Pepsi 2007 Annual Report Download - page 67

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2005 Restructuring Charge
In 2005, we incurred a charge of $83 million
($55 million after-tax or $0.03 per share)
in conjunction with actions taken to
reduce costs in our operations, principally
through headcount reductions. Of this
charge, $34 million related to FLNA,
$21 million to PBNA, $16 million to PI
and $12 million to Corporate. Most of
this charge related to the termination
of approximately 700 employees. As of
December 30, 2006, all terminations had
occurred, and as of December 29, 2007,
no accrual remains.
Note 4 — Property, Plant and Equipment and Intangible Assets
Average Useful Life 2007 2006 2005
Property, plant and equipment, net
Land and improvements 10 – 34 yrs. $ 864 $ 756
Buildings and improvements 20 – 44 4,577 4,095
Machinery and equipment, including fleet and software 5 – 14 14,471 12,768
Construction in progress 1,984 1,439
21,896 19,058
Accumulated depreciation
(10,668) (9,371)
$ 11,228 $ 9,687
Depreciation expense $1,304 $1,182 $1,103
Amortizable intangible assets, net
Brands 5 – 40 $ 1,476 $1,288
Other identifiable intangibles 3 – 15 344 290
1,820 1,578
Accumulated amortization (1,024) (941)
$ 796 $ 637
Amortization expense $58 $162 $150
Property, plant and equipment is
recorded at historical cost. Depreciation
and amortization are recognized on a
straight-line basis over an asset’s esti-
mated useful life. Land is not depreciated
and construction in progress is not depre-
ciated until ready for service. Amortization
of intangible assets for each of the next
fi ve years, based on average 2007 foreign
exchange rates, is expected to be
$62 million in 2008, $60 million in 2009,
$60 million in 2010, $59 million in 2011
and $59 million in 2012.
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