Pepsi 2012 Annual Report Download - page 57
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Please find page 57 of the 2012 Pepsi annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.equity income. In total, the above charges had an after-tax
impact of $648million or $0.40 per share.
Restructuring and Impairment Charges
In 2012, we incurred restructuring charges of $279million
($215million after-tax or $0.14 per share) in conjunction with
our multi-year productivity plan (Productivity Plan), includ-
ing $38million recorded in the FLNA segment, $9million
recorded in the QFNA segment, $50million recorded in the
LAF segment, $102million recorded in the PAB segment,
$42million recorded in the Europe segment, $28 million
recorded in the AMEA segment and $10million recorded in
corporate unallocated expenses.
In 2011, we incurred restructuring charges of $383mil-
lion ($286million after-tax or $0.18 per share) in conjunction
with our Productivity Plan, including $76million recorded in
the FLNA segment, $18million recorded in the QFNA seg-
ment, $48million recorded in the LAF segment, $81million
recorded in the PAB segment, $77million recorded in the
Europe segment, $9million recorded in the AMEA segment
and $74million recorded in corporate unallocated expenses.
The Productivity Plan includes actions in every aspect of
our business that we believe will strengthen our complemen-
tary 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 manu-
facturing, warehouse and sales facilities; and implementing
simplified 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
initiatives, and serve as a financial cushion for potential mac-
roeconomic uncertainty. As a result, we expect to incur pre-tax
charges of approximately $910million, $279million of which
was reflected in our 2012 results, $383million of which was
reflected in our 2011 results, and the balance of which will be
reflected in our 2013 through 2015 results. These charges will
consist of approximately $540million of severance and other
employee-related costs; approximately $270million for other
costs, including consulting-related costs and the termination
of leases and other contracts; and approximately $100 mil-
lion for asset impairments (all non-cash) resulting from plant
closures and related actions. These charges resulted in cash
expenditures of $343million in 2012 and $30million in 2011,
with the balance of approximately $362 million expected in
2013 through 2015. See Note 3 to our consolidated finan-
cial statements.
Restructuring and Other Charges Related to the
Transaction with Tingyi
In 2012, we recorded restructuring and other charges of
$150million ($176million after-tax or $0.11 per share) in the
AMEA segment related to the transaction with Tingyi. See
Note15 to our consolidated financial statements.
Pension Lump Sum Settlement Charge
In 2012, we recorded a pension lump sum settlement charge in
corporate unallocated expenses of $195million ($131million
after-tax or $0.08 per share). See Note7 to our consolidated
financial statements.
Tax Benet Related to Tax Court Decision
In 2012, we recognized a non-cash tax benefit of $217million
($0.14 per share) associated with a favorable tax court deci-
sion related to the classification of financial instruments. See
Note5 to our consolidated financial statements.
53rd Week
In 2011, we had an additional week of results (53rd week).
Our fiscal year ends on the last Saturday of each December,
resulting in an additional week of results every five or six years.
The 53rd week increased 2011 net revenue by $623million
and operating profit by $109million ($64million after-tax or
$0.04 per share).
Inventory Fair Value Adjustments
In 2011, we recorded $46 million ($28 million after-tax or
$0.02 per share) of incremental costs in cost of sales related
to fair value adjustments to the acquired inventory included
in WBD’s balance sheet at the acquisition date and hedging
contracts included in PBG’s and PAS’s balance sheets at the
acquisition date.
In 2010, we recorded $398million ($333million after-tax
or $0.21 per share) of incremental costs related to fair value
adjustments to the acquired inventory and other related hedg-
ing contracts included in PBG’s and PAS’s balance sheets
at the acquisition date. Substantially all of these costs were
recorded in cost of sales.
Gain on Previously Held Equity Interests
In 2010, in connection with our acquisitions of PBG and PAS,
we recorded a gain on our previously held equity interests of
$958million ($0.60 per share), comprising $735million which
was non-taxable and recorded in bottling equity income and
$223million related to the reversal of deferred tax liabilities
associated with these previously held equity interests.
Management’s Discussion and Analysis
2012 PEPSICO ANNUAL REPORT 55