Summary
PepsiCo, Inc. (PEP) filed an 8-K on March 23, 2007, primarily to disclose changes in its reporting calendars for certain international operations and the reclassification of income from non-consolidated bottling interests. Effective December 31, 2006, most PepsiCo International (PI) operations will now report on a monthly calendar basis to align with local statutory reporting requirements, which is expected to improve efficiency by reducing financial closings. Additionally, income from certain non-consolidated international bottling interests has been moved from "bottling equity income" and "corporate unallocated" to PI's divisional operating results for better internal management alignment. This filing also provides supplemental financial information for fiscal year 2006, presented on both a GAAP basis (Table 1) and a "comparable basis" (Table 2) that excludes certain items such as restructuring and impairment charges, non-cash tax benefits, and a share of The Pepsi Bottling Group's (PBG) tax settlement. Investors should note that these changes in reporting methodology and the supplemental "comparable basis" information are intended to provide clearer insights into ongoing performance, although the full-year 2006 net income remains unchanged by these adjustments. The provided supplemental tables are crucial for understanding historical performance trends and for comparing 2006 results with future periods.
Key Highlights
- 1PepsiCo International (PI) operations shifted to a monthly calendar reporting basis starting December 31, 2006, to align with local statutory requirements and improve efficiency.
- 2Income from certain non-consolidated international bottling interests was reclassified to PI's divisional operating results for internal management accountability.
- 3The company provided supplemental 2006 financial data on a GAAP basis and a 'comparable basis' excluding specific charges and benefits.
- 4Excluded items in the 'comparable basis' for 2006 include restructuring and impairment charges, significant non-cash tax benefits, and a portion of PBG's tax settlement.
- 5Full-year 2006 net income was not impacted by these reporting changes.
- 6The supplemental information is intended to aid investors in comparing 2006 results with future fiscal quarters.
- 7The information furnished in this 8-K is not deemed 'filed' and does not alter the reliance on previously issued financial statements.