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 |
Part I Financial Information | Page No. | |
Item 1. | Condensed Consolidated Financial Statements | |
Item 2. | ||
Report of Independent Registered Public Accounting Firm | ||
Item 3. | ||
Item 4. | ||
Part II Other Information | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. |
12 Weeks Ended | 24 Weeks Ended | ||||||||||||||
6/15/13 | 6/16/12 | 6/15/13 | 6/16/12 | ||||||||||||
Net Revenue | $ | 16,807 | $ | 16,458 | $ | 29,388 | $ | 28,886 | |||||||
Cost of sales | 7,898 | 7,915 | 13,732 | 13,804 | |||||||||||
Selling, general and administrative expenses | 6,013 | 6,136 | 11,079 | 10,928 | |||||||||||
Amortization of intangible assets | 27 | 30 | 50 | 55 | |||||||||||
Operating Profit | 2,869 | 2,377 | 4,527 | 4,099 | |||||||||||
Interest expense | (208 | ) | (209 | ) | (422 | ) | (407 | ) | |||||||
Interest income and other | 18 | 1 | 45 | 24 | |||||||||||
Income before income taxes | 2,679 | 2,169 | 4,150 | 3,716 | |||||||||||
Provision for income taxes | 654 | 668 | 1,040 | 1,082 | |||||||||||
Net income | 2,025 | 1,501 | 3,110 | 2,634 | |||||||||||
Less: Net income attributable to noncontrolling interests | 15 | 13 | 25 | 19 | |||||||||||
Net Income Attributable to PepsiCo | $ | 2,010 | $ | 1,488 | $ | 3,085 | $ | 2,615 | |||||||
Net Income Attributable to PepsiCo per Common Share | |||||||||||||||
Basic | $ | 1.30 | $ | 0.95 | $ | 1.99 | $ | 1.67 | |||||||
Diluted | $ | 1.28 | $ | 0.94 | $ | 1.97 | $ | 1.65 | |||||||
Weighted-average common shares outstanding | |||||||||||||||
Basic | 1,548 | 1,563 | 1,546 | 1,565 | |||||||||||
Diluted | 1,567 | 1,581 | 1,565 | 1,583 | |||||||||||
Cash dividends declared per common share | $ | 0.5675 | $ | 0.5375 | $ | 1.105 | $ | 1.0525 |
12 Weeks Ended 6/15/13 | 24 Weeks Ended 6/15/13 | |||||||||||||||||||||||
Pre-tax amounts | Tax amounts | After-tax amounts | Pre-tax amounts | Tax amounts | After-tax amounts | |||||||||||||||||||
Net income | $ | 2,025 | $ | 3,110 | ||||||||||||||||||||
Other Comprehensive Loss | ||||||||||||||||||||||||
Currency translation adjustment | $ | (718 | ) | $ | — | (718 | ) | $ | (953 | ) | $ | — | (953 | ) | ||||||||||
Cash flow hedges: | ||||||||||||||||||||||||
Reclassification of net (gains)/losses to net income | (8 | ) | 2 | (6 | ) | 51 | (19 | ) | 32 | |||||||||||||||
Net derivative gains/(losses) | 5 | (1 | ) | 4 | (18 | ) | 16 | (2 | ) | |||||||||||||||
Pension and retiree medical: | ||||||||||||||||||||||||
Reclassification of net losses to net income | 84 | (27 | ) | 57 | 163 | (54 | ) | 109 | ||||||||||||||||
Remeasurement of net liabilities and translation | 2 | (1 | ) | 1 | 45 | (13 | ) | 32 | ||||||||||||||||
Unrealized gains on securities | 20 | (10 | ) | 10 | 19 | (10 | ) | 9 | ||||||||||||||||
Other | (1 | ) | — | (16 | ) | (17 | ) | (1 | ) | (16 | ) | (17 | ) | |||||||||||
Total Other Comprehensive Loss | $ | (616 | ) | $ | (53 | ) | (669 | ) | $ | (694 | ) | $ | (96 | ) | (790 | ) | ||||||||
Comprehensive income | 1,356 | 2,320 | ||||||||||||||||||||||
Comprehensive income attributable to noncontrolling interests | (14 | ) | (23 | ) | ||||||||||||||||||||
Comprehensive Income Attributable to PepsiCo | $ | 1,342 | $ | 2,297 |
12 Weeks Ended 6/16/12 | 24 Weeks Ended 6/16/12 | ||||||||||||||||||||||
Pre-tax amounts | Tax amounts | After-tax amounts | Pre-tax amounts | Tax amounts | After-tax amounts | ||||||||||||||||||
Net income | $ | 1,501 | $ | 2,634 | |||||||||||||||||||
Other Comprehensive Loss | |||||||||||||||||||||||
Currency translation adjustment | $ | (2,231 | ) | $ | — | (2,231 | ) | $ | (544 | ) | $ | — | (544 | ) | |||||||||
Cash flow hedges: | |||||||||||||||||||||||
Reclassification of net losses to net income | 26 | (9 | ) | 17 | 38 | (14 | ) | 24 | |||||||||||||||
Net derivative losses | (22 | ) | 11 | (11 | ) | (37 | ) | 12 | (25 | ) | |||||||||||||
Pension and retiree medical: | |||||||||||||||||||||||
Reclassification of net losses to net income | 73 | (24 | ) | 49 | 140 | (47 | ) | 93 | |||||||||||||||
Remeasurement of net liabilities and translation | 17 | (5 | ) | 12 | 1 | (1 | ) | — | |||||||||||||||
Unrealized (losses)/gains on securities | (10 | ) | — | (10 | ) | 3 | — | 3 | |||||||||||||||
Other | — | — | — | — | 36 | 36 | |||||||||||||||||
Total Other Comprehensive Loss | $ | (2,147 | ) | $ | (27 | ) | (2,174 | ) | $ | (399 | ) | $ | (14 | ) | (413 | ) | |||||||
Comprehensive (loss)/income | (673 | ) | 2,221 | ||||||||||||||||||||
Comprehensive income attributable to noncontrolling interests | (11 | ) | (13 | ) | |||||||||||||||||||
Comprehensive (Loss)/Income Attributable to PepsiCo | $ | (684 | ) | $ | 2,208 |
Condensed Consolidated Statement of Cash Flows PepsiCo, Inc. and Subsidiaries (in millions, unaudited) | |||||||
24 Weeks Ended | |||||||
6/15/13 | 6/16/12 | ||||||
Operating Activities | |||||||
Net income | $ | 3,110 | $ | 2,634 | |||
Depreciation and amortization | 1,185 | 1,201 | |||||
Stock-based compensation expense | 149 | 125 | |||||
Merger and integration charges | — | 5 | |||||
Cash payments for merger and integration charges | (17 | ) | (47 | ) | |||
Restructuring and impairment charges | 30 | 110 | |||||
Cash payments for restructuring charges | (74 | ) | (140 | ) | |||
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 | (18 | ) | (88 | ) | |||
Non-cash foreign exchange loss related to Venezuela devaluation | 111 | — | |||||
Excess tax benefits from share-based payment arrangements | (83 | ) | (53 | ) | |||
Pension and retiree medical plan contributions | (180 | ) | (1,169 | ) | |||
Pension and retiree medical plan expenses | 306 | 271 | |||||
Deferred income taxes and other tax charges and credits | (189 | ) | 85 | ||||
Change in accounts and notes receivable | (1,088 | ) | (1,084 | ) | |||
Change in inventories | (659 | ) | (643 | ) | |||
Change in prepaid expenses and other current assets | (241 | ) | (196 | ) | |||
Change in accounts payable and other current liabilities | 400 | (193 | ) | ||||
Change in income taxes payable | 543 | 432 | |||||
Other, net | (270 | ) | (166 | ) | |||
Net Cash Provided by Operating Activities | 3,015 | 1,247 | |||||
Investing Activities | |||||||
Capital spending | (911 | ) | (901 | ) | |||
Sales of property, plant and equipment | 30 | 42 | |||||
Cash payments related to the transaction with Tingyi | (3 | ) | (298 | ) | |||
Acquisitions and investments in noncontrolled affiliates | (59 | ) | (49 | ) | |||
Divestitures | 174 | 14 | |||||
Short-term investments, by original maturity – three months or less, net | (4 | ) | 41 | ||||
Other investing, net | (13 | ) | 13 | ||||
Net Cash Used for Investing Activities | (786 | ) | (1,138 | ) |
Condensed Consolidated Statement of Cash Flows (continued) PepsiCo, Inc. and Subsidiaries (in millions, unaudited) | |||||||
24 Weeks Ended | |||||||
6/15/13 | 6/16/12 | ||||||
Financing Activities | |||||||
Proceeds from issuances of long-term debt | $ | 2,491 | $ | 2,733 | |||
Payments of long-term debt | (1,945 | ) | (1,034 | ) | |||
Short-term borrowings, by original maturity | |||||||
More than three months – proceeds | 6 | 53 | |||||
More than three months – payments | (481 | ) | (189 | ) | |||
Three months or less, net | 1,228 | 462 | |||||
Cash dividends paid | (1,677 | ) | (1,626 | ) | |||
Share repurchases – common | (1,028 | ) | (1,206 | ) | |||
Share repurchases – preferred | (4 | ) | (3 | ) | |||
Proceeds from exercises of stock options | 823 | 496 | |||||
Excess tax benefits from share-based payment arrangements | 83 | 53 | |||||
Acquisition of noncontrolling interests | (20 | ) | (12 | ) | |||
Other financing | (3 | ) | (19 | ) | |||
Net Cash Used for Financing Activities | (527 | ) | (292 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (206 | ) | (21 | ) | |||
Net Increase/(Decrease) in Cash and Cash Equivalents | 1,496 | (204 | ) | ||||
Cash and Cash Equivalents, Beginning of Year | 6,297 | 4,067 | |||||
Cash and Cash Equivalents, End of Period | $ | 7,793 | $ | 3,863 |
Condensed Consolidated Balance Sheet PepsiCo, Inc. and Subsidiaries (in millions) | |||||||
(Unaudited) | |||||||
6/15/13 | 12/29/12 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 7,793 | $ | 6,297 | |||
Short-term investments | 346 | 322 | |||||
Accounts and notes receivable, less allowance: 6/13 – $164, 12/12 – $157 | 7,981 | 7,041 | |||||
Inventories | |||||||
Raw materials | 1,910 | 1,875 | |||||
Work-in-process | 351 | 173 | |||||
Finished goods | 1,870 | 1,533 | |||||
4,131 | 3,581 | ||||||
Prepaid expenses and other current assets | 1,712 | 1,479 | |||||
Total Current Assets | 21,963 | 18,720 | |||||
Property, Plant and Equipment | 35,959 | 36,162 | |||||
Accumulated Depreciation | (17,569 | ) | (17,026 | ) | |||
18,390 | 19,136 | ||||||
Amortizable Intangible Assets, net | 1,705 | 1,781 | |||||
Goodwill | 16,719 | 16,971 | |||||
Other nonamortizable intangible assets | 14,469 | 14,744 | |||||
Nonamortizable Intangible Assets | 31,188 | 31,715 | |||||
Investments in Noncontrolled Affiliates | 1,839 | 1,633 | |||||
Other Assets | 1,568 | 1,653 | |||||
Total Assets | $ | 76,653 | $ | 74,638 |
Condensed Consolidated Balance Sheet (continued) PepsiCo, Inc. and Subsidiaries (in millions except per share amounts) | |||||||
(Unaudited) | |||||||
6/15/13 | 12/29/12 | ||||||
Liabilities and Equity | |||||||
Current Liabilities | |||||||
Short-term obligations | $ | 6,298 | $ | 4,815 | |||
Accounts payable and other current liabilities | 12,101 | 11,903 | |||||
Income taxes payable | 763 | 371 | |||||
Total Current Liabilities | 19,162 | 17,089 | |||||
Long-Term Debt Obligations | 23,212 | 23,544 | |||||
Other Liabilities | 6,414 | 6,543 | |||||
Deferred Income Taxes | 5,100 | 5,063 | |||||
Total Liabilities | 53,888 | 52,239 | |||||
Commitments and Contingencies | |||||||
Preferred Stock, no par value | 41 | 41 | |||||
Repurchased Preferred Stock | (168 | ) | (164 | ) | |||
PepsiCo Common Shareholders’ Equity | |||||||
Common stock, par value 12/3¢ per share (authorized 3,600 shares, issued, net of repurchased common stock at par value: 1,547 and 1,544 shares, respectively) | 26 | 26 | |||||
Capital in excess of par value | 3,995 | 4,178 | |||||
Retained earnings | 44,523 | 43,158 | |||||
Accumulated other comprehensive loss | (6,275 | ) | (5,487 | ) | |||
Repurchased common stock, in excess of par value (319 and 322 shares, respectively) | (19,483 | ) | (19,458 | ) | |||
Total PepsiCo Common Shareholders’ Equity | 22,786 | 22,417 | |||||
Noncontrolling interests | 106 | 105 | |||||
Total Equity | 22,765 | 22,399 | |||||
Total Liabilities and Equity | $ | 76,653 | $ | 74,638 |
24 Weeks Ended | |||||||||||||
6/15/13 | 6/16/12 | ||||||||||||
Shares | Amount | Shares | Amount | ||||||||||
Preferred Stock | 0.8 | $ | 41 | 0.8 | $ | 41 | |||||||
Repurchased Preferred Stock | |||||||||||||
Balance, beginning of year | (0.6 | ) | (164 | ) | (0.6 | ) | (157 | ) | |||||
Redemptions | — | (4 | ) | — | (3 | ) | |||||||
Balance, end of period | (0.6 | ) | (168 | ) | (0.6 | ) | (160 | ) | |||||
Common Stock | |||||||||||||
Balance, beginning of year | 1,544 | 26 | 1,565 | 26 | |||||||||
Repurchased common stock | 3 | — | (6 | ) | — | ||||||||
Balance, end of period | 1,547 | 26 | 1,559 | 26 | |||||||||
Capital in Excess of Par Value | |||||||||||||
Balance, beginning of year | 4,178 | 4,461 | |||||||||||
Stock-based compensation expense | 149 | 125 | |||||||||||
Stock option exercises/RSUs converted (a) | (249 | ) | (275 | ) | |||||||||
Withholding tax on RSUs converted | (70 | ) | (60 | ) | |||||||||
Other | (13 | ) | (28 | ) | |||||||||
Balance, end of period | 3,995 | 4,223 | |||||||||||
Retained Earnings | |||||||||||||
Balance, beginning of year | 43,158 | 40,316 | |||||||||||
Net income attributable to PepsiCo | 3,085 | 2,615 | |||||||||||
Cash dividends declared – common | (1,710 | ) | (1,649 | ) | |||||||||
Cash dividends declared – preferred | — | (1 | ) | ||||||||||
Cash dividends declared – RSUs | (10 | ) | (7 | ) | |||||||||
Balance, end of period | 44,523 | 41,274 | |||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||
Balance, beginning of year | (5,487 | ) | (6,229 | ) | |||||||||
Currency translation adjustment | (951 | ) | (538 | ) | |||||||||
Cash flow hedges, net of tax: | |||||||||||||
Reclassification of net losses to net income | 32 | 24 | |||||||||||
Net derivative losses | (2 | ) | (25 | ) | |||||||||
Pension and retiree medical, net of tax: | |||||||||||||
Reclassification of net losses to net income | 109 | 93 | |||||||||||
Remeasurement of net liabilities and translation | 32 | — | |||||||||||
Unrealized gains on securities, net of tax | 9 | 3 | |||||||||||
Other | (17 | ) | 36 | ||||||||||
Balance, end of period | (6,275 | ) | (6,636 | ) | |||||||||
Repurchased Common Stock | |||||||||||||
Balance, beginning of year | (322 | ) | (19,458 | ) | (301 | ) | (17,870 | ) | |||||
Share repurchases | (15 | ) | (1,123 | ) | (19 | ) | (1,253 | ) | |||||
Stock option exercises | 15 | 962 | 11 | 676 | |||||||||
Other | 3 | 136 | 2 | 136 | |||||||||
Balance, end of period | (319 | ) | (19,483 | ) | (307 | ) | (18,311 | ) | |||||
Total PepsiCo Common Shareholders’ Equity | 22,786 | 20,576 | |||||||||||
Noncontrolling Interests | |||||||||||||
Balance, beginning of year | 105 | 311 | |||||||||||
Net income attributable to noncontrolling interests | 25 | 19 | |||||||||||
Distributions to noncontrolling interests | (15 | ) | (15 | ) | |||||||||
Currency translation adjustment | (2 | ) | (6 | ) | |||||||||
Acquisitions and divestitures | (7 | ) | (171 | ) | |||||||||
Balance, end of period | 106 | 138 | |||||||||||
Total Equity | $ | 22,765 | $ | 20,595 |
(a) | Includes total tax benefits of $31 million in 2013 and $27 million in 2012. |
1. | PepsiCo Americas Foods, which includes Frito-Lay North America (FLNA), Quaker Foods North America (QFNA) and all of our Latin American food and snack businesses (LAF); |
2. | PepsiCo Americas Beverages (PAB), which includes all of our North American and Latin American beverage businesses; |
3. | PepsiCo Europe, which includes all beverage, food and snack businesses in Europe and South Africa; and |
4. | PepsiCo Asia, Middle East and Africa (AMEA), which includes all beverage, food and snack businesses in AMEA, excluding South Africa. |
• | FLNA, |
• | QFNA, |
• | LAF, |
• | PAB, |
• | Europe, and |
• | AMEA. |
12 Weeks Ended | 24 Weeks Ended | ||||||||||||||
6/15/13 | 6/16/12 | 6/15/13 | 6/16/12 | ||||||||||||
Net Revenue | |||||||||||||||
FLNA | $ | 3,332 | $ | 3,193 | $ | 6,455 | $ | 6,203 | |||||||
QFNA | 577 | 583 | 1,211 | 1,206 | |||||||||||
LAF | 2,116 | 1,948 | 3,483 | 3,183 | |||||||||||
PAB | 5,260 | 5,352 | 9,680 | 9,800 | |||||||||||
Europe | 3,653 | 3,617 | 5,595 | 5,462 | |||||||||||
AMEA | 1,869 | 1,765 | 2,964 | 3,032 | |||||||||||
$ | 16,807 | $ | 16,458 | $ | 29,388 | $ | 28,886 |
12 Weeks Ended | 24 Weeks Ended | ||||||||||||||
6/15/13 | 6/16/12 | 6/15/13 | 6/16/12 | ||||||||||||
Operating Profit | |||||||||||||||
FLNA | $ | 906 | $ | 835 | $ | 1,734 | $ | 1,615 | |||||||
QFNA | 133 | 154 | 313 | 341 | |||||||||||
LAF | 318 | 271 | 534 | 454 | |||||||||||
PAB | 882 | 840 | 1,447 | 1,365 | |||||||||||
Europe | 425 | 453 | 513 | 534 | |||||||||||
AMEA | 524 | 165 | 708 | 313 | |||||||||||
Total division | 3,188 | 2,718 | 5,249 | 4,622 | |||||||||||
Corporate Unallocated | |||||||||||||||
Mark-to-market net (losses)/gains | (39 | ) | (79 | ) | (55 | ) | 5 | ||||||||
Merger and integration charges | — | (2 | ) | — | (2 | ) | |||||||||
Restructuring and impairment charges | (1 | ) | (3 | ) | (2 | ) | (1 | ) | |||||||
Venezuela currency devaluation | — | — | (124 | ) | — | ||||||||||
Other | (279 | ) | (257 | ) | (541 | ) | (525 | ) | |||||||
$ | 2,869 | $ | 2,377 | $ | 4,527 | $ | 4,099 |
Total Assets | |||||||
6/15/13 | 12/29/12 | ||||||
FLNA | $ | 5,458 | $ | 5,332 | |||
QFNA | 1,027 | 966 | |||||
LAF | 4,903 | 4,993 | |||||
PAB | 31,639 | 30,899 | |||||
Europe | 19,121 | 19,218 | |||||
AMEA | 5,673 | 5,738 | |||||
Total division | 67,821 | 67,146 | |||||
Corporate (a) | 8,832 | 7,492 | |||||
$ | 76,653 | $ | 74,638 |
(a) | Corporate assets consist principally of cash and cash equivalents, short-term investments, derivative instruments and property, plant and equipment. |
12 Weeks Ended | 24 Weeks Ended | |||||||||||||||
6/15/13 | 6/16/12 | 6/15/13 | 6/16/12 | |||||||||||||
FLNA | $ | 2 | $ | 24 | $ | 4 | $ | 32 | ||||||||
QFNA | 1 | 1 | — | 6 | ||||||||||||
LAF | 1 | 6 | 5 | 12 | ||||||||||||
PAB | 5 | 35 | 5 | 43 | ||||||||||||
Europe (a) | 8 | — | 12 | (1 | ) | |||||||||||
AMEA | 1 | 8 | 2 | 17 | ||||||||||||
Corporate | 1 | 3 | 2 | 1 | ||||||||||||
$ | 19 | $ | 77 | $ | 30 | $ | 110 |
(a) | Income balance represents adjustments of previously recorded amounts. |
Severance and Other Employee Costs | Asset Impairment | Other Costs | Total | ||||||||||||
Liability as of December 29, 2012 | $ | 91 | $ | — | $ | 36 | $ | 127 | |||||||
2013 restructuring charges | 11 | 1 | 18 | 30 | |||||||||||
Cash payments | (50 | ) | — | (24 | ) | (74 | ) | ||||||||
Non-cash charges and other | (5 | ) | (1 | ) | (5 | ) | (11 | ) | |||||||
Liability as of June 15, 2013 | $ | 47 | $ | — | $ | 25 | $ | 72 |
Severance and Other Employee Costs | Other Costs | Total | |||||||||
Liability as of December 29, 2012 | $ | 18 | $ | 6 | $ | 24 | |||||
2013 merger and integration charges (a) | (2 | ) | 2 | — | |||||||
Cash payments | (13 | ) | (4 | ) | (17 | ) | |||||
Non-cash charges and other | (1 | ) | — | (1 | ) | ||||||
Liability as of June 15, 2013 | $ | 2 | $ | 4 | $ | 6 |
(a) | Income balance represents adjustments of previously recorded amounts. |
6/15/13 | 12/29/12 | ||||||||||||||||||||||||
Amortizable intangible assets, net | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | |||||||||||||||||||
Acquired franchise rights | $ | 918 | $ | (75 | ) | $ | 843 | $ | 931 | $ | (67 | ) | $ | 864 | |||||||||||
Reacquired franchise rights | 108 | (75 | ) | 33 | 110 | (68 | ) | 42 | |||||||||||||||||
Brands | 1,396 | (974 | ) | 422 | 1,422 | (980 | ) | 442 | |||||||||||||||||
Other identifiable intangibles | 693 | (286 | ) | 407 | 736 | (303 | ) | 433 | |||||||||||||||||
$ | 3,115 | $ | (1,410 | ) | $ | 1,705 | $ | 3,199 | $ | (1,418 | ) | $ | 1,781 |
Balance | Acquisitions/ (Divestitures) | Translation and Other | Balance | ||||||||||||
12/29/12 | 6/15/13 | ||||||||||||||
FLNA | |||||||||||||||
Goodwill | $ | 316 | $ | — | $ | (4 | ) | $ | 312 | ||||||
Brands | 31 | — | (1 | ) | 30 | ||||||||||
347 | — | (5 | ) | 342 | |||||||||||
QFNA | |||||||||||||||
Goodwill | 175 | — | — | 175 | |||||||||||
LAF | |||||||||||||||
Goodwill | 716 | — | (14 | ) | 702 | ||||||||||
Brands | 223 | — | (5 | ) | 218 | ||||||||||
939 | — | (19 | ) | 920 | |||||||||||
PAB | |||||||||||||||
Goodwill | 9,988 | 18 | (15 | ) | 9,991 | ||||||||||
Reacquired franchise rights | 7,337 | 4 | (23 | ) | 7,318 | ||||||||||
Acquired franchise rights | 1,573 | (8 | ) | (5 | ) | 1,560 | |||||||||
Brands | 153 | — | (2 | ) | 151 | ||||||||||
19,051 | 14 | (45 | ) | 19,020 | |||||||||||
Europe | |||||||||||||||
Goodwill | 5,214 | — | (199 | ) | 5,015 | ||||||||||
Reacquired franchise rights | 772 | — | (30 | ) | 742 | ||||||||||
Acquired franchise rights | 223 | — | (4 | ) | 219 | ||||||||||
Brands | 4,284 | — | (190 | ) | 4,094 | ||||||||||
10,493 | — | (423 | ) | 10,070 | |||||||||||
AMEA | |||||||||||||||
Goodwill | 562 | (4 | ) | (34 | ) | 524 | |||||||||
Brands | 148 | — | (11 | ) | 137 | ||||||||||
710 | (4 | ) | (45 | ) | 661 | ||||||||||
Total goodwill | 16,971 | 14 | (266 | ) | 16,719 | ||||||||||
Total reacquired franchise rights | 8,109 | 4 | (53 | ) | 8,060 | ||||||||||
Total acquired franchise rights | 1,796 | (8 | ) | (9 | ) | 1,779 | |||||||||
Total brands | 4,839 | — | (209 | ) | 4,630 | ||||||||||
$ | 31,715 | $ | 10 | $ | (537 | ) | $ | 31,188 |
6/15/13 | 12/29/12 | ||||||
Balance, beginning of year | $ | 2,425 | $ | 2,167 | |||
Additions for tax positions related to the current year | 109 | 275 | |||||
Additions for tax positions from prior years | 7 | 161 | |||||
Reductions for tax positions from prior years | (99 | ) | (172 | ) | |||
Settlement payments | (68 | ) | (17 | ) | |||
Statute of limitations expiration | (19 | ) | (3 | ) | |||
Translation and other | (7 | ) | 14 | ||||
Balance, end of period | $ | 2,348 | $ | 2,425 |
12 Weeks Ended | 24 Weeks Ended | |||||||||||||||
6/15/13 | 6/16/12 | 6/15/13 | 6/16/12 | |||||||||||||
Stock-based compensation expense | $ | 72 | $ | 69 | $ | 149 | $ | 125 | ||||||||
Merger and integration charges | — | — | — | 1 | ||||||||||||
Restructuring and impairment benefits | — | — | — | (7 | ) | |||||||||||
Total | $ | 72 | $ | 69 | $ | 149 | $ | 119 |
24 Weeks Ended | |||||
6/15/13 | 6/16/12 | ||||
Expected life | 6 years | 6 years | |||
Risk free interest rate | 1.0 | % | 1.3 | % | |
Expected volatility (a) | 17 | % | 17 | % | |
Expected dividend yield | 2.7 | % | 3.0 | % |
(a) | Reflects movements in our stock price over the most recent historical period equivalent to the expected life. |
12 Weeks Ended | |||||||||||||||||||||||
Pension | Retiree Medical | ||||||||||||||||||||||
6/15/13 | 6/16/12 | 6/15/13 | 6/16/12 | 6/15/13 | 6/16/12 | ||||||||||||||||||
U.S. | International | ||||||||||||||||||||||
Service cost | $ | 108 | $ | 94 | $ | 27 | $ | 24 | $ | 11 | $ | 11 | |||||||||||
Interest cost | 122 | 123 | 30 | 28 | 12 | 15 | |||||||||||||||||
Expected return on plan assets | (190 | ) | (183 | ) | (40 | ) | (35 | ) | (6 | ) | (5 | ) | |||||||||||
Amortization of prior service cost/(benefit) | 5 | 4 | 1 | 1 | (5 | ) | (6 | ) | |||||||||||||||
Amortization of net losses | 66 | 59 | 16 | 12 | — | — | |||||||||||||||||
111 | 97 | 34 | 30 | 12 | 15 | ||||||||||||||||||
Settlement loss | — | — | 1 | 3 | — | — | |||||||||||||||||
Special termination benefits | 2 | — | — | — | — | — | |||||||||||||||||
Total expense | $ | 113 | $ | 97 | $ | 35 | $ | 33 | $ | 12 | $ | 15 | |||||||||||
24 Weeks Ended | |||||||||||||||||||||||
Pension | Retiree Medical | ||||||||||||||||||||||
6/15/13 | 6/16/12 | 6/15/13 | 6/16/12 | 6/15/13 | 6/16/12 | ||||||||||||||||||
U.S. | International | ||||||||||||||||||||||
Service cost | $ | 216 | $ | 189 | $ | 49 | $ | 42 | $ | 21 | $ | 23 | |||||||||||
Interest cost | 243 | 246 | 52 | 48 | 25 | 30 | |||||||||||||||||
Expected return on plan assets | (380 | ) | (367 | ) | (70 | ) | (61 | ) | (12 | ) | (10 | ) | |||||||||||
Amortization of prior service cost/(benefit) | 9 | 8 | 1 | 1 | (10 | ) | (12 | ) | |||||||||||||||
Amortization of net losses | 133 | 119 | 29 | 22 | — | — | |||||||||||||||||
221 | 195 | 61 | 52 | 24 | 31 | ||||||||||||||||||
Settlement/curtailment (gain)/loss | — | (7 | ) | 1 | 3 | — | — | ||||||||||||||||
Special termination benefits | 3 | 4 | — | — | — | 4 | |||||||||||||||||
Total expense | $ | 224 | $ | 192 | $ | 62 | $ | 55 | $ | 24 | $ | 35 |
• | $625 million of floating rate notes maturing in February 2016, which bear interest at a rate equal to the three-month London Inter-Bank Offered Rate (LIBOR) plus 21 basis points; |
• | $625 million of 0.700% senior notes maturing in February 2016; and |
• | $1.250 billion of 2.750% senior notes maturing in March 2023. |
Payments Due by Period | |||||||||||||||||||
Total | 2013 | 2014 – 2015 | 2016 – 2017 | 2018 and beyond | |||||||||||||||
Long-term debt obligations (b) | $ | 22,681 | $ | — | $ | 3,792 | $ | 4,355 | $ | 14,534 | |||||||||
Interest on debt obligations (c) | 8,698 | 511 | 1,560 | 1,321 | 5,306 | ||||||||||||||
Operating leases | 1,993 | 256 | 700 | 396 | 641 | ||||||||||||||
Purchasing commitments (d) | 1,959 | 449 | 1,082 | 208 | 220 | ||||||||||||||
Marketing commitments (d) | 2,245 | 163 | 630 | 492 | 960 | ||||||||||||||
$ | 37,576 | $ | 1,379 | $ | 7,764 | $ | 6,772 | $ | 21,661 | ||||||||||
(a) | Based on quarter-end foreign exchange rates. |
(b) | Excludes $3,656 million related to current maturities of long-term debt, $273 million related to the increase in carrying value of long-term debt reflecting the gains on our fair value interest rate swaps and $258 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) in February 2010. |
(c) | Interest payments on floating-rate debt are estimated using interest rates effective as of June 15, 2013. |
(d) | Primarily reflects non-cancelable commitments as of June 15, 2013. |
12 Weeks Ended | 24 Weeks Ended | |||||||||
6/15/13 | 6/15/13 | |||||||||
Amount Reclassified from Accumulated Other Comprehensive Loss | Amount Reclassified from Accumulated Other Comprehensive Loss | Affected Line Item in the Condensed Consolidated Statement of Income | ||||||||
Losses/(gains) on cash flow hedges: | ||||||||||
Foreign exchange contracts | $ | 1 | $ | 4 | Cost of sales | |||||
Interest rate derivatives | (18 | ) | 33 | Interest expense | ||||||
Commodity contracts | 8 | 14 | Cost of sales | |||||||
Commodity contracts | 1 | — | Selling, general and administrative expenses | |||||||
Total before tax | (8 | ) | 51 | |||||||
Tax amounts | 2 | (19 | ) | |||||||
(Gains)/losses after tax | $ | (6 | ) | $ | 32 | |||||
Amortization of pension and retiree medical items: | ||||||||||
Net prior service cost (a) | $ | 1 | $ | — | ||||||
Net actuarial losses (a) | 83 | 163 | ||||||||
Total before tax | 84 | 163 | ||||||||
Tax amounts | (27 | ) | (54 | ) | ||||||
Losses after tax | $ |