SEC Filing | PepsiCo

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Form 8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

April 10, 2003

Date of Report (Date of earliest event reported)

PepsiCo, Inc.

(Exact name of registrant as specified in its charter)

North Carolina

(State or other jurisdiction of incorporation)

1-1183		13-1584302
(Commission File Number)		(IRS Employer Identification No.)

700 Anderson Hill Road, Purchase, New York 10577

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (914) 253-2000

Item 7.

Financial Statements, Pro Forma Financial Information and Exhibits.

(c)

Exhibits

99.1

Press Release issued by PepsiCo, Inc. dated, April 10, 2003.

99.2

Letter to shareholders and investors, dated April 10, 2003.

99.3

Financial schedules.

Item 9.

Regulation FD Disclosure.

The information contained in this report is furnished pursuant to Item 12. Results of Operations and Financial Condition.

The information contained in Exhibits 99.1, 99.2 and 99.3 is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 10, 2003	PepsiCo, Inc.

	By:	/S/ THOMAS H. TAMONEY, JR.

		Thomas H. Tamoney, Jr. Vice President and Associate General Counsel

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INDEX TO EXHIBITS

Exhibit Number		Description

99.1		Press Release issued by PepsiCo, Inc., dated April 10, 2003.

99.2		Letter to shareholders and investors, dated April 10, 2003.

99.3		Financial schedules.

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Press Release issued by PepsiCo., Inc. dated April 10, 2003

Exhibit 99.1

PepsiCo Posts Historical Financial Information Reflecting Organization and Calendar Changes

PURCHASE, NY (April 10, 2003) — PepsiCo today said it has posted on its website at www.pepsico.com 2002 and 2001 financial information reflecting the following previously announced adjustments:

•

The combination of Pepsi-Cola North America (PCNA) and Gatorade/Tropicana North America (GTNA) into PepsiCo Beverages North America (PBNA);

•

The combination of Frito-Lay International (FLI) and PepsiCo Beverages International (PBI) into PepsiCo International (PI);

•

The change in the reporting calendar for the Quaker U.S. businesses (Gatorade and Quaker snacks and U.S. foods) from months to fiscal periods; and

•

The reclassification of divested businesses from line of business results to a separate line item. Divested businesses include our Quaker Foods North America (QFNA) Mission pasta business, which was sold in 2003, as well as our QFNA bagged cereal business and our FLI Colombia and Venezuela foods businesses, sold in 2002. The businesses sold in 2002 were reclassified and reflected as divested businesses in our 2002 Annual Report.

These changes do NOT affect full year total volume, total net sales, total operating profit, net income or earnings per share. The changes simply adjust results by quarter and by division.

Letter to Shareholders an Investors, dated April 10, 2003

Exhibit 99.2

April 10, 2003

As mentioned in previous earnings conference calls, starting with the first quarter of 2003 our financial statements will reflect:

•

The combination of Pepsi-Cola North America (PCNA) and Gatorade/Tropicana North America (GTNA) into PepsiCo Beverages North America (PBNA);

•

The combination of Frito-Lay International (FLI) and PepsiCo Beverages International (PBI) into PepsiCo International (PI);

•

The change in the reporting calendar for the Quaker U.S. businesses (Gatorade and Quaker snacks and US Foods) from months to fiscal periods; and

•

These changes do NOT affect full year total volume, total net sales, total operating profit, net income or earnings per share. The changes simply adjust results by quarter and by division.

To present prior year information on the same basis as 2003, we have attached Excel schedules which show:

•

Schedule I—Adjusted reported revenue, operating profit, net income and EPS by quarter and full year for 2002 and 2001;

•

Schedule II—Adjusted comparable revenue, operating profit, net income and EPS by quarter and full year for 2002 and 2001;

•

Schedule III—Adjusted volume growth by quarter for 2002 and full year for 2002 and 2001;

•

Schedule IV—A comparison of the adjusted comparable growth rates with originally communicated comparable growth rates;

•

Schedule V—A reconciliation of PepsiCo’s adjusted reported results with the adjusted comparable results; and

•

Schedule VI—A summary of PepsiCo’s reporting calendar by division.

These schedules are also posted on our website at www.pepsico.com.

Please notice that quarterly 2002 reported and comparable EPS, as adjusted, differ from the previously communicated EPS numbers. Full year 2002 reported and comparable EPS remain unchanged. To the extent that your models provide quarterly historical or 2003 details, you may wish to adjust your comparative results to avoid any confusion when we issue our first quarter results on April 17.

Financial Schedules

Schedule I

Exhibit 99.3

PepsiCo

Unaudited Reported Information

(in millions, except per share amounts)

	First Quarter							Second Quarter							Third Quarter							Fourth Quarter							Full Year
	2002			2001			Index	2002			2001			Index	2002			2001			Index	2002			2001			Index	2002			2001			Index
Total Net Sales	$	5,311		$	4,912		108	$	6,119		$	5,807		105	$	6,300		$	5,901		107	$	7,382		$	6,892		107	$	25,112		$	23,512		107

Total Operating Profit	$	1,001		$	898		112	$	1,226		$	1,141		107	$	1,297		$	951		137	$	1,206		$	1,031		117	$	4,730		$	4,021		118

Bottling Equity Income, net		27			5		NM		94			63		149		130			85		152		29			7		NM		280			160		175
Interest Expense, net		(19	)		(32	)	59		(38	)		(41	)	93		(36	)		(35	)	102		(49	)		(44	)	114		(142	)		(152	)	94

Income Before Taxes		1,009			871		116		1,282			1,163		110		1,391			1,001		139		1,186			994		119		4,868			4,029		121

Provision for Income Taxes		320			278		115		407			372		109		438			391		112		390			326		119		1,555			1,367		114

Net Income	$	689		$	593		116	$	875		$	791		111	$	953		$	610		156	$	796		$	668		119	$	3,313		$	2,662		124

Average Shares Outstanding—Diluted		1,801			1,800				1,809			1,810				1,789			1,817				1,756			1,800				1,789			1,807
Diluted Earnings Per Common Share	$	0.38		$	0.33		116	$	0.48		$	0.44		111	$	0.53		$	0.34		159	$	0.45		$	0.37		122	$	1.85		$	1.47		126

Note: Indices based on unrounded amounts.

Schedule II

PepsiCo

Unaudited Comparable Information

(in millions, except per share amounts)

	First Quarter							Second Quarter							Third Quarter							Fourth Quarter							Full Year
	2002			2001			Index	2002			2001			Index	2002			2001			Index	2002			2001			Index	2002			2001			Index
Net Sales

Frito-Lay North America	$	1,926		$	1,803		107	$	2,026		$	1,956		104	$	2,073		$	2,008		103	$	2,540		$	2,449		104	$	8,565		$	8,216		104

PepsiCo Beverages North America		1,486			1,417		105		1,827			1,799		102		1,956			1,822		107		1,931			1,850		104		7,200			6,888		105

Quaker Foods North America		357			350		102		306			294		104		341			347		98		460			446		103		1,464			1,437		102

PepsiCo International		1,508			1,467		103		1,924			1,887		102		1,896			1,853		102		2,421			2,297		105		7,749			7,504		103


Total Division Net Sales		5,277			5,037		105		6,083			5,936		102		6,266			6,030		104		7,352			7,042		104		24,978			24,045		104

Divested Businesses		34			37		92		36			44		83		34			41		82		30			51		58		134			173		77


Total Net Sales	$	5,311		$	5,074		105	$	6,119		$	5,980		102	$	6,300		$	6,071		104	$	7,382		$	7,093		104	$	25,112		$	24,218		104

Operating Profit

Frito-Lay North America	$	479		$	429		112	$	526		$	490		107	$	558		$	524		107	$	653		$	613		107	$	2,216		$	2,056		108

PepsiCo Beverages North America		326			288		113		448			420		106		465			413		113		338			345		98		1,577			1,466		108

Quaker Foods North America		114			88		129		97			74		133		119			96		123		143			131		109		473			389		122

PepsiCo International		202			179		113		288			241		120		280			237		117		272			206		133		1,042			863		121


Total Division Operating Profit		1,121			984		114		1,359			1,225		111		1,422			1,270		112		1,406			1,295		109		5,308			4,774		111

Divested Businesses		—			8		NM		9			11		87		6			11		62		8			9		78		23			39		59
Corporate Unallocated		(84	)		(78	)	107		(77	)		(84	)	92		(98	)		(78	)	125		(118	)		(131	)	91		(377	)		(371	)	102

Total Operating Profit		1,037			914		113		1,291			1,152		112		1,330			1,203		111		1,296			1,173		110		4,954			4,442		112

Bottling Equity Income, net		27			21		131		94			78		120		130			100		129		29			26		112		280			225		124
Interest Expense, net		(19	)		(34	)	58		(38	)		(41	)	91		(36	)		(35	)	100		(49	)		(44	)	113		(142	)		(154	)	92


Income Before Taxes		1,045			901		116		1,347			1,189		113		1,424			1,268		112		1,276			1,155		110		5,092			4,513		113

Provision for Income Taxes		326			281		116		420			371		113		444			395		112		399			361		110		1,589			1,408		113


Net Income	$	719		$	620		116	$	927		$	818		113	$	980		$	873		112	$	877		$	794		110	$	3,503		$	3,105		113


Average Shares Outstanding—Diluted		1,801			1,800				1,809			1,810				1,789			1,817				1,756			1,800				1,789			1,807
Diluted Earnings Per Common Share	$	0.40		$	0.34		116	$	0.51		$	0.45		113	$	0.55		$	0.48		114	$	0.50		$	0.44		113	$	1.96		$	1.72		114

Note: Indices based on unrounded amounts.

See accompanying reconciliation to reported results.

Schedule III

PepsiCo

Volume Growth

	Index 2002 vs 2001					Index 2001 vs 2000
	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Full Year	Full Year
Total Divisions (Servings)	105	103	105	104	104	104

Frito-Lay North America (Pounds)	106	104	104	103	104	103

PBNA (8 oz. equivalent cases)	105	101	105	101	103	104
Carbonated	104	98	102	98	100	101
Non-carbonated	107	107	113	111	110	114

Quaker Foods North America (Pounds)	104	102	99	102	102	99

PepsiCo International
International Beverages (8 oz. equivalent cases)	105	105	105	106	105	105
International Snacks (Kilos)	105	103	103	108	105	107
International Foods (Kilos)	110	104	111	102	106	103

Servings are calculated based on the following per serving amounts:

–

30 grams for salty snacks,

–

40 grams for sweet snacks,

–

45 grams for other foods and

–

8 ounces for beverages.

Schedule IV

PepsiCo.

2002 vs. 2001 Year-Over-Year Growth Comparisons Presented on a Comparable

	Originally Communicated Comparable						Adjusted Comparable					Change
	Q1	Q2	Q3	Q4		Full Year	Q1	Q2	Q3	Q4	Full Year	Q1		Q2		Q3		Q4		Full Year
Volume (Index)

Frito-Lay North America	106	104.5	104		103	104	106	104	104	103	104	—		(0.5	)	—		—		—

Pepsi-Cola North America	104.5	100	104		99	102
Gatorade/Tropicana North America	104	105	110		110	108
PepsiCo Beverages North America							105	101	105	101	103

Quaker Foods North America	104	101	94		104	102	104	102	99	102	102	—		1		5		(2	)	—

PepsiCo Beverages International	104	105	105		106	105
Frito-Lay International	106	105	105		108	106
International Beverages							105	105	105	106	105
International Snacks							105	103	103	108	105
International Foods (Kilos)							110	104	111	102	106

Total Divisions	105	103	104		104	104	105	103	105	104	104	—		—		1		—		—

Net Sales (Index)

Frito-Lay North America	107	104	103		104	104	107	104	103	104	104	—		—		—		—		—

Pepsi-Cola North America	107	104	107		104	106
Gatorade/Tropicana North America	103	99	108		104	104
PepsiCo Beverages North America							105	102	107	104	105

Quaker Foods North America	104	101	96		102	102	102	104	98	103	102	(2	)	3		2		1		—

PepsiCo Beverages International	98	100	100		105	101
Frito-Lay International	104	103	103		106	104
PepsiCo International							103	102	102	105	103

Division Net Sales	105	102	104		104	104	105	102	104	104	104	—		—		—		—		—

Operating Profit (Index)

Frito-Lay North America	111	108	106		107	108	112	107	107	107	108	1		(1	)	1		—		—

Pepsi-Cola North America	115	109	112		113	112
Gatorade/Tropicana North America	103	103	114		68	101
PepsiCo Beverages North America							113	106	113	98	108

Quaker Foods North America	125	131	114		110	121	129	133	123	109	122	4		2		9		(1	)	1

PepsiCo Beverages International	109	108	110	$	29MM	123
Frito-Lay International	113	129	121		118	120
PepsiCo International							113	120	117	133	121

Division Operating Profit	112	112	111		110	111	114	111	112	109	111	2		(1	)	1		(1	)	—

Pretax Income ($ in millions)	991	1,365	1,447		1,289	5,092	1,045	1,347	1,424	1,276	5,092	54		(18	)	(23	)	(13	)	—

Net Income ($ in millions)	681	940	996		886	3,503	719	926	981	877	3,503	38		(14	)	(15	)	(9	)	—

EPS ($)	0.38	0.52	0.56		0.50	1.96	0.40	0.51	0.55	0.50	1.96	0.02		(0.01	)	(0.01	)	—		—

Schedule V

PepsiCo

Reconciliation of Reported to Comparable Information

(in millions, except per share amounts)

	First Quarter				Second Quarter					Third Quarter					Fourth Quarter				Full Year
	2002		2001		2002		2001			2002		2001			2002		2001		2002		2001
Total Reported Net Sales	$	5,311	$	4,912	$	6,119	$	5,807		$	6,300	$	5,901		$	7,382	$	6,892	$	25,112	$	23,512

SVE consolidation		—		162		—		173			—		170			—		201		—		706

Total Comparable Net Sales	$	5,311	$	5,074	$	6,119	$	5,980		$	6,300	$	6,071		$	7,382	$	7,093	$	25,112	$	24,218

Total Reported Operating Profit	$	1,001	$	898	$	1,226	$	1,141		$	1,297	$	951		$	1,206	$	1,031	$	4,730	$	4,021

Merger-related costs		36		—		65		—			33		235			90		121		224		356
SFAS 142 adoption		—		8		—		3			—		5			—		7		—		23
SVE consolidation		—		4		—		5			—		—			—		4		—		13
Other impairment and restructuring charges		—		4		—		4			—		13			—		10		—		31
Other		—		—		—		(1	)		—		(1	)		—		—		—		(2	)

Total Comparable Operating Profit	$	1,037	$	914	$	1,291	$	1,152		$	1,330	$	1,203		$	1,296	$	1,173	$	4,954	$	4,442

Total Reported Bottling Equity Income	$	27	$	5	$	94	$	63		$	130	$	85		$	29	$	7	$	280	$	160

SFAS 142 adoption		—		16		—		15			—		15			—		19		—		65

Total Comparable Bottling Equity Income	$	27	$	21	$	94	$	78		$	130	$	100		$	29	$	26	$	280	$	225

Total Reported Net Income	$	689	$	593	$	875	$	791		$	953	$	610		$	796	$	668	$	3,313	$	2,662

Merger-related costs		30		—		52		—			27		231			81		91		190		322
SFAS 142 adoption		—		25		—		24			—		24			—		29		—		102
Other impairment and restructuring charges		—		2		—		3			—		8			—		6		—		19

Total Comparable Net Income	$	719	$	620	$	927	$	818		$	980	$	873		$	877	$	794	$	3,503	$	3,105

Total Reported Earnings Per Common Share	$	0.38	$	0.33	$	0.48	$	0.44		$	0.53	$	0.34		$	0.45	$	0.37	$	1.85	$	1.47

Merger-related costs		0.02		—		0.02		—			0.02		0.13			0.05		0.05		0.11		0.18
SFAS 142 adoption		—		0.01		—		0.01			—		0.01			—		0.02		—		0.06
Other impairment and restructuring charges		—		—		0.01		—			—		0.01			—		—		—		0.01
Rounding													(0.01	)

Total Comparable Earnings Per Common Share	$	0.40	$	0.34	$	0.51	$	0.45		$	0.55	$	0.48		$	0.50	$	0.44	$	1.96	$	1.72

For further information, see "Items Affecting Comparability" on page 30 in our 2002 Annual Report.

Comparable amounts are presented to reflect our business trends without certain items and with consistent treatment of other changes, such as changes in accounting principles. As a result, our comparable presentation facilitates comparison with prior periods. Reported amounts reflect our results under U.S. generally accepted accounting principles. Comparable results have not been prepared under U.S. generally accepted accounting principles, and should not be considered an alternative measure to U.S. generally accepted accounting principles. Our comparable results exclude the costs associated with our merger with Quaker and other impairment and restructuring costs, and include the impact in 2001 of the following 2002 accounting changes:

—

the adoption of Statement of Financial Accounting Standards No. (SFAS) 142, Goodwill and Intangibles. As a result of adoption, amortization ceased for nonamortizable intangibles and the remaining useful lives of certain amortizable intangibles were reduced and

—

the consolidation of our European snack joint venture (SVE) as a result of operational changes.

Schedule VI

	Reporting Calendar by Division
	First Quarter	Second Quarter	Third Quarter	Fourth Quarter

Frito-Lay North America	3 fiscal periods	3 fiscal periods	3 fiscal periods	4 fiscal periods

PepsiCo Beverages North America*	3 fiscal periods	3 fiscal periods	3 fiscal periods	4 fiscal periods

Quaker Foods North America	3 fiscal periods	3 fiscal periods	3 fiscal periods	4 fiscal periods

PepsiCo International**	3 fiscal periods/ 2 months	3 fiscal periods/ 3 months	3 fiscal periods/ 3 months	4 fiscal periods/ 4 months

* Volume is reported as stated for the Gatorade and Tropicana brands and is reported based on monthly bottler case sales for products distributed by our bottlers (Q1-3 months, Q2-2 months, Q3-3 months, Q4-4 months).

** The operating results and volume of our largest international snack businesses are reported based on fiscal periods. However, the operating results and volume of a small portion of our international snack business and all of our international beverages business are reported on a monthly calendar with Q1-2 months, Q2-3 months, Q3-3 months, Q4-4 months. Monthly reporting is used where necessary to facilitate compliance with statutory requirements. Note that volume for international beverages was formerly reported based on Q1-3 months, Q2-2 months, Q3-3 months, Q4-4 months.