North Carolina (State or other Jurisdiction of Incorporation) |
1-1183 (Commission File Number) |
13-1584302 (IRS Employer Identification No.) |
Item 2.02. Results of Operations and Financial Condition | ||||||||
Item 9.01. Financial Statements and Exhibits | ||||||||
SIGNATURES | ||||||||
INDEX TO EXHIBITS | ||||||||
EX-99.1 |
99.1 | Press Release issued by PepsiCo, Inc., dated October 12, 2011. |
PEPSICO, INC. |
||||
Date: October 12, 2011 | By: | /s/ Maura Abeln Smith | ||
Name: | Maura Abeln Smith | |||
Title: | Executive Vice President, Government Affairs, General Counsel and Corporate Secretary |
Contacts:
|
Investor | Media | ||
Jamie Caulfield | Jeff Dahncke | |||
Senior Vice President, Investor Relations | Senior Director, Media Bureau | |||
914-253-3035 | 914-253-3941 | |||
jamie.caulfield@pepsico.com | jeff.dahncke@pepsico.com |
| Worldwide snacks volume grew 8 percent in the quarter and 7 percent year to date | ||
| Worldwide beverage volume grew 4 percent in the quarter and 6 percent year to date | ||
| Reported net revenue increased 13 percent to $17.6 billion | ||
| Net revenue increased 9 percent excluding the impact of the Wimm-Bill-Dann transaction | ||
| Reported net income increased 4 percent and core* net income increased 6 percent | ||
| Reported EPS increased 5 percent to $1.25 and core EPS grew 7 percent to $1.31 | ||
| Company reaffirms 2011 target of high-single-digit EPS growth on a core, 52-week basis |
* | Please refer to the Glossary for the definition of core. Core results are non-GAAP financial measures that exclude certain items. Please refer to Reconciliation of GAAP and Non-GAAP information in the attached exhibits for a description of these items. |
Constant Currency* | ||||||||||||||||||||||||
Core* Operating | Core* Operating | |||||||||||||||||||||||
Volume | Net Revenue | Profit | Net Revenue | Profit | Operating Profit | |||||||||||||||||||
PAF |
1 | 6 | 6 | 8 | 8 | 8 | ||||||||||||||||||
FLNA |
1 | 3 | 5.5 | 4 | 6 | 6 | ||||||||||||||||||
LAF |
3.5 | 12 | 8 | 19 | 15 | 15 | ||||||||||||||||||
QFNA |
(4.5) | 1 | 5 | 2 | 6 | 6 | ||||||||||||||||||
PAB |
| 1.5 | (6 | ) | 3 | (5 | ) | (2.5 | ) | |||||||||||||||
Europe |
35/13** | 28 | 9 | 37 | 17 | 19 | ||||||||||||||||||
AMEA |
16/6** | 20 | 18 | 25 | 21 | 21 | ||||||||||||||||||
Total Divisions |
8/4** | 10 | 3 | 13 | 6 | 7 | ||||||||||||||||||
Total PepsiCo |
5 | 4 | *** |
* | The above core results and core constant currency results are non-GAAP financial measures that exclude certain items affecting comparability. For more information about our core results and core constant currency results, see Reconciliation of GAAP and Non-GAAP Information in the attached exhibits. Please refer to the Glossary for definitions of Constant Currency and Core. | |
** | Snacks/Beverage | |
*** | The reported operating profit growth was impacted by certain items excluded from our core results in both 2011 and 2010. See Reconciliation of GAAP and Non-GAAP Information in the attached exhibits for more information about these items. Please refer to the Glossary for the definition of Core. |
2
3
4
5
6
12 Weeks Ended 9/3/11 | 36 Weeks Ended 9/3/11 | |||||||||||||||||||||||
Core Constant | Core Constant | |||||||||||||||||||||||
Currency* Growth | Core* | Currency* Growth | ||||||||||||||||||||||
Reported Growth (%) | Core* Growth (%) | (%) | Reported Growth (%) | Growth (%) | (%) | |||||||||||||||||||
Volume (Servings) |
4.5 | 4.5 | 6 | 6 | ||||||||||||||||||||
Net Revenue |
13 | 13 | 10 | 17 | 17 | 14 | ||||||||||||||||||
Division Operating
Profit |
7 | 6 | 3 | 14 | 5 | 3 | ||||||||||||||||||
Total Operating
Profit |
4 | 5 | 21 | 4.5 | ||||||||||||||||||||
Net Income
Attributable to
PepsiCo |
4 | 6 | 3 | 1.5 | 5 | 2 | ||||||||||||||||||
Earnings per Share
(EPS) |
5 | 7 | 4 | 2 | 6 | 3 |
* | Core results and core constant currency results are financial measures that are not in accordance with Generally Accepted Accounting Principles (GAAP) and, in 2011, exclude the commodity mark-to-market net impact included in corporate unallocated expenses, as well as merger and integration costs and certain inventory fair value adjustments in connection with our acquisitions of The Pepsi Bottling Group, Inc. (PBG), PepsiAmericas, Inc. (PAS) and Wimm-Bill-Dann Foods OJSC (WBD). Core results also exclude, in 2010, the commodity mark-to-market net impact included in corporate unallocated expenses, a one-time net charge related to the change to hyperinflationary accounting and currency devaluation in Venezuela, a contribution to The PepsiCo Foundation, Inc. and an asset write-off charge for SAP software. Additionally, with respect to our acquisitions of PBG and PAS, 2010 core results also exclude our gain on previously held equity interests, merger and integration costs, as well as our share of PBGs and PASs respective merger and integration costs, and certain inventory fair value adjustments. Core growth, on a constant currency basis, assumes constant foreign currency exchange rates used for translation based on the rates in effect for the comparable period during 2010. In addition, core constant currency EPS growth is computed by adjusting core EPS growth by the after-tax foreign currency translation impact on core operating profit growth using PepsiCos core effective tax rate. See schedules A-7 through A-16 for a discussion of these items and reconciliations to the most directly comparable financial measures in accordance with GAAP. |
A-1
12 Weeks Ended | 36 Weeks Ended | |||||||||||||||||||||||
9/3/11 | 9/4/10 | Change | 9/3/11 | 9/4/10 | Change | |||||||||||||||||||
Net Revenue |
$ | 17,582 | $ | 15,514 | 13 | % | $ | 46,346 | $ | 39,683 | 17 | % | ||||||||||||
Cost of sales |
8,452 | 7,008 | 21 | % | 21,862 | 18,216 | 20 | % | ||||||||||||||||
Selling, general and
administrative expenses |
6,186 | 5,676 | 9 | % | 16,995 | 15,288 | 11 | % | ||||||||||||||||
Amortization of intangible assets |
38 | 30 | 23 | % | 103 | 78 | 31 | % | ||||||||||||||||
Operating Profit |
2,906 | 2,800 | 4 | % | 7,386 | 6,101 | 21 | % | ||||||||||||||||
Bottling equity income |
| 10 | n/m | | 728 | n/m | ||||||||||||||||||
Interest expense |
(205 | ) | (169 | ) | 21 | % | (584 | ) | (495 | ) | 18 | % | ||||||||||||
Interest income and other |
(4 | ) | 18 | n/m | 33 | 26 | 29 | % | ||||||||||||||||
Income before income taxes |
2,697 | 2,659 | 1 | % | 6,835 | 6,360 | 7 | % | ||||||||||||||||
Provision for income taxes |
686 | 729 | (6 | )% | 1,775 | 1,383 | 28 | % | ||||||||||||||||
Net income |
2,011 | 1,930 | 4 | % | 5,060 | 4,977 | 2 | % | ||||||||||||||||
Less: Net income attributable to
noncontrolling interests |
11 | 8 | 27 | % | 32 | 22 | 46 | % | ||||||||||||||||
Net Income Attributable to
PepsiCo |
$ | 2,000 | $ | 1,922 | 4 | % | $ | 5,028 | $ | 4,955 | 1.5 | % | ||||||||||||
Diluted |
||||||||||||||||||||||||
Net Income Attributable to
PepsiCo per Common Share |
$ | 1.25 | $ | 1.19 | 5 | % | $ | 3.14 | $ | 3.06 | 2 | % | ||||||||||||
Average Shares Outstanding |
1,599 | 1,612 | 1,603 | 1,618 | ||||||||||||||||||||
Cash dividends declared per
common share |
$ | 0.515 | $ | 0.48 | $ | 1.51 | $ | 1.41 |
A-2
12 Weeks Ended | 36 Weeks Ended | |||||||||||||||||||||||
9/3/11 | 9/4/10 | Change | 9/3/11 | 9/4/10 | Change | |||||||||||||||||||
Net Revenue |
||||||||||||||||||||||||
Frito-Lay North America |
$ | 3,173 | $ | 3,050 | 4 | % | $ | 9,167 | $ | 8,906 | 3 | % | ||||||||||||
Quaker Foods North America |
614 | 601 | 2 | % | 1,837 | 1,866 | (2 | )% | ||||||||||||||||
Latin America Foods |
1,841 | 1,542 | 19 | % | 4,757 | 4,063 | 17 | % | ||||||||||||||||
PepsiCo Americas Foods |
5,628 | 5,193 | 8 | % | 15,761 | 14,835 | 6 | % | ||||||||||||||||
PepsiCo Americas Beverages |
5,947 | 5,792 | 3 | % | 16,107 | 14,105 | 14 | % | ||||||||||||||||
Europe |
3,909 | 2,848 | 37 | % | 9,329 | 6,390 | 46 | % | ||||||||||||||||
Asia, Middle East & Africa |
2,098 | 1,681 | 25 | % | 5,149 | 4,353 | 18 | % | ||||||||||||||||
Total Net Revenue |
$ | 17,582 | $ | 15,514 | 13 | % | $ | 46,346 | $ | 39,683 | 17 | % | ||||||||||||
Operating Profit |
||||||||||||||||||||||||
Frito-Lay North America |
$ | 918 | $ | 866 | 6 | % | $ | 2,545 | $ | 2,394 | 6 | % | ||||||||||||
Quaker Foods North America |
177 | 167 | 6 | % | 558 | 521 | 7 | % | ||||||||||||||||
Latin America Foods |
275 | 238 | 15 | % | 720 | 616 | 17 | % | ||||||||||||||||
PepsiCo Americas Foods |
1,370 | 1,271 | 8 | % | 3,823 | 3,531 | 8 | % | ||||||||||||||||
PepsiCo Americas Beverages |
992 | 1,017 | (2.5 | )% | 2,533 | 2,042 | 24 | % | ||||||||||||||||
Europe |
514 | 432 | 19 | % | 984 | 826 | 19 | % | ||||||||||||||||
Asia, Middle East & Africa |
285 | 235 | 21 | % | 730 | 657 | 11 | % | ||||||||||||||||
Division Operating Profit |
3,161 | 2,955 | 7 | % | 8,070 | 7,056 | 14 | % | ||||||||||||||||
Corporate Unallocated |
||||||||||||||||||||||||
Net Impact of Mark-to-Market
on Commodity Hedges |
(53 | ) | 16 | n/m | (31 | ) | 58 | n/m | ||||||||||||||||
Merger and Integration Charges |
(10 | ) | (16 | ) | (28 | )% | (64 | ) | (128 | ) | (50 | )% | ||||||||||||
Venezuela
Currency Devaluation |
| | | | (129 | ) | n/m | |||||||||||||||||
Asset Write-Off |
| | | | (145 | ) | n/m | |||||||||||||||||
Foundation Contribution |
| | | | (100 | ) | n/m | |||||||||||||||||
Other |
(192 | ) | (155 | ) | 24 | % | (589 | ) | (511 | ) | 15 | % | ||||||||||||
(255 | ) | (155 | ) | 65 | % | (684 | ) | (955 | ) | (28 | )% | |||||||||||||
Total Operating Profit |
$ | 2,906 | $ | 2,800 | 4 | % | $ | 7,386 | $ | 6,101 | 21 | % | ||||||||||||
A-3
36 Weeks Ended | ||||||||
9/3/11 | 9/4/10 | |||||||
(unaudited) | ||||||||
Operating Activities |
||||||||
Net income |
$ | 5,060 | $ | 4,977 | ||||
Depreciation and amortization |
1,877 | 1,580 | ||||||
Stock-based compensation expense |
222 | 191 | ||||||
Cash payments for restructuring charges |
(1 | ) | (29 | ) | ||||
Merger and integration costs |
174 | 545 | ||||||
Cash payments for merger and integration costs |
(293 | ) | (272 | ) | ||||
Gain on previously held equity interests in PBG and PAS |
| (958 | ) | |||||
Asset write-off |
| 145 | ||||||
Non-cash foreign exchange loss related to Venezuela devaluation |
| 120 | ||||||
Excess tax benefits from share-based payment arrangements |
(56 | ) | (73 | ) | ||||
Pension and retiree medical plan contributions |
(185 | ) | (1,350 | ) | ||||
Pension and retiree medical plan expenses |
389 | 310 | ||||||
Bottling equity income, net of dividends |
| 37 | ||||||
Deferred income taxes and other tax charges and credits |
132 | 291 | ||||||
Change in accounts and notes receivable |
(1,643 | ) | (1,287 | ) | ||||
Change in inventories |
(466 | ) | 224 | |||||
Change in prepaid expenses and other current assets |
(54 | ) | (14 | ) | ||||
Change in accounts payable and other current liabilities |
142 | 762 | ||||||
Change in income taxes payable |
936 | 787 | ||||||
Other, net |
(400 | ) | (198 | ) | ||||
Net Cash Provided by Operating Activities |
5,834 | 5,788 | ||||||
Investing Activities |
||||||||
Capital spending |
(1,962 | ) | (1,670 | ) | ||||
Sales of property, plant and equipment |
46 | 55 | ||||||
Acquisitions of PBG and PAS, net of cash and cash equivalents acquired |
| (2,833 | ) | |||||
Acquisition of manufacturing and distribution rights from Dr Pepper
Snapple Group, Inc. (DPSG) |
| (900 | ) | |||||
Acquisition of WBD, net of cash and cash equivalents acquired |
(2,428 | ) | | |||||
Investment in WBD |
(164 | ) | | |||||
Other acquisitions and investments in noncontrolled affiliates |
(160 | ) | (36 | ) | ||||
Divestitures |
10 | | ||||||
Cash restricted for pending acquisitions |
| (8 | ) | |||||
Short-term investments, net |
(34 | ) | (40 | ) | ||||
Other investing, net |
(3 | ) | (12 | ) | ||||
Net Cash Used for Investing Activities |
(4,695 | ) | (5,444 | ) | ||||
Financing Activities |
||||||||
Proceeds from issuances of long-term debt |
3,000 | 4,215 | ||||||
Payments of long-term debt |
(1,596 | ) | (73 | ) | ||||
Debt repurchase |
(771 | ) | | |||||
Short-term borrowings, net |
56 | 3,379 | ||||||
Cash dividends paid |
(2,349 | ) | (2,218 | ) | ||||
Share repurchases common |
(1,929 | ) | (4,418 | ) | ||||
Share repurchases preferred |
(5 | ) | (3 | ) | ||||
Proceeds from exercises of stock options |
724 | 700 | ||||||
Excess tax benefits from share-based payment arrangements |
56 | 73 | ||||||
Acquisition of noncontrolling interests |
(1,327 | ) | (159 | ) | ||||
Other financing |
(2 | ) | (6 | ) | ||||
Net Cash (Used for)/Provided by Financing Activities |
(4,143 | ) | 1,490 | |||||
Effect of exchange rate changes on cash and cash equivalents |
144 | (200 | ) | |||||
Net (Decrease)/Increase in Cash and Cash Equivalents |
(2,860 | ) | 1,634 | |||||
Cash and Cash Equivalents Beginning of Year |
5,943 | 3,943 | ||||||
Cash and Cash Equivalents End of Period |
$ | 3,083 | $ | 5,577 | ||||
Non-cash activity: |
||||||||
Issuance of common stock and equity awards in connection with our
acquisitions of PBG and PAS, as reflected in investing and financing
activities |
| $ | 4,451 | |||||
A-4
9/3/11 | 12/25/10 | |||||||
(unaudited) | ||||||||
Assets |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 3,083 | $ | 5,943 | ||||
Short-term investments |
452 | 426 | ||||||
Accounts and notes receivable, net |
8,330 | 6,323 | ||||||
Inventories |
||||||||
Raw materials |
2,152 | 1,654 | ||||||
Work-in-process |
237 | 128 | ||||||
Finished goods |
1,816 | 1,590 | ||||||
4,205 | 3,372 | |||||||
Prepaid expenses and other current assets |
1,764 | 1,505 | ||||||
Total Current Assets |
17,834 | 17,569 | ||||||
Property, plant and equipment, net |
20,737 | 19,058 | ||||||
Amortizable intangible assets, net |
2,426 | 2,025 | ||||||
Goodwill |
16,272 | 14,661 | ||||||
Other nonamortizable intangible assets |
15,433 | 11,783 | ||||||
Nonamortizable Intangible Assets |
31,705 | 26,444 | ||||||
Investments in noncontrolled affiliates |
1,500 | 1,368 | ||||||
Other assets |
1,176 | 1,689 | ||||||
Total Assets |
$ | 75,378 | $ | 68,153 | ||||
Liabilities and Equity |
||||||||
Current Liabilities |
||||||||
Short-term obligations |
$ | 5,070 | $ | 4,898 | ||||
Accounts payable and other current liabilities |
11,524 | 10,923 | ||||||
Income taxes payable |
971 | 71 | ||||||
Total Current Liabilities |
17,565 | 15,892 | ||||||
Long-term debt obligations |
21,781 | 19,999 | ||||||
Other liabilities |
6,859 | 6,729 | ||||||
Deferred income taxes |
5,170 | 4,057 | ||||||
Total Liabilities |
51,375 | 46,677 | ||||||
Commitments and Contingencies |
||||||||
Preferred stock, no par value |
41 | 41 | ||||||
Repurchased preferred stock |
(155 | ) | (150 | ) | ||||
PepsiCo Common Shareholders Equity |
||||||||
Common stock, par value 12/3¢ per share (authorized 3,600
shares, issued 1,865 shares) |
31 | 31 | ||||||
Capital in excess of par value |
4,406 | 4,527 | ||||||
Retained earnings |
39,714 | 37,090 | ||||||
Accumulated other comprehensive loss |
(2,800 | ) | (3,630 | ) | ||||
Repurchased common stock, at cost (297 and 284 shares, respectively) |
(17,660 | ) | (16,745 | ) | ||||
Total PepsiCo Common Shareholders Equity |
23,691 | 21,273 | ||||||
Noncontrolling interests |
426 | 312 | ||||||
Total Equity |
24,003 | 21,476 | ||||||
Total Liabilities and Equity |
$ | 75,378 | $ | 68,153 | ||||
A-5
12 Weeks Ended | 36 Weeks Ended | |||||||||||||||
9/3/11 | 9/4/10 | 9/3/11 | 9/4/10 | |||||||||||||
Beginning Net Shares Outstanding |
1,585 | 1,594 | 1,582 | 1,565 | ||||||||||||
Shares Issued in Connection with our Acquisitions of PBG and PAS |
| | | 67 | ||||||||||||
Options Exercised/Restricted Stock Units Converted |
2 | 5 | 17 | 19 | ||||||||||||
Shares Repurchased |
(19 | ) | (16 | ) | (31 | ) | (68 | ) | ||||||||
Ending Net Shares Outstanding |
1,568 | 1,583 | 1,568 | 1,583 | ||||||||||||
Weighted Average Basic |
1,578 | 1,588 | 1,581 | 1,593 | ||||||||||||
Dilutive securities: |
||||||||||||||||
Options |
14 | 18 | 15 | 19 | ||||||||||||
Restricted Stock Units |
6 | 5 | 6 | 5 | ||||||||||||
ESOP Convertible Preferred Stock/Other |
1 | 1 | 1 | 1 | ||||||||||||
Weighted Average Diluted |
1,599 | 1,612 | 1,603 | 1,618 | ||||||||||||
Average Share Price for the period |
$ | 66.17 | $ | 64.13 | $ | 66.29 | $ | 63.80 | ||||||||
Growth Versus Prior Year |
3 | % | 14 | % | 4 | % | 21 | % | ||||||||
Options Outstanding |
96 | 113 | 100 | 115 | ||||||||||||
Options in the Money |
74 | 81 | 79 | 90 | ||||||||||||
Dilutive Shares from Options |
14 | 18 | 15 | 19 | ||||||||||||
Dilutive Shares from Options as a % of Options in the Money |
20 | % | 22 | % | 19 | % | 21 | % | ||||||||
Average Exercise Price of Options in the Money |
$ | 52.03 | $ | 48.27 | $ | 52.11 | $ | 48.63 | ||||||||
Restricted Stock Units Outstanding |
12 | 10 | 13 | 9 | ||||||||||||
Dilutive Shares from Restricted Stock Units |
6 | 5 | 6 | 5 | ||||||||||||
Average Intrinsic Value of Restricted Stock Units Outstanding* |
$ | 62.97 | $ | 63.07 | $ | 62.91 | $ | 62.15 |
* | Weighted-average intrinsic value at grant date. |
A-6
A-7
A-8
12 Weeks Ended | 36 Weeks Ended | |||||||
9/3/11 | 9/3/11 | |||||||
Division Operating Profit Growth |
7 | % | 14 | % | ||||
Impact of Corporate Unallocated |
(3 | ) | 7 | |||||
Reported Total Operating Profit Growth |
4 | % | 21 | % | ||||
12 Weeks Ended | ||||||||||||
9/3/11 | 9/4/10 | Growth | ||||||||||
Reported Total Operating Profit Growth |
$ | 2,906 | $ | 2,800 | 4 | % | ||||||
Mark-to-Market Net Losses/(Gains) |
53 | (16 | ) | |||||||||
Merger and Integration Charges |
45 | 69 | ||||||||||
Inventory Fair Value Adjustments |
3 | 17 | ||||||||||
Core Total Operating Profit Growth |
$ | 3,007 | $ | 2,870 | 5 | % | ||||||
12 Weeks Ended | ||||||||||||
9/3/11 | 9/4/10 | Growth | ||||||||||
Reported Net Income Attributable to PepsiCo |
$ | 2,000 | $ | 1,922 | 4 | % | ||||||
Mark-to-Market Net Losses/(Gains) |
34 | (10 | ) | |||||||||
Merger and Integration Charges |
53 | 51 | ||||||||||
Inventory Fair Value Adjustments |
2 | 11 | ||||||||||
Core Net Income Attributable to PepsiCo |
$ | 2,089 | $ | 1,974 | 6 | % | ||||||
12 Weeks Ended | ||||||||||||
9/3/11 | 9/4/10 | Growth | ||||||||||
Reported Diluted EPS |
$ | 1.25 | $ | 1.19 | 5 | % | ||||||
Mark-to-Market Net Losses/(Gains) |
0.02 | (0.01 | ) | |||||||||
Merger and Integration Charges |
0.03 | 0.03 | ||||||||||
Inventory Fair Value Adjustments |
| 0.01 | ||||||||||
Core Diluted EPS |
$ | 1.31 | * | $ | 1.22 | 7 | % | |||||
* | Does not sum due to rounding. |
Year Ended | ||||
12/25/10 | ||||
Reported Diluted EPS |
$ | 3.91 | ||
Mark-to-Market Net Gains |
(0.04 | ) | ||
Gain on Previously Held Equity Interests |
(0.60 | ) | ||
Merger and Integration Charges |
0.40 | |||
Inventory Fair Value Adjustments |
0.21 | |||
Venezuela Currency Devaluation |
0.07 | |||
Asset Write-Off |
0.06 | |||
Foundation Contribution |
0.04 | |||
Debt Repurchase |
0.07 | |||
Core Diluted EPS |
$ | 4.13 | * | |
* | Does not sum due to rounding. |
A-9
36 Weeks Ended | ||||
9/3/11 | ||||
Net Cash Provided by Operating Activities |
$ | 5,834 | ||
Capital Spending |
(1,962 | ) | ||
Sales of Property, Plant and Equipment |
46 | |||
Management Operating Cash Flow |
3,918 | |||
Payments Related to 2009 Restructuring Charges (after-tax) |
1 | |||
Merger and Integration Payments (after-tax) |
223 | |||
Capital Investments Related to the PBG/PAS Integration |
91 | |||
Management Operating Cash Flow Excluding above Items |
$ | 4,233 | ||
12 Weeks Ended | ||||
9/3/11 | ||||
Growth in Total Net Revenue |
13 | % | ||
Impact of WBD |
(5 | ) | ||
Growth in Total Net Revenue Excluding WBD |
9 | %* | ||
* | Does not sum due to rounding |
12 Weeks Ended | ||||
9/3/11 | ||||
Growth in Emerging Markets Net Revenue |
33 | % | ||
Impact of WBD |
(15 | ) | ||
Growth in Emerging Markets Net Revenue Excluding WBD |
18 | % | ||
36 Weeks Ended | ||||||||||||
9/3/11 | ||||||||||||
Pre-Tax | Income | Effective | ||||||||||
Income | Taxes | Tax Rate | ||||||||||
Reported Effective Tax Rate |
$ | 6,835 | $ | 1,775 | 26.0 | % | ||||||
Mark-to-Market Net Losses |
31 | 11 | ||||||||||
Merger and Integration Charges |
174 | 27 | ||||||||||
Inventory Fair Value Adjustments |
41 | 10 | ||||||||||
Core Effective Tax Rate |
$ | 7,081 | $ | 1,823 | 25.8 | % | ||||||
36 Weeks Ended | ||||||||||||
9/4/10 | ||||||||||||
Pre-Tax | Income | Effective | ||||||||||
Income | Taxes | Tax Rate | ||||||||||
Reported Effective Tax Rate |
$ | 6,360 | $ | 1,383 | 21.7 | % | ||||||
Mark-to-Market Net Gains |
(58 | ) | (22 | ) | ||||||||
Merger and Integration Charges |
545 | 114 | ||||||||||
Inventory Fair Value Adjustments |
374 | 55 | ||||||||||
Gain on Previously Held Equity Interests |
(735 | ) | 223 | |||||||||
Asset Write-Off |
145 | 53 | ||||||||||
Venezuela Currency Devaluation |
120 | | ||||||||||
Foundation Contribution |
100 | 36 | ||||||||||
Core Effective Tax Rate |
$ | 6,851 | $ | 1,842 | 26.9 | % | ||||||
A-10
Non-GAAP | ||||||||||||||||||||
GAAP Measure | Non-Core Adjustments | Measure | ||||||||||||||||||
Reported | Core* | |||||||||||||||||||
12 Weeks | Inventory | Merger and | Commodity | 12 Weeks | ||||||||||||||||
Ended | fair value | integration | mark-to-market | Ended | ||||||||||||||||
9/3/11 | adjustments | charges | net losses | 9/3/11 | ||||||||||||||||
Cost of sales |
$ | 8,452 | $ | (3 | ) | $ | | $ | | $ | 8,449 | |||||||||
Selling, general and administrative expenses |
$ | 6,186 | $ | | $ | (45 | ) | $ | (53 | ) | $ | 6,088 | ||||||||
Operating profit |
$ | 2,906 | $ | 3 | $ | 45 | $ | 53 | $ | 3,007 | ||||||||||
Interest expense |
$ | (205 | ) | $ | | $ | 16 | $ | | $ | (189 | ) | ||||||||
Provision for income taxes |
$ | 686 | $ | 1 | $ | 8 | $ | 19 | $ | 714 | ||||||||||
Net income attributable to PepsiCo |
$ | 2,000 | $ | 2 | $ | 53 | $ | 34 | $ | 2,089 | ||||||||||
Net income attributable to PepsiCo per common share diluted |
$ | 1.25 | $ | | $ | 0.03 | $ | 0.02 | $ | 1.31 | ** |
Non-GAAP | ||||||||||||||||||||
GAAP Measure | Non-Core Adjustments | Measure | ||||||||||||||||||
Reported | Core* | |||||||||||||||||||
36 Weeks | Inventory | Merger and | Commodity | 36 Weeks | ||||||||||||||||
Ended | fair value | integration | mark-to-market | Ended | ||||||||||||||||
9/3/11 | adjustments | charges | net losses | 9/3/11 | ||||||||||||||||
Cost of sales |
$ | 21,862 | $ | (41 | ) | $ | | $ | | $ | 21,821 | |||||||||
Selling, general and administrative expenses |
$ | 16,995 | $ | | $ | (158 | ) | $ | (31 | ) | $ | 16,806 | ||||||||
Operating profit |
$ | 7,386 | $ | 41 | $ | 158 | $ | 31 | $ | 7,616 | ||||||||||
Interest expense |
$ | (584 | ) | $ | | $ | 16 | $ | | $ | (568 | ) | ||||||||
Provision for income taxes |
$ | 1,775 | $ | 10 | $ | 27 | $ | 11 | $ | 1,823 | ||||||||||
Noncontrolling interests |
$ | 32 | $ | 6 | $ | | $ | | $ | 38 | ||||||||||
Net income attributable to PepsiCo |
$ | 5,028 | $ | 25 | $ | 147 | $ | 20 | $ | 5,220 | ||||||||||
Net income attributable to PepsiCo per common share diluted |
$ | 3.14 | $ | 0.02 | $ | 0.09 | $ | 0.01 | $ | 3.26 |
* | Core results are financial measures that are not in accordance with GAAP and exclude the above non-core adjustments. See schedules A-7 and A-8 for a discussion of each of these non-core adjustments. | |
** | Does not sum due to rounding. |
A-11
GAAP Measure | Non-Core Adjustments | Non-GAAP Measure | ||||||||||||||||||||||||||||||||||
Reported | Core* | |||||||||||||||||||||||||||||||||||
Gain on previously | ||||||||||||||||||||||||||||||||||||
12 Weeks | held equity | Merger and | Venezuela | Commodity | 12 Weeks | |||||||||||||||||||||||||||||||
Ended | interests in | Inventory fair | integration | Foundation | currency | mark-to-market | Ended | |||||||||||||||||||||||||||||
9/4/10 | PBG and PAS | value adjustments | charges | Asset write-off | contribution | devaluation | net gains | 9/4/10 | ||||||||||||||||||||||||||||
Cost of sales |
$ | 7,008 | $ | | $ | (17 | ) | $ | | $ | | $ | | $ | | $ | | $ | 6,991 | |||||||||||||||||
Selling, general and administrative expenses |
$ | 5,676 | $ | | $ | | $ | (69 | ) | $ | | $ | | $ | | $ | 16 | $ | 5,623 | |||||||||||||||||
Operating profit |
$ | 2,800 | $ | | $ | 17 | $ | 69 | $ | | $ | | $ | | $ | (16 | ) | $ | 2,870 | |||||||||||||||||
Provision for income taxes |
$ | 729 | $ | | $ | 6 | $ | 18 | $ | | $ | | $ | | $ | (6 | ) | $ | 747 | |||||||||||||||||
Net income attributable to PepsiCo |
$ | 1,922 | $ | | $ | 11 | $ | 51 | $ | | $ | | $ | | $ | (10 | ) | $ | 1,974 | |||||||||||||||||
Net income attributable to PepsiCo per common share diluted |
$ | 1.19 | $ | | $ | 0.01 | $ | 0.03 | $ | | $ | | $ | | $ | (0.01 | ) | $ | 1.22 |
GAAP Measure | Non-Core Adjustments | Non-GAAP Measure | ||||||||||||||||||||||||||||||||||
Reported | Core* | |||||||||||||||||||||||||||||||||||
Gain on previously | ||||||||||||||||||||||||||||||||||||
36 Weeks | held equity | Merger and | Venezuela | Commodity | 36 Weeks | |||||||||||||||||||||||||||||||
Ended | interests in | Inventory fair | integration | Foundation | currency | mark-to-market | Ended | |||||||||||||||||||||||||||||
9/4/10 | PBG and PAS | value adjustments | charges | Asset write-off | contribution | devaluation | net gains | 9/4/10 | ||||||||||||||||||||||||||||
Cost of sales |
$ | 18,216 | $ | | $ | (371 | ) | $ | | $ | | $ | | $ | | $ | | $ | 17,845 | |||||||||||||||||
Selling, general and administrative expenses |
$ | 15,288 | $ | | $ | (3 | ) | $ | (506 | ) | $ | (145 | ) | $ | (100 | ) | $ | (120 | ) | $ | 58 | $ | 14,472 | |||||||||||||
Operating profit |
$ | 6,101 | $ | | $ | 374 | $ | 506 | $ | 145 | $ | 100 | $ | 120 | $ | (58 | ) | $ | 7,288 | |||||||||||||||||
Bottling equity income |
$ | 728 | $ | (735 | ) | $ | | $ | 9 | $ | | $ | | $ | | $ | | $ | 2 | |||||||||||||||||
Interest expense |
$ | (495 | ) | $ | | $ | | $ | 30 | $ | | $ | | $ | | $ | | $ | (465 | ) | ||||||||||||||||
Provision for income taxes |
$ | 1,383 | $ | 223 | $ | 55 | $ | 114 | $ | 53 | $ | 36 | $ | | $ | (22 | ) | $ | 1,842 | |||||||||||||||||
Net income attributable to PepsiCo |
$ | 4,955 | $ | (958 | ) | $ | 319 | $ | 431 | $ | 92 | $ | 64 | $ | 120 | $ | (36 | ) | $ | 4,987 | ||||||||||||||||
Net income attributable to PepsiCo per common share diluted |
$ | 3.06 | $ | (0.60 | ) | $ | 0.20 | $ | 0.27 | $ | 0.06 | $ | 0.04 | $ | 0.07 | $ | (0.02 | ) | $ | 3.08 |
* | Core results are financial measures that are not in accordance with GAAP and exclude the above non-core adjustments. See schedules A-7 and A-8 for a discussion of each of these non-core adjustments. |
A-12
Non-GAAP | ||||||||||||||||||||
GAAP Measure | Non-Core Adjustments | Measure | ||||||||||||||||||
Reported | Core* | |||||||||||||||||||
12 Weeks | Inventory | Merger and | Commodity | 12 Weeks | ||||||||||||||||
Ended | fair value | integration | mark-to-market | Ended | ||||||||||||||||
9/3/11 | adjustments | charges | net losses | 9/3/11 | ||||||||||||||||
Operating Profit |
||||||||||||||||||||
Frito-Lay North America |
$ | 918 | $ | | $ | | $ | | $ | 918 | ||||||||||
Quaker Foods North America |
177 | | | | 177 | |||||||||||||||
Latin America Foods |
275 | | | | 275 | |||||||||||||||
PepsiCo Americas Foods |
1,370 | | | | 1,370 | |||||||||||||||
PepsiCo Americas Beverages |
992 | 3 | 24 | | 1,019 | |||||||||||||||
Europe |
514 | | 11 | | 525 | |||||||||||||||
Asia, Middle East & Africa |
285 | | | | 285 | |||||||||||||||
Division Operating Profit |
3,161 | 3 | 35 | | 3,199 | |||||||||||||||
Corporate Unallocated |
(255 | ) | | 10 | 53 | (192 | ) | |||||||||||||
Total Operating Profit |
$ | 2,906 | $ | 3 | $ | 45 | $ | 53 | $ | 3,007 | ||||||||||
Non-GAAP | ||||||||||||||||||||
GAAP Measure | Non-Core Adjustments | Measure | ||||||||||||||||||
Reported | Core* | |||||||||||||||||||
36 Weeks | Inventory | Merger and | Commodity | 36 Weeks | ||||||||||||||||
Ended | fair value | integration | mark-to-market | Ended | ||||||||||||||||
9/3/11 | adjustments | charges | net losses | 9/3/11 | ||||||||||||||||
Operating Profit |
||||||||||||||||||||
Frito-Lay North America |
$ | 2,545 | $ | | $ | | $ | | $ | 2,545 | ||||||||||
Quaker Foods North America |
558 | | | | 558 | |||||||||||||||
Latin America Foods |
720 | | | | 720 | |||||||||||||||
PepsiCo Americas Foods |
3,823 | | | | 3,823 | |||||||||||||||
PepsiCo Americas Beverages |
2,533 | 16 | 77 | | 2,626 | |||||||||||||||
Europe |
984 | 25 | 17 | | 1,026 | |||||||||||||||
Asia, Middle East & Africa |
730 | | | | 730 | |||||||||||||||
Division Operating Profit |
8,070 | 41 | 94 | | 8,205 | |||||||||||||||
Corporate Unallocated |
(684 | ) | | 64 | 31 | (589 | ) | |||||||||||||
Total Operating Profit |
$ | 7,386 | $ | 41 | $ | 158 | $ | 31 | $ | 7,616 | ||||||||||
* | Core results are financial measures that are not in accordance with GAAP and exclude the above non-core adjustments. See schedules A-7 through A-8 for a discussion of each of these non-core adjustments. |
A-13
Non-GAAP | ||||||||||||||||||||||||||||||||
GAAP Measure | Non-Core Adjustments | Measure | ||||||||||||||||||||||||||||||
Reported | Core* | |||||||||||||||||||||||||||||||
12 Weeks | Inventory | Merger and | Venezuela | Commodity | 12 Weeks | |||||||||||||||||||||||||||
Ended | fair value | integration | Foundation | Currency | mark-to-market | Ended | ||||||||||||||||||||||||||
9/4/10 | adjustments | charges | Asset write-off | contribution | devaluation | net losses | 9/4/10 | |||||||||||||||||||||||||
Operating Profit |
||||||||||||||||||||||||||||||||
Frito-Lay North America |
$ | 866 | $ | | $ | | $ | | $ | | $ | | $ | | $ | 866 | ||||||||||||||||
Quaker Foods North America |
167 | | | | | | | 167 | ||||||||||||||||||||||||
Latin America Foods |
238 | | | | | | | 238 | ||||||||||||||||||||||||
PepsiCo Americas Foods |
1,271 | | | | | | | 1,271 | ||||||||||||||||||||||||
PepsiCo Americas Beverages |
1,017 | 17 | 38 | | | | | 1,072 | ||||||||||||||||||||||||
Europe |
432 | | 15 | | | | | 447 | ||||||||||||||||||||||||
Asia, Middle East & Africa |
235 | | | | | | | 235 | ||||||||||||||||||||||||
Division Operating Profit |
2,955 | 17 | 53 | | | | | 3,025 | ||||||||||||||||||||||||
Corporate Unallocated |
(155 | ) | | 16 | | | | (16 | ) | (155 | ) | |||||||||||||||||||||
Total Operating Profit |
$ | 2,800 | $ | 17 | $ | 69 | $ | | $ | | $ | | $ | (16 | ) | $ | 2,870 | |||||||||||||||
Non-GAAP | ||||||||||||||||||||||||||||||||
GAAP Measure | Non-Core Adjustments | Measure | ||||||||||||||||||||||||||||||
Reported | Core* | |||||||||||||||||||||||||||||||
36 Weeks | Inventory | Merger and | Venezuela | Commodity | 36 Weeks | |||||||||||||||||||||||||||
Ended | fair value | integration | Foundation | Currency | mark-to-market | Ended | ||||||||||||||||||||||||||
9/4/10 | adjustments | charges | Asset write-off | contribution | devaluation | net losses | 9/4/10 | |||||||||||||||||||||||||
Operating Profit |
||||||||||||||||||||||||||||||||
Frito-Lay North America |
$ | 2,394 | $ | | $ | | $ | | $ | | $ | | $ | | $ | 2,394 | ||||||||||||||||
Quaker Foods North America |
521 | | | | | | | 521 | ||||||||||||||||||||||||
Latin America Foods |
616 | | | | | | | 616 | ||||||||||||||||||||||||
PepsiCo Americas Foods |
3,531 | | | | | | | 3,531 | ||||||||||||||||||||||||
PepsiCo Americas Beverages |
2,042 | 334 | 334 | | | (9 | ) | | 2,701 | |||||||||||||||||||||||
Europe |
826 | 40 | 44 | | | | | 910 | ||||||||||||||||||||||||
Asia, Middle East & Africa |
657 | | | | | | | 657 | ||||||||||||||||||||||||
Division Operating Profit |
7,056 | 374 | 378 | | | (9 | ) | | 7,799 | |||||||||||||||||||||||
Corporate Unallocated |
(955 | ) | | 128 | 145 | 100 | 129 | (58 | ) | (511 | ) | |||||||||||||||||||||
Total Operating Profit |
$ | 6,101 | $ | 374 | $ | 506 | $ | 145 | $ | 100 | $ | 120 | $ | (58 | ) | $ | 7,288 | |||||||||||||||
* | Core results are financial measures that are not in accordance with GAAP and exclude the above non-core adjustments. See schedules A-7 through A-8 for a discussion of each of these non-core adjustments. |
A-14
12 Weeks | ||||||||
9/3/11 | ||||||||
Net Revenue | Operating Profit | |||||||
Frito-Lay North America |
||||||||
Reported Growth |
4 | % | 6 | % | ||||
Merger and Integration Charges |
| | ||||||
Core Growth |
4 | 6 | ||||||
Impact of Foreign Currency Translation |
(1 | ) | (1 | ) | ||||
Core Constant Currency Growth |
3 | % | 5.5 | % | ||||
Quaker Foods North America |
||||||||
Reported Growth |
2 | % | 6 | % | ||||
Merger and Integration Charges |
| | ||||||
Core Growth |
2 | 6 | ||||||
Impact of Foreign Currency Translation |
(1 | ) | (1 | ) | ||||
Core Constant Currency Growth |
1 | % | 5 | % | ||||
Latin America Foods |
||||||||
Reported Growth |
19 | % | 15 | % | ||||
Merger and Integration Charges |
| | ||||||
Core Growth |
19 | 15 | ||||||
Impact of Foreign Currency Translation |
(8 | ) | (7 | ) | ||||
Core Constant Currency Growth |
12 | % | 8 | % | ||||
PepsiCo Americas Foods |
||||||||
Reported Growth |
8 | % | 8 | % | ||||
Merger and Integration Charges |
| | ||||||
Core Growth |
8 | 8 | ||||||
Impact of Foreign Currency Translation |
(3 | ) | (2 | ) | ||||
Core Constant Currency Growth |
6 | % | 6 | % | ||||
PepsiCo Americas Beverages |
||||||||
Reported Growth |
3 | % | (2.5 | )% | ||||
Merger and Integration Charges |
| (1 | ) | |||||
Inventory Fair Value Adjustments |
| (1 | ) | |||||
Core Growth |
3 | (5 | ) | |||||
Impact of Foreign Currency Translation |
(1 | ) | (1 | ) | ||||
Core Constant Currency Growth |
1.5 | % | (6 | )% | ||||
* | Core results and core constant currency results are financial measures that are not in accordance with GAAP and exclude the above non-core adjustments. See schedules A-7 and A-8 for a discussion of each of these non-core adjustments. |
A-15
12 Weeks | ||||||||
9/3/11 | ||||||||
Net Revenue | Operating Profit | |||||||
Europe |
||||||||
Reported Growth |
37 | % | 19 | % | ||||
Merger and Integration Charges |
| (1 | ) | |||||
Inventory Fair Value Adjustments |
| ( | ) | |||||
Core Growth |
37 | 17 | ||||||
Impact of Foreign Currency Translation |
(9 | ) | (8 | ) | ||||
Core Constant Currency Growth |
28 | % | 9 | % | ||||
Asia, Middle East & Africa |
||||||||
Reported Growth |
25 | % | 21 | % | ||||
Merger and Integration Charges |
| | ||||||
Core Growth |
25 | 21 | ||||||
Impact of Foreign Currency Translation |
(5 | ) | (4 | ) | ||||
Core Constant Currency Growth |
20 | % | 18 | % | ||||
Total Divisions |
||||||||
Reported Growth |
13 | % | 7 | % | ||||
Merger and Integration Charges |
| (1 | ) | |||||
Inventory Fair Value Adjustments |
| ( | ) | |||||
Core Growth |
13 | 6 | ||||||
Impact of Foreign Currency Translation |
(3.5 | ) | (3 | ) | ||||
Core Constant Currency Growth |
10 | % | 3 | % | ||||
* | Core results and core constant currency results are financial measures that are not in accordance with GAAP and exclude the above non-core adjustments. See schedules A-7 and A-8 for a discussion of each of these non-core adjustments. |
A-16
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