) (12,814) (52,244) 228 (51,719) (50,677) 501 704 - (1,026) (1,746) (52,016) (52,244) (51,719) $19,299 $18,981 $16,981 $ 2,117 $ 2,077 $ 1,905 21 65 42 (153) 45 53 (18) (48) (31) (84) 17 3 59 101 - 7 $ 1,985 $ 2,117 $2,077 Current Attempt in Progress The financial statements of Coca-Cola is presented in Appendices C. Click here to view Appendix C. The financial statements of PepsiCo is presented in Appendices D. Click here to view Appendix D. The companies' complete annual reports, including the notes to the financial statements, are available online. Use the companies' financial information to answer the following questions. What were the cash and cash equivalents reported by Coca-Cola and PepsiCo at the end of 2020? (Enter answers in millions.) Cash and cash equivalents Coca-Cola Company 8185 millions PepsiCo, Inc. 5509 millions What were the accounts receivable (net) for Coca-Cola and PepsiCo at the end of 2020? (Enter answers in millions.) Accounts receivable Coca-Cola Company 3144 million PepsiCo, Inc. 8404 million Which company reports the greater allowance for doubtful accounts (amount and percentage of gross receivable) at the end of 2020? Assume PepsiCo's allowance account relates to trade receivables only. (Enter amounts in millions. Round percentage values to 2 decimal places, e.g. 52.76%.) Allowance for doubtful amount Percent of gross receivables +A Coca-Cola Company million % +A PepsiCo, Inc. Company reports the greater allowance for doubtful accounts 201 million PepsiCo % Assuming that all "net operating revenues" (Coca-Cola) and all "net revenues" (PepsiCo) were net credit sales, compute the accounts receivable turnover for 2020 for Coca-Cola and PepsiCo; also compute the days outstanding for receivables. (Round ratio values to 2 decimal places, e.g. 52.75 and other values to 1 decimal place, e.g. 52.7.) Accounts Receivable turnover Days outstanding for receivables Coca-Cola Company times days PepsiCo, Inc. times days 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. The following are PepsiCo's financial statements as presented in its 2020 10-K report. The complete report, including notes to the financial statements, is available at the company's website. Consolidated Statement of Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 26, 2020, December 28, 2019 and December 29, 2018 (in millions except per share amounts) Net Revenue Cost of sales Gross profit Selling, general and administrative expenses Operating Profit Other pension and retiree medical benefits income/(expense) Net interest expense and other Income before income taxes Provision for/(benefit from) 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 Consolidated Statement of Comprehensive Income PepsiCo, Inc. and Subsidiaries 2020 2019 2018 $ 70,372 $67,161 $64,661 31,797 30,132 38,575 29,381 37,029 35,280 28,495 26,738 25,170 10,080 10,291 10,110 117 (44) 298 (1,128) (935) (1,219) 9,069 9,312 9,189 1,894 1,959 (3,370) 7,175 7,353 12,559 55 39 44 $7,120 $ 7,314 $ 12,515 $ 5.14 $5.23 $ 8.84 $ 5.12 $5.20 $8.78 1,385 1,399 1,415 1,392 1,407 1,425 Consolidated Statement of Comprehensive Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 26, 2020, December 28, 2019 and December 29, 2018 (in millions) Net income Other comprehensive (loss)/income, net of taxes: Net currency translation adjustment Net change on cash flow hedges Net pension and retiree medical adjustments Other Comprehensive income Less: Comprehensive income attributable to noncontrolling interests Comprehensive Income Attributable to PepsiCo Consolidated Statement of Cash Flows PepsiCo, Inc. and Subsidiaries Fiscal years ended December 26, 2020, December 28, 2019 and December 29, 2018 (in millions) Operating Activities Net income Depreciation and amortization Share-based compensation expense Restructuring and impairment charges Cash payments for restructuring charges Inventory fair value adjustments and merger and integration charges Cash payments for merger and integration charges Pension and retiree medical plan expenses Pension and retiree medical plan contributions Deferred income taxes and other tax charges and credits 2020 2019 2018 $7,175 $ 7,353 $12,559 (650) 628 (1,641) 7 (90) 40 (532) 283 (467) (1) (2) 6 (1,176) 819 (2,062) 5,999 8,172 10,497 55 39 44 $5,944 $ 8,133 $10,453 2020 2019 2018 $ 7,175 $ 7,353 $12,559 2,548 2,432 2,399 264 237 256 289 370 308 (255) (350) (255) 255 55 75 (131) (10) (73) 408 519 221 (562) (716) (1,708) 361 453 (531) Operating Activities Net income Depreciation and amortization Share-based compensation expense Restructuring and impairment charges Cash payments for restructuring charges Inventory fair value adjustments and merger and integration charges Cash payments for merger and integration charges Pension and retiree medical plan expenses Pension and retiree medical plan contributions Deferred income taxes and other tax charges and credits Net tax related to the TCJ Act Tax payments related to the TCJ Act Other net tax benefits related to international reorganizations 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 Acquisitions, net of cash acquired, and investments in noncontrolled affiliates Divestitures Short-term investments, by original maturity: More than three months - purchases More than three months - maturities More than three months - sales $ 7,175 $ 7,353 $12,559 2,548 2,432 2,399 264 237 256 289 370 308 (255) (350) (255) 255 55 75 (131) (10) (73) 408 519 221 (562) (716) (1,708) 361 453 (531) (8) (28) (78) (423) (115) | (2) (4,347) (420) (650) (253) (516) (190) (174) 26 (87) 9 766 735 882 (159) (287) 448 642 10,613 218 (258) 9,649 9,415 (4,240) 55 (4,232) 170 (3,282) 134 (6,372) (2,717) 253 (1,496) 505 (1,135) (5,637) 25 16 12,824 62 1,498 Net Cash Provided by Operating Activities Investing Activities Capital spending Sales of property, plant and equipment Acquisitions, net of cash acquired, and investments in noncontrolled affiliates 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)/Provided by Investing Activities Financing Activities Proceeds from issuances of long-term debt Payments of long-term debt Debt redemption/cash tender and exchange offers 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 Proceeds from exercises of stock options Withholding tax payments on restricted stock units (RSUs), performance stock units (PSUs) and PepsiCo equity performance units (PEPunits) converted Other financing Net Cash Provided by/(Used for) Financing Activities Effect of exchange rate changes on cash and cash equivalents and restricted cash Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash Cash and Cash Equivalents and Restricted Cash, Beginning of Year 10,613 9,649 9,415 (4,240) (4,232) 55 170 (3,282) 134 (6,372) (2,717) (1,496) 4 253 505 (1,135) (5,637) 16 12,824 62 1,498 27 19 16 42 (8) 2 (11,619) (6,437) 4,564 2020 2019 2018 $13,809 $ 4,621 (1,830) (3,970) (4,007) (1,100) (1,007) (1,589) 4,077 (3,554) (17) (109) (3) (1,352) (5,509) (5,304) (4,930) (2,000) (3,000) (2,000) 179 329 281 (96) (114) (103) (48) (45) (55) 3,819 (8,489) (13,769) (129) 78 (98) 2,684 (5,199) 112 5,570 10,769 10,657 Withholding tax payments on restricted stock units (RSUs), performance stock units (PSUs) and PepsiCo equity performance units (PEPunits) converted Other financing Net Cash Provided by/(Used for) Financing Activities Effect of exchange rate changes on cash and cash equivalents and restricted cash Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash Cash and Cash Equivalents and Restricted Cash, Beginning of Year Cash and Cash Equivalents and Restricted Cash, End of Year Consolidated Balance Sheet PepsiCo, Inc. and Subsidiaries December 26, 2020 and December 28, 2019 (in millions except per share amounts) 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 Indefinite-Lived Intangible Assets Investments in Noncontrolled Affiliates Deferred Income Taxes Other Assets Total Assets LIABILITIES AND EQUITY (96) (114) (103) (48) (45) (55) 3,819 (8,489) (13,769) (129) 78 (98) 2,684 (5,199) 112 5,570 10,769 $ 8,254 $ 5,570 10,657 $ 10,769 2020 2019 $ 8,185 $ 5,509 1,366 229 8,404 7,822 4,172 3,338 874 747 23,001 17,645 21,369 19,305 1,703 1,433 18,757 15,501 17,612 14,610 2,792 2,683 4,372 4,359 3,312 3,011 $92,918 $ 78,547 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 PepsiCo Common Shareholders' Equity Common stock, par value 12/3 per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,380 and 1,391 shares, respectively) Capital in excess of par value Retained earnings Accumulated other comprehensive loss Repurchased common stock, in excess of par value (487 and 476 shares, respectively) Total PepsiCo Common Shareholders' Equity Noncontrolling interests Total Equity Total Liabilities and Equity Consolidated Statement of Equity PepsiCo, Inc. and Subsidiaries Fiscal years ended December 26, 2020, December 28, 2019 and December 29, 2018 (in millions except per share amounts) Preferred Stock $ 3,780 $ 2,920 19,592 17,541 23,372 20,461 40,370 29,148 4,284 4,091 11,340 9,979 79,366 63,679 23 23 3,910 3,886 63,443 61,946 (15,476) (14,300) (38,446) (36,769) 13,454 98 14,786 13,552 $92,918 82 14,868 $ 78,547 2020 2019 2018 Shares Amount Shares Amount Shares Amount Preferred Stock Balance, beginning of year Conversion to common stock Retirement of preferred stock Balance, end of year Repurchased Preferred Stock Balance, beginning of year Redemptions Retirement of preferred stock Balance, end of year Common Stock Balance, beginning of year Shares issued in connection with preferred stock conversion to common stock Change in repurchased common stock Balance, end of year Capital in Excess of Par Value Balance, beginning of year Share-based compensation expense Equity issued in connection with preferred stock conversion to common stock Stock option exercises, RSUs, PSUs and PEPunits converted Withholding tax on RSUs, PSUs and PEPunits converted Other Balance, end of year Retained Earnings Balance, beginning of year Cumulative effect of accounting changes Net income attributable to PepsiCo Cash dividends declared - commona Retirement of preferred stock Balance, end of year Shares 2020 1,391 (11) 1,380 2019 2018 Amount Shares Amount Shares Amount | | 0.8 $ 41 (0.1) (6) (0.7) (35) (0.7) (197) (2) 0.7 199 1,409 23 1,420 24 | (18) (12) (1) 1,391 23 1,409 23 3,886 263 3,953 235 3,996 250 6 (143) (188) (193) (96) (114) (103) (3) 3,910 3,886 3,953 61,946 59,947 52,839 (34) 8 (145) 7,120 7,314 12,515 (5,589) (5,323) (5,098) (164) 63,443 61,946 59,947 Balance, end of year Retained Earnings Balance, beginning of year Cumulative effect of accounting changes Net income attributable to PepsiCo Cash dividends declared - common Retirement of preferred stock Balance, end of year 3,910 3,886 3,953 61,946 59,947 52,839 (34) (145) 7,120 7,314 12,515 (5,589) (5,323) (5,098) (164) 63,443 61,946 59,947 Accumulated Other Comprehensive Loss Balance, beginning of year (14,300) (15,119) (13,057) Other comprehensive (loss)/income attributable to PepsiCo (1,176) 819 (2,062) Balance, end of year (15,476) (14,300) (15,119) Repurchased Common Stock Balance, beginning of year (476) (36,769) (458) (34,286) (446) (32,757) Share repurchases (15) (2,000) (24) (3,000) (18) (2,000) Stock option exercises, RSUs, PSUs and PEPunits converted 322 6 516 469 Other 1 1 2 Balance, end of year (487) (38,446) (476) (36,769) (458) (34,286) Total PepsiCo Common Shareholders' Equity 13,454 14,786 14,518 Noncontrolling Interests Balance, beginning of year Net income attributable to noncontrolling interests Distributions to noncontrolling interests Acquisitions Other, net Balance, end of year Total Equity 98 82 84 92 55 39 44 (44) (42) (49) 5 (3) 84 1 82 $13,552 $14,868 $ 14,602 aCash dividends declared per common share were $4.0225, $3.7925 and $3.5875 for 2020, 2019 and 2018, respectively. 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 following are Coca-Cola's financial statements as presented in its 2020 10-K report. The complete report, including notes to the financial statements, is available at the company's website. Year Ended December 31, Net Operating Revenues Cost of goods sold Gross Profit Selling, general and administrative expenses THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In millions except per share data) 2020 2019 2018 $33,014 $37,266 $34,300 13,433 14,619 13,067 19,581 22,647 21,233 9,731 12,103 11,002 853 458 1,079 8,997 10,086 9,152 370 563 689 1,437 946 950 978 1,049 1,008 841 34 (1,674) 9,749 10,786 8,225 1,981 1,801 1,749 7,768 8,985 6,476 21 65 42 $7,747 $ 8,920 $ 6,434 $ 2.09 $ 1.51 $ 2.07 $ 1.50 4,276 4,259 Other operating charges Operating Income Interest income Interest expense Equity income (loss)net Other income (loss)-net Income Before Income Taxes Income taxes Consolidated Net Income Less: Net income (loss) attributable to noncontrolling interests Net Income Attributable to Shareowners of The Coca-Cola Company Basic Net Income Per Share $ 1.80 $ 1.79 Diluted Net Income Per Share Average Shares Outstanding-Basic Effect of dilutive securities Average Shares OutstandingDiluted Calculated based on net income attributable to shareowners of The Coca-Cola Company. 4,295 28 4,323 4,314 38 40 4,299 Calculated based on net income attributable to shareowners of The Coca-Cola Company. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31, Consolidated Net Income Other Comprehensive Income: Net foreign currency translation adjustments Net gains (losses) on derivatives Net change in unrealized gains (losses) on available-for-sale debt securities Net change in pension and other postretirement benefit liabilities Total Comprehensive Income Less: Comprehensive income attributable to noncontrolling interests Total Comprehensive Income Attributable to Shareowners of The Coca-Cola Company December 31, 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 $526 and $524, respectively Inventories Prepaid expenses and other assets Total Current Assets Equity method investments Other investments Other assets Deferred income tax assets 2020 2019 2018 $ 7,768 $8,985 $6,476 (911) 74 (2,035) 15 (54) (7) (47) 18 (34) (267) (159) 29 6,558 8,864 4,429 (132) 110 $6,690 $8,754 95 $4,334 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions except par value) ASSETS 2020 2019 $ 6,795 $ 6,480 1,771 1,467 8,566 7,947 2,348 3,228 3,144 3,971 3,266 3,379 1,916 1,886 19,240 20,411 19,273 19,025 812 854 6,184 6,075 2,460 2,412 Essels Deferred income tax assets Property, plant and equipmentnet Trademarks with indefinite lives Goodwill Other intangible assets Total Assets Current Liabilities Accounts payable and accrued expenses Loans and notes payable Current maturities of long-term debt Accrued income taxes Total Current Liabilities Long-term debt Other liabilities Deferred income tax liabilities The Coca-Cola Company Shareowners' Equity Common stock, $0.25 par value; authorized-11,200 shares; issued-7,040 shares Capital surplus Reinvested earnings Accumulated other comprehensive income (loss) Treasury stock, at cost2,738 and 2,760 shares, respectively Equity Attributable to Shareowners of The Coca-Cola Company Equity attributable to noncontrolling interests Total Equity Total Liabilities and Equity 2,460 2,412 10,777 10,838 10,395 9,266 17,506 16,764 649 736 $87,296 $86,381 LIABILITIES AND EQUITY $11,145 2,183 $11,312 10,994 485 4,253 788 414 14,601 26,973 40,125 27,516 9,453 8,510 1,833 2,284 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) 1,760 1,760 17,601 17,154 66,555 65,855 (14,601) (13,544) (52,016) (52,244) 19,299 18,981 1,985 2,117 21,284 21,098 $87,296 $86,381 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31, Operating Activities Consolidated net income Depreciation and amortization Stock-based compensation expense Deferred income taxes Equity (income) loss-net of dividends Foreign currency adjustments Significant (gains) losses-net Other operating charges Other items Net change in operating assets and liabilities Net Cash Provided by Operating Activities Investing Activities Purchases of investments 2020 2019 2018 $ 7,768 $ 8,985 $ 6,476 1,536 1,365 1,086 126 201 225 (18) (280) (413) (511) (421) (457) (88) 91 (50) (914) (467) 743 556 127 558 699 504 699 690 366 (1,240) 9,844 10,471 7,627 (13,583) (4,704) (7,789) Proceeds from disposals of investments 13,835 6,973 14,977 Acquisitions of businesses, equity method investments and nonmarketable securities (1,052) (5,542) (1,263) Proceeds from disposals of businesses, equity method investments and nonmarketable securities Purchases of property, plant and equipment 189 429 1,362 (1,177) (2,054) (1,548) Proceeds from disposals of property, plant and equipment 189 978 248 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 122 (56) (60) (1,477) (3,976) 5,927 26,934 23,009 27,605 (28,796) (24,850) (30,600) 647 1,012 1,476 (118) (1,103) (1,912) (7,047) (6,845) (6,644) 310 (227) (272) Other financing activities Net Cash Provided by (Used in) Financing Activities 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 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUITY (In millions except per share data) Year Ended December 31, 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-based compensation plans Purchases of stock for treasury Balance at end of year Common Stock 310 (227) (272) (8,070) (9,004) (10,347) 76 (72) (262) 373 (2,581) 2,945 6,737 9,318 6,373 7,110 6,737 9,318 315 257 241 $ 6,795 $ 6,480 $ 9,077 2020 2019 2018 4,280 22 4,268 33 4,259 48 (21) 4,302 4,280 (39) 4,268 $ 1,760 $1,760 $ 1,760 Capital Surplus Balance at beginning of year Stock issued to employees related to stock-based compensation plans Stock-based compensation expense Other activities Balance at end of year Reinvested Earnings 17,154 16,520 15,864 307 433 467 141 201 225 (1) (36) 17,601 17,154 16,520 Balance at beginning of year 65,855 63,234 60,430 Adoption of accounting standards_ 546 3,014 Net income attributable to shareowners of The Coca-Cola Company 7,747 8,920 6,434 Dividends (per share$1.64, $1.60 and $1.56 in 2020, 2019 and 2018, respectively) (7,047) (6,845) (6,644) Balance at end of year 66,555 65,855 63,234 Net income attributable to shareowners of The Coca-Cola Company 7,747 8,920 6,434 Dividends (per share $1.64, $1.60 and $1.56 in 2020, 2019 and 2018, respectively) (7,047) (6,845) (6,644) Balance at end of year 66,555 65,855 63,234 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-based 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 Acquisition of interests held by noncontrolling owners Contributions by noncontrolling interests Business combinations Other activities Total Equity Attributable to Noncontrolling Interests (13,544) (12,814) (10,305) (564) (409) (1,057) (166) (2,100) (14,601) (13,544) (12,814) (52,244) 228 (51,719) (50,677) 501 704 - (1,026) (1,746) (52,016) (52,244) (51,719) $19,299 $18,981 $16,981 $ 2,117 $ 2,077 $ 1,905 21 65 42 (153) 45 53 (18) (48) (31) (84) 17 3 59 101 - 7 $ 1,985 $ 2,117 $2,077 Current Attempt in Progress The financial statements of Coca-Cola is presented in Appendices C. Click here to view Appendix C. The financial statements of PepsiCo is presented in Appendices D. Click here to view Appendix D. The companies' complete annual reports, including the notes to the financial statements, are available online. Use the companies' financial information to answer the following questions. What were the cash and cash equivalents reported by Coca-Cola and PepsiCo at the end of 2020? (Enter answers in millions.) Cash and cash equivalents Coca-Cola Company 8185 millions PepsiCo, Inc. 5509 millions What were the accounts receivable (net) for Coca-Cola and PepsiCo at the end of 2020? (Enter answers in millions.) Accounts receivable Coca-Cola Company 3144 million PepsiCo, Inc. 8404 million Which company reports the greater allowance for doubtful accounts (amount and percentage of gross receivable) at the end of 2020? Assume PepsiCo's allowance account relates to trade receivables only. (Enter amounts in millions. Round percentage values to 2 decimal places, e.g. 52.76%.) Allowance for doubtful amount Percent of gross receivables +A Coca-Cola Company million % +A PepsiCo, Inc. Company reports the greater allowance for doubtful accounts 201 million PepsiCo % Assuming that all "net operating revenues" (Coca-Cola) and all "net revenues" (PepsiCo) were net credit sales, compute the accounts receivable turnover for 2020 for Coca-Cola and PepsiCo; also compute the days outstanding for receivables. (Round ratio values to 2 decimal places, e.g. 52.75 and other values to 1 decimal place, e.g. 52.7.) Accounts Receivable turnover Days outstanding for receivables Coca-Cola Company times days PepsiCo, Inc. times days