by corey leskanic mark dowicz gabriella grippa danielletantillo n.
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By: Corey Leskanic, Mark Dowicz, Gabriella Grippa, DanielleTantillo . Letter to Shareholders. Corey Leskanic (CEO). Major Accomplishments 2012. Introduced 500-plus new products in 2012, including more than 100 low- and no-calorie choices

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letter to shareholders

Letter to Shareholders

Corey Leskanic (CEO)

major accomplishments 2012
Major Accomplishments 2012
  • Introduced 500-plus new products in 2012, including more than 100 low- and no-calorie choices
  • Coca-Cola volume grew 3%-nearly 300 million unit cases (comparable to adding another Germany and two Russias)
  • In 2012, we announced our new organizational structure of 3 operating businesses: Coca-Cola America, Coca-Cola International, and Bottle Investments Groups
  • #1 Beverage company for environment, social, and governance performance by Goldman Sachs
2012 vs 2011
2012 vs. 2011

Revenue 2012 vs. 2011

  • decreased $222 million

Net income Growth 2012 vs. 2011

  • Decreased $72 Million

Stock Performance 2012 vs. 2011

  • $25.78 Dec. 30, 2011--- $31.73 Dec. 31, 2012
    • increase 23%
2013 growth opportunities
2013 Growth Opportunities
  • Emphasize core brands (Coca-Cola, Coca-Cola Light, Diet Coke, Coca-Cola Zero)
    • Coca-Cola Light 6.5% volume growth (growth in physical volume of sales)
    • Most popular, big potential growth
  • Natural Sweeteners (new consumer preference)- stevia w/ Sprite & Vitamin Water
  • Environment- Bottling
business review

Business Review

Mark Dowicz (COO)

business review1
Business Review

New Products:

  • Ayataka (Green Tea)
  • I Lohas (Water)
  • Partnership with JBF INdustries Ltd.
  • Zico Coconut Water
  • Dasani Drops
  • Odwalla Smoothie Refreshers

New Markets:

business review continued
Business Review (continued)

Competition

  • Pepsico, Inc.
  • Nestle S.A.
  • Dr. Pepper Snapple Group Inc.

Regulatory or Legal Issues

  • Workers sue based on discrimination
  • Discontinue Membership at American Legislative Exchange Council
business review continued1
Business Review (continued)

Risks:

  • Lack of popularity of many products
  • Changing health consciousness attitude
  • Health issues
  • Commodity costs are rising
income statement

Income Statement

Gabriella Grippa (CFO)

something to keep in mind
Something to keep in mind...
  • sales of products are seasonal
  • 2nd and 3rd quarters account for higher unit sales
  • Earn more than 60% of operating income during 2nd and 3rd quarters
why did the company s revenue go down
Why did the company's revenue go down?
  • Customer marketing programs
    • allowances
    • coupon programs

Result: reduction in net sales ($1.0 billion in 2011

and 2012)

  • Unfavorable currency exchange rate changes, impact of volume decline, bottle and can net pricing per case growth, challenging operating conditions, ongoing macroeconomic weakness
cost of revenue in millions
Cost of Revenue (in millions)
  • Payments to licensors for marketing programs = reduction in cost of sales
  • 2012 packaging costs per case grew due to increase cost of key raw materials like sugar.
taxes in millions
Taxes (in millions)
  • Increase French excise tax on beverages w/ added sweetener
  • Tax rate reductions in UK and Sweden
  • Tax law change in Belgium
net income in millions
Net Income (in millions)
  • Charges totaling $85 million related to restructuring activities
  • Net mark-to-market losses totaling $4 million
  • Tax benefit of $62 million from tax rate reductions in UK and Sweden, and tax law change in Belgium.
earnings per share in millions
Earnings per Share (in millions)
  • 2012 paid dividends of $187 million
  • February 2012, increase dividend from $0.13 to $0.16 per share
balance statement

Balance Statement

Danielle Tantillo (CFO)

current asset
Current Asset
  • Cash increased (net income higher in 2011)
  • Accounts Receivables (increased)
  • Inventory- decreased
long term assets
Long Term Assets
  • Property, Plant, and Equipment
long term assets continued
Long Term Assets(continued)
  • Franchise License Intangible Assets and Goodwill
current liabilities
Current Liabilities
  • Accounts Payable and Accrued Expenses
long term liabilities
Long Term Liabilities
  • Long Term Debt
shareholders equity
Shareholders Equity
  • 339,064,025 shares of common stock
  • Share Repurchases
    • 65 million shares (no more than $1.5 billion)
    • 2011: $1,014 million
    • 2012: $1,831 million
retained earnings
Retained Earnings
  • Dividends $187 million
  • Increased net income
  • Bought back more common stock
    • 2012: 1,831
    • 2011: 1,014
ratio interpretations
Ratio Interpretations

Current Ratio

  • 2012- current assets were barely larger than current liabilities
    • assets should be higher than liabilities
    • should be greater than one= IS NOT
    • the ratios show that at 1.07 in 2012
    • Current debt increased $616 million dollars
ratio interpretations1
Ratio Interpretations

Quick Ratio

  • Ability of current assets (without inventory) to cover the current liabilities.
    • Shows if coca-cola has the resources necessary to cover its current liabilities
    • Worse from 2011--> 1.24 to 0.92
ratio interpretations2
Ratio Interpretations

Debt to Asset Ratio

  • Coca-cola's financial risk increased from 33.12% to 36.5% I
    • Increased debt over their assets
    • Debt increased by $616 million dollars.

Times-Covered Ratio

  • Decreased from 35.65 to 30.85
    • Profits can still keep declining and they will still be able to meet interest charges
ratio interpretations3
Ratio Interpretations

Inventory Turnover

  • Increased from 13.04 to 13.37 from 2011 to 2012
    • cost of sales decrease from 2011 to 2012
    • Inventory increased from 2011 to 2012.
    • Took longer to get rid of all the inventory

Days Sales Outstanding

  • Increased from 50.23 in 2011 to 53.29 in 2012
    • Take longer to receive what customers owe