KO Financial Analysis, Page 1 of 10 Enter Firm Ticker KO values in millions Historical Income Statements Income Statement Forecasting Percentages Enter first year in cell B5 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Average Manual Revenue 23,104.0 24,088.0 28,857.0 31,944.0 30,990.0 Revenue Growth 4.3% 19.8% 10.7% 3.0% 7.6% Other Revenue 0.0 0.0 0.0 0.0 0.0 Other Revenue Growth N/A N/A N/A N/A 0.0% Total Revenue 23,104.0 24,088.0 28,857.0 31,944.0 30,990.0 Revenue Growth 4.3% 19.8% 10.7% 3.0% 7.6% Cost Of Goods Sold 8,242.0 8,160.0 10,392.0 11,374.0 11,088.0 COGS % of Sales 35.7% 33.9% 36.0% 35.6% 35.8% 35.4% Gross Profit 14,862.0 15,928.0 18,465.0 20,570.0 19,902.0 Selling General & Admin Exp. 8,739.0 9,431.0 10,945.0 11,774.0 11,358.0 SG&A % of Sales 37.8% 39.2% 37.9% 36.9% 36.7% 37.7% R & D Exp. 0.0 0.0 0.0 0.0 0.0 R&D % of Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Depreciation & Amort. 0.0 0.0 0.0 0.0 0.0 D&A % of Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Other Operating Expense/(Income) 0.0 0.0 0.0 0.0 0.0 Other E/(I) % Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Other Operating Exp., Total 8,739.0 9,431.0 10,945.0 11,774.0 11,358.0 Operating Income 6,123.0 6,497.0 7,520.0 8,796.0 8,544.0 Interest Expense (240.0) (220.0) (456.0) (438.0) (355.0) Int. Exp. (interactive w/bal. Sheet) Interest and Invest. Income 235.0 193.0 236.0 333.0 267.0 Int. and Inv. Inc. % Sales 1.0% 0.8% 0.8% 1.0% 0.9% 0.9% Net Interest Exp. (5.0) (27.0) (220.0) (105.0) (88.0) Income/(Loss) from Affiliates 680.0 102.0 668.0 (874.0) 781.0 Inc./(Loss) Affiliates % of Sales 2.9% 0.4% 2.3% 2.7% 2.5% 1.1% Currency Exchange Gains (Loss) (23.0) (15.0) (10.0) 24.0 80.0 Currency Gains (Loss) % of Sales 0.1% 0.1% 0.0% 0.1% 0.3% 0.0% Other Non Operating Inc. (Exp.) (70.0) (30.0) 2.0 23.0 (115.0) Other Non Op Inc./(Exp) % of Sales 0.3% 0.1% 0.0% 0.1% 0.4% 0.1% EBT Excl. Unusual Items 6,705.0 6,527.0 7,960.0 7,864.0 9,202.0 Unusual Items (15.0) 51.0 (41.0) (358.0) (256.0) Unusual Items % of Sales 0.1% 0.2% 0.1% 1.1% 0.8% 0.4% EBT Incl. Unusual Items 6,690.0 6,578.0 7,919.0 7,506.0 8,946.0 Income Tax Expense 1,818.0 1,498.0 1,892.0 1,632.0 2,040.0 Inc. Tax Exp./EBT Excl. Un. Items 27.1% 23.0% 23.8% 20.8% 22.2% 23.4% Minority Int. in Earnings 0 0 (46.0) (67.0) (82.0) Minority Interest % of Sales 0.0% 0.0% 0.2% 0.2% 0.3% 0.1% Earnings from Cont. Ops. 4,872.0 5,080.0 5,981.0 5,807.0 6,824.0 Earnings of Discontinued Ops. 0.0 0.0 0.0 0.0 0.0 Earnings Disc. Ops % of Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Extraord. Item & Account. Change 0.0 0.0 0.0 0.0 0.0 Extraordinary Items % of Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Net Income 4,872.0 5,080.0 5,981.0 5,807.0 6,824.0 Pref. Dividends and Other Adj. 0.0 0.0 0.0 0.0 0.0 Pref. Dividends % of Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Per Share Items Basic EPS $2.037 $2.164 $2.586 $2.508 $2.949 Basic EPS Excl. Extra Items 2.037 2.164 2.586 2.508 2.949 Weighted Avg. Basic Shares Out. 2,392.0 2,348.0 2,313.0 2,315.0 2,314.0 Share Growth 1.8% 1.5% 0.1% 0.0% 0.8% Diluted EPS $2.036 $2.162 $2.566 $2.486 $2.93 Diluted EPS Excl. Extra Items 2.036 2.162 2.566 2.486 2.93 Weighted Avg. Diluted Shares Out. 2,393.0 2,350.0 2,331.0 2,336.0 2,329.0 Diluted Share Growth 1.8% 0.8% 0.2% 0.3% 0.7% Normalized Basic EPS $1.752 $1.737 $2.151 $2.123 $2.485 Normalized Diluted EPS 1.751 1.736 2.134 2.104 2.469 Dividends per Share $1.12 $1.24 $1.36 $1.52 $1.64 Dividend Growth 10.7% 9.7% 11.8% 7.9% 10.0% 8.0% Payout Ratio % 55.0% 57.3% 52.7% 60.6% 55.7% Gross Dividends 2,679.0 2,911.5 3,145.7 3,518.8 3,795.0 Retained Earnings 2,193.0 2,168.5 2,835.3 2,288.2 3,029.0 Data from Standard & Poor's Capital IQ unless otherwise indicated.
KO Financial Analysis, Page 2 of 10 Year by Year Revenue Growth 2.0% 3.0% 4.0% 5.0% 5.0% 4.0% 4.0% 3.5% 3.5% 3.5% Forecasted Income Statements 10 Years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Revenue Other Revenue Total Revenue 31,610 32,558 33,860 35,553 37,331 38,824 40,377 41,791 43,253 44,767 Cost Of Goods Sold 11,186 11,522 11,983 12,582 13,211 13,740 14,289 14,789 15,307 15,843 Gross Profit 20,423 21,036 21,877 22,971 24,120 25,085 26,088 27,001 27,946 28,924 Selling General & Admin Exp. 11,911 12,269 12,760 13,398 14,067 14,630 15,215 15,748 16,299 16,869 R & D Exp. 0 0 0 0 0 0 0 0 0 0 Depreciation & Amort. 0 0 0 0 0 0 0 0 0 0 Other Operating Expense/(Income) 0 0 0 0 0 0 0 0 0 0 Other Operating Exp., Total 11,911 12,269 12,760 13,398 14,067 14,630 15,215 15,748 16,299 16,869 Operating Income 8,512 8,767 9,118 9,574 10,052 10,455 10,873 11,253 11,647 12,055 Interest Expense (322) (336) (329) (359) (360) (374) (400) (423) (463) (450) Interest and Invest. Income 287 296 307 323 339 353 367 379 393 407 Net Interest Exp. (35) (40) (22) (36) (21) (21) (33) (43) (70) (43) Income/(Loss) from Affiliates 346 356 370 389 408 424 441 457 473 489 Currency Exchange Gains (Loss) 9 9 9 10 10 11 11 11 12 12 Other Non Operating Inc. (Exp.) (45) (47) (49) (51) (54) (56) (58) (60) (62) (64) EBT Excl. Unusual Items 8,786 9,045 9,427 9,885 10,396 10,812 11,234 11,618 11,999 12,449 Unusual Items (123) (126) (132) (138) (145) (151) (157) (162) (168) (174) EBT Incl. Unusual Items 8,663 8,918 9,295 9,747 10,251 10,661 11,077 11,456 11,831 12,275 Income Tax Expense 2,052 2,112 2,201 2,308 2,428 2,525 2,623 2,713 2,802 2,907 Minority Int. in Earnings (40) (41) (43) (45) (47) (49) (51) (53) (55) (57) Earnings fromcont. Ops. 6,572 6,765 7,051 7,393 7,776 8,087 8,403 8,690 8,974 9,311 Earnings of Discontinued Ops. 0 0 0 0 0 0 0 0 0 0 Extraord. Item & Account. Change 0 0 0 0 0 0 0 0 0 0 Net Income 6,572 6,765 7,051 7,393 7,776 8,087 8,403 8,690 8,974 9,311 Pref. Dividends and Other Adj. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Per Share Items Basic EPS 2.86 2.97 3.12 3.30 3.50 3.67 3.85 4.01 4.18 4.37 Basic EPS Excl. Extra Items 2.86 2.97 3.12 3.30 3.50 3.67 3.85 4.01 4.18 4.37 Weighted Avg. Basic Shares Out. 2,295 2,276 2,257 2,239 2,220 2,202 2,184 2,166 2,148 2,130 Diluted EPS 2.84 2.94 3.09 3.26 3.45 3.62 3.78 3.94 4.10 4.28 Diluted EPS Excl. Extra Items 2.84 2.94 3.09 3.26 3.45 3.62 3.78 3.94 4.10 4.28 Weighted Avg. Diluted Shares Out. 2,313 2,298 2,282 2,267 2,251 2,236 2,221 2,206 2,191 2,176 Normalized Basic EPS Normalized Diluted EPS Dividends per Share 1.77 1.91 2.07 2.23 2.41 2.60 2.81 3.04 3.28 3.54 Payout Ratio % 61.9% 64.4% 66.1% 67.6% 68.8% 70.9% 73.0% 75.6% 78.5% 81.0% Gross Dividends 4,065 4,354 4,663 4,995 5,350 5,730 6,137 6,574 7,041 7,541 Retained Earnings 2,507 2,411 2,388 2,399 2,426 2,357 2,265 2,116 1,934 1,770
KO Financial Analysis, Page 3 of 10 Historical Balance Sheets Balance Sheet Forecasting Percentages Year 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Average Manual ASSETS ASSETS Cash And Equivalents 4,701.0 2,440.0 4,093.0 4,701.0 7,021.0 Cash And Equivalents 20.3% 10.1% 14.2% 14.7% 22.7% 16.4% Short Term Investments 66.0 150.0 215.0 278.0 2,192.0 Short Term Investments 0.3% 0.6% 0.7% 0.9% 7.1% 1.9% Total Cash & ST Investments 4,767.0 2,590.0 4,308.0 4,979.0 9,213.0 Total Cash & ST Investments Accounts Receivable 2,281.0 2,587.0 3,317.0 3,090.0 3,758.0 Accounts Receivable 9.9% 10.7% 11.5% 9.7% 12.1% 10.8% Total Receivables 2,281.0 2,587.0 3,317.0 3,090.0 3,758.0 Total Receivables Inventory 1,379.0 1,641.0 2,220.0 2,187.0 2,354.0 Inventory 6.0% 6.8% 7.7% 6.8% 7.6% 7.0% Prepaid Exp. 1,586.0 1,292.0 1,798.0 1,606.0 1,624.0 Prepaid Exp. 6.9% 5.4% 6.2% 5.0% 5.2% 5.7% Deferred Tax Assets, Curr. 153.0 117.0 238.0 119.0 118.0 Deferred Tax Assets, Curr. 0.7% 0.5% 0.8% 0.4% 0.4% 0.5% Other Current Assets 39.0 214.0 224.0 195.0 484.0 Other Current Assets 0.2% 0.9% 0.8% 0.6% 1.6% 0.8% Total Current Assets 10,205.0 8,441.0 12,105.0 12,176.0 17,551.0 Total Current Assets Gross Property, Plant & Equipment 10,184.0 11,911.0 14,444.0 14,400.0 16,467.0 Gross Property, Plant & Equipment Accumulated Depreciation (4,353.0) (5,008.0) (5,951.0) (6,074.0) (6,906.0) Accumulated Depreciation Net Property, Plant & Equipment 5,831.0 6,903.0 8,493.0 8,326.0 9,561.0 Net Property, Plant & Equipment 25.2% 28.7% 29.4% 26.1% 30.9% 28.0% Long term Investments 6,935.0 6,783.0 7,777.0 5,779.0 6,755.0 Long term Investments 30.0% 28.2% 27.0% 18.1% 21.8% 25.0% 22.0% Goodwill 1,047.0 1,403.0 4,256.0 4,029.0 4,224.0 Goodwill 4.5% 5.8% 14.7% 12.6% 13.6% 10.3% Other Intangibles 2,774.0 3,732.0 7,963.0 8,476.0 8,604.0 Other Intangibles 12.0% 15.5% 27.6% 26.5% 27.8% 21.9% 25.0% Deferred Tax Assets, LT 192.0 168.0 66.0 83.0 96.0 Deferred Tax Assets, LT 0.8% 0.7% 0.2% 0.3% 0.3% 0.5% Other Long Term Assets 2,443.0 2,533.0 2,609.0 1,650.0 1,880.0 Other Long Term Assets 10.6% 10.5% 9.0% 5.2% 6.1% 8.3% Total Assets 29,427.0 29,963.0 43,269.0 40,519.0 48,671.0 Total Assets LIABILITIES LIABILITIES Accounts Payable 902.0 929.0 1,380.0 1,370.0 1,410.0 Accounts Payable 3.9% 3.9% 4.8% 4.3% 4.5% 4.3% Accrued Exp. 3,382.0 3,862.0 5,176.0 4,530.0 4,890.0 Accrued Exp. 14.6% 16.0% 17.9% 14.2% 15.8% 15.7% Short term Borrowings 4,518.0 3,235.0 5,919.0 6,066.0 6,749.0 Short term Borrowings 19.6% 13.4% 20.5% 19.0% 21.8% 18.9% Curr. Port. of LT Debt 28.0 33.0 133.0 465.0 51.0 Curr. Port. of LT Debt 0.1% 0.1% 0.5% 1.5% 0.2% 0.5% Curr. Income Taxes Payable 797.0 567.0 258.0 252.0 264.0 Curr. Income Taxes Payable 3.4% 2.4% 0.9% 0.8% 0.9% 1.7% Other Current Liabilities 209.0 264.0 359.0 305.0 357.0 Other Current Liabilities 0.9% 1.1% 1.2% 1.0% 1.2% 1.1% Total Current Liabilities 9,836.0 8,890.0 13,225.0 12,988.0 13,721.0 Total Current Liabilities Long Term Debt 1,154.0 1,314.0 3,277.0 2,781.0 5,059.0 Long Term Debt Minority Interest 0.0 0.0 0.0 390.0 547.0 Minority Interest 0.0% 0.0% 0.0% 1.2% 1.8% 0.6% Pension & Other Post Retire. Benefits 0.0 1,246.0 830.0 1,581.0 1,296.0 Pension & Other Post Retire. Benefits 0.0% 5.2% 2.9% 4.9% 4.2% 3.4% Def. Tax Liability, Non Curr. 352.0 608.0 1,890.0 877.0 1,580.0 Def. Tax Liability, Non Curr. 1.5% 2.5% 6.5% 2.7% 5.1% 3.7% Other Non Current Liabilities 1,730.0 985.0 2,303.0 1,430.0 1,669.0 Other Non Current Liabilities 7.5% 4.1% 8.0% 4.5% 5.4% 5.9% Total Liabilities 13,072.0 13,043.0 21,525.0 20,047.0 23,872.0 Total Liabilities Preferred Stock 0 0 0 0 0 Preferred Stock 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Common Stock 877.0 878.0 880.0 880.0 880.0 Common Stock 3.8% 3.6% 3.0% 2.8% 2.8% 3.2% Additional Paid In Capital 5,492.0 5,983.0 7,378.0 7,966.0 8,537.0 Additional Paid In Capital 23.8% 24.8% 25.6% 24.9% 27.5% 25.3% Retained Earnings 31,299.0 33,468.0 36,235.0 38,513.0 41,537.0 Retained Earnings 135.5% 138.9% 125.6% 120.6% 134.0% 130.9% Treasury Stock (19,644.0) (22,118.0) (23,375.0) (24,213.0) (25,398.0) Treasury Stock 85.0% 91.8% 81.0% 75.8% 82.0% 83.1% Comprehensive Inc. and Other (1,669.0) (1,291.0) 626.0 (2,674.0) (757.0) Comprehensive Inc. and Other 7.2% 5.4% 2.2% 8.4% 2.4% 4.2% Total Common Equity 16,355.0 16,920.0 21,744.0 20,472.0 24,799.0 Total Common Equity Total Equity 16,355.0 16,920.0 21,744.0 20,472.0 24,799.0 Total Equity Total Liabilities And Equity 29,427.0 29,963.0 43,269.0 40,519.0 48,671.0 Total Liabilities And Equity
KO Financial Analysis, Page 4 of 10 Year by Year PPE/Sales Forecasted Balance Sheets 10 Years Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ASSETS Cash And Equivalents 5,186 6,500 7,000 7,500 7,500 8,000 8,500 9,000 9,500 9,000 Short Term Investments 607 625 650 682 717 745 775 802 830 859 Total Cash & ST Investments 5,793 7,125 7,650 8,182 8,217 8,745 9,275 9,802 10,330 9,859 Accounts Receivable 3,408 3,510 3,651 3,833 4,025 4,186 4,353 4,506 4,663 4,827 Total Receivables 3,408 3,510 3,651 3,833 4,025 4,186 4,353 4,506 4,663 4,827 Inventory 2,207 2,274 2,365 2,483 2,607 2,711 2,820 2,918 3,021 3,126 Prepaid Exp. 1,816 1,871 1,945 2,043 2,145 2,231 2,320 2,401 2,485 2,572 Deferred Tax Assets, Curr. 172 178 185 194 204 212 220 228 236 244 Other Current Assets 253 261 271 285 299 311 323 335 347 359 Total Current Assets 13,650 15,218 16,066 17,020 17,496 18,396 19,311 20,190 21,081 20,987 Gross Property, Plant & Equipment Accumulated Depreciation Net Property, Plant & Equipment 8,866 9,132 9,497 9,972 10,471 10,890 11,325 11,722 12,132 12,557 Long term Investments 6,954 7,163 7,449 7,822 8,213 8,541 8,883 9,194 9,516 9,849 Goodwill 3,246 3,344 3,477 3,651 3,834 3,987 4,147 4,292 4,442 4,597 Other Intangibles 7,902 8,140 8,465 8,888 9,333 9,706 10,094 10,448 10,813 11,192 Deferred Tax Assets, LT 147 152 158 165 174 181 188 194 201 208 Other Long Term Assets 2,615 2,693 2,801 2,941 3,088 3,212 3,340 3,457 3,578 3,703 Total Assets 43,381 45,841 47,914 50,460 52,608 54,912 57,289 59,496 61,764 63,093 LIABILITIES Accounts Payable 1,352 1,392 1,448 1,520 1,596 1,660 1,727 1,787 1,850 1,914 Accrued Exp. 4,967 5,116 5,321 5,587 5,866 6,101 6,345 6,567 6,797 7,035 Short term Borrowings 5,959 6,138 6,384 6,703 7,038 7,319 7,612 7,879 8,154 8,440 Curr. Port. of LT Debt 148 152 158 166 175 182 189 196 202 209 Curr. Income Taxes Payable 527 543 565 593 623 647 673 697 721 747 Other Current Liabilities 338 348 362 381 400 416 432 447 463 479 Total Current Liabilities 13,291 13,690 14,238 14,950 15,697 16,325 16,978 17,572 18,187 18,824 Long Term Debt 337 415 142 342 121 115 275 411 791 398 Minority Interest 189 194 202 212 223 232 241 250 258 267 Pension & Other Post Retire. Benefits 1,086 1,119 1,163 1,222 1,283 1,334 1,387 1,436 1,486 1,538 Def. Tax Liability, Non Curr. 1,166 1,201 1,249 1,311 1,377 1,432 1,489 1,541 1,595 1,651 Other Non Current Liabilities 1,860 1,916 1,992 2,092 2,197 2,284 2,376 2,459 2,545 2,634 Total Liabilities 17,929 18,535 18,987 20,129 20,897 21,722 22,746 23,669 24,863 25,313 Preferred Stock 0 0 0 0 0 0 0 0 0 0 Common Stock 1,017 1,047 1,089 1,144 1,201 1,249 1,299 1,344 1,391 1,440 Additional Paid In Capital 8,007 8,248 8,578 9,006 9,457 9,835 10,228 10,586 10,957 11,341 Retained Earnings 44,044 46,455 48,843 51,242 53,668 56,026 58,291 60,407 62,341 64,111 Treasury Stock (26,274) (27,062) (28,145) (29,552) (31,030) (32,271) (33,562) (34,737) (35,952) (37,211) Comprehensive Inc. and Other (1,342) (1,382) (1,438) (1,509) (1,585) (1,648) (1,714) (1,774) (1,836) (1,901) Total Common Equity 25,452 27,306 28,928 30,331 31,711 33,190 34,542 35,827 36,901 37,780 Total Equity 25,452 27,306 28,928 30,331 31,711 33,190 34,542 35,827 36,901 37,780 Total Liabilities And Equity 43,381 45,841 47,914 50,460 52,608 54,912 57,289 59,496 61,764 63,093 AFN (interactive with 2 items below) 0 0 0 0 0 0 0 0 0 0 Adjustment to LT Debt (use Goal Seek) (4,722) 78 (273) 201 (222) (6) 160 136 380 (393) Adjust Balance Sheet Cash 6,500 7,000 7,500 7,500 8,000 8,500 9,000 9,500 9,000
KO Financial Analysis, Page 5 of 10 Enter Firm Ticker KO Historical Ratios and Valuation Model Forecasted Ratios and Valuation Model 10 Years 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E Liquidity Current Ratio 1.04 0.95 0.92 0.94 1.28 1.03 1.11 1.13 1.14 1.11 1.13 1.14 1.15 1.16 1.11 Quick Ratio 0.90 0.76 0.75 0.77 1.11 0.86 0.95 0.96 0.97 0.95 0.96 0.97 0.98 0.99 0.95 Net Working Capital to Total Assets 0.01 (0.01) (0.03) (0.02) 0.08 0.01 0.03 0.04 0.04 0.03 0.04 0.04 0.04 0.05 0.03 Asset Management Days Sales Outstanding 36.04 39.20 41.96 35.31 44.26 39.35 39.35 39.35 39.35 39.35 39.35 39.35 39.35 39.35 39.35 Inventory Turnover 16.75 14.68 13.00 14.61 13.16 14.32 14.32 14.32 14.32 14.32 14.32 14.32 14.32 14.32 14.32 Fixed Assets Turnover 3.96 3.49 3.40 3.84 3.24 3.57 3.57 3.57 3.57 3.57 3.57 3.57 3.57 3.57 3.57 Total Assets Turnover 0.79 0.80 0.67 0.79 0.64 0.73 0.71 0.71 0.70 0.71 0.71 0.70 0.70 0.70 0.71 Debt Management Long Term Debt to Equity 7.1% 7.8% 15.1% 13.6% 20.4% 1.3% 1.5% 0.5% 1.1% 0.4% 0.3% 0.8% 1.1% 2.1% 1.1% Total Debt to Total Assets 19.3% 15.2% 21.3% 21.8% 24.3% 14.5% 14.3% 13.6% 14.0% 13.6% 13.5% 13.8% 13.9% 14.5% 14.0% Times Interest Earned 25.5 29.5 16.5 20.1 24.1 26.5 26.1 27.7 26.7 27.9 28.0 27.2 26.6 25.2 26.8 Profitability Gross Profit Margin 64.3% 66.1% 64.0% 64.4% 64.2% 64.6% 64.6% 64.6% 64.6% 64.6% 64.6% 64.6% 64.6% 64.6% 64.6% Operating Profit Margin 26.5% 27.0% 26.1% 27.5% 27.6% 26.9% 26.9% 26.9% 26.9% 26.9% 26.9% 26.9% 26.9% 26.9% 26.9% Net After Tax Profit Margin 21.1% 21.1% 20.7% 18.2% 22.0% 20.8% 20.8% 20.8% 20.8% 20.8% 20.8% 20.8% 20.8% 20.7% 20.8% Total Assets Turnover 0.79 0.80 0.67 0.79 0.64 0.73 0.71 0.71 0.70 0.71 0.71 0.70 0.70 0.70 0.71 Return on Assets 16.6% 17.0% 13.8% 14.3% 14.0% 15.1% 14.8% 14.7% 14.7% 14.8% 14.7% 14.7% 14.6% 14.5% 14.8% Equity Multiplier 1.80 1.77 1.99 1.98 1.96 1.70 1.68 1.66 1.66 1.66 1.65 1.66 1.66 1.67 1.67 Return on Equity 29.8% 30.0% 27.5% 28.4% 27.5% 25.8% 24.8% 24.4% 24.4% 24.5% 24.4% 24.3% 24.3% 24.3% 24.6% Valuation Metrics Trend Analysis (NOPAT, EVA, MVA, FCF and Capital in millions) Forecasted Valuation Metrics 10 Years 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E NOPAT (net operating profit after tax) 4,463 5,006 5,733 6,971 6,650 6,524 6,720 6,989 7,338 7,705 8,013 8,334 8,626 8,927 9,240 ROIC (return on invested capital) 45.0% 57.0% 49.6% 56.2% 40.6% 48.9% 45.1% 44.4% 44.0% 45.0% 44.5% 44.0% 43.6% 43.2% 44.9% EVA (economic value added) 3,518 4,169 4,630 5,788 5,087 5,252 5,299 5,488 5,748 6,071 6,295 6,530 6,739 6,957 7,280 FCF (free cash flow) N/A 6,134 2,946 6,134 2,660 9,569 5,161 6,152 6,401 7,246 7,128 7,433 7,761 8,050 9,349 Weighted Average Cost of Capital 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% 9.5% Net Operating Working Capital (NOWC) 4,077 1,877 3,074 4,078 6,833 4,483 5,776 6,247 6,709 6,669 7,136 7,602 8,070 8,538 8,004 Operating Long Term Assets 5,831 6,903 8,493 8,326 9,561 8,866 9,132 9,497 9,972 10,471 10,890 11,325 11,722 12,132 12,557 Total Operating Capital 9,908 8,780 11,567 12,404 16,394 13,349 14,908 15,744 16,681 17,140 18,026 18,927 19,792 20,669 20,560 Valuation (in millions) through year 2019 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Long term Horizon Value Growth Rate (user supplied) 3.50% PV of Forecasted FCF, discounted at 9.53% 91,274 93,841 99,841 103,225 110,405 111,360 116,815 121,798 127,007 131,868 137,311 142,968 148,836 154,974 160,398 Value of Non Operating Assets 4,767 2,590 4,308 4,979 9,213 5,793 7,125 7,650 8,182 8,217 8,745 9,275 9,802 10,330 9,859 Total Intrinsic Value of the Firm 96,041 96,431 104,149 108,204 119,618 117,153 123,940 129,448 135,190 140,085 146,056 152,243 158,638 165,304 170,257 Intrinsic Market Value of the Equity 90,369 91,882 94,953 99,357 107,810 110,857 117,387 122,922 128,144 132,926 138,622 144,356 150,348 156,359 161,419 Per Share Intrinsic Value of the Firm $37.76 $39.10 $40.74 $42.53 $46.29 $47.92 $51.09 $53.86 $56.53 $59.04 $61.99 $64.99 $68.15 $71.36 $74.17 MVA (market value added) 68,083 85,101 109,380 79,142 104,924 85,405 90,081 93,995 97,814 101,215 105,432 109,813 114,521 119,458 123,639 Weighted Average Cost of Capital Calculations Capital Asset Pricing Model Item Value Percent Cost Weighted Cost Risk Free Rate 4.50% ST Debt (from most recent balance sheet) 6,749 4.85% 5.00% 0.19% Beta 1.10 LT Debt (from most recent balance sheet) 5,059 3.63% 7.00% 0.19% Market Risk Prem. 5.00% MV Equity (look up stock's mkt. cap, enter in BB52) 127,410 91.52% 10.00% 9.15% Cost of Equity 10.00% Weighted Average Cost of Capital 9.53%
KO Financial Analysis, Page 6 of 10 Per Share Valuation Metrics and Relative Valuation Metrics (Historical) Per Share Valuation Metrics and Relative Valuation Metrics (Forecasted) 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E Per Share Valuation Metrics Revenue Per Share 9.66 10.26 12.48 13.80 13.39 13.77 14.31 15.00 15.88 16.82 17.63 18.49 19.30 20.14 21.02 Earnings Per Share 2.04 2.16 2.59 2.51 2.95 2.86 2.97 3.12 3.30 3.50 3.67 3.85 4.01 4.18 4.37 Dividends Per Share 1.12 1.24 1.36 1.52 1.64 1.77 1.91 2.07 2.23 2.41 2.60 2.81 3.04 3.28 3.54 Total Capital Per Share 4.14 3.74 4.96 5.31 7.04 5.77 6.49 6.90 7.36 7.61 8.06 8.52 8.97 9.43 9.45 NOPAT Per Share 1.86 2.13 2.46 2.98 2.86 2.82 2.92 3.06 3.24 3.42 3.58 3.75 3.91 4.07 4.25 Free Cash Flow Per Share N/A 2.61 1.26 2.63 1.14 4.14 2.25 2.70 2.82 3.22 3.19 3.35 3.52 3.67 4.30 EVA Per Share 1.47 1.77 1.99 2.48 2.18 2.27 2.31 2.40 2.54 2.70 2.82 2.94 3.05 3.18 3.34 MVA Per Share 28.45 36.21 46.92 33.88 45.05 36.92 39.21 41.19 43.15 44.96 47.15 49.44 51.91 54.52 56.81 Relative Valuation Metrics Yr End Stock Price (Hist. x 5 yrs, then Intr. Value) 35.30 43.45 56.69 43.03 56.06 47.92 51.09 53.86 56.53 59.04 61.99 64.99 68.15 71.36 74.17 Price to Earnings Ratio 17.33 20.08 21.92 17.16 19.01 16.74 17.19 17.24 17.12 16.86 16.88 16.89 16.98 17.08 16.97 Price to Free Cash Flow N/A 16.63 44.52 16.24 48.77 11.49 22.53 19.76 19.77 18.09 19.15 19.09 19.02 19.04 16.90 Price to Sales 3.65 4.24 4.54 3.12 4.19 3.48 3.57 3.59 3.56 3.51 3.52 3.51 3.53 3.54 3.53 Price to Book 2.87 3.40 3.03 2.46 2.67 2.54 2.54 2.54 2.51 2.49 2.49 2.48 2.48 2.48 2.50 Dividend Yield 3.17% 2.85% 2.40% 3.53% 2.93% 3.70% 3.74% 3.84% 3.95% 4.08% 4.20% 4.32% 4.45% 4.59% 4.77% Earnings Yield 5.77% 4.98% 4.56% 5.83% 5.26% 5.98% 5.82% 5.80% 5.84% 5.93% 5.93% 5.92% 5.89% 5.86% 5.89% Free Cash Flow Yield N/A 6.01% 2.23% 6.10% 2.04% 8.63% 4.40% 5.01% 5.00% 5.45% 5.14% 5.15% 5.16% 5.15% 5.79% Other Valuation Metrics Stock Price Minus Intrinsic Value (Per Share) (2.46) 4.35 15.95 0.50 9.77 Change in MVA minus EVA (Per Share) 0.00 5.99 8.72 (15.52) 8.99 (10.40) (0.02) (0.42) (0.57) (0.89) (0.62) (0.65) (0.58) (0.57) (1.05) EVA Momentum (Change in EVA/Sales) N/A 2.96% 1.70% 3.56% 2.19% 0.62% 0.25% 0.66% 0.83% 0.96% 0.67% 0.67% 0.60% 0.60% 0.81% Piotroski Financial Fitness Scorecard (Historical, 11 point scale) Piotroski Financial Fitness Scorecard (Forecasted, 11 point scale) 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E Positive Net Income 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Positive Free Cash Flow 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Growing ROA (% change NI > % change TA) 1.0 0.0 1.0 0.0 1.0 0.0 0.0 0.0 1.0 0.0 0.0 0.0 0.0 1.0 Earnings Quality (Operating Income > Net Income) 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Total Assets Growing Faster Than Total Liabilities 1.0 0.0 1.0 1.0 1.0 1.0 1.0 0.0 1.0 1.0 0.0 0.0 0.0 1.0 Increasing Liquidity (Current Ratio) 0.0 0.0 1.0 1.0 0.0 1.0 1.0 1.0 0.0 1.0 1.0 1.0 1.0 0.0 % Change Shares Outstanding (Diluted) < +2.0% 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Expanding Gross Margin 1.0 0.0 1.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Asset Turnover (% change sales > % change assets) 1.0 0.0 1.0 0.0 1.0 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Liabilities to EBITDA < 5.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Total Liabilities to Operating Cash Flow (EBIT) < 4.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Piotroski Score 10.0 6.0 11.0 8.0 10.0 8.0 9.0 7.0 8.0 8.0 7.0 7.0 7.0 8.0 Altman Probability of Bankruptcy Z Score (Historical) Altman Probability of Bankruptcy Z Score (Forecasted) Weight 2006 2007 2008 2009 2010E 2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E (Current Assets-Current Liabilities)/Total Assets 1.200 0.0180 0.0311 0.0240 0.0944 0.0099 0.0400 0.0458 0.0492 0.0410 0.0452 0.0489 0.0528 0.0562 0.0411 Retained Earnings/Total Assets 1.400 0.1013 0.0917 0.0791 0.0871 0.0809 0.0736 0.0698 0.0666 0.0646 0.0601 0.0554 0.0498 0.0438 0.0393 Earnings Before Interest & Tax/Total Assets 3.300 0.7156 0.5735 0.7164 0.5793 0.6475 0.6311 0.6280 0.6261 0.6306 0.6283 0.6263 0.6242 0.6223 0.6305 Market Value Equity/Total Liabilities 0.600 4.6931 3.6550 2.9814 3.2605 3.6805 3.7641 3.8420 3.7722 3.7635 3.7700 3.7434 3.7412 3.6984 3.7445 Sales/Total Assets 0.999 0.8031 0.6663 0.7876 0.6361 0.7279 0.7095 0.7060 0.7039 0.7089 0.7063 0.7041 0.7017 0.6996 0.7088 Altman Score 6.30 4.96 4.54 4.66 5.15 5.22 5.29 5.22 5.21 5.21 5.18 5.17 5.12 5.16 The interpretation for the Altman Score is: Safe Zone = Z > 2.9, Grey Zone = 1.23 < Z < 2.9, Distress Zone = Z < 1.23
KO Financial Analysis, Page 7 of 10 Total Revenue and Net Income $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Total Revenue and Net Income (millions) EPS and DPS $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Earnings and Dividends Per Share Total Revenue Net Income Earnings Per Share Dividends Per Share Current and Quick Ratio 1.4 1.3 1.2 1.1 1.0 0.9 08 0.8 0.7 0.6 Current and Quick Ratio DSO and TIE 50 45 40 35 30 25 20 15 10 Days Sales Outstanding and Times Interest Earned Current Ratio Quick Ratio Days Sales Outstanding Times Interest Earned Debt /Assets & LT Debt/Equity 30% 25% 20% 15% 10% 5% 0% Total Debt to Assets and Long Term Debt to Equity Operating and Net Margin 40% 35% 30% 25% 20% 15% 10% Gross, Operating and Net Profit Margins 70% 65% 60% 55% 50% Gross Margin Total Debt to Assets Long Term Debt to Equity Operating Margin Net Margin Gross Margin
KO Financial Analysis, Page 8 of 10 Asset Turnover and Equity Multiplier 2.5 2.0 1.5 1.0 0.5 0.0 Total Asset Turnover and Equity Multiplier ROA, ROE and ROIC 70% 60% 50% 40% 30% 20% 10% 0% Return on Assets, Equity and Invested Capital Total Assets Turnover Equity Multiplier Return on Assets Return on Equity Return on Capital 25 Price to Earnings and Price to Free Cash Flow 60 7% Dividend and Earnings Yield Price to Earnings 20 15 10 5 0 50 40 30 20 10 0 Price to Free Cash Flow Dividend d and Earnings Yield 6% 5% 4% 3% 2% 1% Price to Earnings Price to Free Cash Flow Dividend Yield Earnings Yield Price to Sales and Price to Book Free Cash Flow Yield Price to Sales and Price to Book 5.0 4.5 4.0 3.5 3.0 2.5 2.0 Frfee Cash Flow Yield 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% Price to Sales Price to Book Free Cash Flow Yield
KO Financial Analysis, Page 9 of 10 NOPAT and FCF $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 Net Operating Profit After Tax and Free Cash Flow (millions) Economic Value Added $12,000 $11,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 Economic and Market Value Added (millions) $130,000 $120,000 $110,000 $100,000 $90,000 $80,000 $70,000 $60,000 Market Value Added NOPAT Free Cash Flow Economic Value Added Market Value Added NOPAT/Share and FCF/Share $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 Net Operating Profit After Tax and FCF Per Share EVA Per Share $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 EVA and MVA Per Share $60 $55 $50 $45 $40 $35 $30 $25 MVA Per Share NOPAT Per Share Free Cash Flow Per Share EVA Per Share MVA Per Share 12 Piotroski Financial Fitness Index (11 point scale) 8.0 Altman Probability of Bankruptcy Z Score Piotroski Score 10 8 6 4 2 0 Altman Z Score 6.0 4.0 2.0 0.0 Z >2.9 = Safe, 1.23 < Z < 2.9 = Grey Area, Z < 1.23 = Distress Piotroski Financial Fitness Index Altman Z Score
KO Financial Analysis, Page 10 of 10 EVA Momentum 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1.0% 2.0% 3.0% EVA Momentum (Change in EVA/Sales) EVA Momentum Stock Price Minus Intrinsic Value $18.0 $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 ($2.0) ($4.0) Stock Price Minus Intrinsic Value Per Share Stock Price Minus Intrinsic Value Change in MVA Minus EVA $18.0 $14.0 $10.0 $6.0 $2.0 ($2.0) ($6.0) ($10.0) ($14.0) ($18.0) Change in MVA Per Share Minus Annual EVA Per Share Change in MVA Minus Annual EVA