SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
February 9, 2004 (February 5, 2004)
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
PepsiCo, Inc. (the “Company”) is filing this amendment to its Current Report on Form 8-K filed with the Securities and Exchange Commission on February 5, 2004. The Current Report on Form 8-K filed on February 5, 2004 is referred to herein as the “Original Report.”
Item 12. Results of Operations and Financial Condition.
On February 5, 2004, the Company issued a press release relating to the Company’s earnings for the fourth quarter and of fiscal year ended 2003. A copy of the press release was attached as Exhibit 99.1 to the Original Report.
As set forth in this Current Report on Form 8-K/A, the Company revised its 2003 and 2002 financial results issued on February 5, 2004 to correct the overstatement of stock option expense due to a computational error. Accordingly, the Company is furnishing the attached revisions to correct information that was furnished in the Original Report.
The information, including the exhibits attached hereto, in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as otherwise expressly stated in such filing.
Attached and incorporated herein by reference as Exhibit 99.2 is a copy of the press release of the Company, dated February 9, 2004, reporting the Company’s revisions to its 2003 and 2002 financial results issued in the Original Report.
-2-
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: February 9, 2004 |
PepsiCo, Inc. | |||||||
| By: | /s/ Robert E. Cox | |||||||
| Robert E. Cox Vice President, Associate General Counsel, and Assistant Secretary | ||||||||
-3-
INDEX TO EXHIBITS
| Exhibit Number |
Description | |
| 99.2 | Press Release issued by PepsiCo, Inc., dated February 9, 2004. | |
-4-
Exhibit 99.2
PEPSICO REVISES UP 2002 AND 2003 EPS DUE TO
OVERSTATEMENT OF STOCK OPTION EXPENSE
| • | 2003 EPS increases by $0.04 to $2.05; a 22% growth rate |
| • | No impact on division operating profit or cash flow |
| • | 2004 EPS guidance adjusted to a range of $2.27 to $2.29 |
PURCHASE, NY (Feb. 9, 2004) — PepsiCo revised its 2003 and 2002 financial results issued on February 5, 2004 to correct the overstatement of stock option expense due to a computational error. The revision increased the previously reported earnings per share for 2003 by $0.04 to $2.05, and for 2002 by $0.02 to $1.68, on a fully diluted basis. The stock option expense is a non-cash charge and the revision had no impact on the company’s previously reported cash flow or division operating profit.
PepsiCo adjusted its 2004 earnings per share guidance to a range of $2.27 to $2.29, 11-12% growth compared to 2003. “A correction of the computational error and a re-estimation of costs, combined with the continued business momentum we are seeing, gives us confidence to take up the EPS range,” said Steve Reinemund, Chairman and CEO.
Summary
| Previous |
Adjusted | |||||||
| EPS |
% to PY |
EPS |
% to PY | |||||
| 2002 |
$1.66 | 27% | $1.68 | 27% | ||||
| 2003 |
$2.01 | 21% | $2.05 | 22% | ||||
| 2004 Guidance |
$2.24 – $2.28 | 11 – 13% | $2.27 – $2.29 | 11 – 12% | ||||
Cautionary Statement
This release contains statements concerning PepsiCo’s expectations for future performance. Any such forward-looking statements are inherently speculative and are based on currently available information, operating plans and projections about future events and trends. As such, they are subject to numerous risks and uncertainties. Actual results and performance may be significantly different from expectations. Please see our filings with the Securities and Exchange Commission, including our Annual Report on form 10-K, for a discussion of specific risks that may affect our performance.
# # #
-2-
PepsiCo, Inc. and Subsidiaries
Condensed Consolidated Statement of Income
(in millions except per share amounts)
| 16 Weeks Ended |
52 Weeks Ended |
|||||||||||||||
| 12/27/03 |
12/28/02 |
12/27/03 |
12/28/02 |
|||||||||||||
| (unaudited) | ||||||||||||||||
| Net Revenue |
$ | 8,073 | $ | 7,382 | $ | 26,971 | $ | 25,112 | ||||||||
| Cost and Expenses |
||||||||||||||||
| Cost of sales |
3,737 | 3,418 | 12,379 | 11,497 | ||||||||||||
| Selling, general and administrative expenses |
2,897 | 2,628 | 9,053 | 8,523 | ||||||||||||
| Stock compensation expense |
118 | 126 | 407 | 435 | ||||||||||||
| Amortization of intangible assets |
46 | 41 | 145 | 138 | ||||||||||||
| Impairment and restructuring charges |
147 | — | 147 | — | ||||||||||||
| Merger-related costs |
28 | 90 | 59 | 224 | ||||||||||||
| Operating Profit |
1,100 | 1,079 | 4,781 | 4,295 | ||||||||||||
| Bottling Equity Income |
77 | 29 | 323 | 280 | ||||||||||||
| Interest Expense |
(51 | ) | (62 | ) | (163 | ) | (178 | ) | ||||||||
| Interest Income |
21 | 13 | 51 | 36 | ||||||||||||
| Income before Income Taxes |
1,147 | 1,059 | 4,992 | 4,433 | ||||||||||||
| Provision for Income Taxes |
233 | 353 | 1,424 | 1,433 | ||||||||||||
| Net Income |
$ | 914 | $ | 706 | $ | 3,568 | $ | 3,000 | ||||||||
| Diluted |
||||||||||||||||
| Net Income Per Common Share |
$ | 0.52 | $ | 0.40 | $ | 2.05 | $ | 1.68 | ||||||||
| Average Shares Outstanding |
1,743 | 1,749 | 1,739 | 1,782 | ||||||||||||
-3-
PepsiCo, Inc. and Subsidiaries
Supplemental Financial Information
(in millions)
| 16 Weeks Ended |
52 Weeks Ended |
|||||||||||||||
| 12/27/03 |
12/28/02 |
12/27/03 |
12/28/02 |
|||||||||||||
| Net Revenue | (unaudited) | |||||||||||||||
| Frito-Lay North America |
$ | 2,696 | $ | 2,540 | $ | 9,091 | $ | 8,565 | ||||||||
| PepsiCo Beverages North America |
2,148 | 1,931 | 7,733 | 7,200 | ||||||||||||
| PepsiCo International |
2,780 | 2,421 | 8,678 | 7,749 | ||||||||||||
| Quaker Foods North America |
449 | 460 | 1,467 | 1,464 | ||||||||||||
| Division Net Revenue |
8,073 | 7,352 | 26,969 | 24,978 | ||||||||||||
| Divested Businesses |
— | 30 | 2 | 134 | ||||||||||||
| Total Net Revenue |
$ | 8,073 | $ | 7,382 | $ | 26,971 | $ | 25,112 | ||||||||
| Operating Profit |
||||||||||||||||
| Frito-Lay North America |
$ | 699 | $ | 653 | $ | 2,366 | $ | 2,216 | ||||||||
| PepsiCo Beverages North America |
416 | 338 | 1,775 | 1,577 | ||||||||||||
| PepsiCo International |
319 | 272 | 1,186 | 1,042 | ||||||||||||
| Quaker Foods North America |
157 | 143 | 486 | 473 | ||||||||||||
| Division Operating Profit |
1,591 | 1,406 | 5,813 | 5,308 | ||||||||||||
| Corporate unallocated |
(198 | ) | (119 | ) | (445 | ) | (377 | ) | ||||||||
| Stock compensation expense |
(118 | ) | (126 | ) | (407 | ) | (435 | ) | ||||||||
| Impairment and restructuring costs |
(147 | ) | — | (147 | ) | — | ||||||||||
| Merger-related costs |
(28 | ) | (90 | ) | (59 | ) | (224 | ) | ||||||||
| Divested businesses |
— | 8 | 26 | 23 | ||||||||||||
| Total Operating Profit |
$ | 1,100 | $ | 1,079 | $ | 4,781 | $ | 4,295 | ||||||||
-4-
PepsiCo, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(in millions)
| 52 Weeks Ended |
||||||||
| 12/27/03 |
12/28/02 |
|||||||
| Cash Flows – Operating Activities |
||||||||
| Net income |
$ | 3,568 | $ | 3,000 | ||||
| Adjustments |
||||||||
| Depreciation and amortization |
1,221 | 1,112 | ||||||
| Merger-related costs |
59 | 224 | ||||||
| Impairment and restructuring charges |
147 | — | ||||||
| Stock compensation expense |
407 | 435 | ||||||
| Cash payments for merger-related costs and impairment and restructuring charges |
(109 | ) | (123 | ) | ||||
| Pension plan contributions |
(535 | ) | (820 | ) | ||||
| Bottling equity income, net of dividends |
(276 | ) | (222 | ) | ||||
| Deferred income taxes |
(323 | ) | 174 | |||||
| Other noncash charges and credits, net |
415 | 263 | ||||||
| Net change in operating working capital |
(75 | ) | 305 | |||||
| Other |
(171 | ) | 279 | |||||
| Net Cash Provided by Operating Activities |
4,328 | 4,627 | ||||||
| Cash Flows – Investing Activities |
||||||||
| Capital spending |
(1,345 | ) | (1,437 | ) | ||||
| Sales of property, plant and equipment |
49 | 89 | ||||||
| Acquisitions and investments in noncontrolled affiliates |
(71 | ) | (351 | ) | ||||
| Divestitures |
46 | 376 | ||||||
| Short-term investments |
(950 | ) | 757 | |||||
| Snack Ventures Europe consolidation |
— | 39 | ||||||
| Net Cash Used for Investing Activities |
(2,271 | ) | (527 | ) | ||||
| Cash Flows – Financing Activities |
||||||||
| Proceeds from issuances of long-term debt |
52 | 11 | ||||||
| Payments of long-term debt |
(641 | ) | (353 | ) | ||||
| Short-term borrowings |
13 | (62 | ) | |||||
| Cash dividends paid |
(1,070 | ) | (1,041 | ) | ||||
| Share repurchases – common |
(1,929 | ) | (2,158 | ) | ||||
| Share repurchases – preferred |
(16 | ) | (32 | ) | ||||
| Proceeds from exercises of stock options |
689 | 456 | ||||||
| Net Cash Used for Financing Activities |
(2,902 | ) | (3,179 | ) | ||||
| Effect of Exchange Rate Changes on Cash and Cash Equivalents |
27 | 34 | ||||||
| Net (Decrease)/Increase in Cash and Cash Equivalents |
(818 | ) | 955 | |||||
| Cash and Cash Equivalents – Beginning of year |
1,638 | 683 | ||||||
| Cash and Cash Equivalents – End of year |
$ | 820 | $ | 1,638 | ||||
-5-
PepsiCo, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
(in millions)
| 12/27/03 |
12/28/02 |
|||||||
| Assets | ||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ | 820 | $ | 1,638 | ||||
| Short-term investments, at cost |
1,181 | 207 | ||||||
| 2,001 | 1,845 | |||||||
| Accounts and notes receivable, net |
2,830 | 2,531 | ||||||
| Inventories |
||||||||
| Raw material |
618 | 525 | ||||||
| Work-in-process |
160 | 214 | ||||||
| Finished goods |
634 | 603 | ||||||
| 1,412 | 1,342 | |||||||
| Prepaid expenses and other current assets |
687 | 695 | ||||||
| Total Current Assets |
6,930 | 6,413 | ||||||
| Property, plant and equipment, net |
7,828 | 7,390 | ||||||
| Amortizable intangible assets, net |
718 | 801 | ||||||
| Goodwill |
3,796 | 3,631 | ||||||
| Other nonamortizable intangibles |
869 | 787 | ||||||
| 4,665 | 4,418 | |||||||
| Investments in unconsolidated affiliates |
2,920 | 2,611 | ||||||
| Other assets |
2,266 | 1,841 | ||||||
| Total Assets |
$ | 25,327 | $ | 23,474 | ||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current Liabilities |
||||||||
| Short-term borrowings |
$ | 591 | $ | 562 | ||||
| Accounts payable and other current liabilities |
5,213 | 4,998 | ||||||
| Income taxes payable |
611 | 492 | ||||||
| Total Current Liabilities |
6,415 | 6,052 | ||||||
| Long-term debt |
1,702 | 2,187 | ||||||
| Other liabilities |
4,075 | 4,226 | ||||||
| Deferred income taxes |
1,261 | 1,486 | ||||||
| Preferred stock, no par value |
41 | 41 | ||||||
| Repurchased preferred stock |
(63 | ) | (48 | ) | ||||
| Common Shareholders’ Equity |
||||||||
| Common stock |
30 | 30 | ||||||
| Capital in excess of par value |
548 | 207 | ||||||
| Retained earnings |
15,961 | 13,489 | ||||||
| Accumulated other comprehensive loss |
(1,267 | ) | (1,672 | ) | ||||
| 15,272 | 12,054 | |||||||
| Less: Repurchased shares |
(3,376 | ) | (2,524 | ) | ||||
| Total Common Shareholders’ Equity |
11,896 | 9,530 | ||||||
| Total Liabilities and Shareholders’ Equity |
$ | 25,327 | $ | 23,474 | ||||
-6-