Pepsi 2010 Annual Report Download - page 83

Notes to Consolidated Financial Statements
82 PepsiCo, Inc. 2010 Annual Report
In 2008, we incurred charges of $543million ($408million
after-tax or $0.25 per share) in conjunction with our Productivity
for Growth program. Approximately $455million of the charge
was recorded in selling, general and administrative expenses,
with the remainder recorded in cost of sales.
A summary of our merger and integration activity in 2010 is
asfollows:
Severance
and Other
Employee Asset Other
Costs(a) Impairment Costs Total
2010 merger and
integration charges $ 396 $ 132 $ 280 $ 808
Cash payments (114) – (271) (385)
Non-cash charges (103) (132) 16 (219)
Liability as of
December25, 2010 $ 179 $ – $ 25 $ 204
(a) Primarily reects termination costs for approximately 2,370 employees.
A summary of our restructuring and impairment charges in
2009 is as follows:
Severance
and Other
Employee Other
Costs(a) Costs Total
FLNA $ – $ 2 $ 2
QFNA – 1 1
LAF 3 – 3
PAB 6 10 16
Europe 1 – 1
AMEA 7 6 13
$17 $19 $36
(a) Primarily reects termination costs for approximately 410 employees.
A summary of our restructuring and impairment charges in
2008 is as follows:
Severance
and Other
Employee Asset Other
Costs Impairment Costs Total
FLNA $ 48 $ 38 $ 22 $108
QFNA 14 3 14 31
LAF 30 8 2 40
PAB 68 92 129 289
Europe 39 6 5 50
AMEA 11 2 2 15
Corporate 2 – 8 10
$212 $149 $182 $543
Severance and other employee costs primarily reflect termina-
tion costs for approximately 3,500 employees. Asset impairments
relate to the closure of six plants and changes to our beverage
product portfolio. Other costs include contract exit costs and
third-party incremental costs associated with upgrading our
product portfolio and our supply chain.
A summary of our Productivity for Growth program activity is
as follows:
Severance
and Other
Employee Asset Other
Costs Impairment Costs Total
2008 restructuring and
impairment charges $ 212 $ 149 $ 182 $ 543
Cash payments (50) – (109) (159)
Non-cash charge (27) (149) (9) (185)
Currency translation (1) – – (1)
Liability as of
December 27, 2008 134 – 64 198
2009 restructuring and
impairment charges 17 12 7 36
Cash payments (128) – (68) (196)
Currency translation (14) (12) 25 (1)
Liability as of
December 26, 2009 9 – 28 37
Cash payments (6) – (25) (31)
Non-cash charge (2) – (1) (3)
Currency translation – – (1) (1)
Liability as of
December25, 2010 $ 1 $ – $ 1 $ 2
Note 4 Property, Plant and
Equipment and Intangible Assets
Average
Useful Life 2010 2009 2008
Property, plant and
equipment, net
Land and improvements 10–34 yrs. $ 1,976 $ 1,208
Buildings and improvements 15–44 yrs. 7,054 5,080
Machinery and equipment,
including eet and software 5–15 yrs. 22,091 17,183
Construction in progress 1,920 1,441
33,041 24,912
Accumulated depreciation (13,983) (12,241)
$ 19,058 $ 12,671
Depreciation expense $ 2,124 $ 1,500 $1,422
Amortizable intangible
assets, net
Acquired franchise rights 56–60 yrs. $ 949 $ –
Reacquired franchise rights 1–14 yrs. 110 –
Brands 5–40 yrs. 1,463 1,465
Other identiable intangibles 10–24 yrs. 747 505
3,269 1,970
Accumulated amortization (1,244) (1,129)
$ 2,025 $ 841
Amortization expense $ 117 $ 63 $ 64