What does 'core constant currency EPS growth' mean?

'Core' results exclude certain items like commodity mark-to-market net impacts, merger-related costs for PBG and PAS, and restructuring actions. 'Constant currency' means financial results are presented assuming foreign currency exchange rates remain consistent with the prior year's period. This non-GAAP measure is used by management to evaluate ongoing performance.

Why doesn't PepsiCo provide a GAAP reconciliation for future core constant currency EPS guidance?

PepsiCo cannot reconcile its projected 2010-2012 core constant currency EPS to GAAP results because it cannot predict future fluctuations in foreign exchange rates, commodity prices, or the timing and amount of additional merger integration costs.

What specific events or costs are excluded from PepsiCo's 'core' results for 2009 and future guidance?

For 2009, 'core' results excluded $274 million in mark-to-market net gains on commodity hedges, $50 million in merger costs for PBG/PAS, and $11 million in PepsiCo's share of PBG/PAS merger costs. Restructuring charges of $36 million were also excluded. Future guidance also excludes these types of items and potential additional merger integration costs.

PEP 8-K: Regulation FD

Q: What is PepsiCo's earnings per share (EPS) growth outlook for 2010-2012?

PepsiCo expects to achieve 11% to 13% core constant currency EPS growth in 2010, and low-double-digit core constant currency EPS growth in both 2011 and 2012.

Summary

PepsiCo, Inc. (PEP) filed an 8-K on March 1, 2010, reiterating its previous financial guidance for the upcoming years. The company expects to achieve 11% to 13% core constant currency EPS growth in 2010, and low-double-digit core constant currency EPS growth in both 2011 and 2012. This filing primarily serves to communicate these forward-looking financial targets to investors, emphasizing management's outlook on continued earnings growth. The report also provides important context regarding the non-GAAP "core" and "constant currency" metrics used to present this guidance. Investors are encouraged to review the provided reconciliations, which detail exclusions such as commodity mark-to-market impacts, merger-related costs for the acquisitions of The Pepsi Bottling Group, Inc. (PBG) and PepsiAmericas, Inc. (PAS), and restructuring actions. A cautionary statement outlines the inherent risks and uncertainties that could cause actual results to deviate from these projections.

Key Highlights

1PepsiCo reiterates 2010 core constant currency EPS growth guidance of 11% to 13%.
2The company projects low-double-digit core constant currency EPS growth for both 2011 and 2012.
3The filing clarifies the definition and exclusions associated with 'core' and 'constant currency' non-GAAP financial measures.
4Key exclusions from 'core' results include commodity mark-to-market impacts and merger-related costs (PBG & PAS).
5Restructuring actions, including plant closures under the 'Productivity for Growth' program, are also noted.
6A comprehensive cautionary statement details potential risks and uncertainties that may affect future results.

PEPSICO INC 8-K Report, Regulation FD Disclosure (Mar 1, 2010)

Summary

Key Highlights

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