Pepsi 2011 Annual Report Download - page 63

We are currently evaluating the impact of the new guidance on our
nancial statements.
In September 2011, the FASB amended its guidance regard-
ing the disclosure requirements for employers participating in
multiemployer pension and other postretirement benet plans
(multiemployer plans) to improve transparency and increase aware-
ness of the commitments and risks involved with participation
in multiemployer plans. The new accounting guidance requires
employers participating in multiemployer plans to provide addi-
tional quantitative and qualitative disclosures to provide users
with more detailed information regarding an employer’s involve-
ment in multiemployer plans. The provisions of this new guidance
were eective as of the beginning of our 2011 scal year. We have
reviewed our level of participation in multiemployer plans and
determined that the impact of adopting this new guidance did not
have a material impact on our nancial statements.
In December 2011, the FASB issued new disclosure requirements
that are intended to enhance current disclosures on osetting
nancial assets and liabilities. The new disclosures require an entity
to disclose both gross and net information about nancial instru-
ments eligible for oset on the balance sheet and instruments and
transactions subject to an agreement similar to a master netting
arrangement. The provisions of the new disclosure requirements
are eective as of the beginning of our 2014 scal year. We are
currently evaluating the impact of the new guidance on our nan-
cial statements.
Note 3
Restructuring, Impairment and
Integration Charges
In 2011, we incurred restructuring charges of $383million ($286mil-
lion after- tax or $0.18 per share) in conjunction with our multi- year
Productivity Plan. All of these charges were recorded in sell-
ing, general and administrative expenses. The Productivity Plan
includes actions in every aspect of our business that we believe
will strengthen our complementary food, snack and beverage
businesses by leveraging new technologies and processes across
PepsiCo’s operations, go- to-market and information systems;
heightening the focus on best practice sharing across the globe;
consolidating manufacturing, warehouse and sales facilities; and
implementing simplied organization structures, with wider spans
of control and fewer layers of management. The Productivity Plan
is expected to enhance PepsiCo’s cost- competitiveness, provide a
source of funding for future brand- building and innovation initia-
tives, and serve as a nancial cushion for potential macroeconomic
uncertainty beyond 2012.
A summary of our Productivity Plan charges in 2011 is as follows:
Severance and Other
EmployeeCosts
Other
Costs Total
FLNA $ 74 $ 2 $ 76
QFNA 18 – 18
LAF 46 2 48
PAB 75 6 81
Europe 65 12 77
AMEA 9 – 9
Corporate 40 34 74
$ 327 $ 56 $ 383
A summary of our Productivity Plan activity in 2011 is as follows:
Severance and Other
Employee Costs
Other
Costs Total
2011 restructuring charges $ 327 $ 56 $ 383
Cash payments (1) (29) (30)
Non- cash charges (25) – (25)
Liability as of December31, 2011 $ 301 $ 27 $ 328
In 2011, we incurred merger and integration charges of $329mil-
lion ($271million after- tax or $0.17 per share) related to our
acquisitions of PBG, PAS and WBD, including $112million recorded
in the PAB segment, $123million recorded in the Europe segment,
$78million recorded in corporate unallocated expenses and
$16million recorded in interest expense. All of these net charges,
other than the interest expense portion, were recorded in selling,
general and administrative expenses. These charges also include
closing costs and advisory fees related to our acquisition of WBD.
Substantially all cash payments related to the above charges were
made by the end of 2011.
In 2010, we incurred merger and integration charges of $799mil-
lion related to our acquisitions of PBG and PAS, as well as advisory
fees in connection with our acquisition of WBD. $467million of these
charges were recorded in the PAB segment, $111million recorded in
the Europe segment, $191million recorded in corporate unallocated
expenses and $30million recorded in interest expense. All of these
charges, other than the interest expense portion, were recorded
in selling, general and administrative expenses. The merger and
integration charges related to our acquisitions of PBG and PAS were
incurred to help create a more fully integrated supply chain and
go- to-market business model, to improve the eectiveness and e-
ciency of the distribution of our brands and to enhance our revenue
growth. These charges also include closing costs, one- time nancing
costs and advisory fees related to our acquisitions of PBG and PAS.
In addition, we recorded $9million of merger–related charges, rep-
resenting our share of the respective merger costs of PBG and PAS,
in bottling equity income. Substantially all cash payments related
to the above charges were made by the end of 2011. In total, these
charges had an after- tax impact of $648million or $0.40 per share.
PepsiCo, Inc.  Annual Report

Notes to Consolidated Financial Statements