Pepsi 2013 Annual Report Download - page 67

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49
which will be reflected in our 2015 through 2018 results. These charges totaling $990 million will consist
of approximately $565 million of severance and other employee-related costs; approximately $210 million
for other costs, including consulting-related costs and the termination of leases and other contracts; and
approximately $215 million for asset impairments (all non-cash) resulting from plant closures and related
actions. We anticipate approximately $320 million of related cash expenditures during 2014, with the balance
of approximately $355 million of related cash expenditures in 2015 through 2018. See Note 3 to our
consolidated financial statements.
2012 Multi-Year Productivity Plan
The multi-year productivity plan we publicly announced on February 9, 2012 (2012 Productivity Plan)
includes actions in every aspect of our business that we believe will strengthen our complementary food,
snack and beverage businesses by leveraging new technologies and processes across PepsiCo’s operations,
go-to-market and information systems; heightening the focus on best practice sharing across the globe;
consolidating manufacturing, warehouse and sales facilities; and implementing simplified organization
structures, with wider spans of control and fewer layers of management. The 2012 Productivity Plan continues
to enhance PepsiCo’s cost-competitiveness and provide a source of funding for future brand-building and
innovation initiatives.
In 2013, we incurred restructuring charges of $110 million ($90 million after-tax or $0.06 per share) in
conjunction with our 2012 Productivity Plan, including $8 million in the FLNA segment, $1 million in the
QFNA segment, $7 million in the LAF segment, $21 million in the PAB segment, $50 million in the Europe
segment, $25 million in the AMEA segment and income of $2 million recorded in corporate unallocated
expenses representing adjustments of previously recorded amounts.
In 2012, we incurred restructuring charges of $279 million ($215 million after-tax or $0.14 per share) in
conjunction with our 2012 Productivity Plan, including $38 million recorded in the FLNA segment, $9 million
recorded in the QFNA segment, $50 million recorded in the LAF segment, $102 million recorded in the PAB
segment, $42 million recorded in the Europe segment, $28 million recorded in the AMEA segment and $10
million recorded in corporate unallocated expenses.
In 2011, we incurred restructuring charges of $383 million ($286 million after-tax or $0.18 per share) in
conjunction with our 2012 Productivity Plan, including $76 million recorded in the FLNA segment, $18
million recorded in the QFNA segment, $48 million recorded in the LAF segment, $81 million recorded in
the PAB segment, $77 million recorded in the Europe segment, $9 million recorded in the AMEA segment
and $74 million recorded in corporate unallocated expenses.
We expect to incur pre-tax charges of approximately $910 million, $110 million of which was reflected in
our 2013 results, $279 million of which was reflected in our 2012 results, $383 million of which was reflected
in our 2011 results, and the balance of which will be reflected in our 2014 through 2015 results. These charges
will consist of approximately $560 million of severance and other employee-related costs; approximately
$270 million for other costs, including consulting-related costs and the termination of leases and other
contracts; and approximately $80 million for asset impairments (all non-cash) resulting from plant closures
and related actions. These charges resulted in cash expenditures of $133 million in 2013, $343 million in
2012 and $30 million in 2011, with the balance of approximately $200 million expected in 2014 through
2015. See Note 3 to our consolidated financial statements.
Venezuela Currency Devaluation
In 2013, we recorded a $111 million net charge related to the devaluation of the bolivar for our Venezuela
businesses. $124 million of this charge was recorded in corporate unallocated expenses, with the balance
(equity income of $13 million) recorded in our PAB segment. In total, this net charge had an after-tax impact
of $111 million or $0.07 per share.