Pepsi 2010 Annual Report Download - page 94

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93
are outstanding), 4.375% notes due 2014 ($350million princi-
pal amount of which are outstanding), 4.875% notes due 2015
($300million principal amount of which are outstanding), 5.00%
notes due 2017 ($250million principal amount of which are
outstanding) and 5.50% notes due 2035 ($250million principal
amount of which are outstanding).These notes are guaranteed
by PepsiCo.
On February 26, 2010, as a result of the transactions con-
templated by the PBG merger agreement, Bottling Group,
LLC became a wholly owned subsidiary of Metro.Bottling
Group, LLC’s 4.625% senior notes due 2012 ($1billion principal
amount of which are outstanding), 4.125% senior notes due 2015
($250million principal amount of which are outstanding), 5.00%
senior notes due 2013 ($400million principal amount of which
are outstanding), 5.50% senior notes due 2016 ($800million
principal amount of which are outstanding), 6.95% senior notes
due 2014 ($1.3billion principal amount of which are outstanding)
and 5.125% senior notes due 2019 ($750million principal amount
of which are outstanding) are guaranteed by PepsiCo.
As of December25, 2010, the long-term debt acquired from
our anchor bottlers (including debt previously issued by PBG,
Bottling Group, LLC and PAS) in connection with our acquisi-
tions of PBG and PAS has a total face value of approximately
$7,484million (fair value of $8,472million) with a weighted-
average stated interest rate of 5.7%. This acquired debt has a
remaining weighted-average maturity of 6.6 years. See Note 15.
In the third quarter of 2010, we entered into a $2,575million
364-day unsecured revolving credit agreement which expires in
June2011. We may request renewal of this facility for an addi-
tional 364-day period or convert any amounts outstanding into
a term loan for a period of up to one year, which would mature no
later than June 2012. This agreement replaced our $1,975million
364-day unsecured revolving credit agreement and a $540mil-
lion amended PAS credit facility and is in addition to our exist-
ing $2,000million unsecured revolving credit agreement and
the $1,080million amended PBG credit facility, both of which
expire in 2012. Funds borrowed under these agreements may be
used for general corporate purposes, including but not limited to
repayment of our outstanding commercial paper, working capi-
tal, capital investments and/or acquisitions. Borrowings under
the amended PBG credit facility are guaranteed by PepsiCo. Our
lines of credit remain unused as of December25, 2010.
In the fourth quarter of 2010, we paid $672million in a cash
tender oer to repurchase $500million (aggregate principal
amount) of our 7.90% senior unsecured notes maturing in 2018.
As a result of this debt repurchase, we recorded a $178million
charge to interest expense, primarily representing the premium
paid in the tender oer.
In the fourth quarter of 2010, we issued $500million of 0.875%
senior unsecured notes maturing in 2013, $1.0billion of 3.125%
senior unsecured notes maturing in 2020 and $750million of
4.875% senior unsecured notes maturing in 2040. A portion
of the net proceeds from the issuance of these notes was used
to finance the debt repurchase and the remainder was used for
general corporate purposes.
In addition, as of December25, 2010, $657million of our debt
related to borrowings from various lines of credit that are main-
tained for our international divisions. These lines of credit are
subject to normal banking terms and conditions and are fully
committed at least to the extent of our borrowings.
Long-Term Contractual Commitments(a)
Payments Due by Period
2016 and
Total 2011 2012–2013 2014–2015 beyond
Long-term debt obligations(b) $19,337 $ – $4,569 $4,322 $10,446
Interest on debt obligations(c) 7,746 809 1,480 1,075 4,382
Operating leases 1,676 390 543 320 423
Purchasing commitments 2,433 765 1,159 481 28
Marketing commitments 824 294 268 151 111
$32,016 $2,258 $8,019 $6,349 $15,390
(a) Reects non-cancelable commitments as of December25, 2010 based on year-end foreign exchange rates and excludes any reserves for uncertain tax positions as
we are unable to reasonably predict the ultimate amount or timing of settlement.
(b) Excludes $662million related to the fair value step-up of debt acquired in connection with our acquisitions of PBG and PAS, as well as $113million related to current
maturities of long-term debt.
(c) Interest payments on oating-rate debt are estimated using interest rates effective as of December25, 2010.