-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ITjKc85/rJACNNbeyaIT4CoTFoVqUWdn/uWd4DW2Fwkn1wS1jz3SnwlOuxApmsrZ 56yp7EC8PE5JvCcv7GN0gg== 0001076405-03-000032.txt : 20030708 0001076405-03-000032.hdr.sgml : 20030708 20030708091730 ACCESSION NUMBER: 0001076405-03-000032 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030708 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030708 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEPSI BOTTLING GROUP INC CENTRAL INDEX KEY: 0001076405 STANDARD INDUSTRIAL CLASSIFICATION: BEVERAGES [2080] IRS NUMBER: 134038356 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14893 FILM NUMBER: 03777778 BUSINESS ADDRESS: STREET 1: ONE PEPSI WAY CITY: SOMERS STATE: NY ZIP: 10589-2201 BUSINESS PHONE: 9147676000 MAIL ADDRESS: STREET 1: ONE PEPSI WAY CITY: SOMERS STATE: NY ZIP: 10589-2201 8-K 1 pbg8k070803.txt PEPSI BOTTLING GROUP, INC. 8-K JULY 8, 2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ______________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 8, 2003 THE PEPSI BOTTLING GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 1-14893 13-4038356 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) One Pepsi Way, Somers, NY 10589 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (914) 767-6000 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Not Applicable. (b) Not Applicable. (c) Exhibit 99.1 Press release dated July 8, 2003. Item 9. Information Furnished Pursuant to Item 12 of Form 8-K - Results of Operations and Financial Condition. On July 8, 2003, The Pepsi Bottling Group, Inc. announced its financial results for its second quarter ended June 14, 2003. The press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE PEPSI BOTTLING GROUP, INC. (Registrant) Date July 8, 2003 /s/ Pamela C. McGuire ----------------- (Signature) Pamela C. McGuire, Senior Vice President, General Counsel and Secretary Exhibit 99.1 Contact: Kelly McAndrew Mary Winn Settino Public Relations Investor Relations (914) 767-7690 (914) 767-7216 FOR IMMEDIATE RELEASE --------------------- THE PEPSI BOTTLING GROUP REPORTS SECOND QUARTER 2003 RESULTS SOMERS, N.Y., July 8, 2003 - The Pepsi Bottling Group, Inc. (NYSE: PBG) today reported second quarter 2003 net income of $131 million, or diluted earnings per share (EPS) of $0.47. These results compare to reported second quarter 2002 net income of $139 million, or EPS of $0.47. o Worldwide physical case volume was flat for the quarter on a constant territory basis. PBG's physical case volume was down two percent in the U.S., while volumes grew three percent in its international territories. o Pricing in the U.S. marketplace grew two percent during the second quarter. This growth was offset by negative mix and the Company's adoption of FASB's Emerging Issues Task Force (EITF) Issue No. 02-16, which resulted in a reported U.S. net revenue per case decline of two percent. o Reported operating income was flat in the second quarter, with soft results in the U.S. offsetting growth in the Company's international markets. "During the second quarter, we faced a number of challenging conditions in our U.S. markets," said John T. Cahill, Chairman and Chief Executive Officer of PBG. "Volume performance in the U.S. was below our expectations, primarily driven by softness in our cold drink business. The introduction of Mountain Dew LiveWire during the latter part of the quarter, however, has produced encouraging results. Our flavor and diet soft drink portfolios also generated positive results with Sierra Mist leading the growth. Throughout the quarter, we remained disciplined in the execution of our pricing principles, which in combination with strict cost controls, helped us generate financial results in line with our guidance for the quarter." - more - PBG REPORTS SECOND QUARTER 2003 RESULTS / 2 of 3 Cahill continued, "We were encouraged by the changing growth trends in our international territories, which improved throughout the quarter. From new product introductions in Russia, to improved on premise results in Spain, to solid growth in our Canadian business, these markets turned in positive topline and operating profit growth. In Mexico, we continued to make progress in spite of a weak carbonated soft drink market. Mountain Dew was launched throughout our markets in Mexico and has been well received by customers and consumers alike, while the introduction of a 2.5 liter package late in the second quarter is helping us to boost volume. Overall, we saw solid progress in our international businesses this past quarter and are confident that this momentum will continue throughout the summer season." On a constant territory basis, physical case volume in the U.S. declined two percent. (Constant territory calculations assume all significant acquisitions made in 2002 were made at the beginning of 2002 and exclude all significant acquisitions made in 2003.) PBG's territories in Europe turned in solid volume performances, with mid single digit growth overall. Volume trends in PBG's Canadian business were also favorable in both channels of the business. In Mexico, sales of jug and bottled water were solid with high and mid single digit growth respectively. Carbonated soft drink volume was soft during the second quarter resulting in total volume growth in Mexico of one percent. PBG achieved rate increases in its U.S. markets of two percent for the quarter. PBG's cold drink volume was down in the mid single digits, which had a negative impact on the Company's reported net revenue per case results. This mix effect, as well as PBG's adoption of FASB's EITF Issue No. 02-16, lowered the Company's reported U.S. net revenue per case results by four percentage points. Worldwide reported net revenue per case declined 10 percent. These results reflect the significant impact of mix from PBG's acquired territories, namely from its markets in Mexico and Turkey, on PBG's overall results. In Mexico, rate increases on soft drinks and bottled water were offset by the shift into jug water, which has a significantly lower sales price. During the second quarter of 2003, PBG completed its original share repurchase program of 50 million shares of common stock, which was initiated in October 1999. PBG's Board of Directors announced a new share repurchase program at the Company's Annual - more - PBG REPORTS SECOND QUARTER 2003 RESULTS / 3 of 3 Meeting in May, under which 25 million additional shares of common stock may be repurchased. Approximately 1.3 million shares have been repurchased to date under the new program, bringing the total shares repurchased during the second quarter of 2003 to 6.1 million shares. The Company stated that in fiscal 2003 it expects to achieve EPS of $1.61 to $1.67, before the cumulative effect of the adoption of EITF Issue No. 02-16. Given the volume trends of the first half of 2003, however, PBG expects EPS to come in at the low end of that range. The Company also stated that it expects worldwide constant territory volume for the full year to be flat to up one percent and reported operating income to grow about 10 percent. The Company reiterated its expectation for solid cash flow, with cash from operations less capital expenditures to be $400 million. The Pepsi Bottling Group, Inc. (www.pbg.com) is the world's largest manufacturer, seller and distributor of Pepsi-Cola beverages with operations in the U.S., Canada, Greece, Mexico, Russia, Spain and Turkey. To receive company news releases by e-mail, please visit www.pbg.com. Listen in live to PBG's second quarter 2003 earnings discussion with financial analysts on July 8th at 11 a.m. (EDT) at http://www.pbg.com. # # # Statements made in this press release that relate to future performance or financial results of the Company are forward-looking statements which involve uncertainties that could cause actual performance or results to materially differ. PBG undertakes no obligation to update any of these statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date hereof. Accordingly, any forward-looking statement should be read in conjunction with the additional information about risks and uncertainties set forth in PBG's Securities and Exchange Commission reports, including its annual report on Form 10-K for the year ended December 28, 2002. Attachments (3 pages) THE PEPSI BOTTLING GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS in millions except per share amounts, unaudited
12-Weeks Ended 24-Weeks Ended -------------------------- -------------------------- June 14, June 15, June 14, June 15, 2003 2002 2003 2002 ----------- ----------- ----------- ----------- Net revenues.................................................... $ 2,532 $ 2,209 $ 4,406 $ 3,981 Cost of sales................................................... 1,290 1,185 2,217 2,127 --------- --------- --------- --------- Gross profit.................................................... 1,242 1,024 2,189 1,854 Selling, delivery and administrative expenses................... 971 753 1,798 1,448 --------- --------- --------- --------- Operating income................................................ 271 271 391 406 Interest expense, net........................................... 57 46 110 91 Other non-operating expenses, net............................... - - 3 - Minority interest............................................... 15 16 20 24 --------- --------- --------- --------- Income before income taxes...................................... 199 209 258 291 Income tax expense.............................................. 68 70 88 98 --------- --------- --------- --------- Income before cumulative effect of change in accounting principle....................................................... 131 139 170 193 Cumulative effect of change in accounting principle, net of tax and minority interest........................................... - - 6 - --------- --------- --------- --------- Net income...................................................... $ 131 $ 139 $ 164 $ 193 ========= ========= ========= ========= Basic earnings per share before cumulative effect of change in accounting principle............................................ $ 0.48 $ 0.49 $ 0.61 $ 0.68 Cumulative effect of change in accounting principle............. - - (0.02) - --------- --------- --------- --------- Basic earnings per share........................................ $ 0.48 $ 0.49 $ 0.59 $ 0.68 ========= ========= ========= ========= Weighted-average shares outstanding............................. 273 283 276 282 Diluted earnings per share before cumulative effect of change in accounting principle............................................ $ 0.47 $ 0.47 $ 0.60 $ 0.66 Cumulative effect of change in accounting principle............. - - (0.02) - --------- --------- --------- --------- Diluted earnings per share...................................... $ 0.47 $ 0.47 $ 0.58 $ 0.66 ========= ========= ========= ========= Weighted-average shares outstanding............................. 279 296 283 294
THE PEPSI BOTTLING GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS in millions, unaudited
24-Weeks Ended --------------------------- June 14, June 15, 2003 2002 ----------- ----------- Cash Flows - Operations Net income................................................................. $ 164 $ 193 Adjustments to reconcile net income to net cash provided by operations:............................................................. Depreciation........................................................... 244 189 Amortization........................................................... 4 3 Changes in working capital and other non-cash charges.................. (181) (89) Other, net................................................................. (16) (18) ------ ------ Net Cash Provided by Operations................................................. 215 278 ------ ------ Cash Flows - Investments Capital expenditures....................................................... (282) (299) Acquisitions of bottlers................................................... (83) (30) Sale of property, plant and equipment...................................... 2 7 ------ ------ Net Cash Used for Investments................................................... (363) (322) ------ ------ Cash Flows - Financing Borrowing activities, net.................................................. 329 (44) Dividends paid............................................................. (6) (6) Treasury stock transactions................................................ (207) 17 ------ ------ Net Cash Provided by (Used for) Financing....................................... 116 (33) ------ ------ Effect of Exchange Rate Changes on Cash and Cash Equivalents..................................................................... 3 2 ------ ------ Net Decrease in Cash and Cash Equivalents....................................... (29) (75) Cash and Cash Equivalents - Beginning of Period................................. 222 277 ------ ------ Cash and Cash Equivalents - End of Period...................................... $ 193 $ 202 ====== ======
Certain reclassifications were made in our Condensed Consolidated Financial Statements to 2002 amounts to conform to the 2003 presentation. THE PEPSI BOTTLING GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS in millions, except per share amounts
(Unaudited) June 14, December 28, 2003 2002 --------- ---------- Assets Current Assets Cash and cash equivalents................................................... $ 193 $ 222 Accounts receivable, net.................................................... 1,216 922 Inventories................................................................. 452 378 Prepaid expenses and other current assets................................... 261 203 Investment in debt defeasance trust......................................... 174 12 ------- ------- Total Current Assets.................................................... 2,296 1,737 Property, plant and equipment, net............................................... 3,411 3,308 Other intangible assets, net..................................................... 3,647 3,495 Goodwill......................................................................... 1,241 1,192 Investment in debt defeasance trust.............................................. - 170 Other assets..................................................................... 155 141 ------- ------- Total Assets............................................................ $10,750 $10,043 ======= ======= Liabilities and Shareholders' Equity Current Liabilities Accounts payable and other current liabilities.............................. $ 1,275 $ 1,179 Short-term borrowings....................................................... 145 51 Current maturities of long-term debt........................................ 1,189 18 ------- ------- Total Current Liabilities............................................... 2,609 1,248 Long-term debt................................................................... 3,630 4,539 Other liabilities................................................................ 873 819 Deferred income taxes............................................................ 1,326 1,265 Minority interest................................................................ 379 348 ------- ------- Total Liabilities....................................................... 8,817 8,219 Shareholders' Equity Common stock, par value $0.01 per share: Authorized 900 shares, issued 310 shares................................ 3 3 Additional paid-in capital.................................................. 1,745 1,750 Retained earnings........................................................... 1,224 1,066 Accumulated other comprehensive loss........................................ (318) (468) Treasury stock: 39 shares and 30 shares at June 14, 2003 and December 28, 2002, respectively..................................... (721) (527) ------- ------- Total Shareholders' Equity.............................................. 1,933 1,824 ------- ------- Total Liabilities and Shareholders' Equity............................ $10,750 $10,043 ======= =======
Certain reclassifications were made in our Condensed Consolidated Financial Statements to 2002 amounts to conform to the 2003 presentation. -----END PRIVACY-ENHANCED MESSAGE-----