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Pepsico Inc – ‘10-K’ for 12/25/10 – ‘XML.R22’

On: Friday, 2/18/11, at 4:57pm ET · For: 12/25/10 · Accession #: 1193125-11-40427 · File #: 1-01183

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/18/11  Pepsico Inc                       10-K       12/25/10  113:25M                                    Donnelley … Solutions/FA

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML   1.74M 
 2: EX-10.63    Amendment to the Pepsico Pension Equalization Plan  HTML     47K 
 3: EX-10.64    Retention Agreement                                 HTML    135K 
 4: EX-10.65    Pbg Pension Equalization Plan (Plan Document for    HTML    206K 
                the 409A Program)                                                
 5: EX-10.66    Pbg Pension Equalization Plan (Plan Document for    HTML    202K 
                the Pre-409A Program)                                            
 6: EX-10.67    Pbg Executive Income Deferral Program (Plan         HTML    209K 
                Document for the 409A Program)                                   
 7: EX-10.68    Pbg Executive Income Deferral Program (Plan         HTML    201K 
                Document for the Pre-409A Program)                               
 9: EX-14       Worldwide Code of Conduct                           HTML     60K 
10: EX-21       Subsidiaries of Pepsico, Inc                        HTML    251K 
11: EX-23       Consent of Kpmg LLP                                 HTML     46K 
12: EX-24       Power of Attorney                                   HTML     70K 
 8: EX-12       Computation of Ratio of Earnings to Fixed Charges   HTML     55K 
13: EX-31       Certification of Our CEO and CFO Pursuant to        HTML     51K 
                Section 302                                                      
14: EX-32       Certification of Our CEO and CFO Pursuant to        HTML     38K 
                Section 906                                                      
86: XML         IDEA XML File -- Definitions and References          XML    404K 
101: XML         IDEA XML File -- Filing Summary                      XML    464K  
96: XML.R1      Document and Entity Information                      XML    226K 
97: XML.R2      Consolidated Statement of Income                     XML    264K 
55: XML.R3      Consolidated Statement of Cash Flows                 XML    772K 
63: XML.R4      Consolidated Balance Sheet                           XML    408K 
84: XML.R5      Consolidated Balance Sheet (Parenthetical)           XML    101K 
80: XML.R6      Consolidated Statement of Equity                     XML   2.53M 
108: XML.R7      Comprehensive Income                                 XML    221K  
32: XML.R8      Basis of Presentation and Our Divisions              XML    264K 
79: XML.R9      Our Significant Accounting Policies                  XML     73K 
28: XML.R10     Restructuring, Impairment and Integration Charges    XML    139K 
27: XML.R11     Property, Plant and Equipment and Intangible         XML    219K 
                Assets                                                           
54: XML.R12     Income Taxes                                         XML    163K 
91: XML.R13     Stock-Based Compensation                             XML    117K 
56: XML.R14     Pension, Retiree Medical and Savings Plans           XML    436K 
59: XML.R15     Noncontrolled Bottling Affiliates                    XML    108K 
74: XML.R16     Debt Obligations and Commitments                     XML    113K 
113: XML.R17     Financial Instruments                                XML    148K  
48: XML.R18     Net Income Attributable to PepsiCo per Common        XML     95K 
                Share                                                            
21: XML.R19     Preferred Stock                                      XML     74K 
62: XML.R20     Accumulated Other Comprehensive Loss Attributable    XML     70K 
                to PepsiCo                                                       
89: XML.R21     Supplemental Financial Information                   XML    122K 
39: XML.R22     Acquisitions                                         XML    100K 
85: XML.R23     Our Significant Accounting Policies (Policy)         XML    125K 
60: XML.R24     Basis of Presentation and Our Divisions (Tables)     XML    247K 
107: XML.R25     Restructuring, Impairment and Integration Charges    XML    148K  
                (Tables)                                                         
93: XML.R26     Property, Plant and Equipment and Intangible         XML    221K 
                Assets (Tables)                                                  
66: XML.R27     Income Taxes (Tables)                                XML    178K 
75: XML.R28     Stock-Based Compensation (Tables)                    XML    129K 
26: XML.R29     Pension, Retiree Medical and Savings Plans           XML    481K 
                (Tables)                                                         
30: XML.R30     Noncontrolled Bottling Affiliates (Tables)           XML    100K 
42: XML.R31     Debt Obligations and Commitments (Tables)            XML    107K 
50: XML.R32     Financial Instruments (Tables)                       XML    131K 
73: XML.R33     Net Income Attributable to PepsiCo per Common        XML     93K 
                Share (Tables)                                                   
92: XML.R34     Preferred Stock (Tables)                             XML     72K 
24: XML.R35     Accumulated Other Comprehensive Loss Attributable    XML     68K 
                to PepsiCo (Tables)                                              
33: XML.R36     Supplemental Financial Information (Tables)          XML    130K 
98: XML.R37     Acquisitions (Tables)                                XML    132K 
106: XML.R38     Basis of Presentation and Our Divisions              XML    283K  
                (Narrative) (Details)                                            
67: XML.R39     Basis of Presentation and Our Divisions (Quarterly   XML    156K 
                Reporting Schedule) (Details)                                    
110: XML.R40     Basis of Presentation and Our Divisions (Net         XML   1.02M  
                Revenue and Operating Profit by Division)                        
                (Details)                                                        
34: XML.R41     Basis of Presentation and Our Divisions (Total       XML    768K 
                Assets and Capital Spending by Division) (Details)               
112: XML.R42     Basis of Presentation and Our Divisions              XML    548K  
                (Amortization of Intangible Assets and                           
                Depreciation and Other Amortization) (Details)                   
44: XML.R43     Basis of Presentation and Our Divisions (Net         XML    572K 
                Revenue and Long-Lived Assets) (Details)                         
22: XML.R44     Our Significant Accounting Policies (Narrative)      XML    268K 
                (Details)                                                        
43: XML.R45     Restructuring, Impairment and Integration Charges    XML    336K 
                (Narrative) (Details)                                            
88: XML.R46     Restructuring, Impairment and Integration Charges    XML    331K 
                (Merger and Integration Activity) (Details)                      
105: XML.R47     Restructuring, Impairment and Integration Charges    XML   1.22M  
                (Restructuring and Impairment Charges) (Details)                 
57: XML.R48     Restructuring, Impairment and Integration Charges    XML    621K 
                (Productivity for Growth Program Activity)                       
                (Details)                                                        
46: XML.R49     Property, Plant and Equipment and Intangible         XML     80K 
                Assets (Narrative) (Details)                                     
72: XML.R50     Property, Plant and Equipment and Intangible         XML    626K 
                Assets (Property, Plant and Equipment and                        
                Intangible Assets) (Details)                                     
25: XML.R51     Property, Plant and Equipment and Intangible         XML   1.72M 
                Assets (Change in Book Value of Nonamortizable                   
                Assets) (Details)                                                
77: XML.R52     Income Taxes (Narrative) (Details)                   XML    178K 
47: XML.R53     Income Taxes (Income Taxes) (Details)                XML    569K 
31: XML.R54     Income Taxes (Reserve Rollforward) (Details)         XML    129K 
104: XML.R55     Stock-Based Compensation (Narrative) (Details)       XML    420K  
100: XML.R56     Stock-Based Compensation (Table of                   XML    110K  
                Weighted-Average Black-Scholes Fair Value                        
                Assumptions) (Details)                                           
53: XML.R57     Stock-Based Compensation (Stock-Based Compensation   XML    164K 
                Activity ) (Details)                                             
38: XML.R58     Stock-Based Compensation (Restricted Stock Units     XML    208K 
                Activity) (Details)                                              
94: XML.R59     Stock-Based Compensation (Other Stock-Based          XML    123K 
                Compensation Data) (Details)                                     
29: XML.R60     Pension, Retiree Medical and Savings Plans           XML    432K 
                (Narrative) (Details)                                            
81: XML.R61     Pension, Retiree Medical and Savings Plans           XML   1.31M 
                (Selected Financial Information for Pension and                  
                Retiree Medical Plans) (Details)                                 
78: XML.R62     Pension, Retiree Medical and Savings Plans           XML    481K 
                (Components of Benefit Expense) (Details)                        
99: XML.R63     Pension, Retiree Medical and Savings Plans           XML    158K 
                (Estimated Amounts to be Amortized from                          
                Accumulated Other Comprehensive Loss into Benefit                
                Expense In 2011 for Pension and Retiree Medical                  
                Plans) (Details)                                                 
95: XML.R64     Pension, Retiree Medical and Savings Plans           XML    236K 
                (Weighted Average Assumptions to Determine                       
                Projected Benefit Liability and Benefit Expense                  
                for Pension and Retiree Medical Plans) (Details)                 
109: XML.R65     Pension, Retiree Medical and Savings Plans           XML    225K  
                (Selected Information about Plans with Liability                 
                for Service to Date and Total Benefit Liability in               
                Excess of Plan Assets) (Details)                                 
36: XML.R66     Pension, Retiree Medical and Savings Plans           XML    161K 
                (Estimated Future Benefit Payments ) (Details)                   
52: XML.R67     Pension, Retiree Medical and Savings Plans           XML   1.78M 
                (Categorized Plan Assets Measured at Fair Value)                 
                (Details)                                                        
70: XML.R68     Pension, Retiree Medical and Savings Plans           XML     75K 
                (Effects of One Percentage Point Change in the                   
                Assumed Health Care Trend Rate) (Details)                        
61: XML.R69     Noncontrolled Bottling Affiliates (Narrative)        XML    260K 
                (Details)                                                        
71: XML.R70     Noncontrolled Bottling Affiliates (Summarized        XML    456K 
                Financial Information) (Details)                                 
111: XML.R71     Noncontrolled Bottling Affiliates (Related Party     XML    215K  
                Transactions) (Details)                                          
37: XML.R72     Debt Obligations and Commitments (Narrative)         XML   1.22M 
                (Details)                                                        
45: XML.R73     Debt Obligations and Commitments (Debt Obligations   XML    576K 
                and Commitments) (Details)                                       
41: XML.R74     Debt Obligations and Commitments (Long-term          XML    843K 
                Contractual Commitments) (Details)                               
68: XML.R75     Financial Instruments (Narrative) (Details)          XML    370K 
76: XML.R76     Financial Instruments (Fair Values of financial      XML    444K 
                assets and liabilities) (Details)                                
65: XML.R77     Financial Instruments (Effective Portion of          XML    423K 
                Pre-Tax (Gains)/Losses on Derivative Instruments)                
                (Details)                                                        
58: XML.R78     Net Income Attributable to PepsiCo per Common        XML     87K 
                Share (Narrative) (Details)                                      
35: XML.R79     Net Income Attributable to PepsiCo per Common        XML    208K 
                Share (Basic and Diluted Net Income attributable                 
                to PepsiCo per common share) (Details)                           
23: XML.R80     Preferred Stock (Narrative) (Details)                XML    236K 
69: XML.R81     Preferred Stock (Schedule of Preferred Shares)       XML    307K 
                (Details)                                                        
51: XML.R82     Accumulated Other Comprehensive Loss Attributable    XML     76K 
                to PepsiCo (Narrative) (Details)                                 
64: XML.R83     Accumulated Other Comprehensive Loss Attributable    XML    172K 
                to PepsiCo (Accumulated Balances for Each                        
                Component of Other Comprehensive Loss Attributable               
                to PepsiCo) (Details)                                            
87: XML.R84     Supplemental Financial Information (Schedule of      XML    419K 
                Supplemental Balance Sheet Information) (Details)                
83: XML.R85     Supplemental Financial Information (Other            XML    169K 
                Supplemental Information) (Details)                              
49: XML.R86     Acquisitions (Narrative) (Details)                   XML    874K 
90: XML.R87     Acquisitions (Computation of Purchase Price)         XML    190K 
                (Details)                                                        
82: XML.R88     Acquisitions (Preliminary Estimates of the Fair      XML    155K 
                Value of Identifiable Assets Acquired and                        
                Liabilities Assumed) (Details)                                   
40: XML.R89     Acquisitions (Pro Forma Financial Information)       XML     83K 
                (Details)                                                        
102: EXCEL       IDEA Workbook of Financial Reports (.xls)            XLS   3.10M  
15: EX-101.INS  XBRL Instance -- pep-20101225                        XML   5.25M 
17: EX-101.CAL  XBRL Calculations -- pep-20101225_cal                XML    326K 
18: EX-101.DEF  XBRL Definitions -- pep-20101225_def                 XML   1.83M 
19: EX-101.LAB  XBRL Labels -- pep-20101225_lab                      XML   2.09M 
20: EX-101.PRE  XBRL Presentations -- pep-20101225_pre               XML   2.01M 
16: EX-101.SCH  XBRL Schema -- pep-20101225                          XSD    349K 
103: ZIP         XBRL Zipped Folder -- 0001193125-11-040427-xbrl      Zip    329K

‘XML.R22’ — Acquisitions

This Financial Report is an XBRL XML File.

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<div> <div> Note 15 — Acquisitions PBG and PAS On August 3, 2009, we entered into a Merger Agreement (the PBG Merger Agreement) with PBG and Metro pursuant to which PBG merged with and into Metro, with Metro continuing as the surviving corporation and a wholly owned subsidiary of PepsiCo. Also on August 3, 2009, we entered into a Merger Agreement (the PAS Merger Agreement and together with the PBG Merger Agreement, the Merger Agreements) with PAS and Metro pursuant to which PAS merged with and into Metro, with Metro continuing as the surviving corporation and a wholly owned subsidiary of PepsiCo. On February 26, 2010, we acquired PBG and PAS to create a more fully integrated supply chain and go-to-market business model, improving the effectiveness and efficiency of the distribution of our brands and enhancing our revenue growth. The total purchase price was approximately $12.6 billion, which included $8.3 billion of cash and equity and the fair value of our previously held equity interests in PBG and PAS of $4.3 billion. Under the terms of the PBG Merger Agreement, each outstanding share of common stock of PBG not held by Metro, PepsiCo or a subsidiary of PepsiCo or held by PBG as treasury stock (each, a "PBG Share") was canceled and converted into the right to receive, at the holder's election, either 0.6432 shares of common stock of PepsiCo (the "PBG Per Share Stock Consideration") or $36.50 in cash, without interest (the "PBG Cash Election Price"), subject to proration provisions which provide that an aggregate 50% of such outstanding PBG Shares were converted into the right to receive common stock of PepsiCo and an aggregate 50% of such outstanding PBG Shares were converted into the right to receive cash and each PBG Share and share of Class B common stock of PBG held by Metro, PepsiCo or a subsidiary of PepsiCo was canceled or converted to the right to receive 0.6432 shares of common stock of PepsiCo. Under the terms of the PAS Merger Agreement, each outstanding share of common stock of PAS not held by Metro, PepsiCo or a subsidiary of PepsiCo or held by PAS as treasury stock (each, a "PAS Share") was canceled and converted into the right to receive, at the holder's election, either 0.5022 shares of common stock of PepsiCo (the "PAS Per Share Stock Consideration") or $28.50 in cash, without interest (the "PAS Cash Election Price"), subject to proration provisions which provide that an aggregate 50% of such outstanding PAS Shares were converted into the right to receive common stock of PepsiCo and an aggregate 50% of such outstanding PAS Shares were converted into the right to receive cash and each PAS Share held by Metro, PepsiCo or a subsidiary of PepsiCo was canceled or converted into the right to receive 0.5022 shares of common stock of PepsiCo. Under the terms of the applicable Merger Agreement, each PBG or PAS stock option was converted into an adjusted PepsiCo stock option to acquire a number of shares of PepsiCo common stock, determined by multiplying the number of shares of PBG or PAS common stock subject to the PBG or PAS stock option by an exchange ratio (the "Closing Exchange Ratio") equal to the closing price of a share of PBG or PAS common stock on the business day immediately before the acquisition date divided by the closing price of a share of PepsiCo common stock on the business day immediately before the acquisition date. The exercise price per share of PepsiCo common stock subject to the adjusted PepsiCo stock option is equal to the per share exercise price of PBG or PAS stock option divided by the Closing Exchange Ratio. Under the terms of the PBG Merger Agreement, each PBG restricted stock unit (RSU) was adjusted so that its holder is entitled to receive, upon settlement, a number of shares of PepsiCo common stock equal to the number of shares of PBG common stock subject to the PBG RSU multiplied by the PBG Per Share Stock Consideration. PBG performance-based RSUs were converted into PepsiCo RSUs based on 100% target achievement, and, following conversion, remain subject to continued service of the holder. Each PBG RSU held by a non-employee director was vested and canceled at the acquisition date, and, in exchange for cancellation of the PBG RSU, the holder received the PBG Per Share Stock Consideration for each share of PBG common stock subject to the PBG RSU. Under the terms of the PAS Merger Agreement, each cash-settled PAS RSU was canceled in exchange for a cash payment equal to the closing price of a share of PAS common stock on the business day immediately before the closing of the PAS merger for each share of PAS common stock subject to each PAS RSU. Each PAS restricted share was converted into either the PAS Per Share Stock Consideration or the PAS Cash Election Price, at the election of the holder, with the same proration procedures applicable to PAS stockholders described above. Pursuant to the terms of PBG's executive retention arrangements, PBG equity awards granted to certain executives prior to the PBG merger vest immediately upon a qualifying termination of the executive's employment except for certain PBG executives whose equity awards vested immediately at the effective time of the PBG merger pursuant to the terms of PepsiCo's executive retention agreements. Each PAS equity award granted prior to the PAS merger vested immediately at the effective time of the PAS merger pursuant to the original terms of the awards. Prior to the acquisitions, we had equity investments in PBG and PAS. In addition to approximately 32% of PBG's outstanding common stock that we owned at year-end 2009, we owned 100% of PBG's class B common stock and approximately 7% of the equity of Bottling Group, LLC, PBG's principal operating subsidiary. At year-end 2009, we owned approximately 43% of the outstanding common stock of PAS. The guidance on accounting for business combinations requires that an acquirer remeasure its previously held equity interest in an acquiree at its acquisition date fair value and recognize the resulting gain or loss in earnings. Thus, in connection with our acquisitions of PBG and PAS, the carrying amounts of our previously held equity interests in PBG and PAS were revalued to fair value at the acquisition date, resulting in a gain in the first quarter of 2010 of $958 million, comprising $735 million which is non-taxable and recorded in bottling equity income and $223 million related to the reversal of deferred tax liabilities associated with these previously held equity interests. As discussed in Note 9, in January 2010, we issued $4.25 billion of fixed and floating rate notes. A portion of the net proceeds from the issuance of these notes was used to finance our acquisitions of PBG and PAS. Our actual stock price on February 25, 2010 (the last trading day prior to the closing of the acquisitions) was used to determine the value of stock, stock options and RSUs issued as consideration in connection with our acquisitions of PBG and PAS and thus to calculate the actual purchase price. The table below represents the computation of the purchase price excluding assumed debt and the fair value of our previously held equity interests in PBG and PAS as of the acquisition date: <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr><td width="75%"> </td> <td valign="bottom" width="9%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="9%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" nowrap="nowrap" align="center">Total Number of Shares/Awards Issued</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" nowrap="nowrap" align="center">Total Fair Value</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Payment in cash, for the remaining (not owned by PepsiCo and its subsidiaries) outstanding shares of PBG and PAS common stock and equity awards vested at consummation of merger</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">— </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3,813</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr><td valign="top"> Payment to PBG and PAS of shares of PepsiCo common stock for the remaining (not owned by PepsiCo and its subsidiaries) outstanding shares of PBG and PAS common stock and equity awards vested at consummation of merger</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">67</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,175</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Issuance of PepsiCo equity awards (vested and unvested) to replace existing PBG and PAS equity awards</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">16</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">276</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-top: #000000 1px solid;" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-top: #000000 1px solid;" valign="bottom"> </td> <td> </td></tr> <tr><td valign="top"> Total purchase price</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">83</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">8,264</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-top: #000000 3px double;" valign="bottom"> </td> <td style="border-top: #000000 3px double;" valign="bottom"> </td> <td> </td> <td valign="bottom"> </td> <td style="border-top: #000000 3px double;" valign="bottom"> </td> <td style="border-top: #000000 3px double;" valign="bottom"> </td> <td> </td></tr></table> The following table summarizes the fair value of identifiable assets acquired and liabilities assumed in the acquisitions of PBG and PAS and the resulting goodwill as of the acquisition date: <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr><td width="84%"> </td> <td valign="bottom" width="11%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Acquisition Date Fair Value</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Inventory</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,006</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr><td valign="top"> Property, plant and equipment</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5,574</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Amortizable intangible assets</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,298</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr><td valign="top"> Nonamortizable intangible assets, primarily reacquired franchise rights</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9,036</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Other current assets and current liabilities(a) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">751</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr><td valign="top"> Other noncurrent assets</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">281</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Debt obligations</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8,814</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr><td valign="top"> Pension and retiree medical benefits</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(962</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Other noncurrent liabilities</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(744</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr><td valign="top"> Deferred income taxes</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(3,246</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-top: #000000 1px solid;" valign="bottom"> </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total identifiable net assets</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,180</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr><td valign="top"> Goodwill</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">8,059</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-top: #000000 1px solid;" valign="bottom"> </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Subtotal</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12,239</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr><td valign="top"> Fair value of acquisition of noncontrolling interest</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">317</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-top: #000000 1px solid;" valign="bottom"> </td> <td style="border-top: #000000 1px solid;" valign="bottom"> </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total purchase price</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">12,556</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-top: #000000 3px double;" valign="bottom"> </td> <td style="border-top: #000000 3px double;" valign="bottom"> </td> <td> </td></tr></table> <table style="border-collapse: collapse;" class="MetaData" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="5%" align="left">(a)</td> <td class="MetaData" valign="top" align="left"> Includes cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and other current liabilities. </td></tr></table> Goodwill is calculated as the excess of the purchase price paid over the net assets recognized. The goodwill recorded as part of the acquisitions of PBG and PAS primarily reflects the value of adding PBG and PAS to PepsiCo to create a more fully integrated supply chain and go-to-market business model, as well as any intangible assets that do not qualify for separate recognition. Goodwill is not amortizable nor deductible for tax purposes. Substantially all of the goodwill is recorded in our PAB segment. In connection with our acquisitions of PBG and PAS, we reacquired certain franchise rights which had previously provided PBG and PAS with the exclusive and perpetual rights to manufacture and/or distribute beverages for sale in specified territories. Reacquired franchise rights totaling $8.0 billion were assigned a perpetual life and are, therefore, not amortizable. Amortizable acquired franchise rights of $0.9 billion have weighted-average estimated useful lives of 56 years. Other amortizable intangible assets, primarily customer relationships, have weighted-average estimated useful lives of 20 years. Under the guidance on accounting for business combinations, merger and integration costs are not included as components of consideration transferred but are accounted for as expenses in the period in which the costs are incurred. See Note 3 for details on the expenses incurred during 2010. The following table presents unaudited consolidated pro forma financial information as if the closing of our acquisitions of PBG and PAS had occurred on December 27, 2009 for purposes of the financial information presented for the year ended December 25, 2010; and as if the closing of our acquisitions of PBG and PAS had occurred on December 28, 2008 for purposes of the financial information presented for the year ended December 26, 2009. <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr><td width="84%"> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="2%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2010</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center"> 2009 </td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Net Revenue</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">59,582</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">57,471</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr><td valign="top"> Net Income Attributable to PepsiCo</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">5,856</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">6,752</td> <td valign="bottom" nowrap="nowrap"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Net Income Attributable to PepsiCo per Common Share – Diluted</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3.60</td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4.09</td> <td valign="bottom" nowrap="nowrap"> </td></tr></table> The unaudited consolidated pro forma financial information was prepared in accordance with the acquisition method of accounting under existing standards, and the regulations of the U.S. Securities and Exchange Commission, and is not necessarily indicative of the results of operations that would have occurred if our acquisitions of PBG and PAS had been completed on the dates indicated, nor is it indicative of the future operating results of PepsiCo. The historical unaudited consolidated financial information has been adjusted to give effect to pro forma events that are (1) directly attributable to the acquisitions, (2) factually supportable, and (3) expected to have a continuing impact on the combined results of PepsiCo, PBG and PAS. The unaudited pro forma results have been adjusted with respect to certain aspects of our acquisitions of PBG and PAS to reflect: <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="4%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> the consummation of the acquisitions; </td></tr></table> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="4%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> consolidation of PBG and PAS which are now owned 100% by PepsiCo and the corresponding gain resulting from the remeasurement of our previously held equity interests in PBG and PAS; </td></tr></table> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="4%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> the elimination of related party transactions between PepsiCo and PBG, and PepsiCo and PAS; </td></tr></table> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="4%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> changes in assets and liabilities to record their acquisition date fair values and changes in certain expenses resulting therefrom; and </td></tr></table> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="4%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> additional indebtedness, including, but not limited to, debt issuance costs and interest expense, incurred in connection with the acquisitions. </td></tr></table> The unaudited pro forma results do not reflect future events that may occur after the acquisitions, including, but not limited to, the anticipated realization of ongoing savings from operating synergies in subsequent periods. They also do not give effect to certain one-time charges we expect to incur in connection with the acquisitions, including, but not limited to, charges that are expected to achieve ongoing cost savings and synergies. WBD On February 3, 2011, we announced that we had completed the previously announced acquisition of ordinary shares, American Depositary Shares and Global Depositary Shares of WBD, a company incorporated in the Russian Federation, which represent in the aggregate approximately 66% of WBD's outstanding ordinary shares, pursuant to the purchase agreement dated December 1, 2010 between PepsiCo and certain selling shareholders of WBD for approximately $3.8 billion. The acquisition increased PepsiCo's total ownership of WBD to approximately 77%. PepsiCo expects to make an offer in Russia (Russian Offer) on or before March 11, 2011 to acquire all of the remaining ordinary shares, in accordance with the mandatory tender offer rules of the Russian Federation. The price to be paid in the Russian Offer will be 3,883.70 Russian rubles per ordinary share. This price is $132, which is the price per share PepsiCo paid to the selling shareholders pursuant to the purchase agreement, converted to Russian rubles at the Central Bank of Russia exchange rate established for February 3, 2011. Concurrently with the Russian Offer, we expect to make an offer (U.S. Offer) to all holders of American Depositary Shares at a price per American Depositary Share equal to 970.925 Russian rubles (which is one-fourth of 3,883.70 Russian rubles since each American Depositary Share represents one-fourth of an ordinary share), without interest and less any fees, conversion expenses and applicable taxes. This amount will be converted to U.S. dollars at the spot market rate on or about the date that PepsiCo pays for the American Depositary Shares tendered in the U.S. Offer. </div> </div>

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<NonNumericTextHeader> Note 15 — Acquisitions PBG and PAS On August 3, 2009, we entered into a Merger Agreement (the PBG Merger Agreement) with PBG and Metro pursuant </NonNumericTextHeader>

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Filing Submission 0001193125-11-040427 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Pepsico Inc – ‘10-K’ for 12/25/10 – ‘XML.R22’

On: Friday, 2/18/11, at 4:57pm ET · For: 12/25/10 · Accession #: 1193125-11-40427 · File #: 1-01183

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Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34Filing Table of Contents

‘XML.R22’ — Acquisitions

This Financial Report is an XBRL XML File.

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents