-----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, H1lovnXlYnphs0njWq5SrMEESBJRSyOlyI9UtDfRli9fQzCJpkbJ9cOg2FUnKcTh uyRYZ0Xn9GZTh/QIN6V4hg== 0001157523-05-005971.txt : 20050707 0001157523-05-005971.hdr.sgml : 20050707 20050707104639 ACCESSION NUMBER: 0001157523-05-005971 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050707 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050707 DATE AS OF CHANGE: 20050707 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: 05942539 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 a4925250.txt THE PEPSI BOTTLING GROUP, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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 7, 2005 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) (914) 767-6000 -------------- (Registrant's telephone number, including area code) N/A ------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Section 2 - Financial Information Item 2.02 Results of Operations and Financial Condition. On July 7, 2005, The Pepsi Bottling Group, Inc. announced its financial results for its second quarter ended June 11, 2005, and also updated its full year 2005 forecast as described in the press release furnished hereto as Exhibit 99.1, which is incorporated herein by reference. Section 9 - Financial Statements and Exhibits Item 9.01 Financial Statements and Exhibits. (a) Not Applicable. (b) Not Applicable. (c) Exhibits. 99.1 Press release dated July 7, 2005, which is being furnished hereto pursuant to Item 2.02. 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 7, 2005 /s/ Steven M. Rapp -------------- ------------------ (Signature) Steven M. Rapp, Senior Vice President, General Counsel and Secretary EX-99.1 2 a4925250ex991.txt THE PEPSI BOTTLING GROUP, INC. EXHIBIT 99.1 Exhibit 99.1 Earnings Per Share Increased 11 Percent at the Pepsi Bottling Group in 2nd Quarter; Company Raises Full-Year Earnings Guidance SOMERS, N.Y.--(BUSINESS WIRE)--July 7, 2005--The Pepsi Bottling Group, Inc. (NYSE: PBG) today reported second quarter 2005 net income of $148 million, or diluted earnings per share (EPS) of $0.59. This compares to reported net income in second quarter 2004 of $142 million, or $0.53 per diluted share. -- PBG grew its worldwide physical case volume by three percent in the second quarter on a constant territory basis. The Company's U.S. and Canada operations each delivered a one-percent volume improvement and its European business generated nine-percent volume growth. In Mexico, physical case volume improved significantly, up eight percent on a year-over-year basis. -- The Company continued its solid performance in the area of net revenue per case growth. Reported net revenue per case was up three percent for the quarter, both worldwide and in the U.S. -- Reported operating income increased six percent in the second quarter, with strong performances from PBG's businesses in the U.S., Canada and Mexico. Foreign currency translation accounted for one point of that growth. -- Based on the Company's strong performance during the first half of the year, PBG is raising its full year pro forma operating income growth expectations to a range of three to five percent. Correspondingly, PBG expects pro forma diluted EPS for the year to be $1.82 to $1.88, excluding the impact of the 53rd week. (See Editor's Note.) "During the second quarter, we continued to deliver on our objective of solid topline growth across our businesses," said John T. Cahill, PBG Chairman and Chief Executive Officer. "We are pleased with our performance in the U.S. While our overall carbonated soft drink business was soft, new products boosted our volume performance. The launch of Pepsi Lime and Tropicana Twister as well as the continued rollout of Aquafina FlavorSplash, Aquafina Sparkling and Lipton Iced Tea lifted our volume for the quarter. We also delivered net revenue per case improvement in the U.S. and worldwide." Cahill continued, "Mexico delivered strong results in the second quarter with profits nearly doubling year-over-year. Despite continuing challenges in the Mexico City area, our overall business performed well and we're realizing the benefits from the productivity initiatives we executed over the past two years, which fueled our profit growth. We have a robust calendar of activities in place to drive consumer excitement for the balance of the year, including new in-and-out product and package innovation." "In Europe, we posted another consecutive quarter of strong volume growth. Double-digit growth in Russia was led by strong sales of Pepsi, AquaMinerale, Tropicana and Lipton Iced Tea. Strong topline growth in Turkey continued with a double-digit volume increase in Pepsi and excellent growth in Lipton Iced Tea and Aquafina. In Spain, volume improved as the quarter came to a close, finishing up two percent. Our innovation calendar in Europe is quite strong for the balance of year with new products and packages planned for each of our territories." PBG's physical case volume in the U.S. grew one percent in the second quarter on a constant territory basis. (Constant territory calculations assume all significant acquisitions made in 2004 were made at the beginning of 2004 and exclude all significant acquisitions made in 2005.) Growth in the Company's foodservice business helped to drive cold drink volume, which was up one percent for the quarter. Volume in the take-home segment was slightly positive. PBG's non-carbonated portfolio continued to perform well, with Aquafina returning to double-digit growth. The volume trends in Canada were similar to those in the U.S. Cold drink volume improved two percent and take-home volume was flat. Volume in PBG's Europe territories grew nine percent, led again by Russia. In Mexico, physical case volume grew eight percent for the quarter with water sales up significantly. Bottled water volume increased 20 percent and jug water volume grew 15 percent. Volume of carbonated soft drinks (CSDs) in Mexico was up one percent. The Company's reported net revenue per case growth in the U.S. was three percent in the second quarter. Rate increases contributed roughly 75 percent of this growth while mix added the remaining quarter. PBG's Canada business also turned in solid net revenue per case improvement. Reported operating income in the second quarter grew six percent on a worldwide basis. Cost of goods sold (COGS) per case was up five percent in the second quarter, with foreign currency translation accounting for about one point of that growth. During the second quarter, PBG repurchased 4.5 million shares of common stock. Since the inception of the Company's share repurchase program in October 1999, 92.4 million shares have been repurchased. PBG is increasing its financial guidance for the full year. In fiscal 2005, PBG now expects to achieve pro forma diluted EPS of $1.82 to $1.88, which excludes the impact of the 53rd week. (See Editor's Note.) The Company's worldwide constant territory volume expectations are unchanged with anticipated growth of two to three percent for the year. Pro forma operating income will likely be up three to five percent for the year. These projections also exclude the impact of the 53rd week. PBG expects net cash provided by operations less capital expenditures to be approximately $500 million, with capital expenditures in the range of $675 to $725 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 2005 earnings discussion with financial analysts on July 7th at 11 a.m. (EDT) at http://www.pbg.com. Editor's Note: PBG's fiscal year ends on the last Saturday in December and, as a result, a 53rd week will be added to the fiscal year 2005. Fiscal 2004 had 52 weeks. 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. THE PEPSI BOTTLING GROUP, INC. RECONCILIATION OF NON-GAAP MEASURES Impact of 53rd Week - ------------------- In 2005, our fiscal year will include a 53rd week, while fiscal year 2004 consisted of 52 weeks. Our U.S. and Canadian operations report on a fiscal year that consists of 52 weeks, ending on the last Saturday in December. Every five or six years a 53rd week is added. Our other countries report on a calendar-year basis. In order to provide comparable guidance for 2005, we have excluded the impact of the 53rd week from our outlook. The table below provides pro forma disclosure by excluding the projected impact of the 53rd week in 2005: Pro Forma Forecasted 2005 Forecasted 2005 Versus 2004 Impact of 53rd Versus 2004 Growth Week Growth Worldwide Constant Territory Volume 2% to 3% 1% 3% to 4% Worldwide Operating Income 3% to 5% 1% 4% to 6% Pro Forma Full- Full-Year Year Forecasted Impact of 53rd Forecasted 2005 2005 Results Week Results Diluted Earnings Per Share $1.82 to $1.88 $0.02 to $0.03 $1.84 to $1.91 THE PEPSI BOTTLING GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS in millions, except per share amounts, unaudited 12 Weeks Ended 24 Weeks Ended ----------------- ----------------- June 11, June 12, June 11, June 12, 2005 2004 2005 2004 -------- -------- -------- -------- Net revenues $ 2,862 $ 2,675 $ 5,009 $ 4,742 Cost of sales 1,495 1,378 2,611 2,429 -------- -------- -------- -------- Gross profit 1,367 1,297 2,398 2,313 Selling, delivery and administrative expenses 1,064 1,011 1,975 1,890 -------- -------- -------- -------- Operating income 303 286 423 423 Interest expense, net 58 53 113 108 Other non-operating expense, net 1 2 1 2 Minority interest 17 15 23 21 -------- -------- -------- -------- Income before income taxes 227 216 286 292 Income tax expense 79 74 99 100 -------- -------- -------- -------- Net income $ 148 $ 142 $ 187 $ 192 ======== ======== ======== ======== Basic earnings per share $ 0.61 $ 0.55 $ 0.76 $ 0.74 ======== ======== ======== ======== Weighted-average shares outstanding 245 258 246 259 Diluted earnings per share $ 0.59 $ 0.53 $ 0.74 $ 0.72 ======== ======== ======== ======== Weighted-average shares outstanding 252 267 253 268 THE PEPSI BOTTLING GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS in millions, unaudited 24 Weeks Ended ----------------- June 11, June 12, 2005 2004 -------- -------- Cash Flows - Operations Net income $ 187 $ 192 Adjustments to reconcile net income to net cash provided by operations: Depreciation 274 258 Amortization 7 6 Changes in working capital and other non-cash charges (230) (72) Pension contributions (20) (51) Other, net (32) (20) -------- -------- Net Cash Provided by Operations 186 313 -------- -------- Cash Flows - Investments Capital expenditures (271) (270) Sale of investment in a non-controlled entity/(Acquisitions of bottlers) 5 (7) Proceeds from sale of property, plant and equipment 12 5 -------- -------- Net Cash Used for Investments (254) (272) -------- -------- Cash Flows - Financing Borrowing activities, net 209 (791) Dividends paid (25) (5) Treasury stock transactions (214) (233) -------- -------- Net Cash Used for Financing (30) (1,029) -------- -------- Effect of Exchange Rate Changes on Cash and Cash Equivalents 1 (2) -------- -------- Net Decrease in Cash and Cash Equivalents (97) (990) Cash and Cash Equivalents - Beginning of Period 305 1,235 -------- -------- Cash and Cash Equivalents - End of Period $ 208 $ 245 ======== ======== THE PEPSI BOTTLING GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS in millions, except per share amounts June 11, December 25, 2005 2004 ------------ ------------ Assets (unaudited) Current Assets Cash and cash equivalents $ 208 $ 305 Accounts receivable, net 1,323 1,054 Inventories, net 515 427 Prepaid expenses and other current assets 313 253 ------------ ------------ Total Current Assets 2,359 2,039 Property, plant and equipment, net 3,550 3,581 Other intangible assets, net 3,637 3,639 Goodwill 1,424 1,416 Other assets 109 118 ------------ ------------ Total Assets $ 11,079 $ 10,793 ============ ============ Liabilities and Shareholders' Equity Current Liabilities Accounts payable and other current liabilities $ 1,457 $ 1,373 Short-term borrowings 328 155 Current maturities of long-term debt 90 53 ------------ ------------ Total Current Liabilities 1,875 1,581 Long-term debt 4,479 4,489 Other liabilities 960 914 Deferred income taxes 1,401 1,415 Minority interest 468 445 ------------ ------------ Total Liabilities 9,183 8,844 ------------ ------------ Shareholders' Equity Common stock, par value $0.01 per share: Authorized 900 shares, issued 310 shares 3 3 Additional paid-in capital 1,714 1,719 Retained earnings 2,043 1,887 Accumulated other comprehensive loss (320) (315) Deferred compensation - (1) Treasury stock: 67 shares and 61 shares at June 11, 2005 and December 25, 2004, respectively, at cost (1,544) (1,344) ------------ ------------ Total Shareholders' Equity 1,896 1,949 ------------ ------------ Total Liabilities and Shareholders' Equity $ 11,079 $ 10,793 ============ ============ CONTACT: The Pepsi Bottling Group, Inc. Public Relations: Kelly McAndrew, 914-767-7690 or Investor Relations: Mary Winn Settino, 914-767-7216 -----END PRIVACY-ENHANCED MESSAGE-----