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Module 10

Module 10. Alysha Zimmerman. Introduction. Comparables. Growth Rate. Two different growth rates 2014-2016 – 1.2% 2017-2019 – 2.5% Growth Rate increases from 1.2% to 2.5% industry as a whole is projected to grow only 1%

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Module 10

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  1. Module 10 Alysha Zimmerman

  2. Introduction

  3. Comparables

  4. Growth Rate • Two different growth rates • 2014-2016 – 1.2% • 2017-2019 – 2.5% • Growth Rate increases from 1.2% to 2.5% • industry as a whole is projected to grow only 1% • the industry giants should eventually recover from this change in consumer preference • 2013 Growth Rate - .03% Change in Consumer Preference

  5. Line Items from Footnotes • Net sales-segments • Advertising and marketing expense • R&D • Inventories • PPE • Goodwill • Other intangible assets • Other current liabilities • Other non-current assets • Other non-current liabilities • Income taxes/ETR • Deferred taxes • Other expense (income) • Employee benefit plans

  6. Net Sales by Segment • 3 Operating segments • Beverage Concentrates (syrup) • Packaged Beverages (bottling & distribution) • Latin America Beverages • Mexico & Caribbean

  7. Advertising & Marketing • 2013 - $486 million • 2012 - $481 million • 2011 - $460 million • Largest explained portion of SG&A • Marketing intense industry • Expected to continue to increase for 2014

  8. Inventories • LIFO Method • Using lean methods such as Kaizen since 2008 to reduce inventory methods • This has been successful • Higher inventory in 2013 might be due to halt in sales

  9. Other Non-Current Assets & Liabilities

  10. Income Taxes and Effective Tax Rate

  11. Deferred Taxes

  12. Other items Pension Expense Depreciation and Amortization • Used several footnotes to increase the other non-current assets and liabilities related to the pension and post-retirement plan to FV • IMPORTANT: New line item this year – DPS withdrew $56 million from one of its pension plans this year • Added an addition Pension Liability of $56 million to Other Non-Current Liabilities • Broken down by the three operating segments in footnotes • Total in footnotes > total on income statement • Concluded there was not enough information in this footnote to use it • Depreciation and Amortization broken down by asset would have been more helpful

  13. Questions?

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