Affirms Core Constant Currency EPS Growth Target of 11 to 13
Percent for Fiscal 2010 - Fourth-Quarter Reported EPS of $0.90, up
99 percent - Full-Year Reported EPS grew 17 percent; Core Constant
Currency EPS up 6 percent* - Full-Year Cash Flow From Operations of
$6.8 Billion; Management Operating Cash Flow, Excluding Certain
Items, of $5.6 Billion, Ahead of Forecast - Company Hopes to Close
Bottling Acquisitions by the End of February 2010; Synergies Ahead
of Earlier Expectations - Affirms Core Constant Currency EPS Growth
Target of 11 to 13 Percent for Fiscal 2010 including the impact of
the Bottling Acquisitions PURCHASE, N.Y., Feb. 11
/PRNewswire-FirstCall/ -- PepsiCo, Inc. (NYSE: PEP) today reported
solid results for 2009 driven by healthy gains in its worldwide
snacks and international beverage businesses, balanced investments
in value and innovation in key markets and cost discipline across
its operations. For the full year, reported EPS grew 17 percent to
$3.77 and core constant currency EPS increased 6 percent. For the
fourth quarter, reported EPS was $0.90. PepsiCo Chairman and CEO,
Indra Nooyi, said: "In 2009, strong execution of PepsiCo's
operational priorities enabled us to deliver healthy revenue and
profit growth and generate strong cash flow, despite the
macroeconomic challenges across much of the world. Our teams
demonstrated their agility in balancing innovation and value, which
enabled us to maintain consumer momentum while driving margin
expansion. In addition, we continued to invest in R&D,
infrastructure and innovation to sustain our long-term growth."
Nooyi continued, "In 2010, we are changing the rules of the game in
North America beverages through the anticipated merger with our
anchor bottlers coupled with the continuing activities to refresh
our core brands. We are extending our global leadership in snacks
by continuing to innovate with new products and platforms, and by
accelerating our growth in developing markets. We will accelerate
our commitment across all our product categories to build a more
balanced and healthier portfolio of enjoyable and wholesome foods
and beverages - using science-based innovation to improve our
existing portfolio and create new platforms. Combined with a
relentless focus on financial performance and productivity, these
activities will drive sustained growth in revenue, profit and cash
flow." PepsiCo CFO, Richard Goodman said, "In 2009, our teams were
disciplined in their working capital management, generating
stronger than expected management operating cash flow of $5.6
billion, excluding certain items. We expect to resume repurchasing
our shares upon the close of the bottling transaction and
anticipate that in 2010 share repurchases together with a voluntary
$600 million pension plan contribution would total about $5
billion." * Please refer to the Glossary for definitions of
constant currency and core. Core results and core constant currency
results are non-GAAP financial measures that exclude certain items.
Please refer to "Reconciliation of GAAP and Non-GAAP information"
in the attached exhibits for a description of these items. Summary
of Full-Year 2009 Performance*
--------------------------------------------------------- Constant
Currency** ------------------- Core** Core** Division Division
Division Net Operating Net Operating Operating % Growth Volume
Revenue Profit Revenue Profit Profit -------- ------ ------- ------
------- ------ ------ PAF - 7 8 2.5 4 8 FLNA 1 6 7 6 6 10 QFNA - -
3 (1) 3 8 LAF (2) 10 13 (3) (3) 1 PAB (6) (6) (3) (8) (5.5) 7 PI 3
/ 6*** 11 17 2.5 6 10 Europe (1)/ 3.5*** 10 13 (2) (3) 2 AMEA 9 /
8*** 12 23 9 20 21 Total Divisions 1 /(1)*** 5 6 - 2 8
--------------------------------------------------------- * For the
full year, total reported operating profit grew 16% ** The above
core results and core constant currency results are non-GAAP
financial measures that exclude certain restructuring actions
associated with the company's Productivity for Growth initiative
and costs associated with our proposed mergers with PBG and PAS.
For more information about our core results and core constant
currency results, see "Reconciliation of GAAP and Non-GAAP
Information" in the attached exhibits. Please refer to the Glossary
for definitions of "Constant Currency" and "Core". ***
Snacks/Beverage Summary of Fourth-Quarter 2009 Performance*
--------------------------------------------------------- Constant
Currency** ------------------- Core** Core** Division Division
Division Net Operating Net Operating Operating % Growth Volume
Revenue Profit Revenue Profit Profit -------- ------ ------- ------
------- ------ ------ PAF - 4 3 5 4 19 FLNA - 2 4 3 5 19 QFNA (2)
(5) (2) (4) (1) 18 LAF - 10 3 11 4 20 PAB (5) (2) 10 (1) 11 191 PI
4 / 3*** 5 (3) 8 (0.5) 26 Europe (3)/ -*** 4 7 5 7 33 AMEA 13 /
5*** 7 (42) 12 (27) (4) Total Divisions 1 /(1)*** 3 3.5 4.5 5 39
--------------------------------------------------------- * In the
fourth quarter total reported operating profit grew 67% ** The
above core results and core constant currency results are non-GAAP
financial measures that exclude certain restructuring actions
associated with the company's Productivity for Growth initiative
and costs associated with our proposed merger of PBG and PAS. For
more information about our core results and core constant currency
results, see "Reconciliation of GAAP and Non-GAAP Information" in
the attached exhibits. Please refer to the Glossary for definitions
of "Constant Currency" and "Core". *** Snacks/Beverage All
references below to net revenue and core operating profit are on a
constant currency basis. Full-Year and Quarter Operating
Highlights: -- For the year, Frito-Lay North America delivered a 6
percent increase in net revenue and a 7 percent increase in core
operating profit, on top of similar gains in 2008, as it maintained
its position as the fastest growing U.S. consumer packaged goods
company in measured channels. -- For the year, PepsiCo
International delivered double-digit gains in net revenue and core
operating profit while making strategic investments in adjacent
product categories and geographies and in infrastructure in key
markets. -- On improving top-line trends, PepsiCo Americas
Beverages grew core operating profit 10 percent in the quarter.
Division Operating Summary PepsiCo Americas Foods (PAF) grew net
revenue 7 percent and core operating profit 8 percent for the full
year 2009 and gained snacks share across the region. In the fourth
quarter, PAF grew net revenue 4 percent and core operating profit 3
percent. Frito-Lay North America (FLNA) gained dollar share and was
the fastest growing CPG Company in the U.S. in 2009 in measured
channels. For the full year, volume increased 1 percent, net
revenue grew 6 percent and core operating profit grew 7 percent, as
FLNA effectively offset commodity inflation and investments in
value initiatives with strong revenue management and productivity
initiatives. In the fourth quarter, volume was flat, reflecting the
completion of the "20% More Free" promotion FLNA ran in the second
and third quarters of the year. It continued to perform well in
large format stores, growing dollar share on the strength of Lay's
potato chips, Cheetos, dips and variety packs. Net revenue
increased 2 percent and core operating profit increased 4 percent
in the quarter, with the muted growth reflecting the lapping of
significant pricing actions in the year-ago period. In 2010, FLNA
will drive top-line growth with strong innovations on its core
platforms, targeted value initiatives, and increased emphasis on
delivering more nutritious snacking options to consumers, including
adding fiber to its SunChips line and whole grains to Tostitos.
Quaker Foods North America (QFNA) volume and net revenue were flat
for the year, and core operating profit grew 3 percent. In the
quarter, volume declined 2 percent, net revenue was down 5 percent
and core operating profit declined 2 percent. Net revenue
performance reflected a step-up in promotional investments, while
growth in core operating profit was adversely impacted by the
overlap of a flood-related insurance settlement in the year-ago
quarter. Latin America Foods (LAF) performed very well in 2009,
growing net revenue 10 percent and core operating profit 13 percent
despite very challenging macros in Mexico. In the fourth quarter,
LAF grew net revenue 10 percent. Core operating profit growth of 3
percent reflected the overlap of an insurance settlement in the
year-ago period as well as input cost inflation on sugar and
potatoes in key markets. In the quarter, Sabritas held its strong
value share position and Gamesa grew value share. South America
posted strong gains in revenue and operating profit. PepsiCo
Americas Beverages (PAB) showed improvement during the course of
2009 against the backdrop of a challenging liquid refreshment
beverage category in North America. For the full year, volume and
net revenue declined 6 percent due to the challenging category
while core operating profit decreased 3 percent. In the fourth
quarter, volume declined 5 percent but operating profit grew by 10
percent, reflecting sequential improvement in top-line trends, a
focus on profitable volume growth, heightened productivity in the
North American business, and significant operating profit growth in
Latin America. The refresh of the North American beverage business
gained traction in the fourth quarter as brands such as SoBe
Lifewater and Gatorade gained market share. Also, important brand
health metrics rose for brand Pepsi, Pepsi Max, Gatorade, Lipton
Tea and Tropicana. In 2010, differentiated value will continue to
play a key role as PAB rolls out targeted innovation, such as the G
Series Performance line, offering additional benefits for pre-,
during and post-athletic occasions. In CSDs, the innovative "Pepsi
Refresh Project" is providing millions of dollars in grants to make
a positive impact in local communities. The integrated campaign
drives consumers to Pepsi's website where they can submit project
ideas and vote for their favorite projects, with the winning grants
ranging from $5,000 to $250,000. PepsiCo International (PI)
delivered another year of solid results in 2009 with a 17 percent
increase in core operating profit on an 11 percent increase in net
revenue. In the fourth quarter, PI net revenue grew 5 percent and
core operating profit declined 3 percent, reflecting the impact of
significant strategic infrastructure investments in our Asia/Middle
East/Africa (AMEA) division. Europe delivered strong 2009 full-year
results in a particularly difficult macroeconomic environment,
growing net revenue 10 percent and core operating profit 13
percent. Acquisitions contributed 8 percentage points to net
revenue growth and 5 percentage points to core operating profit
growth in the full year. In the quarter, net revenue grew 4
percent, reflecting 2 percentage points from acquisitions, and core
operating profit increased 7 percent as the division balanced
revenue growth with tight cost controls and productivity gains. In
the quarter, snacks volume declined 3 percent, reflecting pricing
actions, including weight-outs, as well as continued macroeconomic
challenges. Snacks volume grew in the U.K., driven by the success
of Walkers "Gazillion Bag Giveaway" and the "Do Us a Flavour"
campaign, which has now been rolled out to other markets in Europe.
In Russia, the division continued to gain significant value share
and product innovation included a new flavor of its Hrustream bread
snacks as well as the launch of Lay's Sensations. Beverage volume
was flat in the quarter, including 2 points of growth from
acquisitions. Across Western Europe a combination of value and
marketing programs and our differentiated Pepsi Max proposition
delivered stronger volume momentum and broad based share gains. In
Russia we outpaced the market with continued brand equity and value
programs delivering share gains in colas, teas and energy drinks,
and the Lebedyansky juice portfolio continued to deliver volume and
share gains. AMEA delivered strong growth in 2009, with net revenue
up 12 percent and core operating profit up 23 percent. Acquisitions
contributed 1 percentage to net revenue growth and 10 percentage
points to core operating profit growth. Driven by seasonality, the
fourth quarter is by far the smallest profit quarter for the
division and in the quarter, AMEA grew net revenue 7 percent while
core operating profit declined 42 percent, reflecting significant
incremental strategic investments in key emerging markets and the
shift in the timing of the Chinese New Year. Beverage volume grew 8
percent for the year led by 32 percent growth in India which gained
overall share for the year. Volume grew 5 percent in the quarter
led by growth of 21 percent in India and high-single-digit growth
in Thailand and Egypt. This growth was partially offset by a
decline in China, which was negatively impacted by a shift in the
timing of the Chinese New Year. The business also posted volume and
value share gains in the Middle East. Snacks volume grew 13 percent
in the quarter reflecting double-digit gains in India, Pakistan,
Egypt and Thailand as well as 4 percentage points of growth from
acquisitions. In the quarter, the division expanded its partnership
with dairy producer Almarai to broaden its portfolio of healthy
offerings in Egypt. Beverage System Transformation The company is
on-track with its plans to acquire its two anchor bottlers, The
Pepsi Bottling Group (PBG) and PepsiAmericas, Inc. (PAS), subject
to regulatory and stockholder approval. PBG and PAS shareholders
will vote on February 17, 2010 on whether to approve the
acquisitions. The company hopes the transactions will close by the
end of February 2010. Tax Rate PepsiCo's reported tax rate was 29
percent for the fourth quarter. Excluding the impact of items
affecting comparability, PepsiCo's core tax rate was 28 percent for
the fourth quarter. The company's full-year reported and core tax
rates were 26 percent. Cash Flow PepsiCo's full-year cash flow from
operating activities was $6.8 billion, including a discretionary $1
billion contribution to PepsiCo's pension fund, $196 million of
cash payments associated with the Productivity for Growth program
and $49 million of merger-related payments in connection with our
pending bottling acquisitions. Management operating cash flow,
excluding these items (net of tax benefits) and net of capital
expenditures, was $5.6 billion, well ahead of our forecast. Fiscal
2010 Guidance For fiscal 2010, the company is targeting an 11 to 13
percent growth rate for core constant currency EPS off of its
fiscal 2009 core EPS of $3.71. This guidance assumes the company
will close the bottling transactions by the end of February. The
earnings guidance also reflects roughly 8 to 9 percent growth from
"base" PepsiCo, with additional growth coming from a combination of
financial and accounting accretion from the bottling transaction
plus year-one synergies (totaling about 5 points of growth)
partially offset by strategic investment spending. As a result of
its recent integration planning efforts, the company is now
targeting pre-tax annualized synergies from the proposed bottler
acquisitions of approximately $400 million once fully implemented
by 2012, with one-time costs of about the same amount. Synergies to
be realized in 2010 are expected to total approximately $125 to
$150 million. The company is still in the process of completing its
integration planning. The details of these and other efficiencies
relating to the company's beverage business will be discussed at
its analyst meeting scheduled for March 22 and 23, 2010. Share
Count and Tax Rate The weighted average diluted share count in 2010
is expected to be higher than in 2009, reflecting a higher 2009
year-end share count because of the impact of options exercises and
the lack of share buy-backs in 2009 and the issuance of shares
related to the bottling transaction in 2010 offset in part by the
company's planned share repurchases in 2010. The company
anticipates that share repurchases together with a voluntary $600
million funding of its pension plans would total about $5 billion
in 2010. The company expects its full-year 2010 core tax rate on a
stand-alone basis to be about the same as in 2009. The weighted
average tax rate including the proposed bottler acquisitions will
be about 27 to 28 percent. Impact of Venezuelan Devaluation As of
the beginning of the Company's 2010 fiscal year, Venezuela will be
accounted for under hyperinflationary accounting rules, and the
functional currency of our Venezuelan entities will be changed from
the Bolivar to the U.S. dollar. Effective January 11, 2010, the
Venezuelan government devalued the Bolivar by resetting the
official exchange rate from 2.15 Bolivars per dollar to 4.3
Bolivars per dollar. In 2010, the Company expects that the majority
of its foreign exchange transactions will be conducted at the 4.3
exchange rate, and as a result of the change to hyperinflationary
accounting and the devaluation, the company expects to record a
one-time charge in the first quarter of 2010 of approximately $125
million relating to the remeasurement of its balance sheet. The
company's constant currency core earnings per share guidance for
2010 will not be affected. Please refer to the glossary for more
information about the items excluded from the company's fiscal 2010
core constant currency EPS guidance and for a definition of "base"
PepsiCo. The company has not yet received regulatory or shareholder
approval for the acquisitions. The company is still in the process
of completing its integration planning. Any of these factors, as
well as the risks described under "Cautionary Statement" later in
this release, the risks described in our most recent annual report
on Form 10-K and subsequent reports on Forms 10-Q and 8-K and in
the company's Form S-4 Registration Statements with respect to the
acquisitions could materially adversely impact the company's
ability to achieve these results. About PepsiCo PepsiCo offers the
world's largest portfolio of billion-dollar food and beverage
brands, including 18 different product lines that each generate
more than $1 billion in annual retail sales. Our main businesses -
Frito-Lay, Quaker, Pepsi-Cola, Tropicana and Gatorade - also make
hundreds of other nourishing, tasty foods and drinks that bring joy
to our consumers in approximately 215 countries. With more than $43
billion in 2009 revenues, PepsiCo employs approximately 203,000
people who are united by our unique commitment to sustainable
growth, called Performance with Purpose. By dedicating ourselves to
offering a broad array of choices for healthy, convenient and fun
nourishment, reducing our environmental impact, and fostering a
diverse and inclusive workplace culture, PepsiCo balances strong
financial returns with giving back to our communities worldwide.
For more information, please visit http://www.pepsico.com/.
Cautionary Statement Statements in this release that are
"forward-looking statements", including PepsiCo's 2010 guidance,
are based on currently available information, operating plans and
projections about future events and trends. They inherently involve
risks and uncertainties that could cause actual results to differ
materially from those predicted in such forward-looking statements.
Such risks and uncertainties include, but are not limited to:
PepsiCo's ability to consummate the acquisitions of The Pepsi
Bottling Group, Inc. ("PBG") and PepsiAmericas, Inc. ("PAS");
PepsiCo's ability to achieve the synergies and value creation
contemplated by the proposed acquisitions; loss of key employees or
customers or other business disruption as a result of the proposed
acquisitions; PepsiCo's ability to promptly and effectively
integrate the businesses of PBG, PAS and PepsiCo; the timing to
consummate the proposed acquisitions and any necessary actions to
obtain required regulatory approvals; the diversion of management
time on transaction-related issues; increased indebtedness as a
result of the proposed acquisitions; changes in demand for
PepsiCo's products, as a result of shifts in consumer preferences
or otherwise; increased costs, disruption of supply or shortages of
raw materials and other supplies; unfavorable economic conditions
and increased volatility in foreign exchange rates; PepsiCo's
ability to build and sustain proper information technology
infrastructure, successfully implement its ongoing business process
transformation initiative or outsource certain functions
effectively; damage to PepsiCo's reputation; trade consolidation,
the loss of any key customer, or failure to maintain good
relationships with PepsiCo's bottling partners, including as a
result of the Proposed Transactions; PepsiCo's ability to hire or
retain key employees or a highly skilled and diverse workforce;
changes in the legal and regulatory environment; disruption of
PepsiCo's supply chain; unstable political conditions, civil unrest
or other developments and risks in the countries where PepsiCo
operates; and risks that benefits from the Productivity for Growth
initiative may not be achieved, may take longer to achieve than
expected or may cost more than currently anticipated. For
additional information on these and other factors that could cause
PepsiCo's actual results to materially differ from those set forth
herein, please see PepsiCo's filings with the SEC, including its
most recent annual report on Form 10-K and subsequent reports on
Forms 10-Q and 8-K. Investors are cautioned not to place undue
reliance on any such forward-looking statements, which speak only
as of the date they are made. PepsiCo undertakes no obligation to
update any forward-looking statements, whether as a result of new
information, future events or otherwise. Miscellaneous Disclosures
Conference Call. At 10:00 a.m. (Eastern Time) today, the company
will host a conference call with investors to discuss
fourth-quarter 2009 results and the outlook for full-year 2010. For
details, visit the company's website at http://www.pepsico.com/, in
the "Investors" section. Reconciliation. In discussing financial
results and guidance, the company may refer to certain non-GAAP
measures. Reconciliations of any such non-GAAP measures to the most
directly comparable financial measures in accordance with GAAP can
be found in the attached exhibits, as well as on the company's
website at http://www.pepsico.com/, in the "Investors" section. Our
non-GAAP measures exclude from reported results those items that
management believes are not indicative of our ongoing performance
and how management evaluates our operating results and trends.
Glossary "Base" PepsiCo: PepsiCo's projected 2010 core constant
currency EPS growth (as measured against its full-year 2009 core
EPS), excluding the accretive impact of (1) incremental 2010
results in connection with the proposed bottler acquisitions, (2)
net favorable purchase accounting adjustments in 2010 in connection
with the proposed bottler acquisitions, and (3) expected synergies
in 2010 in connection with the proposed bottler acquisitions, less
(4) the dilutive impact of certain planned 2010 incremental
strategic investments in our businesses. Beverage volume: Volume
shipped to retailers and independent distributors from both PepsiCo
and our bottlers. Core: Core results are non-GAAP financial
measures. 2009 fourth quarter and year-to-date core results
exclude, in both 2009 and 2008, the commodity mark-to-market net
impact included in corporate unallocated expenses and certain
restructuring actions. 2009 fourth quarter and year-to-date core
results also exclude costs associated with our proposed merger with
PBG and PAS, as well as our share of PBG's and PAS's respective
merger costs included in bottling equity income. Core EPS guidance
for full-year 2010 excludes the commodity mark-to-market net impact
included in corporate unallocated expenses, estimated one-time
costs to achieve synergies, the gain or loss on previously held
equity interests in PBG and PAS, the post-merger one-time impact to
earnings of fair value adjustments to acquired inventory, the
one-time charge related to the change to hyperinflationary
accounting and devaluation in Venezuela, any additional
restructuring or integration costs and transaction costs related to
the proposed acquisitions of PBG and PAS. For more details and
reconciliations of our 2009 core results and 2010 core constant
currency EPS guidance, see "Reconciliation of GAAP and Non-GAAP
Information" in the exhibits attached hereto. Constant currency:
Financial results (historical and projected) assuming constant
foreign currency exchange rates used for translation based on the
rates in effect for the comparable prior-year period. In addition,
the impact on EPS growth is computed by adjusting core EPS growth
by the after-tax foreign currency translation impact on core
operating profit growth using PepsiCo's core effective tax rate.
Division operating profit: The aggregation of the operating profit
for each of our reportable segments, which excludes the impact of
corporate unallocated expenses. Effective net pricing: The combined
impact of mix and price. Management operating cash flow: Net cash
provided by operating activities less capital spending plus sales
of property, plant and equipment. It is our primary measure used to
monitor cash flow performance. See the attached exhibits for a
reconciliation of this measure to the most directly comparable
financial measure in accordance with GAAP (operating cash flow).
Management operating cash flow, excluding certain items: Management
operating cash flow, excluding: (1) a discretionary pension
contribution (net of tax) in 2009, (2) restructuring payments (net
of tax) in connection with our Productivity for Growth initiative,
and (3) merger costs paid in connection with our proposed bottler
acquisitions. See the attached exhibits for a reconciliation of
this measure to the most directly comparable financial measure in
accordance with GAAP (operating cash flow). Mark-to-market gain or
loss or net impact: Change in market value for commodity contracts
that we purchase to mitigate the volatility in costs of energy and
raw materials that we consume. The market value is determined based
on average prices on national exchanges and recently reported
transactions in the marketplace. Net pricing: The combined impact
of list price changes, weight changes per package, discounts and
allowances. Net capital spending: Capital spending less cash
proceeds from sales of property, plant and equipment. Pricing: The
impact of list price changes and weight changes per package.
Transaction foreign exchange: The foreign exchange impact on our
financial results of transactions, such as purchases of imported
raw materials, commodities, or services, occurring in currencies
other than the local, functional currency. PepsiCo, Inc. and
Subsidiaries Summary of PepsiCo 2009 Results (unaudited) Quarter
Ended 12/26/09 Year Ended 12/26/09 ----------------------
------------------- Constant Constant Currency Currency % Growth
Reported Core* Core* Reported Core* Core* -------- -------- -----
----- -------- ----- ----- Volume (Servings) - - - - Net Revenue
4.5 4.5 3 - - 5 Division Operating Profit 39 5 3.5 8 2 6 Total
Operating Profit 67 0.5 16 - Net Income Attributable to PepsiCo 99
2 16 (1) Earnings per Share (EPS) 99 2 1 17 1 6 *Core results are
financial measures that are not in accordance with Generally
Accepted Accounting Principles (GAAP) and exclude the commodity
mark-to-market net impact included in corporate unallocated
expenses, certain restructuring actions associated with our
Productivity for Growth initiative, our share of the Pepsi Bottling
Group, Inc.'s (PBG) restructuring and impairment charges in 2008,
costs associated with our proposed mergers with PBG and
PepsiAmericas, Inc. (PAS), as well as our share of their respective
merger costs. Core growth, on a constant currency basis, assumes
constant foreign currency exchange rates used for translation based
on the rates in effect for the comparable period during 2008. In
addition, core EPS growth, on a constant currency basis, is
computed by adjusting core EPS growth by the after-tax foreign
currency translation impact on core operating profit growth using
PepsiCo's core effective tax rate. See schedules A-9 through A-15
for a discussion of these items and reconciliations to the most
directly comparable financial measures in accordance with GAAP.
PepsiCo, Inc. and Subsidiaries Condensed Consolidated Statement of
Income (in millions, except per share amounts, and unaudited)
Quarter Ended Year Ended --------------------------
------------------------- 12/26/09 12/27/08 Change 12/26/09
12/27/08 Change -------- -------- ------ -------- -------- ------
Net Revenue $13,297 $12,729 4.5% $43,232 $43,251 -% Costs and
Expenses Cost of sales 6,293 6,171 2% 20,099 20,351 (1)% Selling,
general and administrative expenses 4,949 5,317 (7)% 15,026 15,877
(5)% Amortization of intangible assets 21 21 5% 63 64 -% --------
-------- -------- -------- Operating Profit 2,034 1,220 67% 8,044
6,959 16% Bottling Equity Income 75 (65) n/m 365 374 (2)% Interest
Expense (112) (124) (11)% (397) (329) 21% Interest Income 23 (12)
n/m 67 41 62% -------- -------- -------- -------- Income before
Income Taxes 2,020 1,019 98% 8,079 7,045 15% Provision for Income
Taxes 583 293 99% 2,100 1,879 12% -------- -------- --------
-------- Net Income 1,437 726 98% 5,979 5,166 16% Less: Net Income
Attributable to Noncontrolling Interests 3 7 (70)% 33 24 34%
-------- -------- -------- -------- Net Income Attributable to
PepsiCo $1,434 $719 99% $5,946 $5,142 16% ======== ========
======== ======== Diluted Net Income Attributable to PepsiCo per
Common Share $0.90 $0.46 99% $3.77 $3.21 17% Average Shares
Outstanding 1,584 1,578 1,577 1,602 n/m = not meaningful PepsiCo,
Inc. and Subsidiaries Supplemental Financial Information (in
millions, unaudited) Quarter Ended Year Ended
-------------------------- ------------------------- 12/26/09
12/27/08 Change 12/26/09 12/27/08 Change -------- -------- ------
-------- -------- ------ Net Revenue Frito-Lay North America $3,888
$3,770 3% $13,224 $12,507 6% Quaker Foods North America 585 610
(4)% 1,884 1,902 (1)% Latin America Foods 2,062 1,857 11% 5,703
5,895 (3)% ------- ------- ------- ------- PepsiCo Americas Foods
6,535 6,237 5% 20,811 20,304 2.5% PepsiCo Americas Beverages 2,754
2,774 (1)% 10,116 10,937 (8)% Europe 2,264 2,157 5% 6,727 6,891
(2)% Asia, Middle East & Africa 1,744 1,561 12% 5,578 5,119 9%
------- ------- ------- ------- PepsiCo International 4,008 3,718
8% 12,305 12,010 2.5% ------- ------- ------- ------- Total Net
Revenue $13,297 $12,729 4.5% $43,232 $43,251 -% ======= =======
======= ======= Operating Profit Frito-Lay North America $956 $806
19% $3,258 $2,959 10% Quaker Foods North America 190 160 18% 628
582 8% Latin America Foods 301 251 20% 904 897 1% ------- -------
------- ------- PepsiCo Americas Foods 1,447 1,217 19% 4,790 4,438
8% PepsiCo Americas Beverages 522 179 191% 2,172 2,026 7% Europe
259 194 33% 932 910 2% Asia, Middle East & Africa 46 49 (4)%
716 592 21% ------- ------- ------- ------- PepsiCo International
305 243 26% 1,648 1,502 10% Division Operating Profit 2,274 1,639
39% 8,610 7,966 8% Corporate Unallocated Net Impact of
Mark-to-Market on Commodity Hedges 83 (227) n/m 274 (346) n/m
PBG/PAS Merger Costs (48) - n/m (49) - n/m Restructuring - (10) n/m
- (10) n/m Other (275) (182) 51% (791) (651) 21% ------- -------
------- ------- (240) (419) (42)% (566) (1,007) (44)% Total
Operating Profit $2,034 $1,220 67% $8,044 $6,959 16% =======
======= ======= ======= n/m = not meaningful PepsiCo, Inc. and
Subsidiaries Condensed Consolidated Statement of Cash Flows (in
millions) Year Ended ------------------------- 12/26/09 12/27/08
-------- -------- (unaudited) Operating Activities Net income
$5,979 $5,166 Depreciation and amortization 1,635 1,543 Stock-based
compensation expense 227 238 Restructuring and impairment charges
36 543 Cash payments for restructuring charges (196) (180) PBG/PAS
merger costs 50 - Cash payments for PBG/PAS merger costs (49) -
Excess tax benefits from share-based payment arrangements (42)
(107) Pension and retiree medical plan contributions (1,299) (219)
Pension and retiree medical plan expenses 423 459 Bottling equity
income, net of dividends (235) (202) Deferred income taxes and
other tax charges and credits 284 573 Change in accounts and notes
receivable 188 (549) Change in inventories 17 (345) Change in
prepaid expenses and other current assets (127) (68) Change in
accounts payable and other current liabilities (133) 718 Change in
income taxes payable 319 (180) Other, net (281) (391) ------ ------
Net Cash Provided by Operating Activities 6,796 6,999 ------ ------
Investing Activities Capital spending (2,128) (2,446) Sales of
property, plant and equipment 58 98 Acquisitions and investments in
noncontrolled affiliates (500) (1,925) Divestitures 99 6 Cash
restricted for pending acquisitions 15 (40) Cash proceeds from sale
of The Pepsi Bottling Group, Inc. (PBG) and PepsiAmericas, Inc.
(PAS) stock - 358 Short-term investments, net 55 1,282 ------
------ Net Cash Used for Investing Activities (2,401) (2,667)
------ ------ Financing Activities Proceeds from issuances of
long-term debt 1,057 3,719 Payments of long-term debt (226) (649)
Short-term borrowings, net (1,018) 445 Cash dividends paid (2,732)
(2,541) Share repurchases - common - (4,720) Share repurchases -
preferred (7) (6) Proceeds from exercises of stock options 413 620
Excess tax benefits from share-based payment arrangements 42 107
Other financing (26) - ------ ------ Net Cash Used for Financing
Activities (2,497) (3,025) Effect of Exchange Rate Changes on Cash
and Cash Equivalents (19) (153) ------ ------ Net Increase in Cash
and Cash Equivalents 1,879 1,154 Cash and Cash Equivalents -
Beginning of year 2,064 910 ------ ------ Cash and Cash Equivalents
- End of period $3,943 $2,064 ====== ====== PepsiCo, Inc. and
Subsidiaries Condensed Consolidated Balance Sheet (in millions)
12/26/09 12/27/08 -------- -------- Assets (unaudited) Current
Assets Cash and cash equivalents $3,943 $2,064 Short-term
investments 192 213 Accounts and notes receivable, net 4,624 4,683
Inventories Raw materials 1,274 1,228 Work-in-process 165 169
Finished goods 1,179 1,125 ------- ------- 2,618 2,522 Prepaid
expenses and other current assets 1,194 1,324 ------- ------- Total
Current Assets 12,571 10,806 Property, plant and equipment, net
12,671 11,663 Amortizable intangible assets, net 841 732 Goodwill
6,534 5,124 Other nonamortizable intangible assets 1,782 1,128
------- ------- Nonamortizable Intangible Assets 8,316 6,252
Investments in noncontrolled affiliates 4,484 3,883 Other assets
965 2,658 ------- ------- Total Assets $39,848 $35,994 =======
======= Liabilities and Equity Current Liabilities Short-term
obligations $464 $369 Accounts payable and other current
liabilities 8,127 8,273 Income taxes payable 165 145 -------
------- Total Current Liabilities 8,756 8,787 Long-term debt
obligations 7,400 7,858 Other liabilities 5,591 6,541 Deferred
income taxes 659 226 ------- ------- Total Liabilities 22,406
23,412 Commitments and Contingencies Preferred stock, no par value
41 41 Repurchased preferred stock (145) (138) PepsiCo Common
Shareholders' Equity Common stock 30 30 Capital in excess of par
value 250 351 Retained earnings 33,805 30,638 Accumulated other
comprehensive loss (3,794) (4,694) Repurchased common stock
(13,383) (14,122) ------- ------- Total PepsiCo Common
Shareholders' Equity 16,908 12,203 Noncontrolling interests 638 476
------- ------- Total Equity 17,442 12,582 ------- ------- Total
Liabilities and Equity $39,848 $35,994 ======= ======= PepsiCo,
Inc. and Subsidiaries Supplemental Share and Stock-Based
Compensation Data (in millions, except dollar amounts, and
unaudited) Quarter Ended Year Ended ---------------------
-------------------- 12/26/09 12/27/08 12/26/09 12/27/08 --------
-------- -------- -------- Beginning Net Shares Outstanding 1,559
1,557 1,553 1,605 Options Exercised/ Restricted Stock Units
Converted 6 3 12 16 Shares Repurchased - (7) - (68) ----- -----
----- ----- Ending Net Shares Outstanding 1,565 1,553 1,565 1,553
===== ===== ===== ===== Weighted Average Basic 1,562 1,554 1,558
1,573 Dilutive securities: Options 17 19 13 23 Restricted Stock
Units 4 4 4 4 ESOP Convertible Preferred Stock/Other 1 1 2 2 -----
----- ----- ----- Weighted Average Diluted 1,584 1,578 1,577 1,602
===== ===== ===== ===== Average Share Price for the period $60.91
$59.25 $55.30 $66.16 Growth Versus Prior Year 3% (20)% (16)% (3)%
Options Outstanding 106 104 112 109 Options in the Money 85 81 72
101 Dilutive Shares from Options 17 19 13 23 Dilutive Shares from
Options as a % of Options in the Money 20% 22% 18% 23% Average
Exercise Price of Options in the Money $47.92 $45.86 $45.68 $48.45
Restricted Stock Units Outstanding 6 6 6 7 Dilutive Shares from
Restricted Stock Units 4 4 4 4 Average Intrinsic Value of
Restricted Stock Units Outstanding* $60.98 $63.18 $61.03 $63.14
*Weighted-average intrinsic value at grant date. PepsiCo, Inc. and
Subsidiaries Condensed Consolidated Statement of Income (in
millions, except per share amounts, and unaudited) COMPARISON OF
CORE RESULTS* Quarter Ended Year Ended --------------------------
-------------------------- 12/26/09 12/27/08 Change 12/26/09
12/27/08 Change -------- -------- ------ -------- -------- ------
Net Revenue $13,297 $12,729 4.5% $43,232 $43,251 -% Costs and
Expenses Cost of sales 6,293 6,084 3% 20,099 20,264 (1)% Selling,
general and administrative expenses 4,983 4,634 8% 15,214 15,075 1%
Amortization of intangible assets 21 21 5% 63 64 -% ------ ------
------ ------ Operating Profit 2,000 1,990 0.5% 7,856 7,848 -%
Bottling Equity Income 78 73 6% 376 512 (27)% Interest Expense
(112) (124) (11)% (397) (329) 21% Interest Income 23 (12) n/m 67 41
62% ------ ------ ------ ------ Income before Income Taxes 1,989
1,927 3% 7,902 8,072 (2)% Provision for Income Taxes 564 532 6%
2,023 2,161 (6)% ------ ------ ------ ------ Net Income 1,425 1,395
2% 5,879 5,911 (1)% Less: Net Income Attributable to Noncontrolling
Interests 3 7 (70)% 33 24 34% ------ ------ ------ ------ Net
Income Attributable to PepsiCo $1,422 $1,388 2% $5,846 $5,887 (1)%
====== ====== ====== ====== Diluted Net Income Attributable to
PepsiCo per Common Share $0.90 $0.88 2% $3.71 $3.68 1% Average
Shares Outstanding 1,584 1,578 1,577 1,602 n/m = not meaningful
*Core results are non-GAAP financial measures that exclude the
commodity mark-to-market net impact included in corporate
unallocated expenses, certain restructuring actions associated with
our Productivity for Growth initiative, our share of PBG's
restructuring and impairment charges in 2008, costs associated with
our proposed mergers with PBG and PAS, as well as our share of
their respective merger costs. See schedules A-9 through A-15 for a
discussion of these items and reconciliations to the most directly
comparable financial measures in accordance with GAAP. PepsiCo,
Inc. and Subsidiaries Supplemental Financial Information (in
millions and unaudited) COMPARISON OF CORE RESULTS* Quarter Ended
Year Ended -------------------------- --------------------------
12/26/09 12/27/08 Change 12/26/09 12/27/08 Change -------- --------
------ -------- -------- ------ Net Revenue Frito-Lay North America
$3,888 $3,770 3% $13,224 $12,507 6% Quaker Foods North America 585
610 (4)% 1,884 1,902 (1)% Latin America Foods 2,062 1,857 11% 5,703
5,895 (3)% ------- ------- ------- ------- PepsiCo Americas Foods
6,535 6,237 5% 20,811 20,304 2.5% PepsiCo Americas Beverages 2,754
2,774 (1)% 10,116 10,937 (8)% Europe 2,264 2,157 5% 6,727 6,891
(2)% Asia, Middle East & Africa 1,744 1,561 12% 5,578 5,119 9%
------- ------- ------- ------- PepsiCo International 4,008 3,718
8% 12,305 12,010 2.5% ------- ------- ------- ------- Total Net
Revenue $13,297 $12,729 4.5% $43,232 $43,251 -% ======= =======
======= ======= Operating Profit Frito-Lay North America $956 $914
5% $3,260 $3,067 6% Quaker Foods North America 190 191 (1)% 629 613
3% Latin America Foods 301 291 4% 907 937 (3)% ------- -------
------- ------- PepsiCo Americas Foods 1,447 1,396 4% 4,796 4,617
4% PepsiCo Americas Beverages 522 468 11% 2,188 2,315 (5.5)% Europe
260 244 7% 934 960 (3)% Asia, Middle East & Africa 46 64 (27)%
729 607 20% ------- ------- ------- ------- PepsiCo International
306 308 (0.5)% 1,663 1,567 6% Division Operating Profit 2,275 2,172
5% 8,647 8,499 2% Corporate Unallocated (275) (182) 51% (791) (651)
21% ------- ------- ------- ------- Total Operating Profit $2,000
$1,990 0.5% $7,856 $7,848 -% ======= ======= ======= ======= *Core
results are non-GAAP financial measures that exclude the commodity
mark-to-market net impact included in corporate unallocated
expenses, certain restructuring actions associated with our
Productivity for Growth initiative, our share of PBG's
restructuring and impairment charges in 2008, costs associated with
our proposed mergers with PBG and PAS, as well as our share of
their respective merger costs. See schedules A-9 through A-15 for a
discussion of these items and reconciliations to the most directly
comparable financial measures in accordance with GAAP.
Reconciliation of GAAP and Non-GAAP Information (unaudited)
Division operating profit, core results and core results on a
constant currency basis are non-GAAP financial measures as they
exclude certain items noted below. However, we believe investors
should consider these measures as they are more indicative of our
ongoing performance and with how management evaluates our
operational results and trends. In the quarter and year ended
December 26, 2009, we recognized $83 million and $274 million,
respectively, of mark-to-market net gains on commodity hedges in
corporate unallocated expenses. In the quarter and year ended
December 27, 2008, we recognized $227 million and $346 million,
respectively, of mark-to-market net losses on commodity hedges in
corporate unallocated expenses. We centrally manage commodity
derivatives on behalf of our divisions. Certain of these commodity
derivatives do not qualify for hedge accounting treatment and are
marked to market with the resulting gains and losses recognized in
corporate unallocated expenses. These gains and losses are
subsequently reflected in division results when the divisions take
delivery of the underlying commodity. In the quarter and year ended
December 26, 2009, we incurred $49 million and $50 million,
respectively, of costs associated with the proposed mergers with
PBG and PAS, as well as an additional $3 million and $11 million of
costs in the quarter and year ended December 26, 2009,
respectively, representing our share of the respective merger costs
of PBG and PAS, recorded in bottling equity income. As a result of
our previously initiated Productivity for Growth program, we
recorded restructuring and impairment charges of $36 million in the
first half of the year ended December 26, 2009. In the fourth
quarter of 2008, we recorded restructuring and impairment charges
of $543 million in connection with this program. The program
includes actions in all segments of the business, including the
closure of six plants that we believe will increase cost
competitiveness across the supply chain, upgrade and streamline our
product portfolio and simplify the organization for more effective
and timely decision-making. In addition, in the fourth quarter of
2008, PBG implemented a restructuring initiative across all of its
geographic segments. PBG also recognized an asset impairment charge
related to its business in Mexico. Consequently, in the fourth
quarter of 2008, we recorded a non-cash charge of $138 million,
included in bottling equity income, as part of recording our share
of PBG's financial results. Additionally, management operating cash
flow is the primary measure management uses to monitor cash flow
performance. This is not a measure defined by GAAP. Since net
capital spending is essential to our product innovation initiatives
and maintaining our operational capabilities, we believe that it is
a recurring and necessary use of cash. As such, we believe
investors should also consider net capital spending when evaluating
our cash from operating activities. We believe investors should
consider the following non-GAAP financial measures with respect to
our fourth quarter results: -- Our 2009 net revenue growth on a
constant currency basis; -- Our 2009 and 2008 division operating
profit and our 2009 division operating profit growth; -- Our 2009
division operating profit excluding the impact of restructuring and
impairment charges and costs associated with our proposed mergers
with PBG and PAS; our 2008 division operating profit excluding the
impact of restructuring and impairment charges; and our 2009
division operating profit growth excluding the impact of the above
items, as well as on a constant currency basis; -- Our 2009 total
operating profit excluding the impact of restructuring and
impairment charges, costs associated with our proposed mergers with
PBG and PAS and the mark-to-market net gains on commodity hedges;
our 2008 total operating profit excluding the impact of
restructuring and impairment charges and the mark-to-market net
losses on commodity hedges; and our 2009 total operating profit
growth excluding the impact of the above items; and -- Our 2009
effective tax rate excluding the impact of costs associated with
our proposed mergers with PBG and PAS and the mark-to-market net
gains on commodity hedges. Reconciliation of GAAP and Non-GAAP
Information (cont.) (unaudited) We believe investors should
consider the following non-GAAP financial measures with respect to
our full-year results: -- Our 2009 net revenue growth on a constant
currency basis; -- Our 2009 and 2008 division operating profit and
our 2009 division operating profit growth; -- Our 2009 division
operating profit excluding the impact of restructuring and
impairment charges and costs associated with our proposed mergers
with PBG and PAS; our 2008 division operating profit excluding the
impact of restructuring and impairment charges; and our 2009
division operating profit growth excluding the impact of the above
items, as well as on a constant currency basis; -- Our 2009 total
operating profit excluding the impact of restructuring and
impairment charges, costs associated with our proposed mergers with
PBG and PAS and the mark-to-market net gains on commodity hedges;
our 2008 total operating profit excluding the impact of
restructuring and impairment charges and the mark-to-market net
losses on commodity hedges; and our 2009 total operating profit
growth excluding the impact of the above items; -- Our 2009
effective tax rate excluding the impact of restructuring and
impairment charges, costs associated with our proposed mergers with
PBG and PAS and the mark-to-market net gains on commodity hedges;
-- Our 2009 diluted EPS excluding the impact of restructuring and
impairment charges, costs associated with our proposed mergers with
PBG and PAS and the mark-to-market net gains on commodity hedges;
our 2008 diluted EPS excluding the impact of restructuring and
impairment charges, mark-to-market net losses on commodity hedges
and our share of PBG's restructuring and impairment charges; and
our 2009 diluted EPS growth excluding the impact of the above
items, on a constant currency basis; and -- Our 2009 management
operating cash flow, excluding the impact of a discretionary
pension contribution in the first quarter of 2009, cash payments
for PBG/PAS merger costs in the fourth quarter of 2009 and
restructuring-related cash payments in 2009. We are not able to
reconcile our full-year projected 2010 core constant currency EPS
(including our full-year projected 2010 EPS growth from "base"
PepsiCo) to our full-year projected 2010 reported results because
we are unable to predict the 2010 full-year impact of foreign
exchange or the mark-to-market net gains or losses on commodity
hedges due to the unpredictability of future changes in foreign
exchange rates and commodity prices. Additionally, with respect to
our proposed transactions with PBG and PAS, we are unable to
predict the 2010 full-year impact of the gain or loss on previously
held equity interests in PBG and PAS, the post-merger one-time
impact to earnings of fair value adjustments to acquired inventory,
any additional restructuring or integration costs and transaction
costs related to the proposed mergers with PBG and PAS due to the
uncertainty of the amounts and/or timing of such items. Therefore,
we are unable to provide a reconciliation of these measures.
Reconciliation of GAAP and Non-GAAP Information (cont.) ($ in
millions, except per share amounts and as otherwise noted,
unaudited) Operating Profit Growth Reconciliation Quarter Ended
Year Ended ------------- ---------- 12/26/09 12/26/09 -------------
---------- Division Operating Profit Growth 39% 8% Impact of
Corporate Unallocated 28 8 --- --- Reported Total Operating Profit
Growth 67% 16% === === Effective Tax Rate Reconciliation Quarter
Ended ---------------------------------- 12/26/09
---------------------------------- Pre-Tax Income Effective Income
Taxes Tax Rate ------- ------ --------- Reported Effective Tax Rate
$2,020 $583 28.9% Mark-to-Market Net Gains (83) (34) PBG/PAS Merger
Costs 52 15 ------ ---- Effective Tax Rate Excluding above Items
$1,989 $564 28.4% ====== ==== Year Ended
------------------------------------ 12/26/09
------------------------------------ Pre-Tax Income Effective
Income Taxes Tax Rate ------- ------ ---------- Reported Effective
Tax Rate $8,079 $2,100 26.0% Mark-to-Market Net Gains (274) (101)
Restructuring and Impairment Charges 36 7 PBG/PAS Merger Costs 61
16 ------ ------ Effective Tax Rate Excluding above Items $7,902
$2,023* 25.6% ====== ======= *Does not sum due to rounding Diluted
EPS Reconciliation Year Ended ----------------------------------
12/26/09 12/27/08 Growth -------- -------- ------ Reported Diluted
EPS $3.77 $3.21 17% Mark-to-Market Net (Gains)/Losses (0.11) 0.14
Restructuring and Impairment Charges 0.02 0.25 PBG's Restructuring
and Impairment Charges - 0.07 PBG/PAS Merger Costs 0.03 - -----
------ Diluted EPS Excluding above Items $3.71 $3.68* 1% =====
====== Impact of Foreign Currency Translation 5 --- Diluted EPS
Excluding above Items, on a constant currency basis 6% === *Does
not sum due to rounding Net Cash Provided by Operating Activities
Reconciliation (in billions) Year Ended ---------- 12/26/09
---------- Net Cash Provided by Operating Activities $6.8 Capital
Spending (2.1) Sales of Property, Plant and Equipment 0.1 ----
Management Operating Cash Flow 4.7* Discretionary Pension
Contribution (After-Tax) 0.6 Restructuring Payments (After-Tax) 0.2
PBG/PAS Merger Cost Payments 0.0 ---- Management Operating Cash
Flow Excluding above Items $5.6* ==== *Does not sum due to rounding
Reconciliation of GAAP and Non-GAAP Information (cont.) Reported
Growth and Growth Excluding the Impact of Restructuring and
Impairment Charges, PBG/PAS Merger Costs and Foreign Currency
Translation (unaudited) Quarter Ended ------------------------
12/26/09 ------------------------ Net Operating Revenue Profit
------- --------- Frito-Lay North America -----------------------
Reported Growth 3% 19% Impact of Restructuring and Impairment
Charges - (13) --- --- Growth Excluding Impact of Restructuring and
Impairment Charges 3 5* Impact of Foreign Currency Translation (1)
(1) --- --- Growth Excluding Impact of above Item, on a constant
currency basis 2% 4% === === Quaker Foods North America
-------------------------- Reported Growth (4)% 18% Impact of
Restructuring and Impairment Charges - (19) --- --- Growth
Excluding Impact of Restructuring and Impairment Charges (4) (1)
Impact of Foreign Currency Translation (1) (1) --- --- Growth
Excluding Impact of above Item, on a constant currency basis (5)%
(2)% === === Latin America Foods ------------------- Reported
Growth 11% 20% Impact of Restructuring and Impairment Charges -
(16) --- --- Growth Excluding Impact of Restructuring and
Impairment Charges 11 4 Impact of Foreign Currency Translation (1)
(1) --- --- Growth Excluding Impact of above Item, on a constant
currency basis 10% 3% === === PepsiCo Americas Foods
---------------------- Reported Growth 5% 19% Impact of
Restructuring and Impairment Charges - (15) --- --- Growth
Excluding Impact of Restructuring and Impairment Charges 5 4 Impact
of Foreign Currency Translation (1) (1) --- --- Growth Excluding
Impact of above Item, on a constant currency basis 4% 3% === ===
PepsiCo Americas Beverages -------------------------- Reported
Growth (1)% 191% Impact of Restructuring and Impairment Charges -
(180) --- ---- Growth Excluding Impact of Restructuring and
Impairment Charges (1) 11 Impact of Foreign Currency Translation
(1) (1.5) --- ---- Growth Excluding Impact of above Item, on a
constant currency basis (2)% 10%* === ==== Europe ------ Reported
Growth 5% 33% Impact of Restructuring and Impairment Charges - (26)
Impact of PBG/PAS Merger Costs - 1 --- --- Growth Excluding Impact
of above Items 5 7* Impact of Foreign Currency Translation (1) 1
--- --- Growth Excluding Impact of above Items, on a constant
currency basis 4% 7%* === === Asia, Middle East & Africa
-------------------------- Reported Growth 12% (4)% Impact of
Restructuring and Impairment Charges - (23) --- --- Growth
Excluding Impact of Restructuring and Impairment Charges 12 (27)
Impact of Foreign Currency Translation (5) (15) --- --- Growth
Excluding Impact of above Item, on a constant currency basis 7%
(42)% === ==== *Does not sum due to rounding Reconciliation of GAAP
and Non-GAAP Information (cont.) Reported Growth and Growth
Excluding the Impact of Restructuring and Impairment Charges,
PBG/PAS Merger Costs and Foreign Currency Translation (unaudited)
Quarter Ended --------------------------- 12/26/09
--------------------------- Net Operating Revenue Profit -------
--------- PepsiCo International --------------------- Reported
Growth 8% 26% Impact of Restructuring and Impairment Charges - (27)
---- --- Growth Excluding Impact of Restructuring and Impairment
Charges 8 (0.5)* Impact of Foreign Currency Translation (3) (2)
---- --- Growth Excluding Impact of above Item, on a constant
currency basis 5% (3)%* ==== === Total Divisions ---------------
Reported Growth 4.5% 39% Impact of Restructuring and Impairment
Charges - (33) ---- --- Growth Excluding Impact of Restructuring
and Impairment Charges 4.5 5* Impact of Foreign Currency
Translation (1.5) (1) ---- --- Growth Excluding Impact of above
Item, on a constant currency basis 3% 3.5%* ==== === *Does not sum
due to rounding Reconciliation of GAAP and Non-GAAP Information
(cont.) Reported Growth and Growth Excluding the Impact of
Restructuring and Impairment Charges and Foreign Currency
Translation (unaudited) Year Ended -------------------------
12/26/09 ------------------------- Net Operating Revenue Profit
------- --------- Frito-Lay North America -----------------------
Reported Growth 6% 10% Impact of Restructuring and Impairment
Charges - (4) --- --- Growth Excluding Impact of Restructuring and
Impairment Charges 6 6 Impact of Foreign Currency Translation 1 0.5
--- --- Growth Excluding Impact of above Item, on a constant
currency basis 6%* 7%* === === Quaker Foods North America
-------------------------- Reported Growth (1)% 8% Impact of
Restructuring and Impairment Charges - (5) --- --- Growth Excluding
Impact of Restructuring and Impairment Charges (1) 3 Impact of
Foreign Currency Translation 1 - --- --- Growth Excluding Impact of
above Item, on a constant currency basis -% 3% === === Latin
America Foods ------------------- Reported Growth (3)% 1% Impact of
Restructuring and Impairment Charges - (4) --- --- Growth Excluding
Impact of Restructuring and Impairment Charges (3) (3) Impact of
Foreign Currency Translation 14 16 --- --- Growth Excluding Impact
of above Item, on a constant currency basis 10%* 13% === ===
PepsiCo Americas Foods ---------------------- Reported Growth 2.5%
8% Impact of Restructuring and Impairment Charges - (4) --- ---
Growth Excluding Impact of Restructuring and Impairment Charges 2.5
4 Impact of Foreign Currency Translation 4.5 4 --- --- Growth
Excluding Impact of above Item, on a constant currency basis 7% 8%
=== === PepsiCo Americas Beverages --------------------------
Reported Growth (8)% 7% Impact of Restructuring and Impairment
Charges - (13) --- --- Growth Excluding Impact of Restructuring and
Impairment Charges (8) (5.5)* Impact of Foreign Currency
Translation 1 2 --- --- Growth Excluding Impact of above Item, on a
constant currency basis (6)% * (3)%* === === Europe ------ Reported
Growth (2)% 2% Impact of Restructuring and Impairment Charges - (5)
--- --- Growth Excluding Impact of Restructuring and Impairment
Charges (2) (3) Impact of Foreign Currency Translation 12 16 ---
--- Growth Excluding Impact of above Item, on a constant currency
basis 10% 13% === === Asia, Middle East & Africa
-------------------------- Reported Growth 9% 21% Impact of
Restructuring and Impairment Charges - (0.5) --- ---- Growth
Excluding Impact of Restructuring and Impairment Charges 9 20*
Impact of Foreign Currency Translation 3 3 --- --- Growth Excluding
Impact of above Item, on a constant currency basis 12% 23% === ===
*Does not sum due to rounding Reconciliation of GAAP and Non-GAAP
Information (cont.) Reported Growth and Growth Excluding the Impact
of Restructuring and Impairment Charges and Foreign Currency
Translation (unaudited) Year Ended ----------------------- 12/26/09
----------------------- Net Operating Revenue Profit -------
--------- PepsiCo International --------------------- Reported
Growth 2.5% 10% Impact of Restructuring and Impairment Charges -
(3) --- --- Growth Excluding Impact of Restructuring and Impairment
Charges 2.5 6* Impact of Foreign Currency Translation 8 11 --- ---
Growth Excluding Impact of above Item, on a constant currency basis
11%* 17% === === Total Divisions --------------- Reported Growth -%
8% Impact of Restructuring and Impairment Charges - (6) --- ---
Growth Excluding Impact of Restructuring and Impairment Charges - 2
Impact of Foreign Currency Translation 5 5 --- --- Growth Excluding
Impact of above Item, on a constant currency basis 5% 6%* === ===
*Does not sum due to rounding DATASOURCE: PepsiCo, Inc. CONTACT:
Investor: Lynn A. Tyson, Senior Vice President, Investor Relations,
+1-914-253-3035, , Media: Dave DeCecco, Director, Media Bureau,
+1-914-253-2655, Web Site: http://www.pepsico.com/
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