Please answer all questions using the provided PEPSICO Table

Review your SEC 10-K company's statement of owner's equity. Your SEC 10-K company has a statement of owners' equity (or a similar name such as statement of retained earnings, or statement of stockholder's equity, etc.).

The change in value of retained earnings from the beginning of the year to the end of the year is reported in this statement.

What is retained earnings?

What does the retained earnings balance represent?

What is it an accumulation of over the life of a corporation?

When cash dividends are paid, they are funded from the accumulated profits of the corporation (retained earnings). Thus, dividends decrease retained earnings. If net income and other 'credits' to retained earnings exceed the value of dividends paid during the period retained earnings may increase. If they do not exceed the amount of dividends paid, retained earnings likely decreases.

What do you learn about dividends for your SEC 10-K company?

Did they issue dividends?

What are the risks and opportunities of issuing dividends to shareholders each year?

Financial Statement order of preparation. - Financial statements are always prepared in a particular order:

1. Income Statement
2. Statement of Owner's Equity
3. Balance Sheet
4. Statement of Cash Flows

Final Summary question: Discuss the reason for the order of the reports.

SEC10K PEPSICO STATEMENT OF OWNERS EQUITY:

2020		2019		2018
	Shares		Amount		Shares		Amount		Shares		Amount
Preferred Stock
Balance, beginning of year				$							$				0.8			$	41
Conversion to common stock													(0.1)			(6)
Retirement of preferred stock													(0.7)			(35)
Balance, end of year
Repurchased Preferred Stock
Balance, beginning of year													(0.7)			(197)
Redemptions																(2)
Retirement of preferred stock													0.7			199
Balance, end of year
Common Stock
Balance, beginning of year	1,391			23			1,409			23			1,420			24
Shares issued in connection with preferred stock conversion to common stock													1
Change in repurchased common stock	(11)						(18)						(12)			(1)
Balance, end of year	1,380			23			1,391			23			1,409			23
Capital in Excess of Par Value
Balance, beginning of year			3,886					3,953					3,996
Share-based compensation expense			263					235					250
Equity issued in connection with preferred stock conversion to common stock													6
Stock option exercises, RSUs, PSUs and PEPunits converted			(143)					(188)					(193)
Withholding tax on RSUs, PSUs and PEPunits converted			(96)					(114)					(103)
Other													(3)
Balance, end of year			3,910					3,886					3,953
Retained Earnings
Balance, beginning of year			61,946					59,947					52,839
Cumulative effect of accounting changes			(34)					8					(145)
Net income attributable to PepsiCo			7,120					7,314					12,515
Cash dividends declared - common (a)			(5,589)					(5,323)					(5,098)
Retirement of preferred stock													(164)
Balance, end of year			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	4			322			6			516			6			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			82					84					92
Net income attributable to noncontrolling interests			55					39					44
Distributions to noncontrolling interests			(44)					(42)					(49)
Acquisitions			5
Other, net								1					(3)
Balance, end of year			98					82					84
Total Equity			$	13,552					$	14,868					$	14,602