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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
August 12, 1996 (August 12, 1996)
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Date of Report (Date of earliest event reported)
PepsiCo, Inc.
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(Exact name of registrant as specified in its charter)
North Carolina
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(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
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (914) 253-2000
Item 5. Other Events.
PepsiCo's 1996 earnings will include losses related to its investment in Buenos
Aires Embotelladora S.A. (BAESA), its franchised beverage bottler with
operations in Argentina, Brazil, Chile, Costa Rica and Uruguay. On August 8,
1996 BAESA issued a press release which reported a loss of $251 million for its
fiscal third quarter ended June 30, 1996. The loss included approximately $124
million related to asset writedowns, restructuring and other charges. BAESA also
indicated in its press release that it expects to record operating losses and
other charges in the fourth quarter of its fiscal year and may early adopt
Statement of Financial Accounting Standards No. 121 (SFAS 121), "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
in its fourth quarter. BAESA must adopt SFAS 121 by October 1, 1996.
PepsiCo reports its 24% economic share of BAESA's losses in equity earnings.
Before any charges related to BAESA's adoption of SFAS 121, PepsiCo estimates
that its share of BAESA's losses will reduce third quarter net income per share
by approximately $0.04 but is not able to estimate the impact on its fourth
quarter results. PepsiCo's 1996 earnings may also be reduced if the carrying
value of our investment in BAESA or any BAESA related concentrate assets is
determined to be impaired. PepsiCo's investment in BAESA, after giving effect to
the estimated third quarter losses, is expected to be approximately $90 million
and the carrying value of the concentrate-related assets, as of July 31, 1996,
was approximately $60 million.
As explained in its quarterly report on Form 10-Q for the quarter ended June 15,
1996, PepsiCo reports its share of all of its international beverage joint
ventures' earnings on a lag. Accordingly, BAESA's results for the months of May
through July and August through November will be included in PepsiCo's third and
fourth quarter results, respectively.
From time to time, in both written reports and oral statements by PepsiCo senior
management, we may express our expectations regarding future performance of the
Company. These "forward-looking statements" are inherently uncertain and
investors must recognize that events could turn out to be different from what
senior management expected. Key factors impacting current and future performance
are described in PepsiCo's 1995 Annual Report in Management's Analysis -
Worldwide Marketplace on page 14.
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: August 12, 1996 PepsiCo, Inc.
By: LAWRENCE F. DICKIE
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Lawrence F. Dickie
Vice President,
Associate General Counsel
and Assistant Secretary