Pepsi 2010 Annual Report Download - page 48

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Management’s Discussion and Analysis
Our Business
Executive Overview 48
Our Operations 49
Our Customers 50
Our Distribution Network 51
Our Competition 51
Other Relationships 51
Our Business Risks 51
Our Critical Accounting Policies
Revenue Recognition 58
Goodwill and Other Intangible Assets 58
Income Tax Expense and Accruals 59
Pension and Retiree Medical Plans 60
Our Financial Results
Items Affecting Comparability 61
Results of Operations — Consolidated Review 63
Results of Operations — Division Review 65
Frito-Lay North America 65
Quaker Foods North America 66
Latin America Foods 66
PepsiCo Americas Beverages 67
Europe 67
Asia, Middle East & Africa 68
Our Liquidity and Capital Resources 69
Consolidated Statement of Income 71
Consolidated Statement of Cash Flows 72
Consolidated Balance Sheet 74
Consolidated Statement of Equity 75
Financials
Notes to Consolidated Financial Statements
Note 1 Basis of Presentation and Our Divisions 77
Note 2 Our Signicant Accounting Policies 80
Note 3 Restructuring, Impairment and Integration Charges 81
Note 4 Property, Plant and Equipment and Intangible Assets 82
Note 5 Income Taxes 84
Note 6 Stock-Based Compensation 85
Note 7 Pension, Retiree Medical and Savings Plans 86
Note 8 Noncontrolled Bottling Afliates 91
Note 9 Debt Obligations and Commitments 92
Note 10 Financial Instruments 94
Note 11 Net Income Attributable to PepsiCo per Common Share 97
Note 12 Preferred Stock 97
Note 13 Accumulated Other Comprehensive Loss
Attributable to PepsiCo 98
Note 14 Supplemental Financial Information 98
Note 15 Acquisitions 99
Management’s Responsibility for Financial Reporting 102
Management’s Report on Internal Control
Over Financial Reporting 103
Report of Independent Registered
Public Accounting Firm 104
Selected Financial Data 105
Reconciliation of GAAP and
Non-GAAP Information 107
Glossary 109
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