What does 'core constant currency EPS growth' mean?

Core constant currency EPS growth is a non-GAAP (Generally Accepted Accounting Principles) measure. 'Core' results exclude certain items such as commodity mark-to-market impacts, restructuring actions, and costs related to the mergers with PBG and PAS. 'Constant currency' means that the financial results are presented assuming foreign currency exchange rates remain unchanged from the prior year's period, isolating the impact of operational performance from currency fluctuations.

Why does PepsiCo report 'core' non-GAAP results instead of just GAAP?

PepsiCo believes that reporting core results provides investors with a clearer view of the company's ongoing operational performance and trends, as it excludes the impact of items that are not considered part of regular, day-to-day business operations, such as significant merger-related costs or volatile commodity hedging gains/losses. Management uses these core results to evaluate operational results.

What were the significant costs or events excluded from core 2009 results?

For fiscal year 2009, core results excluded $274 million in mark-to-market net gains on commodity hedges, $50 million in costs associated with the PBG and PAS mergers (plus $11 million of their merger costs), and $36 million in restructuring and impairment charges from the 'Productivity for Growth' program.

PEP 8-K: Regulation FD — Mar 22, 2010

Q: What is the primary purpose of this 8-K filing?

The primary purpose of this 8-K filing is to confirm and reaffirm PepsiCo's financial guidance for core constant currency Earnings Per Share (EPS) growth for the fiscal years 2010, 2011, and 2012. It provides an update on the company's outlook for future performance.

Summary

PepsiCo, Inc. (PEP) filed an 8-K on March 22, 2010, to confirm its financial guidance for the upcoming years. The company reaffirmed its expectation of 11-13% core constant currency Earnings Per Share (EPS) growth for fiscal year 2010. Furthermore, PepsiCo projected low-double-digit core constant currency EPS growth for both 2011 and 2012. This confirmation of guidance indicates management's confidence in the company's ongoing performance and strategic direction, particularly in light of recent mergers with The Pepsi Bottling Group, Inc. (PBG) and PepsiAmericas, Inc. (PAS). The report also provides clarity on how "core" results are calculated, excluding certain merger-related costs, restructuring charges, and commodity mark-to-market impacts, which allows investors to better assess the underlying operational performance.

Key Highlights

1PepsiCo reaffirmed its 2010 guidance of 11-13% core constant currency EPS growth.
2The company projected low-double-digit core constant currency EPS growth for both 2011 and 2012.
3The 8-K clarifies "core" non-GAAP financial measures, excluding merger costs, restructuring, and commodity hedging impacts.
4The guidance is presented on a "constant currency" basis, indicating management's focus on operational performance independent of foreign exchange fluctuations.
5The filing reiterates a standard cautionary statement regarding forward-looking statements, highlighting various business risks and uncertainties.
6Fiscal 2009 reported diluted EPS was $3.77, with core diluted EPS (excluding specific items) at $3.71.
7Costs associated with the PBG and PAS mergers in 2009 were $50 million, plus an additional $11 million of share in their respective merger costs.

PEPSICO INC 8-K Report, Regulation FD Disclosure (Mar 22, 2010)

Summary

Key Highlights

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