In the news release, PepsiCo Reports Fourth Quarter and Full Year 2012 Results, issued Feb. 14, 2013 by PepsiCo, Inc. over PR Newswire, we are advised by the company that the last sentence in the third paragraph under "2013 Outlook" should read "within the company's long-term capital spending target of less than or equal to 5 percent of net revenue." rather than "within the company's long-term capital spending target of less than 5 percent of net revenue." as originally issued inadvertently. The complete, corrected release follows:

PepsiCo Reports Fourth Quarter and Full Year 2012 Results -- Fourth quarter core(1) EPS $1.09 and reported EPS $1.06 -- Full year core EPS $4.10 and reported EPS $3.92 -- Organic(1) revenue grew 5 percent in the fourth quarter and in the full year. Reported net revenue declined 1 percent for the quarter and 1.5 percent for the full year, reflecting the impact of previously announced structural changes, a 53rd week in 2011 and unfavorable foreign exchange translation -- For 2013, company targets mid-single-digit organic revenue growth and 7 percent core constant currency(1) EPS growth -- Company expects to return approximately $6.4 billion to shareholders through dividends and share repurchases in 2013 -- Company announces quarterly dividend increase of 5.6 percent, starting in June 2013

PURCHASE, N.Y., Feb. 14, 2013 /PRNewswire/ -- PepsiCo, Inc. (NYSE: PEP) today reported core earnings per share of $1.09 for the fourth quarter of 2012 and $4.10 for the full year, on organic revenue growth of 5 percent for both the quarter and the full year.

"In 2012, we delivered 5 percent organic revenue growth, reflecting PepsiCo (PEP)'s many strengths: we're well positioned in attractive and highly complementary growth categories, our portfolio is diversified with products that have broad appeal and a global footprint that is balanced, and we have an enviable portfolio of iconic brands," said Chairman and CEO Indra Nooyi.

"We also took a number of significant steps in 2012 that will even better position our business for sustainable, long-term growth; we increased our brand investment, stepped up our innovation, improved our marketplace execution and embarked on an aggressive productivity program that will contribute to our profitability and act as a funding source of future investment.

"Our recent brand-building initiatives and innovation across the portfolio, including Quaker Real Medleys, Gatorade Energy Chews, Pepsi Next and Doritos Locos Tacos, are translating into success in the marketplace."

"Just as importantly, we remain highly focused on generating attractive returns for our shareholders.  We returned $6.5 billion to shareholders in 2012 through a combination of share repurchases and dividends, and today announced an increase in our quarterly dividend that will take effect in June.

"We're encouraged by the progress we're making and expect performance in the coming year to be consistent with our long-term targets." 

(1) Please refer to the Glossary for the definitions of Non-GAAP financial measures including core, constant currency, organic and management operating cash flow.

Operating and Marketplace Highlights

• Achieved 5 percent organic revenue growth in the quarter and for the full year with a good balance between volume growth(2) and price realization.
• PepsiCo Americas Foods organic revenue grew 8 percent in the quarter driven by organic revenue gains in all divisions, including Frito-Lay North America, Quaker Foods North America and Latin America Foods. Reported net revenue increased 3.5 percent in the quarter, with declines at FLNA and QFNA due to the impact of an extra reporting week in the fourth quarter of 2011.
• Frito-Lay North America and PepsiCo Americas Beverages market share trends in the U.S. improved sequentially in the fourth quarter reflecting disciplined execution and significant investments in advertising and marketing.
• AMEA organic revenue grew 8 percent in the quarter driven by low-double-digit organic volume growth in snacks and mid-single-digit organic volume growth in beverages. Reported net revenue in AMEA declined 13 percent in the fourth quarter, reflecting the impact of structural changes.
• On an organic basis, emerging and developing market revenue grew 9 percent in the quarter. On a reported basis, emerging and developing market net revenue was even with the prior year quarter, primarily due to beverage refranchisings in China and Mexico.    
• Substantially increased advertising and marketing expense by 50 basis points to 5.7 percent of net revenue during 2012, supporting the company's long-term brand-building initiatives.
• Delivered more than $1 billion of productivity savings during 2012 through disciplined cost management programs. The company remains on track to deliver $3 billion in productivity savings by 2015.
• Management operating cash flow (excluding certain items) was $7.4 billion in 2012. Cash flow from operations was $8.5 billion.
• Delivered a 20 percent reduction in net capital spending to 4.0 percent of 2012 net revenue.
• Returned $6.5 billion to shareholders in 2012 through $3.2 billion in share repurchases and $3.3 billion in dividends.

(2) All 2012 volume growth measures reflect an adjustment to the base year (2011) for divestitures that occurred in 2012 and 2011, and exclude the impact of an extra reporting week in 2011.

Summary of Fourth Quarter Financial Performance

• Organic revenue grew 5 percent and reported net revenue declined 1 percent. Organic revenue growth was driven by balanced volume growth and effective net pricing. Structural changes, primarily refranchisings in China and Mexico, negatively impacted reported net revenue performance by 3 percentage points. An extra reporting week in the prior year quarter negatively impacted reported net revenue performance by 3 percentage points and foreign exchange translation had less than a 1 percent unfavorable impact in the quarter. 
• Core constant currency operating profit declined 7 percent reflecting the impact of increased commodity costs, increased advertising and marketing expense, higher pension expense, lapping gains related to certain divestitures and asset disposals in the fourth quarter of 2011, partially offset by productivity initiatives. Reported operating profit declined 1.5 percent and included the impacts of a lump sum pension settlement charge in the current year and an extra reporting week in 2011, partially offset by lower restructuring and certain impairment charges and merger and integration charges in the current year. 
• The company's core effective tax rate was 26.7 percent, below the prior year quarter primarily due to an adjustment to deferred tax liabilities. The company's reported effective tax rate was 15.4 percent reflecting the benefit of a tax court decision. 
• Core EPS was $1.09 and reported EPS was $1.06. Core EPS excludes a $0.14 per share tax benefit related to a tax court decision, an $0.08 per share charge related to a pension lump sum settlement, a $0.06 per share impact of certain restructuring, impairment and integration charges, and a $0.02 per share impact from mark-to-market net losses on commodity hedges. Mark-to-market gains and losses on commodity hedges are subsequently reflected in core division results when the divisions take delivery of the underlying commodity.

Summary Fourth Quarter 2012 Performance (Percent Growth)

	Reported	Core Constant Currencya	Organicb
Volumec
Snacks			4.5
Beverages			2
Net Revenue	(1)		5
Operating Profitd	(1.5)	(7)
EPS	19	(5)

 

	Volumec	Net Revenue	Operating Profitd		Organic Revenue	Core Constant Currency Operating Profit
PAF	6e	3.5	2		8	(2)
FLNA	5	(1)	3.5		5	3
LAF	8e	13	8		13	(4.5)
QFNA	6	(0.5)	(17)		5	(18)
PAB	-	(4)	(1)		2.5	(8)
Europe	1/(1)f	1	38		3.5	(10)
AMEA	12/13f,g	(13)	(25)		8	(20)
Total Divisions	6/4f	(1)	2.5		5	(5)
Total PepsiCo		(1)	(1.5)		5	(7)

 

^a Core constant currency results are non-GAAP financial measures that exclude certain items affecting comparability. For more information about our core constant currency results, see "Reconciliation of GAAP and Non-GAAP Information" in the attached exhibits. Please refer to the Glossary for definitions of "Core" and "Constant currency".

^b Organic results are non-GAAP financial measures that adjust for impacts of acquisitions, divestitures and other structural changes, foreign exchange translation and a 53^rd week in the fourth quarter of 2011. Please refer to the Glossary for additional information regarding organic results.

^c Volume growth measures adjusted to exclude the impact of a 53^rd week in the fourth quarter of the base year (2011).

^d The reported operating profit performance was impacted by certain items excluded from our core results in both 2012 and 2011. See "Reconciliation of GAAP and Non-GAAP Information" in the attached exhibits for more information about these items. Please refer to the Glossary for the definition of "Core".

^e PAF and LAF volumes include 2 percentage points and 4 percentage points of benefit, respectively, related to acquisitions.

^f Snacks/Beverages. 

^g AMEA beverage volume includes an estimated benefit of 6 percentage points relating to co-branded juice drinks in China, after adjustment to include co-branded juice drink volume in China for the fourth quarter of the base year (2011).

Summary Full Year 2012 Performance (Percent Growth)

				Reported	Core Constant  Currencya	Organicb
Volumec
Snacks						3
Beverages						1
Net Revenue				(1.5)		5
Operating Profitd				(5)	(5)
EPS				(3)	(5)

	Volumec	Net Revenue	Operating Profitd		Organic Revenue	Core Constant Currency Operating Profit
PAF	5e	4	(2)		7	-
FLNA	1	2	1		4	2
LAF	13e	9	(2)		14	4
QFNA	1	(1)	(13)		1	(12)
PAB	(1)	(4.5)	(10)		1.5	(11)
Europe	3/1f,g	(1)	10		4	3
AMEA	14/10f,h	(10)	(16)		10	4
Total Divisions	6/2.5 f	(1.5)	(4)		5	(3)
Total PepsiCo		(1.5)	(5)		5	(5)

^a Core constant currency results are non-GAAP financial measures that exclude certain items affecting comparability. For more information about our core constant currency results, see "Reconciliation of GAAP and Non-GAAP Information" in the attached exhibits. Please refer to the Glossary for definitions of "Core" and "Constant currency".

^b Organic results are non-GAAP financial measures that adjust for impacts of acquisitions, divestitures and other structural changes, foreign exchange translation and a 53^rd week in 2011. Please refer to the Glossary for additional information regarding organic results.

^c Volume growth measures adjusted to exclude the impact of a 53^rd week in the fourth quarter of the base year (2011).

^d The reported operating profit performance was impacted by certain items excluded from our core results in both 2012 and 2011. See "Reconciliation of GAAP and Non-GAAP Information" in the attached exhibits for more information about these items. Please refer to the Glossary for the definition of "Core".

^e PAF and LAF volumes include 3 and 9 percentage points of benefit, respectively, related to acquisitions.

^f Snacks/Beverages. 

^g Europe snacks and beverage volumes include 2 percentage points and 1 percentage point of benefit, respectively, related to acquisitions.

^h AMEA beverage volume includes an estimated benefit of 4 percentage points relating to co-branded juice drinks in China, after adjustment to include co-branded juice drink volume in China for the fourth quarter of the base year (2011).

Division Operating Summaries

PepsiCo Americas Foods (PAF)

Organic revenue grew 8 percent in the quarter driven by 5 percentage points of organic volume growth and 3 percentage points of effective net pricing. Reported net revenue increased 3.5 percent reflecting a 4-percentage-point negative impact from the extra reporting week in 2011, and a less than 1-percentage-point unfavorable impact from foreign exchange translation. Core constant currency operating profit declined 2 percent, reflecting higher commodity costs and increased advertising and marketing investments across all PAF divisions, partially offset by productivity initiatives and effective net pricing.

For the full year, organic revenue grew 7 percent driven by 2 percentage points of organic volume growth and 5 percentage points of effective net pricing. Reported net revenue grew 4 percent reflecting a 1-percentage-point negative impact from the extra reporting week in 2011, and a 2-percentage-point unfavorable impact from foreign exchange translation. Core constant currency operating profit was even with the prior year, reflecting revenue gains and productivity initiatives, offset by higher commodity costs and increased advertising and marketing investments across all PAF divisions.

Frito-Lay North America (FLNA)

Organic revenue increased 5 percent in the quarter, reflecting a 5-percentage-point increase in organic volume and even effective net pricing. Reported revenue declined 1 percent reflecting the impact from the extra reporting week in the prior year quarter. For the full year, organic revenue grew 4 percent, reflecting a 1-percentage-point contribution from organic volume and 3 percentage points of effective net pricing. Full year reported revenue grew 2 percent, including 2 percentage points of negative impact from the extra reporting week in 2011.

Core constant currency operating profit grew 3 percent in the quarter, and 2 percent for the full year. These results reflect organic revenue gains and productivity initiatives, partially offset by higher commodity costs and a significant increase in advertising and marketing investments.

Latin America Foods (LAF)

Organic revenue grew 13 percent in the quarter, reflecting 3 percentage points of organic volume growth and 10 percentage points of effective net pricing. Reported net revenue also grew 13 percent in the quarter, with a 1-percentage-point benefit from acquisitions and divestitures offset by a 1-percentage-point unfavorable foreign exchange translation impact.  

Full-year organic revenue grew 14 percent, reflecting 4 percentage points of organic volume growth and 10 percentage points of effective net pricing. Reported net revenue increased 9 percent and included a 2-percentage-point benefit from acquisitions and divestitures and a 7-percentage-point unfavorable impact from foreign exchange translation.

Core constant currency operating profit declined 4.5 percent in the quarter and rose 4 percent for the full year. These results reflect revenue growth and productivity gains offset by increased advertising and marketing expense and commodity cost inflation in both periods as well as lapping a gain from the sale of a fish business in Brazil in the fourth quarter of 2011.

Quaker Foods North America (QFNA)

Organic revenue grew 5 percent in the quarter and 1 percent for the full year driven primarily by organic volume gains. Reported net revenue declined 0.5 percent in the quarter and 1 percent for the full year, reflecting the impact from the extra reporting week in 2011.

Core constant currency operating profit declined 18 percent for the quarter and declined 12 percent for the full year. This was driven principally by higher commodity costs and increased advertising and marketing expense in the quarter and the full year, and by lapping gains from a divestiture and an asset sale in the fourth quarter of 2011. 

PepsiCo Americas Beverages (PAB)

Organic revenue grew 2.5 percent in the quarter reflecting organic volume that was even with the prior year and 2.5 percentage points of effective net pricing. Non-carbonated beverages volume grew low-single-digits led by mid-single-digit volume growth at Gatorade, and CSD volume declined approximately 1 percent in the quarter. 

For the full year, organic revenue grew 1.5 percent reflecting a 1-percentage-point organic volume decline, 3 percentage points of effective net pricing, and the impact of concentrate shipment timing. 

Reported net revenue declines included the impacts of refranchising the division's Mexican bottling operation in 2011, which had a negative 2-percentage-point impact for the quarter and a negative 5-percentage-point impact for the full year, and of the extra reporting week in 2011, which had a negative 5-percentage-point impact for the quarter, and a negative 1-percentage-point impact for the year.

Core constant currency operating profit declined 8 percent in the quarter and 11 percent for the full year, primarily reflecting increased commodity costs and higher advertising and marketing expense, partially offset by favorable effective net pricing and productivity initiatives. Operating profit comparisons were also impacted by a gain associated with the refranchising of the division's Mexico bottling operation in the fourth quarter of 2011.

Europe

Organic revenue grew 3.5 percent in the quarter and 4 percent for the full year. This reflected even organic volume and 3 percentage points of effective net pricing in the quarter and even organic volume performance on 4 percentage points of effective net pricing for the full year. Continued healthy volume growth in Russia and parts of Eastern Europe partially offset softer trends in Western Europe for the quarter and the full year. 

Reported net revenue grew 1 percent in the quarter, including a 1-percentage-point unfavorable impact from foreign exchange translation, and a 1-percentage-point negative impact from the extra reporting week in 2011. Reported net revenue declined 1 percent for the full year, including a 7-percentage-point unfavorable impact from foreign exchange translation.  

Core constant currency operating profit declined 10 percent in the quarter and grew 3 percent for the full year, reflecting significantly higher marketing investments and commodity cost inflation partially offset by productivity savings. 

Asia, Middle East & Africa (AMEA)

Organic revenue grew 8 percent in the quarter, led by low double-digit organic volume growth in snacks and mid-single-digit organic volume growth in beverages.  Reported net revenue declined 13 percent reflecting a 19-percentage-point negative impact from structural changes, principally the refranchising of bottling operations in China and an unfavorable 1-percentage-point impact from foreign exchange translation.

For the full year, organic revenue grew 10 percent led by double-digit organic volume growth in snacks and mid-single-digit organic volume growth in beverages. Including structural changes and foreign exchange translation, reported net revenue declined 10 percent reflecting a 17-percentage-point negative impact from structural changes, principally the refranchising of bottling operations in China, and an unfavorable 3-percentage-point impact from foreign exchange translation.

Core constant currency operating profit declined 20 percent for the fourth quarter and was up 4 percent for the full year. These results include the impact of lapping a gain on divestiture associated with the sale of the division's minority interest in its franchise bottler in Thailand in the fourth quarter of 2011.

2013 Outlook

For 2013, the company expects 7 percent core constant currency EPS growth versus its fiscal 2012 core EPS of $4.10. Based on the current foreign exchange market consensus, the company expects that foreign exchange translation will have an unfavorable impact of up to 1 point on the company's full-year core EPS performance in 2013. Excluding the impact of structural changes and foreign exchange translation, organic revenue is expected to grow mid-single-digits, consistent with the company's long-term targets. The impact of structural changes, principally beverage refranchisings, are expected to reduce organic revenue growth by approximately 1 percentage point for the full year. 

For 2013, the company expects low-single-digit commodity inflation, and productivity savings of approximately $900 million. The company also expects advertising and marketing expense to increase at or above the rate of net revenue growth. Below the operating line, the company expects higher interest expense driven by increased debt balances and a core effective tax rate of approximately 27 percent.

The company is targeting over $9 billion in cash flow from operating activities and more than $7 billion in management operating cash flow (excluding certain items) in 2013.  Net capital spending is expected to be approximately $3 billion in 2013, within the company's long-term capital spending target of less than or equal to 5 percent of net revenue.

Reflecting its commitment to return capital to shareholders, the company announced a new share repurchase program providing for the repurchase of up to $10 billion of PepsiCo common stock from July 1, 2013 through June 30, 2016, which will succeed the current repurchase program that expires on June 30, 2013. The company also announced a 5.6 percent increase in its annualized dividend to $2.27 per share from $2.15 per share, to take effect with the June 2013 payment. Under these programs, the company expects to return a total of $6.4 billion to shareholders in 2013 through dividends of approximately $3.4 billion, and share repurchases of approximately $3.0 billion.

Conference Call

At 8 a.m. (Eastern Time) today, the company will host a conference call with investors to discuss fourth-quarter results and the outlook for 2013. Further details, including a slide presentation accompanying the call, will be accessible on the company's website at www.pepsico.com/investors in advance of the call.

 

PepsiCo, Inc. and Subsidiaries
Condensed Consolidated Statement of Income
(in millions except per share amounts, unaudited, except year-ended 12/31/2011 amounts)
	Quarter Ended							Year Ended
	12/29/2012		12/31/2011		Change			12/29/2012		12/31/2011		Change
Net Revenue	$     19,954		$     20,158		(1)	%		$     65,492		$     66,504		(1.5)	%
Cost of sales	9,654		9,731		(1)	%		31,291		31,593		(1)	%
Selling, general and administrative	8,050		8,150					24,970		25,145
expenses					(1)	%						(1)	%
Amortization of intangible assets	37		30		24	%		119		133		(11)	%
Operating Profit	2,213		2,247		(1.5)	%		9,112		9,633		(5)	%
Interest expense	(288)		(272)		6	%		(899)		(856)		5	%
Interest income and other	44		24		89	%		91		57		61	%
Income before income taxes	1,969		1,999		(1)	%		8,304		8,834		(6)	%
Provision for income taxes	302		597		(49)	%		2,090		2,372		(12)	%
Net income	1,667		1,402		19	%		6,214		6,462		(4)	%
Less:  Net income (loss) attributable to			(13)							19
noncontrolling interests	6				n/m			36				92	%
Net Income Attributable to PepsiCo	$      1,661		$      1,415		17	%		$      6,178		$      6,443		(4)	%
Diluted
Net Income Attributable to PepsiCo per
Common Share	$        1.06		$        0.89		19	%		$        3.92		$        4.03		(3)	%
Weighted-average common shares
outstanding	1,564		1,584					1,575		1,597
Cash dividends declared per common
share	$     0.5375		$      0.515					$     2.1275		$      2.025
n/m = not meaningful
A-1

 

PepsiCo, Inc. and Subsidiaries
Supplemental Financial Information
(in millions and unaudited, except year-ended 12/31/2011 amounts)
	Quarter Ended							Year Ended
	12/29/2012		12/31/2011		Change			12/29/2012		12/31/2011		Change
Net Revenue
Frito-Lay North America	$      4,102		$      4,155		(1)	%		$    13,574		$   13,322		2	%
Quaker Foods North America	815		819		(0.5)	%		2,636		2,656		(1)	%
Latin America Foods	2,714		2,399		13	%		7,780		7,156		9	%
PepsiCo Americas Foods	7,631		7,373		3.5	%		23,990		23,134		4	%
PepsiCo Americas Beverages	6,078		6,311		(4)	%		21,408		22,418		(4.5)	%
Europe	4,288		4,231		1	%		13,441		13,560		(1)	%
Asia, Middle East & Africa	1,957		2,243		(13)	%		6,653		7,392		(10)	%
Total Net Revenue	$    19,954		$    20,158		(1)	%		$    65,492		$   66,504		(1.5)	%
Operating Profit
Frito-Lay North America	$      1,114		$      1,076		3.5	%		$     3,646		$     3,621		1	%
Quaker Foods North America	200		239		(17)	%		695		797		(13)	%
Latin America Foods	386		358		8	%		1,059		1,078		(2)	%
PepsiCo Americas Foods	1,700		1,673		2	%		5,400		5,496		(2)	%
PepsiCo Americas Beverages	735		740		(1)	%		2,937		3,273		(10)	%
Europe	313		226		38	%		1,330		1,210		10	%
Asia, Middle East & Africa	117		157		(25)	%		747		887		(16)	%
Division Operating Profit	2,865		2,796		2.5	%		10,414		10,866		(4)	%
Corporate Unallocated
Mark-to-Market net impact (Losses)/Gains	(61)		(71)		(14)	%		65		(102)		n/m
Merger and Integration Charges	-		(14)		n/m			-		(78)		n/m
Restructuring and Impairment Charges	(2)		(74)		(97)	%		(10)		(74)		(86)	%
Pension Lump Sum Settlement Charge	(195)		-		n/m			(195)		-		n/m
53rdWeek	-		(18)		n/m			-		(18)		n/m
Other	(394)		(372)		6	%		(1,162)		(961)		21	%
	(652)		(549)		19	%		(1,302)		(1,233)		6	%
Total Operating Profit	$      2,213		$      2,247		(1.5)	%		$     9,112		$     9,633		(5)	%
n/m = not meaningful
A-2

 

PepsiCo, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(in millions)
			Year Ended
			12/29/2012		12/31/2011
			(unaudited)
Operating Activities
Net income			$      6,214		$      6,462
Depreciation and amortization			2,689		2,737
Stock-based compensation expense			278		326
Merger and integration charges			16		329
Cash payments for merger and integration charges			(83)		(377)
Restructuring and impairment charges			279		383
Cash payments for restructuring charges			(343)		(31)
Restructuring and other charges related to the transaction with Tingyi    (Cayman Islands) Holding Corp. (Tingyi)
			176		-
Cash payments for restructuring and other charges related to the    transaction with Tingyi
			(109)		-
Excess tax benefits from share-based payment arrangements			(124)		(70)
Pension and retiree medical plan contributions			(1,865)		(349)
Pension and retiree medical plan expenses			796		571
Deferred income taxes and other tax charges and credits			321		495
Change in accounts and notes receivable			(250)		(666)
Change in inventories			144		(331)
Change in prepaid expenses and other current assets			89		(27)
Change in accounts payable and other current liabilities			548		520
Change in income taxes payable			(97)		(340)
Other, net			(200)		(688)
Net Cash Provided by Operating Activities			8,479		8,944
Investing Activities
Capital spending			(2,714)		(3,339)
Sales of property, plant and equipment			95		84
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			(306)		-
Other acquisitions and investments in noncontrolled affiliates			(121)		(601)
Divestitures			(32)		780
Short-term investments, net			61		66
Other investing, net			12		(16)
Net Cash Used for Investing Activities			(3,005)		(5,618)
Financing Activities
Proceeds from issuances of long-term debt			5,999		3,000
Payments of long-term debt			(2,449)		(1,596)
Debt repurchase			-		(771)
Short-term borrowings, net			(1,461)		303
Cash dividends paid			(3,305)		(3,157)
Share repurchases common			(3,219)		(2,489)
Share repurchases preferred			(7)		(7)
Proceeds from exercises of stock options			1,122		945
Excess tax benefits from share-based payment arrangements			124		70
Acquisition of noncontrolling interests			(68)		(1,406)
Other financing			(42)		(27)
Net Cash Used for Financing Activities			(3,306)		(5,135)
Effect of exchange rate changes on cash and cash equivalents			62		(67)
Net Increase/(Decrease) in Cash and Cash Equivalents			2,230		(1,876)
Cash and Cash Equivalents Beginning of Year			4,067		5,943
Cash and Cash Equivalents End of Year			$      6,297		$      4,067
A-3

 

PepsiCo, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(in millions except per share amounts)
		12/29/2012		12/31/2011
Assets		(unaudited)
Current Assets
Cash and cash equivalents		$         6,297		$          4,067
Short-term investments		322		358
Accounts and notes receivable, net		7,041		6,912
Inventories
Raw materials		1,875		1,883
Work-in-process		173		207
Finished goods		1,533		1,737
		3,581		3,827
Prepaid expenses and other current assets		1,479		2,277
Total Current Assets		18,720		17,441
Property, plant and equipment, net		19,136		19,698
Amortizable intangible assets, net		1,781		1,888
Goodwill		16,971		16,800
Other nonamortizable intangible assets		14,744		14,557
Nonamortizable Intangible Assets		31,715		31,357
Investments in noncontrolled affiliates		1,633		1,477
Other assets		1,653		1,021
Total Assets		$       74,638		$        72,882
Liabilities and Equity
Current Liabilities
Short-term obligations		$         4,815		$          6,205
Accounts payable and other current liabilities		11,903		11,757
Income taxes payable		371		192
Total Current Liabilities		17,089		18,154
Long-term debt obligations		23,544		20,568
Other liabilities		6,543		8,266
Deferred income taxes		5,063		4,995
Total Liabilities		52,239		51,983
Commitments and Contingencies
Preferred stock, no par value		41		41
Repurchased preferred stock		(164)		(157)
PepsiCo Common Shareholders' Equity
Common stock, par value 12/3¢ per share (authorized 3,600 shares, issued, net		26		26
of repurchased common stock at par value: 1,544 and 1,565 shares, respectively)
Capital in excess of par value		4,178		4,461
Retained earnings		43,158		40,316
Accumulated other comprehensive loss		(5,487)		(6,229)
Repurchased common stock, in excess of par (322 and 301 shares, respectively)		(19,458)		(17,870)
Total PepsiCo Common Shareholders' Equity		22,417		20,704
Noncontrolling interests		105		311
Total Equity		22,399		20,899
Total Liabilities and Equity		$       74,638		$        72,882
A-4

 

PepsiCo, Inc. and Subsidiaries
Supplemental Share and Stock-Based Compensation Data
(in millions except dollar amounts, unaudited)
		Quarter Ended					Year Ended
		12/29/2012			12/31/2011		12/29/2012			12/31/2011
Beginning Net Shares Outstanding		1,552			1,568		1,565			1,582
Options Exercised/Restricted Stock Units and PEPUnits Converted		4			5		26			22
Shares Repurchased		(12)			(8)		(47)			(39)
Ending Net Shares Outstanding		1,544			1,565		1,544			1,565
Weighted Average Basic		1,546			1,564		1,557			1,576
Dilutive Securities:
Options		10			12		11			14
Restricted Stock Units		7			7		6			6
PEPUnits		-			-		-			-
ESOP Convertible Preferred Stock/Other		1			1		1			1
Weighted Average Diluted		1,564			1,584		1,575			1,597
Average Share Price for the Period		$              69.91			$             62.92		$              68.34			$             65.25
Growth Versus Prior Year		11%			(4)%		5%			1%
Options Outstanding		68			91		76			97
Options in the Money		67			55		66			72
Dilutive Shares from Options		10			12		11			14
Dilutive Shares from Options as a % of Options in the Money		15%			22%		16%			20%
Average Exercise Price of Options in the Money		$              58.96			$             48.93		$              56.42			$             51.36
Restricted Stock Units Outstanding		12			12		12			13
Dilutive Shares from Restricted Stock Units		7			7		6			6
Dilutive Shares from PEPUnits		-			-		-			-
Average Intrinsic Value of Restricted Stock Units Outstanding*		$              65.60			$             62.96		$              65.41			$             62.93
Average Intrinsic Value of PEPUnits Outstanding*		$              64.89			$                    -		$              64.78			$                     -
* Weighted average intrinsic value at grant date.
A-5

 

PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information
Organic Growth
Quarters Ended December 29, 2012 and December 31, 2011
(unaudited)
		GAAP Measure		Percent Impact						Non-GAAP Measure
		Reported % Change								Organic % Change*
Net Revenue Year over Year % Change		Quarter Ended 12/29/2012		Acquisitions and divestitures		Foreign exchange  translation		53rd week		Quarter Ended 12/29/2012
Frito-Lay North America		(1)		-		-		7		5
Quaker Foods North America		(0.5)		-		(0.5)		5.5		5
Latin America Foods		13		(1)		1		-		13
PepsiCo Americas Foods		3.5		-		-		4		8
PepsiCo Americas Beverages		(4)		2		-		5		2.5
Europe		1		-		1		1		3.5
Asia, Middle East & Africa		(13)		19		1		-		8
Total PepsiCo		(1)		3		0.5		3		5
		GAAP Measure		Percent Impact						Non-GAAP Measure
		Reported % Change								Organic % Change*
Net Revenue Year over Year % Change		Quarter Ended 12/31/2011		Acquisitions and divestitures		Foreign exchange translation		53rd week		Quarter Ended 12/31/2011
Frito-Lay North America		13		-		-		(7)		6
Quaker Foods North America		4		-		-		(5)		(2)
Latin America Foods		7		-		6		-		13
PepsiCo Americas Foods		10		-		2		(4.5)		8
PepsiCo Americas Beverages		-		4		-		(5)		-
Europe		32		(30)		3		(1)		4
Asia, Middle East & Africa		16		-		1		-		17
Total PepsiCo		11		(4)		1.5		(3)		5
* Organic percent change is a financial measure that is not in accordance with GAAP and is calculated by excluding the impact of acquisitions and      divestitures, foreign exchange translation and a 53rd week in the fourth quarter of 2011 from reported growth.
Note - certain amounts above may not sum due to rounding.
A-6

 

PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (cont.)
Organic Growth
Years Ended December 29, 2012 and December 31, 2011
(unaudited)
		GAAP Measure		Percent Impact						Non-GAAP Measure
		Reported % Change								Organic % Change*
Net Revenue Year over Year % Change		Year Ended 12/29/2012		Acquisitions and divestitures		Foreign exchange translation		53rd week		Year Ended 12/29/2012
Frito-Lay North America		2		-		-		2		4
Quaker Foods North America		(1)		-		-		2		1
Latin America Foods		9		(2)		7		-		14
PepsiCo Americas Foods		4		(0.5)		2		1		7
PepsiCo Americas Beverages		(4.5)		4.5		-		1		1.5
Europe		(1)		(2)		7		-		4
Asia, Middle East & Africa		(10)		17		3		-		10
Total PepsiCo		(1.5)		3		2.5		1		5
		GAAP Measure		Percent Impact						Non-GAAP Measure
		Reported % Change								Organic % Change*
Net Revenue Year over Year % Change		Year Ended 12/31/2011		Acquisitions and divestitures		Foreign exchange translation		53rd week		Year Ended 12/31/2011
Frito-Lay North America		6		-		-		(2)		3.5
Quaker Foods North America		-		-		(1)		(2)		(2)
Latin America Foods		13		-		(2)		-		11
PepsiCo Americas Foods		7		-		(1)		(1)		5
PepsiCo Americas Beverages		10		**		(1)		(1)		**
Europe		41		**		(3)		-		**
Asia, Middle East & Africa		17		-		(2)		-		16
Total PepsiCo		15		**		(1)		(1)		**
* Organic percent change is a financial measure that is not in accordance with GAAP and is calculated by excluding the impact of       acquisitions and divestitures, foreign exchange translation and a 53rd week in the fourth quarter of 2011 from reported growth.
** It is impractical to separately determine and quantify the impact of our acquisitions of PBG and PAS from changes in our pre-existing       beverage business since we now manage these businesses as an integrated system.
Note - certain amounts above may not sum due to rounding.
A-7

 

 

PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (cont.)
Year over Year Growth Rates
Quarters Ended December 29, 2012 and December 31, 2011
(unaudited)
		GAAP Measure																Non-GAAP Measure				Non-GAAP Measure
		Reported % Change		Percent Impact of Non-Core Adjustments														Core* % Change		Percent Impact of		Core Constant Currency* % Change
Operating Profit Year over Year % Change		Quarter Ended 12/29/2012		Commodity mark-to- market net impact		Merger and  integration charges		Restructuring and impairment charges		Restructuring and other charges related to the transaction with  Tingyi		Pension lump sum settlement charge		53rd week		Inventory fair value adjustments		Quarter Ended 12/29/2012		Foreign exchange translation		Quarter Ended 12/29/2012
Frito-Lay North America		3.5		-		-		(7)		-		-		7		-		3		-		3
Quaker Foods North America		(17)		-		-		(7)		-		-		5		-		(18)		-		(18)
Latin America Foods		8		-		-		(11)		-		-		-		-		(2.5)		(2)		(4.5)
PepsiCo Americas Foods		2		-		-		(8)		-		-		5		-		(1)		(1)		(2)
PepsiCo Americas Beverages		(1)		-		(5)		(7)		-		-		5		(1)		(8)		-		(8)
Europe		38		-		(38)		(12)		-		-		3		-		(10)		-		(10)
Asia, Middle East & Africa		(25)		-		-		(3)		8		-		-		-		(19)		(1)		(20)
Division Operating Profit		2.5		-		(5)		(8)		0.5		-		5		-		(5)		-		(5)
Impact of Corporate Unallocated		(4)		-		(2)		(3)		-		8		-		-		(1.5)		-		(1.5)
Total Operating Profit		(1.5)		-		(7)		(12)		0.5		8		5		-		(7)		-		(7)
Net income Attributable to PepsiCo		17																(6)		-		(7)
Net income Attributable to PepsiCo per common share - diluted		19																(5)		(0.5)		(5)
		GAAP Measure												Non-GAAP Measure				Non-GAAP Measure
		Reported % Change		Percent Impact of Non-Core Adjustments										Core* % Change		Percent Impact of		Core Constant Currency* % Change
Operating Profit Year over Year % Change		Quarter Ended 12/31/2011		Commodity mark-to-market net impact		Merger and integration charges		Restructuring and impairment charges		53rdweek		Inventory fair value adjustments		Quarter Ended 12/31/2011		Foreign exchange translation		Quarter Ended 12/31/2011
Frito-Lay North America		10		-		-		8		(7)		-		10		-		10
Quaker Foods North America		9		-		-		8		(6)		-		11		-		11
Latin America Foods		(8)		-		-		12		-		-		4		7		12
PepsiCo Americas Foods		5		-		-		9		(5)		-		9		2		11
PepsiCo Americas Beverages		1		-		(13)		11		(5)		(3)		(7)		1		(6)
Europe		-		-		13		26		(3)		-		36		2		38
Asia, Middle East & Africa		209		-		-		19		-		-		227		5		232
Division Operating Profit		7		-		(2)		12		(5)		(1)		10		1.5		12
Impact of Corporate Unallocated		(7)		5		(3)		5		-		-		-		-		-
Total Operating Profit		1		5		(5)		17		(5)		(1)		11		2		12
Net income Attributable to PepsiCo		4												8		2		9
Net income Attributable to PepsiCo per common share - diluted		5												9		2		11
* Core results and core constant currency results are financial measures that are not in accordance with GAAP and exclude the above adjustments.  See A-17 through A-19 for a discussion of each of these adjustments.
Note - certain amounts above may not sum due to rounding.
A-8

 

 

Reconciliation of GAAP and Non-GAAP Information (cont.)
Year over Year Growth Rates
Years Ended December 29, 2012 and December 31, 2011
(unaudited)
		GAAP Measure																Non-GAAP Measure				Non-GAAP Measure
		Reported % Change		Percent Impact of Non-Core Adjustments														Core* % Change		Percent Impact of		Core Constant Currency* % Change
Operating Profit Year over Year % Change		Year Ended 12/29/2012		Commodity mark-to- market net impact		Merger and integration charges		Restructuring and impairment charges		Restructuring and other charges related to the transaction with Tingyi		Pension lump sum settlement charge		53rd week		Inventory fair value  adjustments		Year Ended 12/29/2012		Foreign exchange translation		Year Ended 12/29/2012
Frito-Lay North America		1		-		-		(1)		-		-		2		-		2		-		2
Quaker Foods North America		(13)		-		-		(1)		-		-		2		-		(12)		-		(12)
Latin America Foods		(2)		-		-		-		-		-		-		-		(1.5)		5.5		4
PepsiCo Americas Foods		(2)		-		-		(1)		-		-		1.5		-		(1)		1		-
PepsiCo Americas Beverages		(10)		-		(3)		1		-		-		1		(1)		(12)		1		(11)
Europe		10		-		(9)		(3)		-		-		1		(2)		(3)		6		3
Asia, Middle East & Africa		(16)		-		-		2		17		-		-		-		3		1		4
Division Operating Profit		(4)		-		(2)		-		1		-		1		-		(4)		2		(3)
Impact of Corporate Unallocated		(1)		(2)		(1)		(1)		-		2		-		-		(2)		-		(2)
Total Operating Profit		(5)		(2)		(3)		(1)		1		2		1		(0.5)		(7)		2		(5)
Net income Attributable to PepsiCo		(4)																(8)		2		(6)
Net income Attributable to PepsiCo per common share - diluted		(3)																(7)		2		(5)
		GAAP Measure																		Non-GAAP Measure				Non-GAAP Measure
		Reported % Change		Percent Impact of Non-Core Adjustments																Core* % Change		Percent Impact of		Core Constant Currency* % Change
Operating Profit Year over Year % Change		Year Ended 12/31/2011		Commodity mark-to- market net impact		Merger and integration charges		Restructuring and impairment charges		53rdweek		Inventory fair value adjustments		Venezuela currency devaluation		Asset write-off		Foundation contribution		Year Ended 12/31/2011		Foreign exchange translation		Year Ended 12/31/2011
Frito-Lay North America		7		-		-		2		(2)		-		-		-		-		7		-		7
Quaker Foods North America		8		-		-		2		(2)		-		-		-		-		8		(0.5)		8
Latin America Foods		7		-		-		5		-		-		-		-		-		12		(1)		11
PepsiCo Americas Foods		7		-		-		3		(2)		-		-		-		-		8		(0.5)		8
PepsiCo Americas Beverages		18		-		(13)		3		(1)		(12)		-		-		-		(4)		(0.5)		(4)
Europe		15