Pepsi 2012 Annual Report Download - page 101

2012 2011
Other assets
Noncurrent notes and accounts receivable $ 136 $ 159
Deferred marketplace spending 195 186
Pension plans 62 65
Other investments(a) 718 89
Other 542 522
$ 1,653 $ 1,021
Accounts payable and other current liabilities
Accounts payable $ 4,451 $ 4,083
Accrued marketplace spending 2,187 2,105
Accrued compensation and benefits 1,705 1,771
Dividends payable 838 813
Other current liabilities 2,722 2,985
$ 11,903 $ 11,757
(a) Net increase in 2012 primarily relates to our 5% indirect equity interest in Tingyi-
Asahi Beverages Holding Co. Ltd. (TAB).
2012 2011 2010
Other supplemental information
Rent expense $ 581 $ 589 $ 526
Interest paid $ 1,074 $ 1,039 $ 1,043
Income taxes paid, net of refunds $ 1,840 $ 2,218 $ 1,495
Note— Acquisitions and Divestitures
PBG and PAS
On February26, 2010, we acquired PBG and PAS to create
a more fully integrated supply chain and go-to-market busi-
ness model, improving the effectiveness and efficiency of
the distribution of our brands and enhancing our revenue
growth. The total purchase price was approximately $12.6bil-
lion, which included $8.3billion of cash and equity and the fair
value of our previously held equity interests in PBG and PAS
of $4.3billion. The acquisitions were accounted for as busi-
ness combinations, and, accordingly, the identifiable assets
acquired and liabilities assumed were recorded at their esti-
mated fair values at the date of acquisition. Our fair market
valuations of the identifiable assets acquired and liabilities
assumed were completed in the first quarter of 2011.
WBD
On February3, 2011, we acquired the ordinary shares, includ-
ing shares underlying ADSs and Global Depositary Shares
(GDS), of WBD, a company incorporated in the Russian
Federation, which represented in the aggregate approxi-
mately 66% of WBD’s outstanding ordinary shares, pursuant
to the purchase agreement dated December1, 2010 between
PepsiCo and certain selling shareholders of WBD for approxi-
mately $3.8 billion in cash (or $2.4 billion, net of cash and
cash equivalents acquired). The acquisition of those shares
increased our total ownership to approximately 77%, giving us
a controlling interest in WBD. Under the guidance on account-
ing for business combinations, once a controlling interest is
obtained, we were required to recognize and measure 100%
of the identifiable assets acquired, liabilities assumed and
noncontrolling interests at their full fair values. Our fair market
valuations of the identifiable assets acquired and liabilities
assumed were completed in the first quarter of 2012 and the
final valuations did not materially differ from those fair values
reported as of December31, 2011.
On March10, 2011, we commenced tender offers in Russia
and the U.S. for all remaining outstanding ordinary shares
andADSs of WBD for 3,883.70 Russian rubles per ordinary
share and 970.925 Russian rubles per ADS, respectively. The
Russian offer was made to all holders of ordinary shares and
the U.S. offer was made to all holders of ADSs. We com-
pleted the Russian offer on May19, 2011 and the U.S. offer on
May16, 2011. After completion of the offers, we paid approxi-
mately $1.3billion for WBD’s ordinary shares (including shares
underlying ADSs) and increased our total ownership of WBD
to approximately 98.6%.
On June30, 2011, we elected to exercise our squeeze-out
rights under Russian law with respect to all remaining WBD
ordinary shares not already owned by us. Therefore, under
Russian law, all remaining WBD shareholders were requiredto
sell their ordinary shares (including those underlying ADSs)
tous at the same price that was offered to WBD shareholders
in the Russian tender offer. Accordingly, all registered holders
of ordinary shares on August 15, 2011 (including the ADSs
depositary) received 3,883.70 Russian rubles per ordinary
share. After completion of the squeeze-out in September
2011, we paid approximately $79million for WBD’s ordinary
shares (including shares underlying ADSs) and increased our
total ownership to 100% of WBD.
Tingyi-Asahi Beverages Holding Co. Ltd.
On March31, 2012, we completed a transaction with Tingyi.
Under the terms of the agreement, we contributed our com-
pany-owned and joint venture bottling operations in China to
Tingyi’s beverage subsidiary, TAB, and received as consider-
ation a 5% indirect equity interest in TAB. As a result of this
transaction, TAB is now our franchise bottler in China. We
also have a call option to increase our indirect holding in TAB
to 20% by 2015. We recorded restructuring and other charges
of $150 million ($176million after-tax or $0.11 per share),
primarily consisting of employee-related charges, in our 2012
results. This charge is reflected in items affecting compara-
bility. See “Items Affecting Comparability” in Management’s
Discussion and Analysis.
2012 PEPSICO ANNUAL REPORT 99
Notes to Consolidated Financial Statements