Question

The Coca-Cola Company and PepsiCo, Inc.

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.

Instructions

Use the companies' financial information to answer the following questions.

a. Based on the information contained in these financial statements, determine each of the following for each company.

1. Cash used in (for) investing activities during 2017 (from the statement of cash flows).

2. What was the total other comprehensive income for the year 2017?

3. What was the unrealized gains or losses reported as part of other comprehensive income?

b. Identify from Coca-Cola's December 31, 2017, balance sheet the investments it reported as being accounted for under the equity method.

c. In Note 3, what is Coca-Cola's policy regarding its cost method investments?

THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME 2017 2016 2015 Year Ended December 31, (In millions except per share data) NET OPERATING REVENUES Cost of goods sold GROSS PROFIT Selling, general and administrative expenses Other operating charges OPERATING INCOME Interest income Interest expense Equity income (loss) - net Other income (loss) net INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES Income taxes from continuing operations NET INCOME FROM CONTINUING OPERATIONS Income from discontinued operations (net of income taxes of $47. $0 and $0, respectively) CONSOLIDATED NET INCOME Less: Net income attributable to noncontrolling interests NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY $ 35,410 $41,863 $ 44,294 13,256 16.465 17,482 22,154 25,398 26,812 12,496 15.262 16,427 2,157 1,510 1.657 7,501 8,626 8,728 677 642 613 841 733 856 1,071 835 489 (1,666) (1.234) 631 6,742 8,136 9,605 5,560 1.586 2.239 1,182 6,550 7,366 101 1,283 6,550 7,366 35 23 15 $ 1.248 $ 6,527 $ 7.351 S Basic net income per share from continuing operations $ 0.28 $ 1.51 $ 1.69 Basic net income per share from discontinued operations 0.02 BASIC NET INCOME PER SHARE $ 0.29 $ 1.51 S 1.69 Diluted net income per share from continuing operations! $ 0.27 $ 1.49 $ 1.67 Diluted net income per share from discontinued operations 0.02 DILUTED NET INCOME PER SHARE 0.29 $ 1.49 $ 1.67 AVERAGE SHARES OUTSTANDING -BASIC 4,272 4.317 4.352 Effect of dilutive securities 52 50 53 AVERAGE SHARES OUTSTANDING - DILUTED 4,324 4,367 4,405 Calculated based on net income from continuing operations less net income from continuing operations attributable to noncontrolling interests Calculated based on net income from discontinued operations less net income from discontinued operations attributable to non controlling interests. Per share amounts do not add due to rounding. Refer to Notes to Consolidated Financial Statements.

Answer 1

a.1	Cash used in (for) investing activities during 2017 (from the statement of cash flows)
	Particulars	Coca-Cola Company	PepsiCo, Inc.
	Cash used in (for) investing activities during 2017	-2385	-4403
a.2	Total other comprehensive income for the year 2017
	Particulars	Coca-Cola Company	PepsiCo, Inc.
	Total other comprehensive income for the year 2017	938	862
	Particulars	Coca-Cola Company
	Net foreign currency translation adjustment	861
	Net gain (loss) on derivatives	-433
	Net unrealized gain (loss) on available-for-sale securities	188
	Net change in pension and other benefit liabilities	322
	Total other comprehensive income for the year 2017	938
a.3	Unrealized gains or losses reported as part of other comprehensive income
	Particulars	Coca-Cola Company	PepsiCo, Inc.
	Unrealized gains or losses reported as part of other comprehensive income	188	-68
b	Investments reported by Coca Cola as being accounted for under the equity method
	Particulars	Coca-Cola Company
	Investments under the equity method	20856

c	Coca-Cola's policy regarding its cost method investments in Note 3
	Cost method investments are initially recorded at cost, and dividend income are recoreded when applicable dividends are declared. Cost method investments are reported as other investments in consolidated balance sheets, and dividend income from cost method investments is reported in other income (loss) — net inconsolidated statements of income. All cost method investments are reviewed quarterly to determine if impairment indicators are present. When impairment indicators exist, discounted cash flow analyses is used to determine the fair value.
	(*taken from Coca Cola's Annual Report 2017)