X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
PepsiCo, Inc. |
North Carolina | 13-1584302 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
700 Anderson Hill Road, Purchase, New York | 10577 | |
(Address of Principal Executive Offices) | (Zip Code) |
914-253-2000 | ||||
(Registrant’s Telephone Number, Including Area Code) |
N/A |
Large accelerated filer X | Accelerated filer | |||
Non-accelerated filer (Do not check if a smaller reporting company) | Smaller reporting company |
Page No. | |
Part I Financial Information | |
Part II Other Information | |
12 Weeks Ended | 36 Weeks Ended | ||||||||||||||
9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | ||||||||||||
Net Revenue | $ | 16,652 | $ | 17,582 | $ | 45,538 | $ | 46,346 | |||||||
Cost of sales | 7,833 | 8,452 | 21,637 | 21,862 | |||||||||||
Selling, general and administrative expenses | 5,992 | 6,186 | 16,920 | 16,995 | |||||||||||
Amortization of intangible assets | 27 | 38 | 82 | 103 | |||||||||||
Operating Profit | 2,800 | 2,906 | 6,899 | 7,386 | |||||||||||
Interest expense | (204 | ) | (205 | ) | (611 | ) | (584 | ) | |||||||
Interest income and other | 23 | (4 | ) | 47 | 33 | ||||||||||
Income before income taxes | 2,619 | 2,697 | 6,335 | 6,835 | |||||||||||
Provision for income taxes | 706 | 686 | 1,788 | 1,775 | |||||||||||
Net income | 1,913 | 2,011 | 4,547 | 5,060 | |||||||||||
Less: Net income attributable to noncontrolling interests | 11 | 11 | 30 | 32 | |||||||||||
Net Income Attributable to PepsiCo | $ | 1,902 | $ | 2,000 | $ | 4,517 | $ | 5,028 | |||||||
Net Income Attributable to PepsiCo per Common Share | |||||||||||||||
Basic | $ | 1.22 | $ | 1.27 | $ | 2.89 | $ | 3.18 | |||||||
Diluted | $ | 1.21 | $ | 1.25 | $ | 2.86 | $ | 3.14 | |||||||
Weighted-average common shares outstanding | |||||||||||||||
Basic | 1,556 | 1,578 | 1,562 | 1,581 | |||||||||||
Diluted | 1,575 | 1,599 | 1,580 | 1,603 | |||||||||||
Cash dividends declared per common share | $ | 0.5375 | $ | 0.515 | $ | 1.59 | $ | 1.51 |
12 Weeks Ended | 36 Weeks Ended | ||||||||||||||
9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | ||||||||||||
Net Income | $ | 1,913 | $ | 2,011 | $ | 4,547 | $ | 5,060 | |||||||
Other Comprehensive Income/(Loss) | |||||||||||||||
Currency translation adjustment | 530 | (515 | ) | (14 | ) | 939 | |||||||||
Cash flow hedges, net of tax: | |||||||||||||||
Net derivative losses(a) | (15 | ) | (46 | ) | (40 | ) | (63 | ) | |||||||
Reclassification of net losses to net income(b) | 13 | 4 | 37 | 11 | |||||||||||
Pension and retiree medical, net of tax: | |||||||||||||||
Reclassification of losses to net income(c) | 23 | 26 | 109 | 49 | |||||||||||
Remeasurement of net liabilities(d) | — | — | 7 | — | |||||||||||
Unrealized (losses)/gains on securities, net of tax(e) | (1 | ) | (18 | ) | 2 | (20 | ) | ||||||||
Other | — | — | 36 | (17 | ) | ||||||||||
Total Other Comprehensive Income/(Loss) | 550 | (549 | ) | 137 | 899 | ||||||||||
Comprehensive Income | 2,463 | 1,462 | 4,684 | 5,959 | |||||||||||
Comprehensive income attributable to noncontrolling interests | (11 | ) | (8 | ) | (24 | ) | (101 | ) | |||||||
Comprehensive Income Attributable to PepsiCo | $ | 2,452 | $ | 1,454 | $ | 4,660 | $ | 5,858 | |||||||
(a) | Net of tax expense of $2 million and tax benefits of $10 million for the 12 and 36 weeks in 2012, respectively. Net of tax benefits of $27 million and $21 million for the 12 and 36 weeks in 2011, respectively. |
(b) | Net of tax benefits of $7 million and $21 million for the 12 and 36 weeks in 2012, respectively. Net of tax expense of $3 million and $8 million for the 12 and 36 weeks in 2011, respectively. |
(c) | Net of tax benefits of $17 million and $61 million for the 12 and 36 weeks in 2012, respectively. Net of tax benefits of $12 million and $26 million for the 12 and 36 weeks in 2011, respectively. |
(d) | Net of tax expense of $4 million for the 36 weeks in 2012. |
(e) | Net of tax benefits of $6 million and $7 million for the 12 and 36 weeks in 2011, respectively. |
PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (in millions, unaudited) | |||||||
36 Weeks Ended | |||||||
9/8/2012 | 9/3/2011 | ||||||
Operating Activities | |||||||
Net income | $ | 4,547 | $ | 5,060 | |||
Depreciation and amortization | 1,837 | 1,877 | |||||
Stock-based compensation expense | 193 | 222 | |||||
Restructuring and impairment charges | 193 | — | |||||
Cash payments for restructuring charges | (243 | ) | (1 | ) | |||
Merger and integration charges | 7 | 174 | |||||
Cash payments for merger and integration charges | (57 | ) | (293 | ) | |||
Restructuring and other charges related to the transaction with Tingyi (Cayman Islands) Holding Corp. (Tingyi) | 163 | — | |||||
Cash payments for restructuring and other charges related to the transaction with Tingyi | (98 | ) | — | ||||
Excess tax benefits from share-based payment arrangements | (89 | ) | (56 | ) | |||
Pension and retiree medical plan contributions | (1,253 | ) | (185 | ) | |||
Pension and retiree medical plan expenses | 414 | 389 | |||||
Deferred income taxes and other tax charges and credits | 283 | 132 | |||||
Change in accounts and notes receivable | (1,300 | ) | (1,643 | ) | |||
Change in inventories | (234 | ) | (466 | ) | |||
Change in prepaid expenses and other current assets | (83 | ) | (54 | ) | |||
Change in accounts payable and other current liabilities | 281 | 142 | |||||
Change in income taxes payable | 736 | 936 | |||||
Other, net | (179 | ) | (400 | ) | |||
Net Cash Provided by Operating Activities | 5,118 | 5,834 | |||||
Investing Activities | |||||||
Capital spending | (1,409 | ) | (1,962 | ) | |||
Sales of property, plant and equipment | 58 | 46 | |||||
Acquisition of Wimm-Bill-Dann Foods OJSC (WBD), net of cash and cash equivalents acquired | — | (2,428 | ) | ||||
Investment in WBD | — | (164 | ) | ||||
Cash payments related to the transaction with Tingyi | (298 | ) | — | ||||
Other acquisitions and investments in noncontrolled affiliates | (76 | ) | (160 | ) | |||
Divestitures | 7 | 10 | |||||
Short-term investments, by original maturity | |||||||
More than three months – maturities | — | 14 | |||||
Three months or less, net | (21 | ) | (48 | ) | |||
Other investing, net | 11 | (3 | ) | ||||
Net Cash Used for Investing Activities | (1,728 | ) | (4,695 | ) |
PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (continued) (in millions, unaudited) | |||||||
36 Weeks Ended | |||||||
9/8/2012 | 9/3/2011 | ||||||
Financing Activities | |||||||
Proceeds from issuances of long-term debt | $ | 5,207 | $ | 3,000 | |||
Payments of long-term debt | (1,357 | ) | (1,596 | ) | |||
Debt repurchase | — | (771 | ) | ||||
Short-term borrowings, by original maturity | |||||||
More than three months – proceeds | 53 | 224 | |||||
More than three months – payments | (213 | ) | (274 | ) | |||
Three months or less, net | (2,034 | ) | 106 | ||||
Cash dividends paid | (2,470 | ) | (2,349 | ) | |||
Share repurchases – common | (2,328 | ) | (1,929 | ) | |||
Share repurchases – preferred | (5 | ) | (5 | ) | |||
Proceeds from exercises of stock options | 927 | 724 | |||||
Excess tax benefits from share-based payment arrangements | 89 | 56 | |||||
Acquisition of noncontrolling interests | (15 | ) | (1,327 | ) | |||
Other financing | (18 | ) | (2 | ) | |||
Net Cash Used for Financing Activities | (2,164 | ) | (4,143 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 16 | 144 | |||||
Net Increase/(Decrease) in Cash and Cash Equivalents | 1,242 | (2,860 | ) | ||||
Cash and Cash Equivalents, Beginning of Year | 4,067 | 5,943 | |||||
Cash and Cash Equivalents, End of Period | $ | 5,309 | $ | 3,083 |
PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (in millions) | |||||||
(Unaudited) | |||||||
9/8/2012 | 12/31/2011 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 5,309 | $ | 4,067 | |||
Short-term investments | 402 | 358 | |||||
Accounts and notes receivable, less allowance: 9/12 – $156, 12/11 – $157 | 7,998 | 6,912 | |||||
Inventories | |||||||
Raw materials | 1,930 | 1,883 | |||||
Work-in-process | 253 | 207 | |||||
Finished goods | 1,722 | 1,737 | |||||
3,905 | 3,827 | ||||||
Prepaid expenses and other current assets | 1,656 | 2,277 | |||||
Total Current Assets | 19,270 | 17,441 | |||||
Property, Plant and Equipment | 34,920 | 35,140 | |||||
Accumulated Depreciation | (16,390 | ) | (15,442 | ) | |||
18,530 | 19,698 | ||||||
Amortizable Intangible Assets, net | 1,799 | 1,888 | |||||
Goodwill | 16,701 | 16,800 | |||||
Other Nonamortizable Intangible Assets | 14,511 | 14,557 | |||||
Nonamortizable Intangible Assets | 31,212 | 31,357 | |||||
Investments in Noncontrolled Affiliates | 1,585 | 1,477 | |||||
Other Assets | 1,621 | 1,021 | |||||
Total Assets | $ | 74,017 | $ | 72,882 |
PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (continued) (in millions except per share amounts) | |||||||
(Unaudited) | |||||||
9/8/2012 | 12/31/2011 | ||||||
Liabilities and Equity | |||||||
Current Liabilities | |||||||
Short-term obligations | $ | 4,211 | $ | 6,205 | |||
Accounts payable and other current liabilities | 11,722 | 11,757 | |||||
Income taxes payable | 287 | 192 | |||||
Total Current Liabilities | 16,220 | 18,154 | |||||
Long-term Debt Obligations | 23,732 | 20,568 | |||||
Other Liabilities | 7,551 | 8,266 | |||||
Deferred Income Taxes | 4,930 | 4,995 | |||||
Total Liabilities | 52,433 | 51,983 | |||||
Commitments and Contingencies | |||||||
Preferred Stock, no par value | 41 | 41 | |||||
Repurchased Preferred Stock | (162 | ) | (157 | ) | |||
PepsiCo Common Shareholders’ Equity | |||||||
Common stock, par value 1 2/3 cents per share: | |||||||
Authorized 3,600 shares, issued 9/12 and 12/11 – 1,865 shares | 31 | 31 | |||||
Capital in excess of par value | 4,179 | 4,461 | |||||
Retained earnings | 42,332 | 40,316 | |||||
Accumulated other comprehensive loss | (6,086 | ) | (6,229 | ) | |||
Less: repurchased common stock, at cost: 9/12 – 314 shares, 12/11 – 301 shares | (18,896 | ) | (17,875 | ) | |||
Total PepsiCo Common Shareholders’ Equity | 21,560 | 20,704 | |||||
Noncontrolling interests | 145 | 311 | |||||
Total Equity | 21,584 | 20,899 | |||||
Total Liabilities and Equity | $ | 74,017 | $ | 72,882 |
PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF EQUITY (in millions, unaudited) | |||||||||||||
36 Weeks Ended | |||||||||||||
9/8/2012 | 9/3/2011 | ||||||||||||
Shares | Amount | Shares | Amount | ||||||||||
Preferred Stock | 0.8 | $ | 41 | 0.8 | $ | 41 | |||||||
Repurchased Preferred Stock | |||||||||||||
Balance, beginning of year | (0.6 | ) | (157 | ) | (0.6 | ) | (150 | ) | |||||
Redemptions | (–) | (5 | ) | (–) | (5 | ) | |||||||
Balance, end of period | (0.6 | ) | (162 | ) | (0.6 | ) | (155 | ) | |||||
Common Stock | 1,865 | 31 | 1,865 | 31 | |||||||||
Capital in Excess of Par Value | |||||||||||||
Balance, beginning of year | 4,461 | 4,527 | |||||||||||
Stock-based compensation expense | 193 | 222 | |||||||||||
Stock option exercises/RSUs converted(a) | (384 | ) | (303 | ) | |||||||||
Withholding tax on RSUs converted | (65 | ) | (54 | ) | |||||||||
Other | (26 | ) | 14 | ||||||||||
Balance, end of period | 4,179 | 4,406 | |||||||||||
Retained Earnings | |||||||||||||
Balance, beginning of year | 40,316 | 37,090 | |||||||||||
Net income attributable to PepsiCo | 4,517 | 5,028 | |||||||||||
Cash dividends declared – common | (2,482 | ) | (2,388 | ) | |||||||||
Cash dividends declared – preferred | (1 | ) | (1 | ) | |||||||||
Cash dividends declared – RSUs | (18 | ) | (15 | ) | |||||||||
Balance, end of period | 42,332 | 39,714 | |||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||
Balance, beginning of year | (6,229 | ) | (3,630 | ) | |||||||||
Currency translation adjustment | (8 | ) | 870 | ||||||||||
Cash flow hedges, net of tax: | |||||||||||||
Net derivative losses | (40 | ) | (63 | ) | |||||||||
Reclassification of net losses to net income | 37 | 11 | |||||||||||
Pension and retiree medical, net of tax: | |||||||||||||
Reclassification of net losses to net income | 109 | 49 | |||||||||||
Remeasurement of net liabilities | 7 | — | |||||||||||
Unrealized gains/(losses) on securities, net of tax | 2 | (20 | ) | ||||||||||
Other | 36 | (17 | ) | ||||||||||
Balance, end of period | (6,086 | ) | (2,800 | ) | |||||||||
Repurchased Common Stock | |||||||||||||
Balance, beginning of year | (301 | ) | (17,875 | ) | (284 | ) | (16,745 | ) | |||||
Share repurchases | (35 | ) | (2,387 | ) | (30 | ) | (1,970 | ) | |||||
Stock option exercises | 20 | 1,225 | 15 | 948 | |||||||||
Other | 2 | 141 | 2 | 107 | |||||||||
Balance, end of period | (314 | ) | (18,896 | ) | (297 | ) | (17,660 | ) | |||||
Total PepsiCo Common Shareholders’ Equity | 21,560 | 23,691 | |||||||||||
Noncontrolling Interests | |||||||||||||
Balance, beginning of year | 311 | 312 | |||||||||||
Net income attributable to noncontrolling interests | 30 | 32 | |||||||||||
Distributions to noncontrolling interests | (15 | ) | (10 | ) | |||||||||
Currency translation adjustment | (6 | ) | 69 | ||||||||||
Acquisitions and divestitures | (175 | ) | 23 | ||||||||||
Balance, end of period | 145 | 426 | |||||||||||
Total Equity | $ | 21,584 | $ | 24,003 |
(a) | Includes total tax benefits of $57 million in 2012 and $35 million in 2011. |
Basis of Presentation and Our Divisions |
1. | PepsiCo Americas Foods (PAF), 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. |
• | FLNA, |
• | QFNA, |
• | LAF, |
• | PAB, |
• | Europe, and |
• | AMEA. |
12 Weeks Ended | 36 Weeks Ended | ||||||||||||||
9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | ||||||||||||
Net Revenue | |||||||||||||||
FLNA | $ | 3,269 | $ | 3,173 | $ | 9,472 | $ | 9,167 | |||||||
QFNA | 615 | 614 | 1,821 | 1,837 | |||||||||||
LAF | 1,883 | 1,841 | 5,066 | 4,757 | |||||||||||
PAB | 5,530 | 5,947 | 15,330 | 16,107 | |||||||||||
Europe | 3,691 | 3,909 | 9,153 | 9,329 | |||||||||||
AMEA | 1,664 | 2,098 | 4,696 | 5,149 | |||||||||||
$ | 16,652 | $ | 17,582 | $ | 45,538 | $ | 46,346 | ||||||||
12 Weeks Ended | 36 Weeks Ended | ||||||||||||||
9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | ||||||||||||
Operating Profit | |||||||||||||||
FLNA | $ | 917 | $ | 918 | $ | 2,532 | $ | 2,545 | |||||||
QFNA | 154 | 177 | 495 | 558 | |||||||||||
LAF | 219 | 275 | 673 | 720 | |||||||||||
PAB | 837 | 992 | 2,202 | 2,533 | |||||||||||
Europe | 483 | 514 | 1,017 | 984 | |||||||||||
AMEA | 317 | 285 | 630 | 730 | |||||||||||
Total division | 2,927 | 3,161 | 7,549 | 8,070 | |||||||||||
Corporate Unallocated | |||||||||||||||
Net impact of mark-to-market on commodity hedges | 121 | (53 | ) | 126 | (31 | ) | |||||||||
Restructuring and impairment charges | (7 | ) | — | (8 | ) | — | |||||||||
Merger and integration charges | 2 | (10 | ) | — | (64 | ) | |||||||||
Other | (243 | ) | (192 | ) | (768 | ) | (589 | ) | |||||||
$ | 2,800 | $ | 2,906 | $ | 6,899 | $ | 7,386 |
Total Assets | |||||||
9/8/2012 | 12/31/2011 | ||||||
FLNA | $ | 6,075 | $ | 6,120 | |||
QFNA | 1,223 | 1,174 | |||||
LAF | 4,734 | 4,731 | |||||
PAB | 31,925 | 31,187 | |||||
Europe | 18,959 | 18,479 | |||||
AMEA | 5,669 | 6,048 | |||||
Total division | 68,585 | 67,739 | |||||
Corporate(a) | 5,432 | 5,143 | |||||
$ | 74,017 | $ | 72,882 | ||||
(a) | Corporate assets consist principally of cash and cash equivalents, short-term investments, derivative instruments and property, plant and equipment. |
Acquisitions and Divestitures |
Intangible Assets |
9/8/2012 | 12/31/2011 | ||||||
Amortizable intangible assets, net | |||||||
Acquired franchise rights | $ | 932 | $ | 916 | |||
Reacquired franchise rights | 110 | 110 | |||||
Brands | 1,432 | 1,417 | |||||
Other identifiable intangibles | 701 | 777 | |||||
3,175 | 3,220 | ||||||
Accumulated amortization | (1,376 | ) | (1,332 | ) | |||
$ | 1,799 | $ | 1,888 |
Balance | Acquisitions/ Divestitures | Translation and Other | Balance | ||||||||||||
12/31/2011 | 9/8/2012 | ||||||||||||||
FLNA | |||||||||||||||
Goodwill | $ | 311 | $ | — | $ | 7 | $ | 318 | |||||||
Brands | 30 | — | 2 | 32 | |||||||||||
341 | — | 9 | 350 | ||||||||||||
QFNA | |||||||||||||||
Goodwill | 175 | — | — | 175 | |||||||||||
LAF | |||||||||||||||
Goodwill | 793 | (83 | ) | (17 | ) | 693 | |||||||||
Brands | 157 | 109 | (15 | ) | 251 | ||||||||||
950 | 26 | (32 | ) | 944 | |||||||||||
PAB | |||||||||||||||
Goodwill | 9,932 | 23 | 42 | 9,997 | |||||||||||
Reacquired franchise rights | 7,342 | (33 | ) | 42 | 7,351 | ||||||||||
Acquired franchise rights | 1,562 | 9 | 3 | 1,574 | |||||||||||
Brands | 168 | — | (17 | ) | 151 | ||||||||||
19,004 | (1 | ) | 70 | 19,073 | |||||||||||
Europe | |||||||||||||||
Goodwill | 4,900 | 78 | (16 | ) | 4,962 | ||||||||||
Reacquired franchise rights | 732 | — | (2 | ) | 730 | ||||||||||
Acquired franchise rights | 218 | — | (5 | ) | 213 | ||||||||||
Brands | 4,178 | (96 | ) | (21 | ) | (a) | 4,061 | ||||||||
10,028 | (18 | ) | (44 | ) | 9,966 | ||||||||||
AMEA | |||||||||||||||
Goodwill | 689 | (142 | ) | 9 | 556 | ||||||||||
Brands | 170 | (24 | ) | 2 | 148 | ||||||||||
859 | (166 | ) | 11 | 704 | |||||||||||
Total goodwill | 16,800 | (124 | ) | 25 | 16,701 | ||||||||||
Total reacquired franchise rights | 8,074 | (33 | ) | 40 | 8,081 | ||||||||||
Total acquired franchise rights | 1,780 | 9 | (2 | ) | 1,787 | ||||||||||
Total brands | 4,703 | (11 | ) | (49 | ) | 4,643 | |||||||||
$ | 31,357 | $ | (159 | ) | $ | 14 | $ | 31,212 | |||||||
Stock-Based Compensation |
36 Weeks Ended | |||||
9/8/2012 | 9/3/2011 | ||||
Expected life | 6 years | 6 years | |||
Risk free interest rate | 1.3 | % | 2.5 | % | |
Expected volatility(a) | 17 | % | 16 | % | |
Expected dividend yield | 3.0 | % | 2.9 | % |
(a) | Reflects movements in our stock price over the most recent historical period equivalent to the expected life. |
Pension and Retiree Medical Benefits |
12 Weeks Ended | |||||||||||||||||||||||
Pension | Retiree Medical | ||||||||||||||||||||||
9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | ||||||||||||||||||
U.S. | International | ||||||||||||||||||||||
Service cost | $ | 93 | $ | 80 | $ | 23 | $ | 22 | $ | 12 | $ | 12 | |||||||||||
Interest cost | 124 | 127 | 27 | 28 | 15 | 20 | |||||||||||||||||
Expected return on plan assets | (183 | ) | (163 | ) | (34 | ) | (32 | ) | (5 | ) | (3 | ) | |||||||||||
Amortization of prior service cost/(benefit) | 4 | 3 | — | 1 | (6 | ) | (6 | ) | |||||||||||||||
Amortization of experience loss | 60 | 34 | 13 | 10 | — | 2 | |||||||||||||||||
98 | 81 | 29 | 29 | 16 | 25 | ||||||||||||||||||
Settlement/Curtailment gain | — | — | (2 | ) | — | — | — | ||||||||||||||||
Special termination benefits | 2 | — | — | — | — | — | |||||||||||||||||
Total expense | $ | 100 | $ | 81 | $ | 27 | $ | 29 | $ | 16 | $ | 25 | |||||||||||
36 Weeks Ended | |||||||||||||||||||||||
Pension | Retiree Medical | ||||||||||||||||||||||
9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | ||||||||||||||||||
U.S. | International | ||||||||||||||||||||||
Service cost | $ | 282 | $ | 242 | $ | 65 | $ | 62 | $ | 35 | $ | 35 | |||||||||||
Interest cost | 370 | 379 | 75 | 77 | 45 | 61 | |||||||||||||||||
Expected return on plan assets | (550 | ) | (487 | ) | (95 | ) | (89 | ) | (15 | ) | (10 | ) | |||||||||||
Amortization of prior service cost/(benefit) | 12 | 10 | 1 | 2 | (18 | ) | (19 | ) | |||||||||||||||
Amortization of experience loss | 179 | 101 | 35 | 26 | — | 8 | |||||||||||||||||
293 | 245 | 81 | 78 | 47 | 75 | ||||||||||||||||||
Settlement/Curtailment (gain)/loss | (7 | ) | (9 | ) | 1 | — | — | — | |||||||||||||||
Special termination benefits | 6 | 10 | — | — | 4 | 1 | |||||||||||||||||
Total expense | $ | 292 | $ | 246 | $ | 82 | $ | 78 | $ | 51 | $ | 76 |
Income Taxes |
9/8/2012 | 12/31/2011 | ||||||
Balance, beginning of year | $ | 2,167 | $ | 2,022 | |||
Additions for tax positions related to the current year | 190 | 233 | |||||
Additions for tax positions from prior years | 101 | 147 | |||||
Reductions for tax positions from prior years | (25 | ) | (46 | ) | |||
Settlement payments | (10 | ) | (156 | ) | |||
Statute of limitations expiration | — | (15 | ) | ||||
Translation and other | 5 | (18 | ) | ||||
Balance, end of period | $ | 2,428 | $ | 2,167 |
Net Income Attributable to PepsiCo per Common Share |
12 Weeks Ended | |||||||||||||
9/8/2012 | 9/3/2011 | ||||||||||||
Income | Shares(a) | Income | Shares(a) | ||||||||||
Net income attributable to PepsiCo | $ | 1,902 | $ | 2,000 | |||||||||
Preferred shares: | |||||||||||||
Dividends | — | — | |||||||||||
Redemption premium | (1 | ) | (1 | ) | |||||||||
Net income available for PepsiCo common shareholders | $ | 1,901 | 1,556 | $ | 1,999 | 1,578 | |||||||
Basic net income attributable to PepsiCo per common share | $ | 1.22 | $ | 1.27 | |||||||||
Net income available for PepsiCo common shareholders | $ | 1,901 | 1,556 | $ | 1,999 | 1,578 | |||||||
Dilutive securities: | |||||||||||||
Stock options and RSUs(b) | — | 18 | — | 20 | |||||||||
ESOP convertible preferred stock | 1 | 1 | 1 | 1 | |||||||||
Diluted | $ | 1,902 | 1,575 | $ | 2,000 | 1,599 | |||||||
Diluted net income attributable to PepsiCo per common share | $ | 1.21 | $ | 1.25 |
36 Weeks Ended | |||||||||||||
9/8/2012 | 9/3/2011 | ||||||||||||
Income | Shares(a) | Income | Shares(a) | ||||||||||
Net income attributable to PepsiCo | $ | 4,517 | $ | 5,028 | |||||||||
Preferred shares: | |||||||||||||
Dividends | (1 | ) | (1 | ) | |||||||||
Redemption premium | (4 | ) | (4 | ) | |||||||||
Net income available for PepsiCo common shareholders | $ | 4,512 | 1,562 | $ | 5,023 | 1,581 | |||||||
Basic net income attributable to PepsiCo per common share | $ | 2.89 | $ | 3.18 | |||||||||
Net income available for PepsiCo common shareholders | $ | 4,512 | 1,562 | $ | 5,023 | 1,581 | |||||||
Dilutive securities: | |||||||||||||
Stock options and RSUs(b) | — | 17 | — | 21 | |||||||||
ESOP convertible preferred stock | 5 | 1 | 5 | 1 | |||||||||
Diluted | $ | 4,517 | 1,580 | $ | 5,028 | 1,603 | |||||||
Diluted net income attributable to PepsiCo per common share | $ | 2.86 | $ | 3.14 | |||||||||
(a) | Weighted-average common shares outstanding (in millions). |
(b) | Options to purchase 0.6 million and 13.5 million shares, respectively, for the 12 and 36 weeks in 2012 were not included in the calculation of earnings per share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $72.26 and $67.51, respectively. Options to purchase 22.1 million and 21.2 million shares, respectively, for the 12 and 36 weeks in 2011 were not included in the calculation of earnings per share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $67.67 and $67.46, respectively. |
Debt Obligations and Commitments |
• | $750 million of 0.750% senior notes maturing in 2015; |
• | $1.250 billion of 2.750% senior notes maturing in 2022; and |
• | $750 million of 4.000% senior notes maturing in 2042. |
• | $900 million of 0.700% senior notes maturing in 2015; |
• | $1.000 billion of 1.250% senior notes maturing in 2017; and |
• | $600 million of 3.600% senior notes maturing in 2042. |
Payments Due by Period | |||||||||||||||||||
Total | 2012 | 2013 – 2014 | 2015 – 2016 | 2017 and beyond | |||||||||||||||
Long-term debt obligations(b) | $ | 22,989 | $ | — | $ | 4,153 | $ | 5,093 | $ | 13,743 | |||||||||
Interest on debt obligations(c) | 8,882 | 300 | 1,656 | 1,311 | 5,615 | ||||||||||||||
Operating leases | 1,754 | 142 | 680 | 388 | 544 | ||||||||||||||
Purchasing commitments | 2,450 | 394 | 1,664 | 331 | 61 | ||||||||||||||
Marketing commitments | 2,364 | 78 | 596 | 540 | 1,150 | ||||||||||||||
$ | 38,439 | $ | 914 | $ | 8,749 | $ | 7,663 | $ | 21,113 | ||||||||||
(a) | Reflects non-cancelable commitments as of September 8, 2012 based on foreign exchange rates in effect on the balance sheet date and excludes any reserves for uncertain tax positions as we are unable to reasonably predict the ultimate amount or timing of settlement. |
(b) | Excludes $3,054 million related to current maturities of long-term debt, $390 million related to the fair value step-up of debt acquired in connection with our acquisitions of The Pepsi Bottling Group, Inc. (PBG) and PepsiAmericas, Inc. (PAS), and $353 million related to the increase in carrying value of long-term debt reflecting the gains on our fair value interest rate swaps. |
(c) | Interest payments on floating-rate debt are estimated using interest rates effective as of September 8, 2012. |
Restructuring, Impairment and Integration Charges |
Severance and Other Employee Costs | Asset Impairment | Other Costs | Total | ||||||||||||
Liability as of December 31, 2011 | $ | 249 | $ | — | $ | 27 | $ | 276 | |||||||
2012 restructuring and impairment charges | 51 | 57 | 85 | 193 | |||||||||||
Cash payments | (173 | ) | — | (70 | ) | (243 | ) | ||||||||
Non-cash charges | (7 | ) | (57 | ) | (2 | ) | (66 | ) | |||||||
Liability as of September 8, 2012 | $ | 120 | $ | — | $ | 40 | $ | 160 |
Severance and Other Employee Costs | Other Costs | Total | |||||||||
Liability as of December 31, 2011 | $ | 98 | $ | 7 | $ | 105 | |||||
2012 merger and integration charges | 2 | 5 | 7 | ||||||||
Cash payments | (50 | ) | (7 | ) | (57 | ) | |||||
Non-cash charges | (6 | ) | — | (6 | ) | ||||||
Liability as of September 8, 2012 | $ | 44 | $ | 5 | $ | 49 |
Financial Instruments |
• | commodity prices, affecting the cost of our raw materials and energy, |
• | foreign exchange rates and currency restrictions, and |
• | interest rates. |
2012 | 2011 | ||||||||||||||
Assets(a) | Liabilities(a) | Assets(a) | Liabilities(a) | ||||||||||||
Available-for-sale securities(b) | $ | 61 | $ | — | $ | 61 | $ | — | |||||||
Short-term investments – index funds(c) | $ | 164 | $ | — | $ | 159 | $ | — | |||||||
Prepaid forward contracts(d) | $ | 41 | $ | — | $ | 38 | $ | — | |||||||
Deferred compensation(e) | $ | — | $ | 503 | $ | — | $ | 519 | |||||||
Derivatives designated as fair value hedging instruments: | |||||||||||||||
Interest rate derivatives(f) | $ | 293 | $ | — | $ | 428 | $ | — | |||||||
Derivatives designated as cash flow hedging instruments: | |||||||||||||||
Foreign exchange contracts(g) | $ | 10 | $ | 31 | $ | 12 | $ | 23 | |||||||
Interest rate derivatives(f) | — | — | — | 56 | |||||||||||
Commodity contracts(h) | 13 | 38 | 28 | 17 | |||||||||||
$ | 23 | $ | 69 | $ | 40 | $ | 96 | ||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Foreign exchange contracts(g) | $ | 30 | $ | 6 | $ | 5 | $ | 19 | |||||||
Interest rate derivatives(f) | 128 | 159 | 104 | 140 | |||||||||||
Commodity contracts(h) | 84 | 25 | 24 | 30 | |||||||||||
$ | 242 | $ | 190 | $ | 133 | $ | 189 | ||||||||
Total derivatives at fair value | $ | 558 | $ | 259 | $ | 601 | $ | 285 | |||||||
Total | $ | 824 | $ | 762 | $ | 859 | $ | 804 | |||||||
(a) | Financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets, with the exception of available-for-sale securities and short-term investments. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities. Unless specifically indicated, all financial assets and liabilities are categorized as Level 2 assets or liabilities. |
(b) | Based on the price of common stock. Categorized as a Level 1 asset. |
(c) | Based on price changes in index funds used to manage a portion of market risk arising from our deferred compensation liability. Categorized as a Level 1 asset. |
(d) | Based primarily on the price of our common stock. |
(e) | Based on the fair value of investments corresponding to employees’ investment elections. As of September 8, 2012 and September 3, 2011, $11 million and $43 million, respectively, are categorized as Level 1 liabilities. The remaining balances are categorized as Level 2 liabilities. |
(f) | Based on LIBOR forward rates. |
(g) | Based on recently reported market transactions of spot and forward rates. |
(h) | Based on recently reported market transactions, primarily swap arrangements. |
12 Weeks Ended | |||||||||||||||||||||||
Fair Value/Non- designated Hedges | Cash Flow Hedges | ||||||||||||||||||||||
(Gains)/Losses Recognized in Income Statement(a) | Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss | Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(b) | |||||||||||||||||||||
9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | ||||||||||||||||||
Foreign exchange contracts | $ | (9 | ) | $ | 7 | $ | 41 | $ | (9 | ) | $ | (6 | ) | $ | 9 | ||||||||
Interest rate derivatives | (5 | ) | (84 | ) | — | 42 | 6 | 4 | |||||||||||||||
Commodity contracts | (99 | ) | 29 | (28 | ) | 40 | 20 | (12 | ) | ||||||||||||||
Total | $ | (113 | ) | $ | (48 | ) | $ | 13 | $ | 73 | $ | 20 | $ | 1 |
36 Weeks Ended | |||||||||||||||||||||||
Fair Value/Non- designated Hedges | Cash Flow Hedges | ||||||||||||||||||||||
(Gains)/Losses Recognized in Income Statement(a) | Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss | Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(b) | |||||||||||||||||||||
9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | ||||||||||||||||||
Foreign exchange contracts | $ | (16 | ) | $ | 8 | $ | 37 | $ | 28 | $ | (4 | ) | $ | 30 | |||||||||
Interest rate derivatives | 3 | (162 | ) | 4 | 71 | 15 | 10 | ||||||||||||||||
Commodity contracts | (76 | ) | (17 | ) | 9 | (15 | ) | 47 | (37 | ) | |||||||||||||
Total | $ | (89 | ) | $ | (171 | ) | $ | 50 | $ | 84 | $ | 58 | $ | 3 | |||||||||
(a) | Interest rate derivatives gains/losses are primarily from fair value hedges and are included in interest expense. These gains/losses are substantially offset by increases/decreases in the value of the underlying debt, which are also included in interest expense. All other gains/losses are from non-designated hedges and are included in corporate unallocated expenses. |
(b) | Interest rate losses are included in interest expense. All other gains/losses are primarily included in cost of sales. |
Recent Accounting Pronouncements |
FINANCIAL REVIEW |
Our Critical Accounting Policies |
Our Business Risks |
Results of Operations – Consolidated Review |
12 Weeks Ended | 36 Weeks Ended | ||||||||||||||
9/8/2012 | 9/3/2011 | 9/8/2012 | 9/3/2011 | ||||||||||||
Operating profit | |||||||||||||||
Mark-to-market net gains/(losses) | $ | 121 | $ | (53 | ) | $ | 126 | $ | (31 | ) | |||||
Restructuring and impairment charges | $ | (83 | ) | $ | — | $ | (193 | ) | $ | — | |||||
Merger and integration charges | $ | (2 | ) | $ | (45 | ) | $ | (7 | ) | $ | (158 | ) | |||
Inventory fair value adjustments | $ | — | $ | (3 | ) | $ | — | $ | (41 | ) | |||||
Restructuring and other charges related to the transaction with Tingyi | $ | — | $ | — | $ | (137 | ) | $ | — | ||||||
Interest expense | |||||||||||||||
Merger and integration charges | $ | — | $ | (16 | ) | $ | — | $ | (16 | ) | |||||
Net income attributable to PepsiCo | |||||||||||||||
Mark-to-market net gains/(losses) | $ | 70 | $ | (34 | ) | $ | 75 | $ | (20 | ) | |||||
Restructuring and impairment charges | $ | (59 | ) | $ | — | $ | (139 | ) | $ | — | |||||
Merger and integration charges | $ | (2 | ) | $ | (53 | ) | $ | (6 | ) | $ | (147 | ) | |||
Inventory fair value adjustments | $ | — | $ | (2 | ) | $ | — | $ | (25 | ) | |||||
Restructuring and other charges related to the transaction with Tingyi | $ | — | $ | — | $ | (163 | ) | $ | — | ||||||
Net income attributable to PepsiCo per common share – diluted | |||||||||||||||
Mark-to-market net gains/(losses) | $ | 0.05 | $ | (0.02 | ) | $ | 0.05 | $ | (0.01 | ) | |||||
Restructuring and impairment charges | $ | (0.04 | ) | $ | — | $ | (0.09 | ) | $ | — | |||||
Merger and integration charges | $ | — | $ | (0.03 | ) | $ | — | $ | (0.09 | ) | |||||
Inventory fair value adjustments | $ | — | $ | — | $ | — | $ | (0.02 | ) | ||||||
Restructuring and other charges related to the transaction with Tingyi | $ | — | $ | — | $ | (0.10 | ) | $ | — |
12 Weeks Ended | 36 Weeks Ended | ||||||||||||||||||||
9/8/2012 | 9/3/2011 | Change | 9/8/2012 | 9/3/2011 | Change | ||||||||||||||||
Total net revenue | $ | 16,652 | $ | 17,582 | (5 | )% | $ | 45,538 | $ | 46,346 | (2 | )% | |||||||||
Operating profit | |||||||||||||||||||||
FLNA | $ | 917 | $ | 918 | — | % | $ | 2,532 | $ | 2,545 | (0.5 | )% | |||||||||
QFNA | 154 | 177 | (13 | )% | 495 | 558 | (11 | )% | |||||||||||||
LAF | 219 | 275 | (21 | )% | 673 | 720 | (7 | )% | |||||||||||||
PAB | 837 | 992 | (16 | )% | 2,202 | 2,533 | (13 | )% | |||||||||||||
Europe | 483 | 514 | (6 | )% | 1,017 | 984 | 3 | % | |||||||||||||
AMEA | 317 | 285 | 11 | % | 630 | 730 | (14 | )% | |||||||||||||
Corporate unallocated | |||||||||||||||||||||
Mark-to-market net gains/(losses) | 121 | (53 | ) | n/m | 126 | (31 | ) | n/m | |||||||||||||
Restructuring and impairment charges | (7 | ) | — | n/m | (8 | ) | — | n/m | |||||||||||||
Merger and integration charges | 2 | (10 | ) | n/m | — | (64 | ) | n/m | |||||||||||||
Other | (243 | ) | (192 | ) | 27 | % | (768 | ) | (589 | ) | 30 | % | |||||||||
Total operating profit | $ | 2,800 | $ | 2,906 | (4 | )% | $ | 6,899 | $ | 7,386 | (7 | )% | |||||||||
Total operating profit margin | 16.8 | % | 16.5 | % | 0.3 | 15.1 | % | 15.9 | % | (0.8 | ) |
12 Weeks Ended | 36 Weeks Ended | ||||||||||||||||||||||
9/8/2012 | 9/3/2011 | Change | 9/8/2012 | 9/3/2011 | Change | ||||||||||||||||||
Interest expense, net | $ | (181 | ) | $ | (209 | ) | (14 | )% | $ | (564 | ) | $ | (551 | ) | 2.5 | % | |||||||
Tax rate | 26.9 | % | 25.4 | % | 28.2 | % | 26.0 | % | |||||||||||||||
Net income attributable to PepsiCo | $ | 1,902 | $ | 2,000 | (5 | )% | $ | 4,517 | $ | 5,028 | (10 | )% | |||||||||||
Net income attributable to PepsiCo per common share – diluted | $ | 1.21 | $ | 1.25 | (3 | )% | $ | 2.86 | $ | 3.14 | (9 | )% | |||||||||||
Mark-to-market net (gains)/losses | (0.05 | ) | 0.02 | (0.05 | ) | 0.01 | |||||||||||||||||
Restructuring and impairment charges | 0.04 | — | 0.09 | — | |||||||||||||||||||
Merger and integration charges | — | 0.03 | — | 0.09 | |||||||||||||||||||
Inventory fair value adjustments | — | — | — | 0.02 | |||||||||||||||||||
Restructuring and other charges related to the transaction with Tingyi | — | — | 0.10 | — | |||||||||||||||||||
Net income attributable to PepsiCo per common share – diluted, excluding above items* | $ | 1.20 | $ | 1.31 | ** | (8 | )% | $ | 3.01 | ** | $ | 3.26 | (8 | )% |
Results of Operations – Division Review |
Net Revenue | |||||||||||||||||||||||||||
12 Weeks Ended | FLNA | QFNA | LAF | PAB | Europe | AMEA | Total | ||||||||||||||||||||
9/8/2012 | $ | 3,269 | $ | 615 | $ | 1,883 | $ | 5,530 | $ | 3,691 | $ | 1,664 | $ | 16,652 | |||||||||||||
9/3/2011 | $ | 3,173 | $ | 614 | $ | 1,841 | $ | 5,947 | $ | 3,909 | $ | 2,098 | $ | 17,582 | |||||||||||||
% Impact of: | |||||||||||||||||||||||||||
Volume(a) | 1 | % | 2 | % | 4 | % | (4 | )% | 1 | % | 10 | % | 1 | % | |||||||||||||
Effective net pricing(b) | 2 | (1 | ) | 9 | 3 | 6 | 0.5 | 4 | |||||||||||||||||||
Foreign currency translation | — | — | (13 | ) | (1 | ) | (12 | ) | (4 | ) | (5 | ) | |||||||||||||||
Acquisitions and divestitures | — | — | 2 | (6 | ) | — | (27 | ) | (5 | ) | |||||||||||||||||
% Change(c) | 3 | % | — | % | 2 | % | (7 | )% | (6 | )% | (21 | )% | (5 | )% | |||||||||||||
Net Revenue | |||||||||||||||||||||||||||
36 Weeks Ended | FLNA | QFNA | LAF | PAB | Europe | AMEA | Total | ||||||||||||||||||||
9/8/2012 | $ | 9,472 | $ | 1,821 | $ | 5,066 | $ | 15,330 | $ | 9,153 | $ | 4,696 | $ | 45,538 | |||||||||||||
9/3/2011 | $ | 9,167 | $ | 1,837 | $ | 4,757 | $ | 16,107 | $ | 9,329 | $ | 5,149 | $ | 46,346 | |||||||||||||
% Impact of: | |||||||||||||||||||||||||||
Volume(a) | (1 | )% | (1 | )% | 4 | % | (3 | )% | — | % | 8 | % | — | % | |||||||||||||
Effective net pricing(b) | 4 | 1 | 10 | 4 | 5 | 3 | 4.5 | ||||||||||||||||||||
Foreign currency translation | — | — | (10 | ) | — | (9 | ) | (3 | ) | (3 | ) | ||||||||||||||||
Acquisitions and divestitures | — | — | 2 | (6 | ) | 2 | (16 | ) | (3 | ) | |||||||||||||||||
% Change(c) | 3 | % | (1 | )% | 7 | % | (5 | )% | (2 | )% | (9 | )% | (2 | )% | |||||||||||||
(a) | Excludes the impact of acquisitions and divestitures. In certain instances, volume growth varies from the amounts disclosed in the following divisional discussions due to nonconsolidated joint venture volume, and, for our beverage businesses, temporary timing differences between BCS and CSE. Our net revenue excludes nonconsolidated joint venture volume, and, for our beverage businesses, is based on CSE. |
(b) | Includes the year-over-year impact of discrete pricing actions, sales incentive activities and mix resulting from selling varying products in different package sizes and in different countries. |
(c) | Amounts may not sum due to rounding. |
Organic Net Revenue Growth | ||||||||||||||||||||
12 Weeks Ended 9/8/2012 | FLNA | QFNA | LAF | PAB | Europe | AMEA | Total | |||||||||||||
Reported Growth | 3 | % | — | % | 2 | % | (7 | )% | (6 | )% | (21 | )% | (5 | )% | ||||||
% Impact of: | ||||||||||||||||||||
Foreign currency translation | — | — | 13 | 1 | 12 | 4 | 5 | |||||||||||||
Acquisitions and divestitures | — | — | (2 | ) | 6 | — | 27 | 5 | ||||||||||||
Organic Growth(a) | 3 | % | 1 | % | 13 | % | — | % | 7 | % | 10 | % | 5 | % | ||||||
Organic Net Revenue Growth | ||||||||||||||||||||
36 Weeks Ended 9/8/2012 | FLNA | QFNA | LAF | PAB | Europe | AMEA | Total | |||||||||||||
Reported Growth | 3 | % | (1 | )% | 7 | % | (5 | )% | (2 | )% | (9 | )% | (2 | )% | ||||||
% Impact of: | ||||||||||||||||||||
Foreign currency translation | — | — | 10 | — | 9 | 3 | 3 | |||||||||||||
Acquisitions and divestitures | — | — | (2 | ) | 6 | (2 | ) | 16 | 3 | |||||||||||
Organic Growth(a) | 4 | % | — | % | 14 | % | 1 | % | 5 | % | 11 | % | 5 | % | ||||||
(a) | Amounts may not sum due to rounding. |
12 Weeks Ended | % | 36 Weeks Ended | % | ||||||||||||||||||||
9/8/2012 | 9/3/2011 | Change | 9/8/2012 | 9/3/2011 | Change | ||||||||||||||||||
Net revenue | $ | 3,269 | $ | 3,173 | 3 | $ | 9,472 | $ | 9,167 | 3 | |||||||||||||
Impact of foreign currency translation | — | — | |||||||||||||||||||||
Net revenue growth, on a constant currency basis* | 3 | 4 | ** | ||||||||||||||||||||
Operating profit | $ | 917 | $ | 918 | — | $ | 2,532 | $ | 2,545 | (0.5 | ) | ||||||||||||
Restructuring and impairment charges | 8 | — | 40 | — | |||||||||||||||||||
Operating profit excluding above item* | $ | 925 | $ | 918 | 1 | $ | 2,572 | $ | 2,545 | 1 | |||||||||||||
Impact of foreign currency translation | — | — | |||||||||||||||||||||
Operating profit growth excluding above item, on a constant currency basis* | 1 | 1 |
12 Weeks Ended | % | 36 Weeks Ended | % | ||||||||||||||||||||
9/8/2012 | 9/3/2011 | Change | 9/8/2012 | 9/3/2011 | Change | ||||||||||||||||||
Net revenue | $ | 615 | $ | 614 | — | $ | 1,821 | $ | 1,837 | (1 | ) | ||||||||||||
Impact of foreign currency translation | — | — | |||||||||||||||||||||
Net revenue growth, on a constant currency basis* | 0.5 | ** | (0.5 | ) | ** | ||||||||||||||||||
Operating profit | $ | 154 | $ | 177 | (13 | ) | $ | 495 | $ | 558 | (11 | ) | |||||||||||
Restructuring and impairment charges | 1 | — | 7 | — | |||||||||||||||||||
Operating profit excluding above item* | $ | 155 | $ | 177 | (12 | ) | $ | 502 | $ | 558 | (10 | ) | |||||||||||
Impact of foreign currency translation | — | — | |||||||||||||||||||||
Operating profit growth excluding above item, on a constant currency basis* | (11 | ) | ** | (10 | ) |
12 Weeks Ended | % | 36 Weeks Ended | % | ||||||||||||||||||||
9/8/2012 | 9/3/2011 | Change | 9/8/2012 | 9/3/2011 | Change | ||||||||||||||||||
Net revenue | $ | 1,883 | $ | 1,841 | 2 | $ | 5,066 | $ | 4,757 | 7 | |||||||||||||
Impact of foreign currency translation | 13 | 10 | |||||||||||||||||||||
Net revenue growth, on a constant currency basis* | 15 | 16 | ** | ||||||||||||||||||||
Operating profit | $ | 219 | $ | 275 | (21 | ) | $ | 673 | $ | 720 | (7 | ) | |||||||||||
Restructuring and impairment charges | 29 | — | 41 | — | |||||||||||||||||||
Operating profit excluding above item* | $ | 248 | $ | 275 | (10 | ) | $ | 714 | $ | 720 | (1 | ) | |||||||||||
Impact of foreign currency translation | 11 | 10 | |||||||||||||||||||||
Operating profit growth excluding above item, on a constant currency basis* | — | ** | 9 |
12 Weeks Ended | % | 36 Weeks Ended | % | |||||||||||||||||||
9/8/2012 | 9/3/2011 | Change | 9/8/2012 | 9/3/2011 | Change | |||||||||||||||||
Net revenue | $ | 5,530 | $ | 5,947 | (7 | ) | $ | 15,330 | $ | 16,107 | (5 | ) | ||||||||||
Impact of foreign currency translation | 1 | — | ||||||||||||||||||||
Net revenue growth, on a constant currency basis* | (6 | ) | (4 | ) | ** | |||||||||||||||||
Operating profit | $ | 837 | $ | 992 | (16 | ) | $ | 2,202 | $ | 2,533 | (13 | ) | ||||||||||
Restructuring and impairment charges | 33 | — | 76 | — | ||||||||||||||||||
Merger and integration charges | — | 24 | — | 77 | ||||||||||||||||||
Inventory fair value adjustments | — | 3 | — | 16 | ||||||||||||||||||
Operating profit excluding above items* | $ | 870 | $ | 1,019 | (15 | ) | $ | 2,278 | $ | 2,626 | (13 | ) | ||||||||||
Impact of foreign currency translation | 1 | 1 | ||||||||||||||||||||
Operating profit growth excluding above items, on a constant currency basis* | (13 | ) | ** | (12 | ) |
12 Weeks Ended | % | 36 Weeks Ended | % | ||||||||||||||||||||
9/8/2012 | 9/3/2011 | Change | 9/8/2012 | 9/3/2011 | Change | ||||||||||||||||||
Net revenue | $ | 3,691 | $ | 3,909 | (6 | ) | $ | 9,153 | $ | 9,329 | (2 | ) | |||||||||||
Impact of foreign currency translation | 12 | 9 | |||||||||||||||||||||
Net revenue growth, on a constant currency basis* | 7 | ** | 7 | ||||||||||||||||||||
Operating profit | $ | 483 | $ | 514 | (6 | ) | $ | 1,017 | $ | 984 | 3 | ||||||||||||
Restructuring and impairment charges | (1 | ) | — | (2 | ) | — | |||||||||||||||||
Merger and integration charges | 4 | 11 | 7 | 17 | |||||||||||||||||||
Inventory fair value adjustments | — | — | — | 25 | |||||||||||||||||||
Operating profit excluding above items* | $ | 486 | $ | 525 | (7 | ) | $ | 1,022 | $ | 1,026 | — | ||||||||||||
Impact of foreign currency translation | 11 | 9 | |||||||||||||||||||||
Operating profit growth excluding above items, on a constant currency basis* | 3 | ** | 8 | ** |
12 Weeks Ended | % | 36 Weeks Ended | % | ||||||||||||||||||||
9/8/2012 | 9/3/2011 | Change | 9/8/2012 | 9/3/2011 | Change | ||||||||||||||||||
Net revenue | $ | 1,664 | $ | 2,098 | (21 | ) | $ | 4,696 | $ | 5,149 | (9 | ) | |||||||||||
Impact of foreign currency translation | 4 | 3 | |||||||||||||||||||||
Net revenue growth, on a constant currency basis* | (17 | ) | (6 | ) | |||||||||||||||||||
Operating profit | $ | 317 | $ | 285 | 11 | $ | 630 | $ | 730 | (14 | ) | ||||||||||||
Restructuring and impairment charges | 6 | — | 23 | — | |||||||||||||||||||
Restructuring and other charges related to the transaction with Tingyi | — | — | 137 | — | |||||||||||||||||||
Operating profit excluding above items* | $ | 323 | $ | 285 | 13 | $ | 790 | $ | 730 | 8 | |||||||||||||
Impact of foreign currency translation | 1 | 1 | |||||||||||||||||||||
Operating profit growth excluding above items, on a constant currency basis* | 14 | 10 | ** |
Our Liquidity and Capital Resources |
36 Weeks Ended | |||||||
9/8/2012 | 9/3/2011 | ||||||
Net cash provided by operating activities | $ | 5,118 | $ | 5,834 | |||
Capital spending | (1,409 | ) | (1,962 | ) | |||
Sales of property, plant and equipment | 58 | 46 | |||||
Management operating cash flow | 3,767 | 3,918 | |||||
Discretionary pension and retiree medical contributions (after-tax) | 770 | — | |||||
Payments related to restructuring charges (after-tax) | 203 | 1 | |||||
Merger and integration payments (after-tax) | 44 | 223 | |||||
Capital investments related to the PBG/PAS integration | 8 | 91 | |||||
Capital investments related to the Productivity Plan | 12 | — | |||||
Payments for restructuring and other charges related to the transaction with Tingyi | 98 | — | |||||
Management operating cash flow excluding above items | $ | 4,902 | $ | 4,233 |
Period | Total Number of Shares Repurchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that may Yet Be Purchased Under the Plans or Programs | |||||||||
06/16/12 | $ | 9,794 | |||||||||||
6/17/12 – 7/14/12 | 4.5 | $ | 69.68 | 4.5 | (316 | ) | |||||||
9,478 | |||||||||||||
7/15/12 – 8/11/12 | 3.9 | $ | 70.57 | 3.9 | (271 | ) | |||||||
9,207 | |||||||||||||
8/12/12 – 9/8/12 | 7.5 | $ | 72.69 | 7.5 | (547 | ) | |||||||
Total | 15.9 | $ | 71.32 | 15.9 | $ | 8,660 |
Period | Total Number of Shares Repurchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that may Yet Be Purchased Under the Plans or Programs | ||||||
06/16/12 | ||||||||||
6/17/12 – 7/14/12 | 2,200 | $ | 341.96 | N/A | N/A | |||||
7/15/12 – 8/11/12 | 2,400 | $ | 349.46 | N/A | N/A | |||||
8/12/12 – 9/8/12 | — | — | N/A | N/A | ||||||
Total | 4,600 | $ | 345.87 | N/A | N/A |
See Index to Exhibits on page 52. |
PepsiCo, Inc. | ||
(Registrant) | ||
Date: | October 17, 2012 | /s/ Marie T. Gallagher |
Marie T. Gallagher | ||
Senior Vice President and Controller | ||
Date: | October 17, 2012 | /s/ Kelly Mahon Tullier |
Kelly Mahon Tullier | ||
Senior Vice President, | ||
Deputy General Counsel (Duly Authorized Officer) |
EXHIBITS | |
Exhibit 2.1 | Agreement and Plan of Merger dated as of August 3, 2009, among PepsiCo, Inc., The Pepsi Bottling Group, Inc. and Pepsi-Cola Metropolitan Bottling Company, Inc. (the schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K), which is incorporated herein by reference to Exhibit 2.1 to PepsiCo’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 4, 2009. |
Exhibit 2.2 | Agreement and Plan of Merger dated as of August 3, 2009, among PepsiCo, Inc., PepsiAmericas, Inc. and Pepsi-Cola Metropolitan Bottling Company, Inc. (the schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K), which is incorporated herein by reference to Exhibit 2.2 to PepsiCo’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 4, 2009. |
Exhibit 2.3 | Purchase Agreement dated as of December 1, 2010 among PepsiCo, Inc., Pepsi-Cola (Bermuda) Limited, Gavril A. Yushvaev, David Iakobachvili, Mikhail V. Dubinin, Sergei A. Plastinin, Alexander S. Orlov, Mikhail I. Vishnaykov, Aladaro Limited, Tony D. Maher, Dmitry Ivanov, Wimm Bill Dann Finance Cyprus Ltd. and Wimm-Bill-Dann Finance Co. Ltd. (the schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K), which is incorporated herein by reference to Exhibit 2.1 to PepsiCo’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 2, 2010. |
Exhibit 3.1 | Articles of Incorporation of PepsiCo, Inc., as amended and restated, effective as of May 9, 2011, which are incorporated herein by reference to Exhibit 3.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 9, 2011. |
Exhibit 3.2 | By-laws of PepsiCo, Inc., as amended, effective as of March 8, 2012, which are incorporated herein by reference to Exhibit 3.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 12, 2012. |
Exhibit 4.1 | Form of 0.700% Senior Note due 2015, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 13, 2012. |
Exhibit 4.2 | Form of 1.250% Senior Note due 2017, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 13, 2012. |
Exhibit 4.3 | Form of 3.600% Senior Note due 2042, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 13, 2012. |
Exhibit 4.4 | Board of Directors Resolutions Authorizing PepsiCo's Officers to Establish the Terms of the 0.700% Senior Notes due 2015, the 1.250% Senior Notes due 2017 and the 3.600% Senior Notes due 2042, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo's Current Report filed on Form 8-K with the Securities and Exchange Commission on May 6, 2011. |
Exhibit 10.1 | PepsiCo Director Deferral Program, amended and restated effective as of January 1, 2005 with revisions through September 19, 2012. |
Exhibit 10.2 | Summary of Compensation Arrangements for Zein Abdalla. |
Exhibit 12 | Computation of Ratio of Earnings to Fixed Charges. |
Exhibit 14 | PepsiCo, Inc. Global Code of Conduct. |
Exhibit 15 | Letter re: Unaudited Interim Financial Information. |
Exhibit 24 | Power of Attorney executed by Indra K. Nooyi, Hugh F. Johnston, Marie T. Gallagher, Shona L. Brown, Ian M. Cook, Dina Dublon, Victor J. Dzau, Ray L. Hunt, Alberto Ibargüen, Sharon Percy Rockefeller, James J. Schiro, Lloyd G. Trotter, Daniel Vasella and Alberto Weisser, which is incorporated herein by reference to Exhibit 24 to PepsiCo’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 13, 2012. |
Exhibit 31 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
Exhibit 32 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
Exhibit 101 | The following materials from PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 8, 2012 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statement of Income, (ii) the Condensed Consolidated Statement of Comprehensive Income, (iii) the Condensed Consolidated Statement of Cash Flows, (iv) the Condensed Consolidated Balance Sheet, (v) the Condensed Consolidated Statement of Equity, and (vi) notes to the condensed consolidated financial statements. |
TABLE OF CONTENTS Page | |||
ARTICLE I - INTRODUCTION | 1 | ||
ARTICLE II - DEFINITIONS | 3 | ||
2.01 | ACCOUNT | 3 | |
2.02 | ACT | 3 | |
2.03 | BENEFICIARY | 3 | |
2.04 | CODE | 3 | |
2.05 | COMPANY | 3 | |
2.06 | COMPENSATION YEAR | 3 | |
2.07 | DEFERRAL SUBACCOUNT | 4 | |
2.08 | DIRECTOR | 4 | |
2.09 | DIRECTOR COMPENSATION | 4 | |
2.10 | DISABILITY | 5 | |
2.11 | DISTRIBUTION VALUATION DATE | 5 | |
2.12 | ELECTION FORM | 5 | |
2.13 | ELIGIBLE DIRECTOR | 6 | |
2.14 | ERISA | 6 | |
2.15 | FAIR MARKET VALUE | 6 | |
2.16 | 409A PROGRAM | 6 | |
2.17 | KEY EMPLOYEE | 6 | |
2.18 | MANDATORY DEFERRAL | 7 | |
2.19 | PARTICIPANT | 7 | |
2.20 | PEPSICO ORGANIZATION | 7 | |
2.21 | PLAN | 7 | |
2.22 | PLAN ADMINISTRATOR | 7 | |
2.23 | PLAN YEAR | 8 | |
2.24 | PRE-409A PROGRAM | 8 | |
2.25 | RECORDKEEPER | 8 | |
2.26 | RETAINER COMPENSATION | 8 | |
2.27 | SECOND LOOK ELECTION | 8 | |
2.28 | SECTION 409A | 8 | |
2.29 | SEPARATION FROM SERVICE | 8 | |
2.30 | SPECIFIC PAYMENT DATE | 9 | |
2.31 | UNFORESEEABLE EMERGENCY | 9 | |
2.32 | VALUATION DATE | 9 | |
ARTICLE III - ELIGIBILITY AND PARTICIPATION | 10 | ||
3.01 | ELIGIBILITY TO PARTICIPATE | 10 | |
3.02 | TERMINATION OF ELIGIBILITY TO DEFER | 10 | |
3.03 | TERMINATION OF PARTICIPATION | 10 |
TABLE OF CONTENTS Page | |||
ARTICLE IV - DEFERRAL OF COMPENSATION | 11 | ||
4.01 | DEFERRAL ELECTION | 11 | |
4.02 | TIME AND MANNER OF DEFERRAL ELECTION | 12 | |
4.03 | PERIOD OF DEFERRAL; FORM OF PAYMENT | 14 | |
4.04 | SECOND LOOK ELECTION | 15 | |
4.05 | MANDATORY DEFERRALS | 17 | |
ARTICLE V - INTERESTS OF PARTICIPANTS | 19 | ||
5.01 | ACCOUNTING FOR PARTICIPANTS' INTERESTS | 19 | |
5.02 | PHANTOM INVESTMENT OF ACCOUNT | 19 | |
5.03 | VESTING OF A PARTICIPANT'S ACCOUNT | 22 | |
5.04 | PROHIBITED MISCONDUCT | 22 | |
ARTICLE VI - DISTRIBUTIONS | 23 | ||
6.01 | GENERAL | 23 | |
6.02 | DISTRIBUTIONS BASED ON A SPECIFIC PAYMENT DATE | 24 | |
6.03 | DISTRIBUTIONS ON ACCOUNT OF A SEPARATION FROM SERVICE | 24 | |
6.04 | DISTRIBUTIONS ON ACCOUNT OF DEATH | 26 | |
6.05 | DISTRIBUTIONS ON ACCOUNT OF DISABILITY | 27 | |
6.06 | DISTRIBUTIONS ON ACCOUNT OF UNFORESEEABLE EMERGENCY | 28 | |
6.07 | DISTRIBUTIONS OF MANDATORY DEFERRALS | 28 | |
6.08 | VALUATION | 29 | |
6.09 | IMPACT OF SECTION 16 OF THE ACT ON DISTRIBUTIONS | 29 | |
6.10 | ACTUAL PAYMENT DATE | 29 | |
ARTICLE VII - PLAN ADMINISTRATION | 30 | ||
7.01 | PLAN ADMINISTRATOR | 30 | |
7.02 | ACTION | 30 | |
7.03 | POWERS OF THE PLAN ADMINISTRATOR | 30 | |
7.04 | COMPENSATION, INDEMNITY AND LIABILITY | 31 | |
7.05 | WITHHOLDING | 31 | |
7.06 | SECTION 16 COMPLIANCE | 32 | |
7.07 | CONFORMANCE WITH SECTION 409A | 33 | |
ARTICLE VIII - CLAIMS PROCEDURE | 34 | ||
8.01 | CLAIMS FOR BENEFITS | 34 | |
8.02 | APPEALS OF DENIED CLAIMS | 34 | |
8.03 | SPECIAL CLAIMS PROCEDURES FOR DISABILITY DETERMINATIONS | 34 | |
ARTICLE IX - AMENDMENT AND TERMINATION | 35 | ||
9.01 | AMENDMENT OF PLAN | 35 | |
9.02 | TERMINATION OF PLAN | 35 |
TABLE OF CONTENTS Page | |||
ARTICLE X - MISCELLANEOUS | 36 | ||
10.01 | LIMITATION ON PARTICIPANT'S RIGHTS | 36 | |
10.02 | UNFUNDED OBLIGATION OF THE COMPANY | 36 | |
10.03 | OTHER PLANS | 36 | |
10.04 | RECEIPT OR RELEASE | 36 | |
10.05 | GOVERNING LAW | 36 | |
10.06 | GENDER, TENSE, AND EXAMPLES | 37 | |
10.07 | SUCCESSORS AND ASSIGNS; NONALIENATION OF BENEFITS | 37 | |
10.08 | FACILITY OF PAYMENT | 37 | |
ARTICLE XI - AUTHENTICATION | 38 | ||
ARTICLE XII - SIGNATURE | 39 | ||
APPENDIX | APPENDIX | ||
APPENDIX ARTICLE A - TRANSITION PROVISIONS | A-1 |
I. | Cancellation Elections: |
II. | Modifications to Article IV: |
III. | Modifications to Article VI: |
A | For this purpose, Sections 6.01(a)-(f) read as follows: |
(a) | Section 6.02 (Distributions Based on a Specific Payment Date) applies when a Participant has elected to defer until a Specific Payment Date and the Specific Payment Date is reached before the Participant’s (i) Separation from Service (other than for Retirement), (ii) Disability, or (iii) death. However, if such a Participant Separates from Service (other than for Retirement or death) prior to the Specific Payment Date (or prior to processing of the first installment payment due in connection with the Specific Payment Date), Section 6.03 shall apply. If such a Participant dies prior to the Specific Payment Date, Section 6.04 shall apply to the extent it would result in an earlier distribution of all or part of a Participant’s Account. If such a Participant becomes Disabled prior to the Specific Payment Date, Section 6.06 shall apply to the extent it would result in an earlier distribution of all or part of a Participant’s Account. |
(b) | Section 6.03 (Distributions on Account of a Separation from Service) applies (i) when a Participant has elected to defer until a Separation from Service and then the Participant Separates from Service (other than for Retirement or death), or (ii) when applicable under Subsection (a) above). |
(c) | Section 6.04 (Distributions on Account of Death) applies when the Participant dies. If a Participant is entitled to receive or is receiving a distribution under Section 6.02, 6.03 or 6.05 (see below) at the time of his or her death, Section 6.04 shall take precedence over those sections to the extent Section 6.04 would result in an earlier distribution of all or part of a Participant’s Account. |
(d) | Section 6.05 (Distributions on Account of Retirement) applies when a Participant has elected to defer until a Separation from Service and then the Participant Separates from Service on account of his or her Retirement. Subsections (c) and (e) of this Section provide for when Section 6.04 or Section 6.06 take precedence over Section 6.05. |
(e) | Section 6.06 (Distributions on Account of Disability) applies when the Participant becomes Disabled. If a Participant who becomes Disabled dies, Section 6.04 shall take precedence over Section 6.06 to the extent it would result in an earlier distribution of all or part of a Participant’s Account. If a Participant is entitled to receive or is receiving a distribution under Section 6.02, 6.03 or 6.05 at the time of his Disability, Section 6.06 shall take precedence over those sections to the extent Section 6.06 would result in an earlier distribution of all or part of a Participant’s Account. |
(f) | Section 6.07 (Distributions on Account of Unforeseeable Emergency) applies when the Participant incurs an Unforeseeable Emergency prior to when a Participant’s Account is distributed under Sections 6.02 through 6.06. In this case, the provisions of Section 6.07 shall take precedence over Sections 6.02 through 6.06 to the extent Section 6.07 would result in an earlier distribution of all or part of the Participant’s Account. |
B | For this purpose, Section 6.02 reads as follows: |
(a) | If the Participant has not made a valid Second Look Election that includes installment payments, the Deferral Subaccount shall be valued as of the Distribution Valuation Date that corresponds to the Participant’s Specific Payment Date, and the resulting amount shall be paid in a single lump sum. |
(b) | If the Participant has made a valid Second Look Election that includes installment payments, the first installment payment shall be paid (based on the schedule elected in the Participant’s Second Look Election) on the Specific Payment Date. Thereafter, installment payments shall continue in accordance with the schedule elected by the Participant, except as provided in Sections 6.03, 6.04, 6.06 and 6.07 (relating to distributions on account of a Separation from Service, death, Disability and Unforeseeable Emergency). The amount of each installment shall be determined under Section 6.08. Notwithstanding the preceding provisions of this Subsection, if before the date the first installment distribution is processed for payment the Participant Separates from Service other than for Retirement) or the Participant would be entitled to a distribution in accordance with Sections 6.03, 6.04 or 6.06 (relating to a distribution on account of Separation from Service, death or Disability), the Participant’s Deferral Subaccounts that would otherwise be distributed based on such Specific Payment Date shall instead be distributed in accordance with Section 6.04 or 6.05 (relating to distributions on account of death or Disability), whichever applies, but only to the extent it would result in an earlier distribution of the Participant’s Subaccounts in the case of Section 6.04 or 6.06. |
C | For this purpose, Section 6.03 reads as follows: |
(a) | Subject to subsections (b) and (c), a Participant’s total Account balance, shall be distributed in a single lump sum payment on the first day of the first Plan Year after the date of the Participant’ s Separation from Service. |
(b) | If the Participant incurs a Separation from Service after making a valid Second Look Election (and before the first payment has been processed in accordance with such Second Look Election), each Deferral Subaccount to which the Second Look Election applies shall be distributed in a single lump sum payment on the |
(c) | If the Participant is classified as a Key Employee at the time of the Participant’s Separation from Service (or at such other time for determining Key Employee status as may apply under Section 409A), then such Participant’s Account shall not be paid, as a result of the Participant’s Separation from Service, earlier than the date that is at least 6 months after the Participant’s Separation from Service. |
D | For this purpose, a new Section 6.05 reads as follows: |
(a) | If the Participant’s Retirement is prior to the Specific Payment Date that is applicable to a Deferral Subaccount, the Participant’s deferral election pursuant to Sections 4.03 or 4.04 (i.e., time and form of payment) shall continue to be given effect, and the Deferral Subaccounts shall be distributed based upon the provisions of Section 6.02. |
(b) | If the Participant has selected payment of his or her deferral on account of Separation from Service, distribution of the related Deferral Subaccount shall commence on the first day of the first Plan Year after the date of the Participant’s Separation from Service. Such distribution shall be made in a single lump sum payment under Section 4.03. However, if the Participant is classified as a Key Employee at the time of the Participant’s Retirement (or at such other time for determining Key Employee status as may apply under Section 409A), then such Participant’s Account shall not be paid, as a result of the Participant’s Retirement, earlier than the date that is at least 6 months after the Participant’s Retirement. |
(c) | If the Participant is receiving installment payments for one or more Deferral Subaccounts in accordance with Section 6.02 at the time of his or her Retirement, such installment payments shall continue to be paid based upon the Participant’s Second Look Election (but subject to acceleration under Sections 6.04, 6.06 and |
36 Weeks Ended | |||||||||
9/8/2012 | 9/3/2011 | ||||||||
Earnings: | |||||||||
Income before income taxes | $6,335 | $6,835 | |||||||
Unconsolidated affiliates’ interests, net | (18 | ) | (66 | ) | |||||
Amortization of capitalized interest | 2 | 2 | |||||||
Interest expense (a) | 611 | 584 | |||||||
Interest portion of rent expense (b) | 144 | 129 | |||||||
Earnings available for fixed charges | $7,074 | $7,484 | |||||||
Fixed Charges: | |||||||||
Interest expense (a) | $611 | $584 | |||||||
Capitalized interest | 4 | 7 | |||||||
Interest portion of rent expense (b) | 144 | 129 | |||||||
Total fixed charges | $759 | $720 | |||||||
Ratio of Earnings to Fixed Charges (c) | 9.32 | 10.40 | |||||||
(a) | Excludes interest related to our reserves for income taxes as such interest is included in provision for income taxes. |
(b) | One-third of net rent expense is the portion deemed representative of the interest factor. |
(c) | Based on unrounded amounts. |
The Purpose Behind Our Performance | ||
Doing Business the Right Way | 2 | |
Responsibility for Our Code | 2 | |
Your Personal Responsibilities | ||
Follow Our Code | 2 | |
Lead by Example | 2 | |
Seek Guidance and Report Concerns | 2 | |
Speak Up | 3 | |
Non-Retaliation | 3 | |
Respect in Our Workplace | ||
Diversity and Inclusion | 3 | |
Human Rights | 3 | |
Anti-Discrimination | 4 | |
Anti-Harassment | 4 | |
Health and Safety | 4 | |
Substance Abuse | 4 | |
Anti-Violence | 4 | |
Integrity in Our Marketplace | ||
Product Quality | 5 | |
Responsible Marketing | 5 | |
Our Customers | 5 | |
Our Suppliers | 5 | |
Our Competitors | 5 | |
Community Involvement | 6 | |
Ethics in Our Business Activities | ||
Conflicts of Interest | 6 | |
Anti-Corruption | 7 | |
Anti-Bribery | 7 | |
Anti-Money Laundering | 8 | |
International Trade Controls | 8 | |
Political Activities | 8 | |
Business Gifts | 8 | |
Responsibility to Our Shareholders | ||
Accurate Business Records | 9 | |
Public Disclosures | 9 | |
Records Management | 9 | |
Audits and Investigations | 9 | |
Company Resources | 9 | |
Fraud | 10 | |
Confidential Information | 10 | |
Insider Trading | 10 | |
Privacy | 11 | |
External Communications | 11 | |
Intellectual Property | 11 | |
Email, Internet and Information Systems | 11 | |
Administering Our Code | ||
The Global Compliance and Ethics Department | 12 | |
Investigating Misconduct | 12 | |
Disciplinary Actions | 12 | |
Our Code is Not a Contract | 12 | |
Issuance of and Amendments to Our Code | 12 | |
Acknowledgement | 12 | |
Disclosure of Waivers | 12 | |
Speak Up | 13 |
• | Show respect in the workplace |
• | Act with integrity in the marketplace |
• | Ensure ethics in our business relationships |
• | Perform work responsibly for our shareholders |
• | All PepsiCo employees around the world (including employees of our subsidiaries) |
• | Members of the PepsiCo Board of Directors when they act in their capacity as directors |
• | PepsiCo’s joint ventures over which PepsiCo has management control, and to every employee, officer and director of such joint ventures |
• | Rewarding integrity |
• | Encouraging ethical decision-making |
• | Creating an open work environment where team members feel comfortable raising concerns |
• | Preventing retaliation against those who speak up |
• | Seeking help in resolving and escalating issues when they arise |
• | Accounting or auditing irregularities or misrepresentations |
• | Fraud, theft, bribery and other corrupt business practices |
• | Antitrust or insider trading violations |
• | Significant environmental, safety or product quality issues |
• | Illegal discrimination or harassment |
• | Actual or potential conflicts of interest |
• | Guidance on any national, regional, tribal, state or municipal legal requirements that apply to our company or to your job |
• | Am I sure this course of action is legal? Is it consistent with our Values, Code and policies? |
• | Could it be considered unethical or dishonest? |
• | Could it hurt PepsiCo’s reputation? Put our company at risk? Cause our company to lose credibility? |
• | Will this hurt other people? Employees? Customers? Consumers? Investors? |
• | Will it reflect poorly on me or PepsiCo? How would it look on the front page of the newspaper? |
• | By phone using a special toll-free telephone number based on the country from which you are calling. In the United States call 1-866-729-4888. For a list of international country phone numbers, see our Speak Up section at the end of our Code |
• | By web available at www.tnwgrc.com/PepsiCoSpeakUp |
• | Reports what he or she believes is a violation of our Code, our policies, or the law |
• | Raises a compliance question or seeks advice about a particular business practice, decision or action |
• | Cooperates in an investigation of a potential violation |
• | Respect the diversity of each other’s talents, abilities and experiences |
• | Value the input of others |
• | Foster an atmosphere of trust, openness and candor |
• | Provide fair and equitable wages, benefits and other conditions of employment in accordance with local laws |
• | Recognize employees’ right to freedom of association |
• | Provide humane and safe working conditions |
• | Prohibit forced or child labor |
• | Promote a workplace free of discrimination and harassment |
• | Race, color, ethnicity, or national origin |
• | Gender or gender identity |
• | Sexual orientation |
• | Age |
• | Religion |
• | Disability |
• | Veteran status |
• | Any other legally protected status |
• | Sexual harassment |
• | Offensive language or jokes |
• | Racial, ethnic, gender or religious slurs |
• | Degrading comments |
• | Intimidating or threatening behavior |
• | Showing hostility towards others because of individual characteristics |
• | Sexual advances, requests for sexual favors or unwelcome demands for dates |
• | Sexually oriented jokes, pictures, text or email messages |
• | Explicit or degrading comments about appearance |
• | Display of sexually suggestive pictures or pornography |
• | Are asked to do a task you consider unsafe |
• | Are asked to do a job you think you are not properly trained to perform and that may harm you or others |
• | See someone performing a task that you think is unsafe or that the person is not properly trained to do |
• | Suspect that a vehicle or piece of equipment is not operating properly and may be unsafe |
• | Observe or are made aware of an unsafe condition or a potential danger to yourself or others |
• | Working under the influence of alcohol, illegal drugs or controlled substances on or off PepsiCo premises |
• | Possessing, selling, using, transferring or distributing illegal drugs or controlled substances while working or on the premises |
• | Working while impaired by a lawful prescription medication or over-the-counter drug |
• | Know the product quality standards, policies, and procedures that apply to the products produced at your location |
• | Follow good manufacturing practices and testing protocols |
• | Comply with all applicable food safety laws and regulations |
• | Overstate or misrepresent the qualities of our products or packaging |
• | Use misleading or untruthful statements in our advertising or labels |
• | Make claims about our products, product ingredients, or health effects without adequate substantiation and proper legal clearance |
• | Earn their business on the basis of our superior products, customer service and competitive prices |
• | Present our services and products in an honest and forthright manner |
• | Avoid unfair or deceptive trade practices |
• | Communicate our sales programs clearly |
• | Deliver on your promises |
• | Follow our applicable bidding, negotiating and contracting processes |
• | Perform appropriate due diligence to determine that the supplier is a legitimate enterprise, with a reputation for integrity and ethical behavior, that does not engage in unlawful activities |
• | Avoid potential or actual conflicts of interest with suppliers |
• | Never comment on competitors’ products or services in an inaccurate or untruthful manner |
• | Only use legitimate means of obtaining competitive information |
• | Respect the confidential information and intellectual property rights of our competitors and other third parties |
• | Always comply with antitrust and competition laws |
• | Performance: delivering financial results and ensuring long-term profitable growth |
• | Human: providing customers with a variety of product choices to help them lead balanced and healthier lives |
• | Environmental: protecting the earth’s natural resources through innovation and efficiency in our operations |
• | Talent: investing in our associates to develop their talents and skills while creating employment opportunities in our communities |
• | Engage in activities that compete with, or appear to compete with, our company’s interests |
• | Let your business decisions be influenced, or appear to be influenced, by personal or family interests or friendships |
• | Use company property, information or resources for personal benefit or the benefit of others |
• | Hire, supervise or have a direct or indirect line of reporting to a family member or someone with whom you have a romantic relationship |
• | Have outside employment that negatively affects your job performance or interferes with your PepsiCo responsibilities |
• | Receive any personal or financial benefit from, have a financial interest in, provide services to or work for a supplier, customer or competitor or a company that seeks to do business with us. (You may, individually, own stock of less than one percent (1%) of suppliers, customers, or competitors, provided that you own such stock through a publicly traded mutual fund or bank investment portfolio) |
• | Check with Global Compliance or your local controller to submit your disclosure through the proper channels established by your sector or region. If you are unsure about who to contact, you can also disclose your potential conflict by sending an email to PepsiCoComplianceDisclosures@pepsico.com. |
• | If you are subject to our annual online Code of Conduct training, you must also disclose your potential conflict of interest at the end of the training course when prompted to do so. You should continue to disclose such circumstances each year in your annual Code training if the potential conflict is ongoing. |
• | Do my outside interests influence, or appear to influence, my ability to make sound business decisions? |
• | Do I stand to benefit from my involvement in this situation? Does a friend or relative of mine stand to benefit? |
• | Could my participation in this activity interfere with my ability to do my job? |
• | Is the situation causing me to put my own interests ahead of PepsiCo’s interests? |
• | If the situation became public knowledge, would I be embarrassed? Would PepsiCo be embarrassed? |
• | Bribery (bribery of a government official or commercial bribery) |
• | Extortion |
• | Kickbacks |
• | Obtain or retain business, |
• | Influence business decisions, or |
• | Secure an unfair advantage |
• | Government employees of environmental, licensing, tax and custom agencies, commissions or departments |
• | Representatives of public international organizations, such as the World Bank |
• | Mayors or other local city officials who issue permits |
• | Members of law enforcement, including the military, local police and other enforcement agencies |
• | Purchasing managers of government-run airlines, universities, school systems or hospitals |
• | Members of royal families |
• | Employees of companies that are owned by the government |
• | Employees of public international charities such as UNICEF |
• | Government-imposed export controls, trade restrictions, trade embargoes, legal economic sanctions and boycotts |
• | Anti-boycott laws that prohibit companies from participating in or cooperating with an international boycott that is not approved or sanctioned by the U.S. government |
• | The gift has a legitimate business purpose, is of nominal value (generally under $75 U.S. dollars or its equivalent), is infrequent and meets all other requirements of our Gifts Policy, Travel and Entertainment Policy and your function or sector gift policies |
• | The gift is not cash or a cash equivalent |
• | Your division or function does not have a “no gifts” policy in effect |
• | The gift is permitted under the laws that apply to the recipient and the recipient of the gift is authorized and permitted to accept the gift |
• | Falsify, omit, misstate, alter or conceal any information or otherwise misrepresent the facts on a company record |
• | Encourage or allow anyone else to compromise the accuracy and integrity of our records |
• | Understate or overstate known or estimated liabilities or assets |
• | Accelerate or defer costs in violation of generally accepted accounting principles |
• | Fail to properly maintain supporting documents for business transactions |
• | “Channel stuff,” “trade load” or otherwise inflate or deflate quarterly or annual sales by pulling forward or delaying shipments or intentionally selling larger quantities than the customer needs |
• | Comply with our records management policies for all documents, files, electronic records and emails |
• | Follow the retention periods specified in the Records Retention Schedule for your sector, country or function |
• | Follow the instructions in a “Legal Hold” record retention notification |
• | Ensure the funds are properly used for their established purpose |
• | Obtain required approval before incurring an expense |
• | Accurately record all expenditures |
• | Verify that expenses submitted for reimbursement are business-related, properly documented and comply with our policies |
• | Altering manufacturing numbers to meet productivity goals |
• | Presenting false medical information to obtain disability benefits |
• | Falsely reporting time worked to earn more pay or to avoid discipline for being late or absent from work |
• | Misrepresenting sales or donations of products to obtain unauthorized pricing for a customer |
• | Misstating financial information in our company’s books and records |
• | Properly authorized |
• | In connection with a clearly defined, legitimate business need |
• | Subject to a written confidentiality agreement approved by the Law Department |
• | has not been widely disseminated to the public, and |
• | is information that a reasonable investor would consider important in making a decision to buy or sell a particular security |
• | Only access personal information for legitimate business purposes |
• | Securely store and dispose of personal information |
• | Transmit—securely via encryption—personal information only to authorized parties who are obligated to protect its confidentiality |
• | Promptly report any possible privacy breaches or security risks to the Law Department |
• | State that the materials and opinions you are posting are yours and not the company’s |
• | Take every possible precaution to ensure that you are not disclosing any confidential information about PepsiCo |
• | Refrain from using any PepsiCo or third party logos or trademarks without express permission |
• | Consume a large amount of time or resources |
• | Interfere with your work performance or that of others |
• | Involve illegal, sexually explicit, discriminatory or otherwise inappropriate material |
• | Relate to outside business interests |
• | Violate our Code or any company policy |
• | Share your PepsiCo system passwords with anyone |
• | Leave laptops or other mobile devices unattended while traveling or in an exposed location where they can be stolen |
• | Download unauthorized or unlicensed software on PepsiCo computers |
• | For general inquiries, contact PepsiCoComplianceandEthics@pepsico.com |
• | For questions on our training programs, contact PepsiCoComplianceTraining@pepsico.com |
• | For questions and disclosures concerning Conflicts of Interest, |
• | You can send a postal mail letter to Global Compliance Department, PepsiCo, Inc., 700 Anderson Hill Road, Purchase, New York 10577 |
• | You can contact us by fax: (914) 249-8086 |
• | Act objectively in determining facts through interviews or a review of documents |
• | Contact employees who may have knowledge about the alleged incident(s) |
• | Recommend corrective actions and/or disciplinary measures where appropriate |
• | Protect the confidentiality of the individuals involved, to the extent practical |
• | Inform an employee of the accusations reported against him/her at a time when such a disclosure will not jeopardize the investigation |
• | Where permissible, allow employees to review and correct information reported |
• | Disciplinary action, up to and including termination of employment, depending on the nature and severity of the Code violation |
• | In the case of a violation of law, civil and/or criminal penalties may be imposed by a governmental agency or a court |
• | Inaccuracy of financial records |
• | Accounting and auditing irregularities |
• | Bribery, corruption or illegal payments |
• | Criminal conduct and violations of law |
• | Discrimination and harassment |
• | Product quality issues |
• | Safety and environmental hazards |
• | Conflicts of interest |
• | Theft or fraud |
• | Workplace violence |
Argentina | 0-800-444-3110 | Greece | 00-800-11-008-3110 | Russia* | |
Australia | 1-800-30-8737 | Guatemala | Moscow and St. Petersburg | ||
Belgium | 0800-71899 | Use international | Dial AT&T Access | ||
Bosnia | operator to place | Code | 363-2400 | ||
Dial AT&T | collect call to | After the tone, dial | 800-472-6145 | ||
Access Code | 00-800-0010 | U.S. at | 770-810-2637 | All other areas | |
After the tone, dial | 800-472-6145 | Hong Kong* | For dial tone, dial | 8 | |
or | Telecom | Then, dial Access | |||
Use international | Dial AT&T Access | Code | 10-800-110-1011 | ||
operator to place | Code | 800-96-1111 | After the tone, dial | 800-472-6145 | |
collect call to U.S. at | 770-810-2637 | After tone, dial | 800-472-6145 | Saudi Arabia* | |
Ask for “Bosnian” | New World | Dial AT&T Access | |||
or press | 3 | Dial AT&T Access | 800-93-2266 | Code | 1-800-10 |
Brazil | 0-800-891-4156 | Code | After the tone, dial | 800-472-6145 | |
Bulgaria | After tone, dial | 800-472-6145 | Serbia | ||
Dial AT&T Access | Hungary | 06-800-18042 | Use international | ||
Code | 00-800-0010 | India | operator to place | ||
After the tone, dial | 800-472-6145 | Mobile | 000-800-100-1038 | collect call to U.S. at | 770-810-2637 |
Canada | Landlines | 1-800-800-1038 | Ask for “Serbian” | ||
Call toll free at | 1-866-729-4888 | Indonesia | 001-803-1-008-3110 | or press | 3 |
Chile | 800-442400 | Ireland | 1800-553836 | Singapore | 800-110-1514 |
China | Israel | 180-941-3110 | Slovakia* | ||
North China | 10-800-711-0632 | Italy | 800-788033 | Dial AT&T Access | |
South China | 10-800-110-0575 | Japan | 00531-11-4490 | Code | 0-800-000-101 |
Colombia | 01-800-912-0113 | Jordan* | After the tone, dial | 800-472-6145 | |
Croatia* | Dial AT&T Access | South Africa | 0800-980-063 | ||
Dial AT&T Access | Code | 18-800-000 | Spain | 900-97-1022 | |
Code | 0800-220-111 | After the tone, dial | 800-472-6145 | Switzerland | 0800-55-7441 |
After the tone, dial | 800-472-6145 | Kazakhstan | Taiwan* | ||
Cyprus | 8009-0662 | and Kyrgystan | Dial AT&T Access | ||
Czech Republic | 800-143-711 | Use international | Code | 00-801-10-288-0 | |
Dominican Republic | 1-800-472-6145 | operator to place | After the tone, dial | 800-472-6145 | |
Ecuador* | collect call to | Thailand | 011-800-11-008-3110 | ||
Andinatel | U.S. at | 770-810-1120 | Turkey* | ||
Dial AT&T Access | Malaysia | 1-800-80-3427 | Dial AT&T Access | ||
Code | 1-999-119 | Mexico | 001-800-472-6145 | Code | 0811-288-0001 |
After tone, dial | 800-472-6145 | Netherlands | 0800-022-9671 | After the tone, dial | 800-472-6145 |
Pacifictel | New Zealand | 0800-449-061 | Ukraine* | ||
Dial AT&T Access | Norway | 800-15561 | Dial AT&T Access | ||
Code | 1-800-999-119 | Pakistan* | Code | 8 | |
After tone, dial | 800-472-6145 | Dial AT&T Access | Wait for tone, then dial | 10011 | |
Egypt* | Code | 00-800-01-001 | After the second tone, | ||
Cairo | After the tone, dial | 800-472-6145 | dial | 800-472-6145 | |
Dial AT&T Access | Peru | 0800-52-501 | United Arab Emirates* | ||
Code | 510-0200 | Philippines | 1-800-1-111-0910 | Dial AT&T Access | |
After the tone, dial | 800-472-6145 | Poland | 0-0-800-111-1603 | Code | 0-800-121 |
Outside of Cairo | Portugal | 800-811072 | After the tone, dial | 800-472-6145 | |
Dial AT&T Access | Puerto Rico | United Kingdom | 0808-234-6702 | ||
Code | 02-510-0200 | Call toll free at | 1-866-729-4888 | United States | |
After the tone, dial | 800-472-6145 | Romania* | Call toll free at | 1-866-729-4888 | |
Georgia | Dial AT&T Access | Uruguay | 000-411-008-3110 | ||
Use international | Code | 0808-03-4288 | Venezuela | ||
operator to place | After the tone, dial | 800-472-6145 | Use international operator | ||
collect call to U.S. at | 770-810-1120 | to place collect call to U.S. | |||
Germany | 0800-181-7774 | at | 770-810-2637 | ||
Vietnam* | |||||
Dial AT&T Access | |||||
Code | 1-201-0288 | ||||
After the tone, dial | 800-472-6145 |
• | PepsiCo Automatic Shelf Registration Statement, 333-177307 |
• | PepsiCo Automatic Shelf Registration Statement, 333-154314 |
• | PepsiAmericas, Inc. 2000 Stock Incentive Plan, 333-165176 |
• | PBG 2004 Long Term Incentive Plan, PBG 2002 Long Term Incentive Plan, PBG Long Term Incentive Plan, The Pepsi Bottling Group, Inc. 1999 Long Term Incentive Plan and PBG Stock Incentive Plan, 333-165177 |
• | The PepsiCo 401(k) Plan for Hourly Employees, 333-150868 |
• | The PepsiCo 401(k) Plan for Salaried Employees, 333-150867 |
• | PepsiCo, Inc. 2007 Long-Term Incentive Plan, 333-142811, 333-166740 |
• | PepsiCo, Inc. 2003 Long-Term Incentive Plan, 333-109509 |
• | PepsiCo SharePower Stock Option Plan, 33-35602, 33-29037, 33-42058, 33-51496, 33-54731, 33-66150 and 333-109513 |
• | Director Stock Plan, 33-22970 and 333-110030 |
• | 1979 Incentive Plan and the 1987 Incentive Plan, 33-19539 |
• | 1994 Long-Term Incentive Plan, 33-54733 |
• | PepsiCo, Inc. 1995 Stock Option Incentive Plan, 33-61731, 333-09363 and 333-109514 |
• | 1979 Incentive Plan, 2-65410 |
• | PepsiCo, Inc. Long Term Savings Program, 2-82645, 33-51514 and 33-60965 |
• | PepsiCo 401(k) Plan, 333-89265 |
• | Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates and the Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates (Teamster Local Union #173), 333-65992 |
• | The Quaker Long Term Incentive Plan of 1990, The Quaker Long Term Incentive Plan of 1999 and The Quaker Oats Company Stock Option Plan for Outside Directors, 333-66632 |
• | The Quaker 401(k) Plan for Salaried Employees and The Quaker 401(k) Plan for Hourly Employees, 333-66634 |
• | The PepsiCo 401(k) Plan for Salaried Employees, 333-76196 |
• | The PepsiCo 401(k) Plan for Hourly Employees, 333-76204 |
• | The PepsiCo Share Award Plan, 333-87526 |
• | PBG 401(k) Savings Program, PBG 401(k) Program, PepsiAmericas, Inc. Salaried 401(k) Plan and PepsiAmericas, Inc. Hourly 401(k) Plan, 333-165106 |
• | PBG 2004 Long Term Incentive Plan, PBG 2002 Long Term Incentive Plan, PBG Long Term Incentive Plan, The Pepsi Bottling Group, Inc. 1999 Long Term Incentive Plan, PBG Directors’ Stock Plan, PBG Stock Incentive Plan and PepsiAmericas, Inc. 2000 Stock Incentive Plan, 333-165107 |
1. | I have reviewed this quarterly report on Form 10-Q of PepsiCo, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: October 17, 2012 | /s/ Indra K. Nooyi |
Indra K. Nooyi | |
Chairman of the Board of Directors | |
and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of PepsiCo, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: October 17, 2012 | /s/ Hugh F. Johnston |
Hugh F. Johnston | |
Executive Vice President and Chief Financial | |
Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. |
Date: October 17, 2012 | /s/ Indra K. Nooyi |
Indra K. Nooyi | |
Chairman of the Board of Directors | |
and Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. |
Date: October 17, 2012 | /s/ Hugh F. Johnston |
Hugh F. Johnston | |
Executive Vice President and Chief Financial | |
Officer |
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