Reference no: EM13346604
THE COCA-COLA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31, 2005 2004 2003
(In millions except per share data)
NET OPERATING REVENUES $ 23,104 $ 21,742 $ 20,857
Cost of goods sold 8,195 7,674 7,776
GROSS PROFIT 14,909 14,068 13,081
Selling, general and administrative expenses 8,739 7,890 7,287
Other operating charges 85 480 573
OPERATING INCOME 6,085 5,698 5,221
Interest income 235 157 176
Interest expense 240 196 178
Equity income - net 680 621 406
Other loss - net (93) (82) (138)
Gains on issuances of stock by equity investees 23 24 8
INCOME BEFORE INCOME TAXES 6,690 6,222 5,495
Income taxes 1,818 1,375 1,148
NET INCOME $ 4,872 $ 4,847 $ 4,347
BASIC NET INCOME PER SHARE $ 2.04 $ 2.00 $ 1.77
DILUTED NET INCOME PER SHARE $ 2.04 $ 2.00 $ 1.77
AVERAGE SHARES OUTSTANDING 2,392 2,426 2,459
Effect of dilutive securities 1 3 3
AVERAGE SHARES OUTSTANDING ASSUMING DILUTION 2,393 2,429 2,462
THE COCA-COLA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31, 2005 2004 2003
(In millions)
OPERATING ACTIVITIES
Net income $ 4,872 $ 4,847 $ 4,347
Depreciation and amortization 932 893 850
Stock-based compensation expense 324 345 422
Deferred income taxes (88) 162 (188)
Equity income or loss, net of dividends (446) (476) (294)
Foreign currency adjustments 47 (59) (79)
Gains on issuances of stock by equity investees (23) (24) (8)
Gains on sales of assets, including bottling interests (9) (20) (5)
Other operating charges 85 480 330
Other items 299 437 249
Net change in operating assets and liabilities 430 (617) (168)
Net cash provided by operating activities 6,423 5,968 5,456
INVESTING ACTIVITIES
Acquisitions and investments, principally trademarks and bottling companies (637) (267) (359)
Purchases of investments and other assets (53) (46) (177)
Proceeds from disposals of investments and other assets 33 161 147
Purchases of property, plant and equipment (899) (755) (812)
Proceeds from disposals of property, plant and equipment 88 341 87
Other investing activities (28) 63 178
Net cash used in investing activities (1,496) (503) (936)
FINANCING ACTIVITIES
Issuances of debt 178 3,030 1,026
Payments of debt (2,460) (1,316) (1,119)
Issuances of stock 230 193 98
Purchases of stock for treasury (2,055) (1,739) (1,440)
Dividends (2,678) (2,429) (2,166)
Net cash used in financing activities (6,785) (2,261) (3,601)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS (148) 141 183
CASH AND CASH EQUIVALENTS
Net increase (decrease) during the year (2,006) 3,345 1,102
Balance at beginning of year 6,707 3,362 2,260
Balance at end of year $ 4,701 $ 6,707 $ 3,362
Consolidated Statement of Income
PepsiCo, Inc. and Subsidiaries
Fiscal years ended December 31, 2005, December 25, 2004 and December 27, 2003
(in millions except per share amounts) 2005 2004 2003
Net Revenue........................................................................................................................... $32,562 $29,261 $26,971
Cost of sales........................................................................................................................... 14,176 12,674 11,691
Selling, general and administrative expenses ........................................................................ 12,314 11,031 10,148
Amortization of intangible assets........................................................................................... 150 147 145
Restructuring and impairment charges.................................................................................. - 150 147
Merger-related costs............................................................................................................... - - 59
Operating Profit..................................................................................................................... 5,922 5,259 4,781
Bottling equity income............................................................................................................ 557 380 323
Interest expense...................................................................................................................... (256) (167) (163)
Interest income....................................................................................................................... 159 74 51
Income from Continuing Operations before Income Taxes ................................................. 6,382 5,546 4,992
Provision for Income Taxes................................................................................................... 2,304 1,372 1,424
Income from Continuing Operations..................................................................................... 4,078 4,174 3,568
Tax Benefit from Discontinued Operations ........................................................................... - 38 -
Net Income ............................................................................................................................ $ 4,078 $ 4,212 $ 3,568
Net Income per Common Share - Basic
Continuing operations ....................................................................................................... $2.43 $2.45 $2.07
Discontinued operations.................................................................................................... - 0.02 -
Total .................................................................................................................................. $2.43 $2.47 $2.07
Net Income per Common Share - Diluted
Continuing operations ....................................................................................................... $2.39 $2.41 $2.05
Discontinued operations.................................................................................................... - 0.02 -
Total .................................................................................................................................. $2.39 $2.44* $2.05
Consolidated Statement of Cash Flows
PepsiCo, Inc. and Subsidiaries
Fiscal years ended December 31, 2005, December 25, 2004 and December 27, 2003
(in millions) 2005 2004 2003
Operating Activities
Net income................................................................................................................................. $ 4,078 $ 4,212 $ 3,568
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization ............................................................................................. 1,308 1,264 1,221
Stock-based compensation expense..................................................................................... 311 368 407
Restructuring and impairment charges ............................................................................... - 150 147
Cash payments for merger-related costs and restructuring charges ................................... (22) (92) (109)
Tax benefit from discontinued operations............................................................................. - (38) -
Pension and retiree medical plan contributions ................................................................... (877) (534) (605)
Pension and retiree medical plan expenses.......................................................................... 464 395 277
Bottling equity income, net of dividends .............................................................................. (411) (297) (276)
Deferred income taxes and other tax charges and credits ................................................... 440 (203) (286)
Merger-related costs............................................................................................................. - - 59
Other non-cash charges and credits, net ............................................................................. 145 166 101
Changes in operating working capital, excluding effects of acquisitions and divestitures
Accounts and notes receivable........................................................................................ (272) (130) (220)
Inventories ...................................................................................................................... (132) (100) (49)
Prepaid expenses and other current assets .................................................................... (56) (31) 23
Accounts payable and other current liabilities................................................................ 188 216 (11)
Income taxes payable...................................................................................................... 609 (268) 182
Net change in operating working capital.............................................................................. 337 (313) (75)
Other..................................................................................................................................... 79 (24) (101)
Net Cash Provided by Operating Activities .............................................................................. 5,852 5,054 4,328
Investing Activities
Snack Ventures Europe (SVE) minority interest acquisition ....................................................... (750) - -
Capital spending ....................................................................................................................... (1,736) (1,387) (1,345)
Sales of property, plant and equipment..................................................................................... 88 38 49
Other acquisitions and investments in noncontrolled affiliates ................................................ (345) (64) (71)
Cash proceeds from sale of PBG stock ...................................................................................... 214 - -
Divestitures................................................................................................................................ 3 52 46
Short-term investments, by original maturity
More than three months - purchases ................................................................................ (83) (44) (38)
More than three months - maturities ................................................................................ 84 38 28
Three months or less, net ..................................................................................................... (992) (963) (940)
Net Cash Used for Investing Activities..................................................................................... (3,517) (2,330) (2,271)
Financing Activities
Proceeds from issuances of long-term debt .............................................................................. 25 504 52
Payments of long-term debt ...................................................................................................... (177) (512) (641)
Short-term borrowings, by original maturity
More than three months - proceeds................................................................................... 332 153 88
More than three months - payments ................................................................................. (85) (160) (115)
Three months or less, net ..................................................................................................... 1,601 1,119 40
Cash dividends paid .................................................................................................................. (1,642) (1,329) (1,070)
Share repurchases - common ................................................................................................. (3,012) (3,028) (1,929)
Share repurchases - preferred ................................................................................................ (19) (27) (16)
Proceeds from exercises of stock options................................................................................... 1,099 965 689
Net Cash Used for Financing Activities.................................................................................... (1,878) (2,315) (2,902)
Effect of exchange rate changes on cash and cash equivalents ............................................... (21) 51 27
Net Increase/(Decrease) in Cash and Cash Equivalents......................................................... 436 460 (818)
Cash and Cash Equivalents, Beginning of Year ....................................................................... 1,280 820 1,638
Cash and Cash Equivalents, End of Year ................................................................................. $ 1,716 $ 1,280 $ 820
See accompanying notes to consolidated financial statements.
Specimen Financial Statements: PepsiCo, Inc.
Consolidated Balance Sheet
PepsiCo, Inc. and Subsidiaries
December 31, 2005 and December 25, 2004
(in millions except per share amounts) 2005 2004
ASSETS
Current Assets
Cash and cash equivalents................................................................................................................................... $ 1,716 $ 1,280
Short-term investments ........................................................................................................................................ 3,166 2,165
4,882 3,445
Accounts and notes receivable, net....................................................................................................................... 3,261 2,999
Inventories............................................................................................................................................................. 1,693 1,541
Prepaid expenses and other current assets........................................................................................................... 618 654
Total Current Assets ....................................................................................................................................... 10,454 8,639
Property, Plant and Equipment, net .................................................................................................................... 8,681 8,149
Amortizable Intangible Assets, net...................................................................................................................... 530 598
Goodwill................................................................................................................................................................. 4,088 3,909
Other nonamortizable intangible assets................................................................................................................ 1,086 933
Nonamortizable Intangible Assets.................................................................................................................. 5,174 4,842
Investments in Noncontrolled Affiliates .............................................................................................................. 3,485 3,284
Other Assets ......................................................................................................................................................... 3,403 2,475
Total Assets................................................................................................................................................ $31,727 $27,987
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term obligations .......................................................................................................................................... $ 2,889 $ 1,054
Accounts payable and other current liabilities...................................................................................................... 5,971 5,599
Income taxes payable............................................................................................................................................ 546 99
Total Current Liabilities .................................................................................................................................. 9,406 6,752
Long-Term Debt Obligations................................................................................................................................. 2,313 2,397
Other Liabilities .................................................................................................................................................... 4,323 4,099
Deferred Income Taxes........................................................................................................................................ 1,434 1,216
Total Liabilities................................................................................................................................................ 17,476 14,464
Commitments and Contingencies
Preferred Stock, no par value ............................................................................................................................. 41 41
Repurchased Preferred Stock............................................................................................................................. (110) (90)
Common Shareholders' Equity
Common stock, par value 1 2/3¢ per share (issued 1,782 shares)....................................................................... 30 30
Capital in excess of par value............................................................................................................................... 614 618
Retained earnings ................................................................................................................................................. 21,116 18,730
Accumulated other comprehensive loss ................................................................................................................ (1,053) (886)
20,707 18,492
Less: repurchased common stock, at cost (126 and 103 shares, respectively) ................................................... (6,387) (4,920)
Total Common Shareholders' Equity .............................................................................................................. 14,320 13,572
Total Liabilities and Shareholders' Equity ................................................................................................ $31,727 $27,987