Basis of Presentation

9 Months Ended

Sep. 07, 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 September 7, 2013, Condensed Consolidated Statements of Income and Comprehensive Income for the 12 and 36 weeks endedSeptember 7, 2013 and September 8, 2012 and Condensed Consolidated Statements of Cash Flows and Equity for the 36 weeks ended September 7, 2013 and September 8, 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 36 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 June, July and August are reflected in our third 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				36 Weeks Ended
	9/7/2013		9/8/2012		9/7/2013		9/8/2012
Net Revenue
FLNA	$	3,424	$	3,269	$	9,879	$	9,472
QFNA	604		615		1,815		1,821
LAF	2,049		1,883		5,532		5,066
PAB	5,406		5,530		15,086		15,330
Europe	3,818		3,691		9,413		9,153
AMEA	1,608		1,664		4,572		4,696
	$	16,909	$	16,652	$	46,297	$	45,538

	12 Weeks Ended						36 Weeks Ended
	9/7/2013			9/8/2012			9/7/2013			9/8/2012
Operating Profit
FLNA	$	977		$	917		$	2,711		$	2,532
QFNA	137			154			450			495
LAF	295			219			829			673
PAB	843			837			2,290			2,202
Europe	501			483			1,014			1,017
AMEA	295			317			1,003			630
Total division	3,048			2,927			8,297			7,549
Corporate Unallocated
Mark-to-market net (losses)/gains	(19		)	121			(74		)	126
Merger and integration charges	—			2			—			—
Restructuring and impairment charges	1			(7		)	(1		)	(8		)
Venezuela currency devaluation	—			—			(124		)	—
Other	(250		)	(243		)	(791		)	(768		)
	$	2,780		$	2,800		$	7,307		$	6,899

	Total Assets
	9/7/2013		12/29/2012
FLNA	$	5,424	$	5,332
QFNA	1,016		966
LAF	4,704		4,993
PAB	31,145		30,899
Europe	18,902		19,218
AMEA	5,496		5,738
Total division	66,687		67,146
Corporate (a)	10,127		7,492
	$	76,814	$	74,638

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