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Effect of exchange rate changes on cash and cash
Course:- Cost Accounting
Reference No.:- EM13496




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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




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