|
Severance and Other |
Other |
Total |
|||||
|
FLNA |
$74 |
$2 |
$76 |
||||
|
QFNA |
18 |
– |
18 |
||||
|
LAF |
46 |
2 |
48 |
||||
|
PAB |
75 |
6 |
81 |
||||
|
Europe |
65 |
12 |
77 |
||||
|
AMEA |
9 |
– |
9 |
||||
|
Corporate |
40 |
34 |
74 |
||||
|
$327 |
$56 |
$383 |
|||||
Note 3: Restructuring, Impairment and Integration Charges
In 2011, we incurred restructuring charges of $383 million ($286 million after-tax or $0.18 per share) in conjunction with our multi-year Productivity Plan. All of these charges were recorded in selling, general and administrative expenses. The Productivity Plan includes actions in every aspect of our business that we believe will strengthen our complementary food, snack and beverage businesses by leveraging new technologies and processes across PepsiCo's operations, go-to-market and information systems; heightening the focus on best practice sharing across the globe; consolidating manufacturing, warehouse and sales facilities; and implementing simplified organization structures, with wider spans of control and fewer layers of management. The Productivity Plan is expected to enhance PepsiCo's cost-competitiveness, provide a source of funding for future brand-building and innovation initiatives, and serve as a financial cushion for potential macroeconomic uncertainty beyond 2012.
A summary of our Productivity Plan charges in 2011 is as follows:
A summary of our Productivity Plan activity in 2011 is as follows:
|
Severance and Other |
Other |
Total |
|||||
|
2011 restructuring charges |
$327 |
$56 |
$383 |
||||
|
Cash payments |
(1 |
) |
(29 |
) |
(30 |
) |
|
|
Non-cash charges |
(25 |
) |
– |
(25 |
) |
||
|
Liability as of December 31, 2011 |
$301 |
$27 |
$328 |
||||
In 2011, we incurred merger and integration charges of $329 million ($271 million after-tax or $0.17 per share) related to our acquisitions of PBG, PAS and WBD, including $112 million recorded in the PAB segment, $123 million recorded in the Europe segment, $78 million recorded in corporate unallocated expenses and $16 million recorded in interest expense. All of these net charges, other than the interest expense portion, were recorded in selling, general and administrative expenses. These charges also include closing costs and advisory fees related to our acquisition of WBD. Substantially all cash payments related to the above charges were made by the end of 2011.
In 2010, we incurred merger and integration charges of $799 million related to our acquisitions of PBG and PAS, as well as advisory fees in connection with our acquisition of WBD. $467 million of these charges were recorded in the PAB segment, $111 million recorded in the Europe segment, $191 million recorded in corporate unallocated expenses and $30 million recorded in interest expense. All of these charges, other than the interest expense portion, were recorded in selling, general and administrative expenses. The merger and integration charges related to our acquisitions of PBG and PAS were incurred to help create a more fully integrated supply chain and go-to-market business model, to improve the effectiveness and efficiency of the distribution of our brands and to enhance our revenue growth. These charges also include closing costs, one-time financing costs and advisory fees related to our acquisitions of PBG and PAS. In addition, we recorded $9 million of merger–related charges, representing our share of the respective merger costs of PBG and PAS, in bottling equity income. Substantially all cash payments related to the above charges were made by the end of 2011. In total, these charges had an after-tax impact of $648 million or $0.40 per share.
A summary of our merger and integration activity is as follows:
|
Severance |
Asset Impairment |
Other Costs |
Total |
|||||
|
2010 merger and |
$396 |
$132 |
$280 |
$808 |
||||
|
Cash payments |
(114 |
) |
– |
(271 |
) |
(385 |
) |
|
|
Non-cash charges |
(103 |
) |
(132 |
) |
16 |
(219 |
) |
|
|
Liability as of |
179 |
– |
25 |
204 |
||||
|
2011 merger and |
146 |
34 |
149 |
329 |
||||
|
Cash payments |
(191 |
) |
– |
(186 |
) |
(377 |
) |
|
|
Non-cash charges |
(88 |
) |
(34 |
) |
19 |
(103 |
) |
|
|
Liability as of |
$46 |
$– |
$7 |
$53 |
||||
In 2009, we incurred $50 million of charges related to the merger of PBG and PAS, of which substantially all was paid in 2009. In 2009, we also incurred charges of $36 million ($29 million after-tax or $0.02 per share) in conjunction with our Productivity for Growth program that began in 2008. The program included actions in all divisions of the business, including the closure of six plants, to increase cost competitiveness across the supply chain, upgrade and streamline our product portfolio, and simplify the organization for more effective and timely decision-making. These charges were recorded in selling, general and administrative expenses. This program was completed in the second quarter of 2009 and substantially all cash payments related to these charges were made by the end of 2010.
A summary of our Productivity for Growth charges in 2009 is as follows:
|
Severance and Other |
Other |
Total |
|||||
|
FLNA |
$– |
$1 |
$1 |
||||
|
QFNA |
– |
2 |
2 |
||||
|
LAF |
3 |
– |
3 |
||||
|
PAB |
6 |
10 |
16 |
||||
|
Europe |
2 |
– |
2 |
||||
|
AMEA |
6 |
6 |
12 |
||||
|
$17 |
$19 |
$36 |
|||||
A summary of our Productivity for Growth activity is as follows:
|
Severance |
Asset Impairment |
Other Costs |
Total |
||||||
|
Liability as of |
$134 |
$– |
$64 |
$198 |
|||||
|
2009 restructuring and impairment charges |
17 |
12 |
7 |
36 |
|||||
|
Cash payments |
(128 |
) |
– |
(68 |
) |
(196 |
) |
||
|
Currency translation |
(14 |
) |
(12 |
) |
25 |
(1 |
) |
||
|
Liability as of |
9 |
– |
28 |
37 |
|||||
|
Cash payments |
(6 |
) |
– |
(25 |
) |
(31 |
) |
||
|
Non-cash charges |
(2 |
) |
– |
(1 |
) |
(3 |
) |
||
|
Currency translation |
– |
– |
(1 |
) |
(1 |
) |
|||
|
Liability as of |
$1 |
$– |
$1 |
$2 |
|||||