Basis of Presentation

6 Months Ended

Jun. 15, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Our Divisions

Basis of Presentation

When used in this report, the terms “we,” “us,” “our,” “PepsiCo” and the “Company” mean PepsiCo, Inc. and its divisions and subsidiaries.

Our Condensed Consolidated Balance Sheet as of June 15, 2013 and the Condensed Consolidated Statements of Income and Comprehensive Income for the 12 and 24 weeks endedJune 15, 2013 and June 16, 2012, and the Condensed Consolidated Statements of Cash Flows and Equity for the 24 weeks ended June 15, 2013 and June 16, 2012 have not been audited. These statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended December 29, 2012. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation. The results for the 12 and 24 weeks are not necessarily indicative of the results expected for the full year.

While our North America (United States and Canada) results are reported on a period basis, most of our international operations report on a monthly calendar basis for which the months of March, April and May are reflected in our second quarter results.

Our significant interim accounting policies include the recognition of a pro rata share of certain estimated annual sales incentives, and certain advertising and marketing costs, in proportion to revenue and volume, as applicable, and the recognition of income taxes using an estimated annual effective tax rate. Raw materials, direct labor and plant overhead, as well as purchasing and receiving costs, costs directly related to production planning, inspection costs and raw material handling facilities, are included in cost of sales. The costs of moving, storing and delivering finished product are included in selling, general and administrative expenses.

The following information is unaudited. Tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Certain reclassifications were made to the prior year’s amounts to conform to the 2013 presentation. This report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 29, 2012.

Our Divisions

We are organized into four business units, as follows:

1. PepsiCo Americas Foods, which includes Frito-Lay North America (FLNA), Quaker Foods North America (QFNA) and all of our Latin American food and snack businesses (LAF);

2. PepsiCo Americas Beverages (PAB), which includes all of our North American and Latin American beverage businesses;

3. PepsiCo Europe, which includes all beverage, food and snack businesses in Europe and South Africa; and

4. PepsiCo Asia, Middle East and Africa (AMEA), which includes all beverage, food and snack businesses in AMEA, excluding South Africa.

Our four business units comprise six reportable segments (also referred to as divisions), as follows:

• FLNA,

• QFNA,

• LAF,

• PAB,

• Europe, and

• AMEA.

	12 Weeks Ended				24 Weeks Ended
	6/15/13		6/16/12		6/15/13		6/16/12
Net Revenue
FLNA	$	3,332	$	3,193	$	6,455	$	6,203
QFNA	577		583		1,211		1,206
LAF	2,116		1,948		3,483		3,183
PAB	5,260		5,352		9,680		9,800
Europe	3,653		3,617		5,595		5,462
AMEA	1,869		1,765		2,964		3,032
	$	16,807	$	16,458	$	29,388	$	28,886

	12 Weeks Ended						24 Weeks Ended
	6/15/13			6/16/12			6/15/13			6/16/12
Operating Profit
FLNA	$	906		$	835		$	1,734		$	1,615
QFNA	133			154			313			341
LAF	318			271			534			454
PAB	882			840			1,447			1,365
Europe	425			453			513			534
AMEA	524			165			708			313
Total division	3,188			2,718			5,249			4,622
Corporate Unallocated
Mark-to-market net (losses)/gains	(39		)	(79		)	(55		)	5
Merger and integration charges	—			(2		)	—			(2		)
Restructuring and impairment charges	(1		)	(3		)	(2		)	(1		)
Venezuela currency devaluation	—			—			(124		)	—
Other	(279		)	(257		)	(541		)	(525		)
	$	2,869		$	2,377		$	4,527		$	4,099

	Total Assets
	6/15/13		12/29/12
FLNA	$	5,458	$	5,332
QFNA	1,027		966
LAF	4,903		4,993
PAB	31,639		30,899
Europe	19,121		19,218
AMEA	5,673		5,738
Total division	67,821		67,146
Corporate (a)	8,832		7,492
	$	76,653	$	74,638

(a) Corporate assets consist principally of cash and cash equivalents, short-term investments, derivative instruments and property, plant and equipment.