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56 PepsiCo, Inc. 2008 Annual Report
Management’s Discussion and Analysis
on the acquisition date and in subsequent periods. The provisions
of SFAS 141R are effective as of the beginning of our 2009 scal
year, with the exception of adjustments made to valuation allow-
ances on deferred taxes and acquired tax contingencies. Future
adjustments made to valuation allowances on deferred taxes and
acquired tax contingencies associated with acquisitions that
closed prior to the beginning of our 2009 scal year would apply
the provisions of SFAS 141R and will be evaluated based on the
outcome of these matters. We do not expect the adoption of
SFAS 141R to have a material impact on our nancial statements.
In December 2007, the FASB issued SFAS 160, Noncontrolling
Interests in Consolidated Financial Statements, an Amendment
of ARB 51 (SFAS 160). SFAS 160 amends Accounting Research
Bulletin (ARB) 51 to establish new standards that will govern the
accounting for and reporting of (1) noncontrolling interests in par-
tially owned consolidated subsidiaries and (2) the loss of control
of subsidiaries. The provisions of SFAS 160 are effective as of the
beginning of our 2009 scal year on a prospective basis. We do
not expect our adoption of SFAS 160 to have a signicant impact
on our nancial statements. In the rst quarter of 2009, we will
include the required disclosures for all periods presented.
In March 2008, the FASB issued SFAS 161, Disclosures
about Derivative Instruments and Hedging Activities (SFAS 161),
which amends and expands the disclosure requirements of
SFAS 133, Accounting for Derivative Instruments and Hedging
Activities (SFAS 133), to provide an enhanced understanding of
the use of derivative instruments, how they are accounted for
under SFAS 133 and their effect on nancial position, nancial
performance and cash ows. The disclosure provisions of SFAS 161
are effective as of the beginning of our 2009 scal year.
OUR FINANCIAL RESULTS
ITEMS AFFECTING COMPARABILITY
The year-over-year comparisons of our nancial results are
affected by the following items:
2008 2007 2006

Mark-to-market net impact $(346) $÷÷19 $÷«(18)
Restructuring and impairment charges $(543) $«(102) $÷«(67)
Net income
Mark-to-market net impact $(223) $÷÷12 $÷«(12)
Restructuring and impairment charges $(408) $÷«(70) $÷«(43)
Tax benets –$÷129 $÷602
PepsiCo share of PBG restructuring
and impairment charges $(114) – –
PepsiCo share of PBG tax settlement –– $÷÷18
Net income per common
share – diluted
Mark-to-market net impact $(0.14) $«0.01 $(0.01)
Restructuring and impairment charges $(0.25) $(0.04) $(0.03)
Tax benets –$«0.08 $«0.36
PepsiCo share of PBG restructuring
and impairment charges $(0.07) – –
PepsiCo share of PBG tax settlement –– $«0.01
Mark-to-Market Net Impact
We centrally manage commodity derivatives on behalf of our
divisions. These commodity derivatives include energy, fruit and
other raw materials. Certain of these commodity derivatives do
not qualify for hedge accounting treatment and are marked to
market with the resulting gains and losses recognized in corpo-
rate unallocated expenses. These gains and losses are subse-
quently reected in division results when the divisions take
delivery of the underlying commodity.
In 2008, we recognized $346 million ($223 million after-tax
or $0.14 per share) of mark-to-market net losses on commodity
hedges in corporate unallocated expenses.
In 2007, we recognized $19 million ($12 million after-tax or
$0.01 per share) of mark-to-market net gains on commodity
hedges in corporate unallocated expenses.
In 2006, we recognized $18 million ($12 million after-tax or
$0.01 per share) of mark-to-market net losses on commodity
hedges in corporate unallocated expenses.
Restructuring and Impairment Charges
In 2008, we incurred a charge of $543 million ($408 million
after-tax or $0.25 per share) in conjunction with our Productivity
for Growth program. The program includes actions in all divisions
of the business, including the closure of six plants that we believe