Pepsi 2012 Annual Report Download - page 83

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A summary of our Productivity Plan activity in 2011 and
2012 was as follows:
Severance
and Other
Employee Costs
Asset
Impairments
Other
Costs Total
2011 restructuring
charges $ 327 $ – $ 56 $ 383
Cash payments (1) – (29) (30)
Non-cash charges (77) – – (77)
Liability as of
December31, 2011 249 – 27 276
2012 restructuring
charges 89 75 115 279
Cash payments (239) – (104) (343)
Non-cash charges (8) (75 ) (2) (85)
Liability as of
December29, 2012 $ 91 $ – $ 36 $ 127
In 2012, we incurred merger and integration charges of
$16million ($12million after-tax or $0.01 per share) related
to our acquisition of WBD, including $11 million recorded
in the Europe segment and $5million recorded in interest
expense. All of these net charges, other than the interest
expense portion, were recorded in selling, general and admin-
istrative expenses. The majority of cash payments related to
these charges were paid by the end of 2012.
In 2011, we incurred merger and integration charges of
$329million ($271million after-tax or $0.17 per share) related
to our acquisitions of PBG, PAS and WBD, including $112mil-
lion recorded in the PAB segment, $123million recorded in
the Europe segment, $78million recorded in corporate unallo-
cated 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 advi-
sory 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 million 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 effec-
tiveness and efficiency of the distribution of our brands and to
enhance our revenue growth. These charges also include clos-
ing costs, one-time financing costs and advisory fees related
to our acquisitions of PBG and PAS. In addition, we recorded
$9million of merger-related charges, representing 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.
A summary of our merger and integration activity was
as follows:
Severance
and Other
Employee Costs
Asset
Impairments
Other
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
2011 merger and
integration charges 146 34 149 329
Cash payments (191) – (186) (377)
Non-cash charges (36) (34) 19 (51)
Liability as of
December31, 2011 98 – 7 105
2012 merger and
integration charges (3) 1 18 16
Cash payments (65) – (18) (83)
Non-cash charges (12) (1) (1) (14)
Liability as of
December29, 2012 $ 18 $ – $ 6 $ 24
Note— Property, Plant and Equipment and
Intangible Assets
Average Useful
Life (Years) 2012 2011 2010
Property, plant and
equipment, net
Land and improvements 10–34 $ 1,890 $ 1,951
Buildings and improvements 15–44 7,792 7,565
Machinery and equipment,
including fleet and software 5–15 24,743 23,798
Construction in progress 1,737 1,826
36,162 35,140
Accumulated depreciation (17,026) (15,442)
$ 19,136 $ 19,698
Depreciation expense $ 2,489 $ 2,476 $2,124
2012 PEPSICO ANNUAL REPORT 81
Notes to Consolidated Financial Statements