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$ 6.18 9,739 $ 6.20 $ 8.20 to $16.37 52,340 4.30 13.63 45,470 13.52 $16.87 to $37.72 83,685 7.28 23.85 26,238 22.04 146,329 5.85 18.95 81,447 15.39 Pro forma income and pro forma income per share, as if the fair value-based method had been applied in measuring compensation cost for stock-based awards: 1997 1996 1995 Reported Income Continuing operations $1,491 $ 942 $1,422 Discontinued operations 651 207 184 Net income $2,142 $1,149 $1,606 Income per share Continuing operations $ 0.95 $ 0.59 $ 0.88 Discontinued operations 0.41 0.13 0.12 Net income $ 1.36 $ 0.72 $ 1.00 Pro Forma Income Continuing operations $1,390 $ 893 $1,411 Discontinued operations 635 188 179 Net income $2,025 $1,081 $1,590 Income per share Continuing operations $ 0.89 $ 0.55 $ 0.88 Discontinued operations 0.40 0.12 0.11 Net income $ 1.29 $ 0.67 $ 0.99 - -------------------------------------------------------------------------- Without the effect of pro forma costs related to the modification of outstanding options arising from the TRICON spin-off, pro forma income from continuing operations is $1,436 million or $0.92 per share in 1997. |
F - 20 Components of net pension expense for U.S. plans: 1997 1996 1995 Service cost of benefits earned $ 69 $ 62 $ 46 Interest cost on projected benefit obligation 103 93 78 Return on plan assets Actual gain (370) (163) (287) Deferred gain 253 55 188 (117) (108) (99) Amortization of net transition gain (14) (14) (14) Net other amortization 13 11 4 $ 54 $ 44 $ 15 - ------------------------------------------------------------------------ Reconciliations of the funded status of the U.S. plans to the pension liability: Assets Exceed Accumulated Benefits Accumulated Benefits Exceed Assets 1997 1996 1997 1996 Actuarial present value of benefit obligation Vested benefits $(1,177) $(1,036) $ (57) $ (34) Nonvested benefits (153) (133) (3) (2) Accumulated benefit obligation (1,330) (1,169) (60) (36) Effect of projected compensation increases (165) (143) (69) (67) Projected benefit obligation (1,495) (1,312) (129) (103) Plan assets at fair value 1,655 1,337 - 2 Plan assets in excess of (less than) projected benefit obligation 160 25 (129) (101) Unrecognized prior service cost 63 65 17 20 Unrecognized net (gain)/loss (205) (26) 39 28 Unrecognized net transition gain (15) (29) - - Prepaid (accrued) pension liability $ 3 $ 35 $ (73) $ (53) - ------------------------------------------------------------------------ Assumptions used to compute the U.S. information presented above: 1997 1996 1995 Expected long-term rate of return on plan assets 10.0% 10.0 10.0 Discount rate - projected benefit obligation 7.2% 7.7 7.7 Future compensation growth rate 3.2%-6.5% 3.2-6.6 3.3-6.6 - ------------------------------------------------------------------------ F - 21 Components of net pension expense for international plans: 1997 1996 1995 Service cost of benefits earned $ 13 $ 12 $ 10 Interest cost on projected benefit obligation 20 18 16 Return on plan assets Actual gain (57) (38) (30) Deferred gain 26 10 6 (31) (28) (24) Net other amortization 3 1 - $ 5 $ 3 $ 2 - ------------------------------------------------------------------------ Reconciliations of the funded status of the international plans to the pension liability: Assets Exceed Accumulated Benefits Accumulated Benefits Exceed Assets 1997 1996 1997 1996 Actuarial present value of benefit obligation Vested benefits $(223) $(173) $(21) $(30) Nonvested benefits (7) (5) (2) (4) Accumulated benefit obligation (230) (178) (23) (34) Effect of projected compensation increases (42) (33) (9) (12) Projected benefit obligation (272) (211) (32) (46) Plan assets at fair value 328 282 14 17 Plan assets in excess of (less than) projected benefit obligation 56 71 (18) (29) Unrecognized prior service cost 3 3 - - Unrecognized net loss 42 25 2 5 Unrecognized net transition (gain)/loss (1) (1) - 3 Prepaid (accrued) pension liability $ 100 $ 98 $(16) $(21) - ---------------------------------------------------------------------- Assumptions used to compute the international information presented above: 1997 1996 1995 Expected long-term rate of return on plan assets 11.5% 11.4 11.3 Discount rate - projected benefit obligation 7.6% 8.4 8.8 Future compensation growth rate 3.0%-13.8% 3.0-10.5 3.0-11.8 - --------------------------------------------------------------------------- F - 22 The discount rates and rates of return for the international plans represent weighted averages. |
F - 25 INDUSTRY SEGMENTS (page 2 of 3) - --------------------------------------------------------------------- 1997 1996 1995 Amortization of Intangible Assets Beverages $ 155 $ 165 $ 167 Snack Foods 44 41 41 $ 199 $ 206 $ 208 - --------------------------------------------------------------------- Depreciation Expense Beverages $ 444 $ 440 $ 445 Snack Foods 394 346 304 Corporate 7 7 7 $ 845 $ 793 $ 756 - --------------------------------------------------------------------- Identifiable Assets Beverages $ 9,752 $ 9,816 $10,032 Snack Foods 6,998 6,279 5,451 Investments in Unconsoli- dated Affiliates 1,201 1,147 1,253 Corporate 2,150 468 1,464 Net Assets of Discontinued Operations - 4,450 4,744 $20,101 $22,160 $22,944 - --------------------------------------------------------------------- Capital Spending Beverages $ 618 $ 648 $ 563 Snack Foods 873 973 768 Corporate 15 9 34 $ 1,506 $ 1,630 $ 1,365 United States $ 996 $ 1,109 $ 928 International 510 521 437 $ 1,506 $ 1,630 $ 1,365 - --------------------------------------------------------------------- Acquisitions and Investments in Unconsolidated Affiliates Beverages $ 43 $ 75 $ 318 Snack Foods 76 - 82 $ 119 $ 75 $ 400 United States $ 3 $ 15 $ 37 International 116 60 363 $ 119 $ 75 $ 400 - --------------------------------------------------------------------- F - 26 GEOGRAPHIC AREAS (b) (page 3 of 3) - --------------------------------------------------------------------- Net Sales 1997 1996 1995 Europe $ 2,327 $ 2,513 $ 2,451 Canada 941 946 889 Mexico 1,541 1,314 1,204 United Kingdom 859 810 751 Other 1,371 1,346 1,371 Total International 7,039 6,929 6,666 United States 13,878 13,408 12,401 Combined Segments $20,917 $20,337 $19,067 - --------------------------------------------------------------------- Segment Operating Profit (Loss)(c) 1997 1996 1995 Europe $ (133) $ (88) $ (7) Canada 105 116 94 Mexico 214 105 135 United Kingdom 106 159 139 Other (50) (342) 103 Total International 242 (50) 464 United States 2,567 2,548 2,277 Combined Segments $ 2,809 $ 2,498 $ 2,741 - --------------------------------------------------------------------- Identifiable Assets 1997 1996 1995 Europe $ 1,130 $ 1,224 $ 1,382 Canada 1,013 1,045 1,054 Mexico 685 583 550 United Kingdom 1,582 1,542 1,408 Other 1,670 1,698 1,672 Total International 6,080 6,092 6,066 United States 10,670 10,003 9,417 Combined Segments 16,750 16,095 15,483 Investments in Unconsoli- dated Affiliates 1,201 1,147 1,253 Corporate 2,150 468 1,464 Net Assets of Discontinued Operations - 4,450 4,744 $20,101 $22,160 $22,944 - --------------------------------------------------------------------- (b) The results of centralized concentrate manufacturing operations in Puerto Rico and Ireland have been allocated based upon sales to the respective geographic areas. |
F - 27 Note 18 - Selected Quarterly Financial Data ($ in millions except per share amounts, unaudited) (page 1 of 3) First Quarter (12 Weeks) 1997 1996 Net sales $ 4,213 4,053 Gross profit $ 2,492 2,387 Unusual items - gain (a) $ (22) - Operating profit $ 581 532 Income from continuing operations $ 318 296 Income from discontinued operations (b) $ 109 98 Net income $ 427 394 Net income per share - basic Continuing operations $ 0.21 0.19 Discontinued operations $ 0.07 0.06 Net income $ 0.28 0.25 Net income per share - assuming dilution Continuing operations $ 0.20 0.18 Discontinued operations $ 0.07 0.06 Net income $ 0.27 0.24 Cash dividends declared per share $ 0.115 0.10 Stock price per share(c) High $34 55/64 33 3/8 Low $ 29 1/8 27 1/2 Close $ 32 1/2 31 5/8 - --------------------------------------------------------------------------- Second Quarter (12 Weeks) 1997 1996 Net sales $ 5,086 5,075 Gross profit $ 3,017 2,963 Unusual items - loss (a) $ 326 - Operating profit $ 436 774 Income from continuing operations $ 176 438 Income from discontinued operations (b) $ 480 145 Net income $ 656 583 Net income per share - basic Continuing operations $ 0.11 0.27 Discontinued operations $ 0.31 0.10 Net income $ 0.42 0.37 Net income per share - assuming dilution Continuing operations $ 0.11 0.27 Discontinued operations $ 0.31 0.09 Net income $ 0.42 0.36 Cash dividends declared per share $ 0.125 0.115 Stock price per share (c) High $ 39 34 1/2 Low $ 31 1/4 29 11/16 Close $ 39 33 1/8 - --------------------------------------------------------------------------- F - 28 ($ in millions except per share amounts, unaudited) (page 2 of 3) Third Quarter (12 Weeks) 1997 1996 Net sales $ 5,362 5,159 Gross profit $ 3,183 3,001 Unusual items - loss (a) $ - 390 Operating profit $ 929 333 Income from continuing operations $ 551 10 Income from discontinued operations (b) $ 107 134 Net income $ 658 144 Net income per share - basic Continuing operations $ 0.36 0.01 Discontinued operations $ 0.07 0.08 Net income $ 0.43 0.09 Net income per share - assuming dilution Continuing operations $ 0.35 0.01 Discontinued operations $ 0.07 0.08 Net income $ 0.42 0.09 Cash dividends declared per share $ 0.125 0.115 Stock price per share (c) High $39 11/16 35 5/8 Low $ 35 1/2 28 1/4 Close $ 37 5/8 28 3/8 - --------------------------------------------------------------------------- Fourth Quarter (16 Weeks) 1997 1996 Net sales $ 6,256 6,050 Gross profit $ 3,700 3,534 Unusual items - (gain)/loss (a) $ (14) 186 Operating profit $ 716 401 Income from continuing operations $ 446 198 Income (loss) from discontinued operations(b) $ (45) (170) Net income $ 401 28 Net income (loss) per share - basic Continuing operations $ 0.30 0.13 Discontinued operations $ (0.03) (0.11) Net income $ 0.27 0.02 Net income (loss) per share - assuming dilution Continuing operations $ 0.29 0.13 Discontinued operations $ (0.04) (0.10) Net income $ 0.25 0.03 Cash dividends declared per share $ 0.125 0.115 Stock price per share (c) High $ 40 32 7/8 Low $ 34 1/4 28 1/8 Close $34 11/16 29 5/8 - --------------------------------------------------------------------------- F - 29 ($ in millions except per share amounts, unaudited) (page 3 of 3) Full Year (52 Weeks) 1997 1996 Net sales $ 20,917 20,337 Gross profit $ 12,392 11,885 Unusual items - loss (a) $ 290 576 Operating profit $ 2,662 2,040 Income from continuing operations $ 1,491 942 Income from discontinued operations (b) $ 651 207 Net income $ 2,142 1,149 Net income per share - basic Continuing operations $ 0.98 0.60 Discontinued operations $ 0.42 0.13 Net income $ 1.40 0.73 Net income per share - assuming dilution Continuing operations $ 0.95 0.59 Discontinued operations $ 0.41 0.13 Net income $ 1.36 0.72 Cash dividends declared per share $ 0.49 0.445 Stock price per share (c) High $ 40 35 5/8 Low $ 29 1/8 27 1/2 Close $34 11/16 29 5/8 - --------------------------------------------------------------------------- Notes: (a)Unusual items - (gain)/loss (see Note 2): 1997 1996 Pre- After Per Pre- After Per Tax Tax Share Tax Tax Share First quarter $(22) $ 2 $ - $ - $ - $ - Second quarter 326 238 0.15 - - - Third quarter - - - 390 376 0.23 Fourth quarter (14) (1) - 186 151 0.10 Full year $290 $239 $0.15 $576 $527 $0.33 (b)See Note 4. |
KPMG Peat Marwick LLP New York, New York February 3, 1998 F - 32 Selected Financial Data (Page 1 of 4) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries 1997(a) 1996(a) 1995(b) Summary of Operations Net sales $ 20,917 20,337 19,067 Operating profit $ 2,662 2,040 2,606 Income from continuing operations $ 1,491 942 1,422 Cash Flow Data Dividends paid $ 736 675 599 EBITDA from continuing operations (f) $ 4,001 3,479 3,718 Free cash flow from continuing operations (g) $ 1,382 725 556 Share repurchases $ 2,459 1,651 541 Per Share Data Income from continuing operations - assuming dilution $ 0.95 0.59 0.88 Cash dividends declared $ 0.49 0.445 0.39 Book value per share at year-end $ 4.62 4.29 4.64 Market price per share at year-end (h) $34 11/16 29 5/8 27 15/16 Market price per share at year-end - continuing operations (i) $34 11/16 27 15/64 25 43/64 Balance Sheet Net assets of discontinued operations (j) $ - 4,450 4,744 Total assets (k) $ 20,101 22,160 22,944 Long-term debt $ 4,946 8,174 8,248 Total debt (l) $ 4,946 8,174 8,806 Shareholders' equity $ 6,936 6,623 7,313 Other Statistics Number of shares repurchased 69.0 54.2 24.6 Shares outstanding at year-end 1,502 1,545 1,576 Average shares outstanding used to calculate income per share from continuing operations - assuming dilution 1,570 1,606 1,608 Employees of continuing operations 142,000 137,000 137,000 F - 33 Selected Financial Data (Page 2 of 4) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries 1994(c)(d)(e) 1993 Summary of Operations Net sales $ 17,984 15,706 Operating profit $ 2,506 2,141 Income from continuing operations $ 1,363 1,152 Cash Flow Data Dividends paid $ 540 462 EBITDA from continuing operations (f) $ NA NA Free cash flow from continuing operations (g) $ NA NA Share repurchases $ 549 463 Per Share Data Income from continuing operations - assuming dilution $ 0.85 0.71 Cash dividends declared $ 0.35 0.305 Book value per share at year-end $ 4.34 3.97 Market price per share at year-end (h) $ 18 1/8 20 15/16 Market price per share at year-end - continuing operations (i) $16 21/32 19 1/4 Balance Sheet Net assets of discontinued operations (j) $ 5,183 4,548 Total assets (k) $ 22,533 21,628 Long-term debt $ 8,570 7,148 Total debt (l) $ 9,114 9,209 Shareholders' equity $ 6,856 6,339 Other Statistics Number of shares repurchased 30.0 24.8 Shares outstanding at year-end 1,580 1,598 Average shares outstanding used to calculate income per share from continuing operations - assuming dilution 1,608 1,620 Employees of continuing operations 129,000 119,000 NA - Not available F - 34 - --------------------------------------------------------------------------- Selected Financial Data (Page 3 of 4) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries - --------------------------------------------------------------------------- PepsiCo disposed of its Restaurants segment in 1997 and accounted for it as discontinued operations (see Note 4); all information has been reclassified accordingly. |
($ in millions except Expense/(Income) per share amounts) 1996 1995 1994 ---- ---- ----- Per Per Per (a) Share (a) Share (a) Share UNUSUAL ITEMS AND --- ----- --- ------ --- ----- ACCOUNTING CHANGES - ------------------ International beverages impairment, disposal and other charges $ 576 $ 0.33 Disposal of non-core U.S. restaurant businesses 246 0.12 Gain on stock offering by an unconsolidated affiliate $(18) $(0.01) Accounting changes (b) SFAS 121 $520 $ 0.24 SFAS 112 84 0.03 Pension assets (38) (0.01) ----- ----- ---- ------ ---- ------ $ 822 $ 0.45 $520 $ 0.24 $ 28 $ 0.01 ----- ----- ---- ------ ---- ------ OTHER ITEMS - ----------- Refranchising gains (c) $(139) $(0.05) $(93) $(0.03) Store closure costs 40 0.01 38 0.01 $10 $ - ---- ---- ---- ---- --- ------ Net refranchising (gains)/ losses (99) (0.04) (55) (0.02) 10 - Reduced depreciation and amortization (46) (0.02) (21) (0.01) Recurring restaurant impairment charges 62 0.03 Fifty-third week (54) (0.02) ---- ------ ----- ------ --- ---- $ (83) $(0.03) $(76) $(0.03) $(44) $(0.02) ==== ====== ==== ====== ==== ====== (a) Pre-tax amounts. |
INDUSTRY SEGMENTS - MANAGEMENT BASIS - -------------------------------------------------------------------------------- ($ in millions) Growth Rate 1991-1996(a) 1996 1995 1994 1993 1992 - -------------------------------------------------------------------------------- NET SALES Beverages North America(b) 7% $ 7,725 $ 7,400 $ 7,031 $ 6,404 $ 5,932 International 15% 2,799 2,982 2,535 2,148 1,589 ------- ------ ------- ------- ------- 9% 10,524 10,382 9,566 8,552 7,521 ------- ------- ------- ------- ------- Snack Foods North America(b) 12% 6,618 5,863 5,356 4,674 3,922 International 15% 3,062 2,682 2,908 2,353 2,210 ----- ----- ----- ----- ----- 13% 9,680 8,545 8,264 7,027 6,132 ----- ----- ----- ----- ----- Restaurants U.S. 8% 9,110 9,206 8,696 8,025 7,112 International 22% 2,331 2,122 1,825 1,331 1,120 ----- ----- ----- ----- ----- 10% 11,441 11,328 10,521 9,356 8,232 ------ ------ ------ ----- ----- Combined Segments 10% $31,645 $30,255 $28,351 $24,935 $21,885 ------- ------- ------- ------- ------- OPERATING PROFIT(c) Beverages North America(b) 12% $1,428 $1,249 $1,115 $1,019 $ 759 International NM (846) 117 136 97 45 ------ ------ ------ ------ ----- 6% 582 1,366 1,251 1,116 804 ------ ------ ------ ----- ----- Snack Foods North America(b) 13% 1,286 1,149 1,043 914 762 International 12% 346 301 354 285 221 ------ ----- ------- ----- ----- 13% 1,632 1,450 1,397 1,199 983 ----- ----- ------ ----- ----- Restaurants U.S. 4% 370 726 637 682 594 International 7% 153 112 86 109 134 ------ ----- ------ ----- ----- 4% 523 838 723 791 728 ------ ------ ------ ----- ----- Combined Segments - Management Basis 8% 2,737 3,654 3,371 3,106 2,515 Adjustments ------ ------ ------ ------ ----- Equity (income)/loss 266 (14) (38) (30) (40) Initial impact of impairment accounting change (SFAS 121) (520) Gain on stock offering by unconsolidated affiliate (18) Other(d) 6 51 9 1 27 ------ ------ ------ ------ ------ Total Adjustments 272 (483) (47) (29) (13) ------ ------ ----- ------ ------ Combined Segments - SFAS 14 Basis(e) 10% $3,009 $3,171 $3,324 $3,077 $2,502 ======= ====== ====== ====== ====== (a) Five-year compounded annual growth rate. |
SIGNATURE TITLE DATE - --------- ----- ---- Chairman of the /s/ ROGER A. ENRICO Board and Roger A. Enrico Chief Executive March 25, 1997 Officer (Principal Executive Officer) /s/ KARL M. VON DER HEYDEN Vice Chairman of the Karl M. von der Heyden Board and Chief March 25, 1997 Financial Officer (Principal Financial Officer) /s/ ROBERT L. CARLETON Senior Vice Robert L. Carleton President and March 10, 1997 Controller (Principal Accounting Officer) /s/ JOHN F. AKERS Director March 25, 1997 John F. Akers /s/ ROBERT E. ALLEN Director Robert E. Allen March 10, 1997 /s/ D. WAYNE CALLOWAY Director D. Wayne Calloway March 25, 1997 /s/ RAY L. HUNT Director March 25, 1997 Ray L. Hunt /s/ JOHN J. MURPHY Director March 25, 1997 John J. Murphy S-1 Chairman and Chief /s/ STEVEN S REINEMUND Executive Officer of March 25, 1997 Steven S Reinemund The Frito-Lay Company and Director /s/ SHARON PERCY ROCKEFELLER Director Sharon Percy Rockefeller March 11, 1997 /s/ FRANKLIN A. THOMAS Director Franklin A. Thomas March 25, 1997 /s/ P. ROY VAGELOS Director P. Roy Vagelos March 10, 1997 Chairman and Chief /s/ CRAIG E. WEATHERUP Executive Officer of Craig E. Weatherup Pepsi-Cola Company March 25, 1997 and Director /s/ ARNOLD R. WEBER Director March 17, 1997 Arnold R. Weber S-2 INDEX TO EXHIBITS ITEM 14(a)(3) EXHIBIT 3.1 Restated Articles of Incorporation of PepsiCo, Inc., which is incorporated herein by reference from Exhibit 3(i) to PepsiCo's Quarterly Report on Form 10-Q for the quarterly period ended June 15, 1996. |
The following estimated decline in net income and net income per share for PepsiCo's operations in Mexico reflected the decrease in Mexico's combined segment operating profit (see each industry segment discussion for the impact by segment) and PepsiCo's equity share of the increased net losses of our unconsolidated affiliates in Mexico: ($ in millions except per share amounts) Year-Over-Year Decline ---------------------- 1995 1994 Reported Ongoing* ---- ---- -------- ------- Net sales $1,228 $2,023 (39%) (39%) Operating profit $ 80 $ 261 (69%) (61%) Operating profit margin 7% 13% (6 points) (5 points) % of total international segment operating profit 18% 42% (24 points) (26 points) % of total segment operating profit 3% 8% (5 points) (5 points) Net income $ 55 $ 175 (69%) (57%) Net income per share $ 0.07 $ 0.22 (68%) (55%) Identifiable assets $ 637 $ 995 (36%) (34%) - -------------------------------------------------------------------------------- * Excluded Mexico's portion of the 1995 initial, noncash charge upon adoption of SFAS 121 of $21 million ($21 million after-tax or $0.03 per share) (see below). |
SIGNATURE TITLE DATE /s/ D. WAYNE CALLOWAY Chairman of the Board and - --------------------- Chief Executive Officer March 26, 1996 D. Wayne Calloway (Principal Executive Officer) Executive Vice President /s/ ROBERT G. DETTMER and Chief Financial March 26, 1996 - --------------------- Officer (Principal Robert G. Dettmer Financial Officer) /s/ ROBERT L. CARLETON Senior Vice President and March 26, 1996 Robert L. Carleton Controller (Principal Accounting Officer) Vice Chairman of the /s/ ROGER A. ENRICO Board,Chairman and Chief March 26, 1996 - ------------------- Executive Officer, PepsiCo Roger A. Enrico Worldwide Restaurants /s/ JOHN F. AKERS Director March 26, 1996 - ----------------- John F. Akers S-2 /s/ ROBERT E. ALLEN Director March 26, 1996 - ------------------- Robert E. Allen /s/ JOHN J. MURPHY Director March 26, 1996 - ------------------ John J. Murphy /s/ ANDRALL E. PEARSON Director March 26, 1996 - ---------------------- Andrall E. Pearson /s/ SHARON PERCY ROCKEFELLER Director March 26, 1996 --------------------------- Sharon Percy Rockefeller /s/ ROGER B. SMITH Director March 26, 1996 - ------------------ Roger B. Smith /s/ ROBERT H. STEWART, III Director March 26, 1996 - -------------------------- Robert H. Stewart, III /s/ FRANKLIN A. THOMAS Director March 26, 1996 - ---------------------- Franklin A. Thomas /s/ P. ROY VAGELOS Director March 26, 1996 - ------------------ P. Roy Vagelos /s/ ARNOLD R. WEBER Director March 26, 1996 - ------------------- Arnold R. Weber E-1 INDEX TO EXHIBITS ITEM 14(a)(3) EXHIBIT 3.1 Restated Articles of Incorporation of PepsiCo, Inc., which is incorporated herein by reference from Exhibit 4(a) to PepsiCo's Registration Statement on Form S-3 (Registration No. |
- ------------------------------------------------------------------------ CONSOLIDATED STATEMENT OF INCOME (in millions except per share amounts) PepsiCo, Inc. and Subsidiaries Fiscal years ended December 30, 1995, December 31, 1994 and December 25, 1993 1995 1994 1993 (52 Weeks) (53 Weeks) (52 Weeks) - ----------------------------------------------------------------------------- NET SALES............................. $30,421 $28,472 $25,021 COSTS AND EXPENSES, NET Cost of sales......................... 14,886 13,715 11,946 Selling, general and administrative expenses.............. 11,712 11,244 9,864 Amortization of intangible assets..... 316 312 304 Impairment of long-lived assets....... 520 - - ------- ------- ------- OPERATING PROFIT 2,987 3,201 2,907 Gain on stock offering by an unconsolidated affiliate............. - 18 - Interest expense...................... (682) (645) (573) Interest income....................... 127 90 89 ------- ------- ------- INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGES........ 2,432 2,664 2,423 PROVISION FOR INCOME TAXES............ 826 880 835 ------- ------- ------- INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGES.................. 1,606 1,784 1,588 CUMULATIVE EFFECT OF ACCOUNTING CHANGES Postemployment benefits (net of income tax benefit of $29).................. - (55) - Pension assets (net of income tax expense of $15)...................... - 23 - ------- ------- ------- NET INCOME............................ $ 1,606 $ 1,752 $ 1,588 ======= ======= ======= INCOME (CHARGE) PER SHARE Before cumulative effect of accounting changes.............................. $ 2.00 $ 2.22 $ 1.96 Cumulative effect of accounting changes Postemployment benefits.............. - (0.07) - Pension assets....................... - 0.03 - ------- ------- ------- NET INCOME PER SHARE.................. $ 2.00 $ 2.18 $ 1.96 ======= ======= ======= Average shares outstanding............ 804 804 810 - ----------------------------------------------------------------------------- See accompanying Notes to Consolidated Financial Statements. |
- ----------------------------------------------------------------------------- - --------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET (in millions except per share amount) PepsiCo, Inc. and Subsidiaries December 30, 1995 and December 31, 1994 1995 1994 - --------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash and cash equivalents...................... $ 382 $ 331 Short-term investments, at cost................ 1,116 1,157 ------- ------- 1,498 1,488 Accounts and notes receivable, less allowance: $150 in 1995 and $151 in 1994................ 2,407 2,051 Inventories.................................... 1,051 970 Prepaid expenses, taxes and other current assets.......................... 590 563 ------- ------- TOTAL CURRENT ASSETS...................... 5,546 5,072 INVESTMENTS IN UNCONSOLIDATED AFFILIATES....... 1,635 1,295 PROPERTY, PLANT AND EQUIPMENT, NET............. 9,870 9,883 INTANGIBLE ASSETS, NET......................... 7,584 7,842 OTHER ASSETS................................... 797 700 ------- ------- TOTAL ASSETS............................ $25,432 $24,792 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable............................... $ 1,556 $ 1,452 Accrued compensation and benefits.............. 815 753 Short-term borrowings.......................... 706 678 Accrued marketing.............................. 469 546 Income taxes payable........................... 387 672 Other current liabilities...................... 1,297 1,169 ------- ------- TOTAL CURRENT LIABILITIES................. 5,230 5,270 LONG-TERM DEBT................................. 8,509 8,841 OTHER LIABILITIES.............................. 2,495 1,852 DEFERRED INCOME TAXES.......................... 1,885 1,973 SHAREHOLDERS' EQUITY Capital stock, par value 1 2/3 cents per share: authorized 1,800 shares, issued 863 shares.... 14 14 Capital in excess of par value................. 1,060 935 Retained earnings.............................. 8,730 7,739 Currency translation adjustment and other...... (808) (471) ------- ------- 8,996 8,217 Less: Treasury stock, at cost: 75 shares and 73 shares in 1995 and 1994, respectively.......................... (1,683) (1,361) ------- ------- TOTAL SHAREHOLDERS' EQUITY................ 7,313 6,856 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................... $25,432 $24,792 ======= ======= - --------------------------------------------------------------------------- See accompanying Notes to Consolidated Financial Statements. |
- --------------------------------------------------------------------------- - --------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CASH FLOWS (PAGE 1 OF 2) (in millions) PepsiCo, Inc. and Subsidiaries Fiscal years ended December 30, 1995, December 31, 1994 and December 25, 1993 1995 1994 1993 (52 Weeks) (53 Weeks) (52 Weeks) - ----------------------------------------------------------------------------- CASH FLOWS - OPERATING ACTIVITIES Income before cumulative effect of accounting changes................. $ 1,606 $ 1,784 $ 1,588 Adjustments to reconcile income before cumulative effect of accounting changes to net cash provided by operating activities Depreciation and amortization..... 1,740 1,577 1,444 Impairment of long-lived assets.......................... 520 - - Deferred income taxes............. (111) (67) 83 Other noncash charges and credits, net.................... 398 391 345 Changes in operating working capital, excluding effects of acquisitions Accounts and notes receivable... (434) (112) (161) Inventories..................... (129) (102) (90) Prepaid expenses, taxes and other current assets................. 76 1 3 Accounts payable................ 133 30 143 Income taxes payable............ (97) 55 (125) Other current liabilities....... 40 159 (96) ------- ------- ------- Net change in operating working capital.................. (411) 31 (326) ------- ------- ------- NET CASH PROVIDED BY OPERATING ACTIVITIES......................... 3,742 3,716 3,134 ------- ------- ------- CASH FLOWS - INVESTING ACTIVITIES Acquisitions and investments in unconsolidated affiliates....... (466) (316) (1,011) Capital spending.................... (2,104) (2,253) (1,982) Sales of property, plant and equipment...................... 138 55 73 Sales of restaurants................ 165 - 7 Short-term investments, by original maturity More than three months-purchases.. (289) (219) (579) More than three months-maturities. |
335 650 846 Three months or less, net......... 18 (10) (8) Other, net.......................... (247) (268) (117) ------- ------- ------- NET CASH USED FOR INVESTING ACTIVITIES......................... (2,450) (2,361) (2,771) ------- ------- ------- - --------------------------------------------------------------------------- (Continued on following page) - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CASH FLOWS (PAGE 2 OF 2) (in millions) PepsiCo, Inc. and Subsidiaries Fiscal years ended December 30, 1995, December 31, 1994 and December 25, 1993 1995 1994 1993 (52 Weeks) (53 Weeks) (52 Weeks) - --------------------------------------------------------------------------- CASH FLOWS - FINANCING ACTIVITIES Proceeds from issuances of long-term debt..................... 2,030 1,285 711 Payments of long-term debt.......... (928) (1,180) (1,202) Short-term borrowings, by original maturity More than three months-proceeds.. 2,053 1,304 3,034 More than three months-payments.. (2,711) (1,728) (2,792) Three months or less, net........ (747) 114 839 Cash dividends paid................. (599) (540) (462) Purchases of treasury stock......... (541) (549) (463) Proceeds from exercises of stock options...................... 252 97 69 Other, net.......................... (42) (43) (37) ------- ------- ------- NET CASH USED FOR FINANCING ACTIVITIES............... (1,233) (1,240) (303) ------- ------- ------- EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS.......... (8) (11) (3) ------- ------- ------- NET INCREASE IN CASH AND CASH EQUIVALENTS............... 51 104 57 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR................ 331 227 170 ------- ------- ------- CASH AND CASH EQUIVALENTS - END OF YEAR...................... $ 382 $ 331 $ 227 ======= ======= ======= - --------------------------------------------------------------------------- SUPPLEMENTAL CASH FLOW INFORMATION CASH FLOW DATA Interest paid....................... $ 671 591 550 Income taxes paid................... $ 790 663 676 SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES Liabilities assumed in connection with acquisitions....... $ 66 224 897 Issuance of treasury stock and debt for acquisitions.............. $ 9 39 365 Book value of net assets exchanged for investments in unconsolidated affiliates........................ $ 39 - 61 - --------------------------------------------------------------------------- See accompanying Notes to Consolidated Financial Statements. |
- --------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (PAGE 1 OF 2) (in millions except per share amounts) PepsiCo, Inc. and Subsidiaries Fiscal years ended December 30, 1995, December 31, 1994 and December 25, 1993 Capital Stock ------------------------------------- Issued Treasury ---------------- ------------------ Shares Amount Shares Amount - --------------------------------------------------------------------------- Shareholders' Equity, December 26, 1992.................. 863 $14 (64) $ (667) ------------------------------------ 1993 Net income.................... - - - - Cash dividends declared (per share-$0.61)................. - - - - Currency translation adjustment.... - - - - Purchases of treasury stock........ - - (12) (463) Shares issued in connection with acquisitions...................... - - 9 170 Stock option exercises, including tax benefits of $23............... - - 3 46 Pension liability adjustment, net of deferred taxes of $5........... - - - - Other.............................. - - - 1 ------------------------------------ Shareholders' Equity, December 25, 1993.................. 863 $14 (64) $ (913) ------------------------------------ 1994 Net income.................... - - - - Cash dividends declared (per share-$0.70)................. - - - - Currency translation adjustment.... - - - - Purchases of treasury stock........ - - (15) (549) Stock option exercises, including tax benefits of $27............... - - 5 81 Shares issued in connection with acquisitions...................... - - 1 15 Pension liability adjustment, net of deferred taxes of $5........... - - - - Other.............................. - - - 5 ------------------------------------ Shareholders' Equity, December 31, 1994.................. 863 $14 (73) $(1,361) ------------------------------------ 1995 Net income.................... - - - - Cash dividends declared (per share-$0.78)................. - - - - Currency translation adjustment.... - - - - Purchases of treasury stock........ - - (12) (541) Stock option exercises, including tax benefits of $91.............. - - 10 218 Other.............................. - - - 1 ------------------------------------ Shareholders' Equity, December 30, 1995.................. 863 $14 (75) $(1,683) ==================================== - --------------------------------------------------------------------------- (Continued on next page) - --------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (PAGE 2 OF 2) (in millions except per share amounts) PepsiCo, Inc. and Subsidiaries Fiscal years ended December 30, 1995, December 31, 1994 and December 25, 1993 Capital Currency in Translation Excess of Retained Adjustment Par Value Earnings and Other Total Shareholders' Equity, December 26, 1992.................. $ 668 $5,440 $ (99) $5,356 ----------------------------------- 1993 Net income.................... - 1,588 - 1,588 Cash dividends declared (per share-$0.61)................. - (486) - (486) Currency translation adjustment.... - - (77) (77) Purchases of treasury stock........ - - - (463) Shares issued in connection with acquisitions...................... 165 - - 335 Stock option exercises, including tax benefits of $23............... 46 - - 92 Pension liability adjustment, net of deferred taxes of $5........... - - (8) (8) Other.............................. 1 - - 2 ----------------------------------- Shareholders' Equity, December 25, 1993.................. $ 880 $6,542 $(184) $6,339 ----------------------------------- 1994 Net income.................... - 1,752 - 1,752 Cash dividends declared (per share-$0.70)................. - (555) - (555) Currency translation adjustment.... - - (295) (295) Purchases of treasury stock........ - - - (549) Stock option exercises, including tax benefits of $27............... 44 - - 125 Shares issued in connection with acquisitions...................... 14 - - 29 Pension liability adjustment, net of deferred taxes of $5........... - - 8 8 Other.............................. (3) - - 2 ----------------------------------- Shareholders' Equity, December 31, 1994.................. $ 935 $7,739 $(471) $6,856 ----------------------------------- 1995 Net income.................... - 1,606 - 1,606 Cash dividends declared (per share-$0.78)................. - (615) - (615) Currency translation adjustment.... - - (337) (337) Purchases of treasury stock........ - - - (541) Stock option exercises, including tax benefits of $91.............. 125 - - 343 Other.............................. - - - 1 ----------------------------------- Shareholders' Equity, December 30, 1995.................. $1,060 $8,730 $(808) $7,313 =================================== - --------------------------------------------------------------------------- See accompanying Notes to Consolidated Financial Statements. |
NOTE 8 - SHORT-TERM BORROWINGS AND LONG-TERM DEBT 1995 1994 - ------------------------------------------------------------------------------- SHORT-TERM BORROWINGS Commercial paper (5.7% and 5.4%)(A)............ $ 2,006 $ 2,254 Current maturities of long-term debt issuances (A)(B)......................... 1,405 988 Notes (6.9% and 5.4%) (A)...................... 252 1,492 Other borrowings (7.9% and 6.5%) (C)........... 543 444 Amount reclassified to long-term debt (D)......................... (3,500) (4,500) ------- ------- $ 706 $ 678 ======= ======= LONG-TERM DEBT Short-term borrowings, reclassified (D)........ $ 3,500 $ 4,500 Notes due 1996 through 2010 (6.3% and 6.6%) (A)..................................... 3,886 3,725 Euro notes due 1997 through 1998 (7.5% and 8.0%) (A)........................... 550 250 Zero coupon notes, $780 million due 1996 through 2012 (14.4% annual yield to maturity) (A)................................. 234 219 Swiss franc perpetual Foreign Interest Payment bonds (E)............................. 214 213 Australian dollar 6.3% bonds due 1997 through 1998 with interest payable in Japanese yen (A)(C)........................... 212 - Japanese yen 3.3% bonds due 1997 (C)........... 194 201 Zero coupon notes, $200 million due 1999 (6.4% annual yield to maturity) (A)........... 161 - Swiss franc 5.0% notes due 1999 (A)(C)......... 108 - Italian lira 11.4% notes due 1998 (A)(C)....... 95 - Luxembourg franc 6.6% notes due 1998 (A)(C).... 68 - Swiss franc 5 1/4% bearer bonds due 1995 (C).................................. - 100 Capital lease obligations (See Note 10)................................. 294 298 Other, due 1996-2020 (6.8% and 8.1%)........... 398 323 ------- ------- 9,914 9,829 Less current maturities of long-term debt issuances (B)............................ (1,405) (988) ------- ------- $ 8,509 $ 8,841 ======= ======= - ------------------------------------------------------------------------------- The interest rates in the above table indicate, where applicable, the weighted average of the stated rates at year-end 1995 and 1994, respectively, prior to the effects of any interest rate swaps. |
NOTE 9 - FAIR VALUE OF FINANCIAL INSTRUMENTS 1995 1994 --------------- -------------- Carrying Fair Carrying Fair Amount Value Amount Value -------- ----- -------- ----- Assets Cash and cash equivalents............. $ 382 $ 382 $ 331 $ 331 Short-term investments.................. $1,116 $1,116 $1,157 $1,157 Other assets (noncurrent investments)................. $ 23 $ 23 $ 48 $ 48 Liabilities Debt Short-term borrowings and long-term debt, net of capital leases.................... $8,921 $9,217 $9,221 $9,266 Debt-related derivative instruments Open contracts in asset position.................. (25) (96) (52) (52) Open contracts in liability position.................. 13 26 8 54 ------ ------ ------ ------ Net debt................ $8,909 $9,147 $9,177 $9,268 ------ ------ ------ ------ Other liabilities (GEMEX put option).......... $ 30 $ 30 - - Guarantees.................... - $ 4 - $ 3 - ------------------------------------------------------------------------------ The carrying amounts in the above table are included in the Consolidated Balance Sheet under the indicated captions, except for debt-related derivative instruments (interest rate and currency swaps), which are included in the appropriate current or noncurrent asset or liability caption. |
A reconciliation of the U.S. Federal statutory tax rate to PepsiCo's effective tax rate is set forth below: 1995 1994 1993 - ---------------------------------------------------------------------- U.S. Federal statutory tax rate.... 35.0% 35.0% 35.0% State income tax, net of Federal tax benefit..................... 2.0 3.2 2.9 Effect of lower taxes on foreign income (including Puerto Rico and Ireland)..................... (3.0) (5.4) (3.3) Adjustment to the beginning-of- the-year deferred tax assets valuation allowance.............. - (1.3) - Reduction of prior years' foreign accruals.................. - - (2.0) Settlement of prior years' audit issues...................... (4.1) - - Effect of 1993 tax legislation on deferred income taxes............. - - 1.1 Effect of adopting SFAS 121........ 1.4 - - Nondeductible amortization of U.S. goodwill..................... 1.0 0.8 0.8 Other, net......................... 1.7 0.7 - ---- ---- ---- Effective tax rate................. 34.0% 33.0% 34.5% ==== ==== ==== - ---------------------------------------------------------------------- The details of the 1995 and 1994 deferred tax liabilities (assets) are set forth below: 1995 1994 - ------------------------------------------------------------------------ Intangible assets other than nondeductible goodwill........... $ 1,631 $ 1,628 Property, plant and equipment....... 496 506 Safe harbor leases.................. 165 171 Zero coupon notes................... 100 111 Other............................... 257 337 ------- ------- Gross deferred tax liabilities...... 2,649 2,753 ------- ------- Net operating loss carryforwards.... (418) (306) Postretirement benefits............. (248) (248) Casualty claims..................... (119) (71) Various accrued liabilities and other.......................... (790) (637) ------- ------- Gross deferred tax assets........... (1,575) (1,262) ------- ------- Deferred tax assets valuation allowance................ 498 319 ------- ------- Net deferred tax liability.......... $ 1,572 $ 1,810 ======= ======= Included in Prepaid expenses, taxes and other current assets............ $ (313) $ (167) Other current liabilities........ - 4 Deferred income taxes............ 1,885 1,973 ------- ------- $ 1,572 $ 1,810 ======= ======= - ------------------------------------------------------------------------ The valuation allowance related to deferred tax assets increased by $179 million in 1995, primarily resulting from additions related to current year operating losses in a number of state and foreign jurisdictions and the adoption of SFAS 121. |
The components of postretirement benefit expense for 1995, 1994 and 1993 are set forth below: 1995 1994 1993 - ------------------------------------------------------------------------ Service cost of benefits earned........... $ 13 $ 19 $ 15 Interest cost on accumulated postretirement benefit obligation........ 46 41 41 Amortization of prior service cost (gain).............................. (20) (20) (20) Amortization of net (gain) loss........... (1) 6 - ---- ---- ---- $ 38 $ 46 $ 36 ==== ==== ==== - ------------------------------------------------------------------------ The components of the 1995 and 1994 postretirement benefit liability recognized in the Consolidated Balance Sheet are set forth below: 1995 1994 - ------------------------------------------------------------------------ Actuarial present value of postretirement benefit obligation: Retirees.......................................... $(344) $(289) Fully eligible active plan participants........... (96) (88) Other active plan participants.................... (171) (148) ----- ----- Accumulated postretirement benefit obligation....... (611) (525) Unrecognized prior service cost (gain).............. (132) (152) Unrecognized net loss............................... 68 12 ----- ----- $(675) $(665) ===== ===== - ------------------------------------------------------------------------ The discount rate assumptions used in computing the information above are set forth below: 1995 1994 1993 - ------------------------------------------------------------------------ Postretirement benefit expense.... 9.1% 6.8 8.2 Accumulated postretirement benefit obligation............... 7.7% 9.1 6.8 - ------------------------------------------------------------------------ The year-to-year fluctuations in the discount rate assumptions primarily reflect changes in U.S. interest rates. |
The components of net pension expense for U.S. company-sponsored plans are set forth below: 1995 1994 1993 - ------------------------------------------------------------------------ Service cost of benefits earned........... $ 60 $ 70 $ 57 Interest cost on projected benefit obligation............................... 92 84 76 Return on plan assets Actual (gain) loss...................... (338) 20 (162) Deferred gain (loss).................... 221 (131) 71 ----- ----- ----- (117) (111) (91) Amortization of net transition gain....... (19) (19) (19) Net other amortization.................... 5 9 9 ----- ----- ----- $ 21 $ 33 $ 32 ===== ===== ===== - ------------------------------------------------------------------------ Reconciliations of the funded status of the U.S. plans to the pension liability recognized in the Consolidated Balance Sheet are set forth below: Assets Exceed Accumulated Benefits Accumulated Benefits Exceed Assets ==================== ==================== 1995 1994 1995 1994 - ------------------------------------------------------------------------ Actuarial present value of benefit obligation Vested benefits............. $ (824) $ (774) $(270) $(22) Nonvested benefits.......... (110) (98) (30) (1) ------ ------ ----- ---- Accumulated benefit obligation................... (934) (872) (300) (23) Effect of projected compensation increases....... (155) (111) (78) (48) ------ ------ ----- ---- Projected benefit obligation.. (1,089) (983) (378) (71) Plan assets at fair value..... 1,152 1,134 267 3 ------ ------ ----- ---- Plan assets in excess of (less than) projected benefit obligation.......... 63 151 (111) (68) Unrecognized prior service cost................. 37 31 51 30 Unrecognized net (gain) loss ................. (20) (72) 34 4 Unrecognized net transition (gain) loss....... (51) (73) (3) - Adjustment required to recognize minimum liability. |
- - (26) - ------ ------ ------ ----- Prepaid (accrued) pension liability.................... $ 29 $ 37 $ (55) $(34) ====== ====== ===== ==== - ------------------------------------------------------------------------ The assumptions used to compute the U.S. information above are set forth below: 1995 1994 1993 - ------------------------------------------------------------------------ Discount rate - pension expense........... 9.0% 7.0 8.2 Expected long-term rate of return on plan assets........................... 10.0% 10.0 10.0 Discount rate - projected benefit obligation............................... 7.7% 9.0 7.0 Future compensation growth rate........... 3.3%-6.6% 3.3-7.0 3.3-7.0 - ------------------------------------------------------------------------ The components of net pension expense for international company-sponsored plans are set forth below: 1995 1994 1993 - ------------------------------------------------------------------------ Service cost of benefits earned........... $ 11 $ 15 $ 12 Interest cost on projected benefit obligation............................... 16 15 15 Return on plan assets Actual (gain) loss...................... (31) 8 (41) Deferred gain (loss).................... 6 (32) 21 ---- ---- ---- (25) (24) (20) Net other amortization.................... - 2 2 ---- ---- ---- $ 2 $ 8 $ 9 ==== ==== ==== - ------------------------------------------------------------------------ Reconciliations of the funded status of the international plans to the pension liability recognized in the Consolidated Balance Sheet are set forth below: Assets Exceed Accumulated Benefits Accumulated Benefits Exceed Assets -------------------- -------------------- 1995 1994 1995 1994 - -------------------------------------------------------------------------- Actuarial present value of benefit obligation Vested benefits............. $(144) $(125) $(34) $(23) Nonvested benefits.......... (2) (2) (1) (7) ----- ----- ---- ---- Accumulated benefit obligation................... (146) (127) (35) (30) Effect of projected compensation increases....... (23) (24) (12) (10) ----- ----- ---- ---- Projected benefit obligation.. (169) (151) (47) (40) Plan assets at fair value..... 235 213 18 15 ----- ----- ---- ---- Plan assets in excess of (less than) projected benefit obligation.......... 66 62 (29) (25) Unrecognized prior service cost................. 3 4 - - Unrecognized net loss (gain).................. 16 14 4 (3) Unrecognized net transition (gain) loss....... (1) (2) 4 5 Adjustment required to recognize minimum liability................... - - (2) - ----- ----- ---- ---- Prepaid (accrued) pension liability.................... $ 84 $ 78 $(23) $(23) ===== ===== ==== ==== - ------------------------------------------------------------------------ The assumptions used to compute the international information above are set forth below: 1995 1994 1993 - ------------------------------------------------------------------------ Discount rate - pension expense........... 9.2% 7.3 9.0 Expected long-term rate of return on plan assets........................... 11.3% 11.3 10.8 Discount rate - projected benefit obligation............................... 8.8% 9.3 7.4 Future compensation growth rate........... 3.0%-11.8% 3.0-8.5 3.5-8.5 - ------------------------------------------------------------------------ The discount rates and rates of return for the international plans represent weighted averages. |
Stock option activity for 1993, 1994 and 1995 is set forth below: (options in thousands) SharePower LTIP/SOIP - -------------------------------------------------------------------------------- Outstanding at December 26, 1992........................ 28,796 32,990 Granted................................... 9,121 2,834 Exercised................................. (1,958) (1,412) Surrendered for PSUs...................... - (96) Canceled.................................. (2,524) (966) ------ ------ Outstanding at December 25, 1993........................ 33,435 33,350 Granted................................... 11,633 16,237 Exercised................................. (1,820) (3,052) Surrendered for PSUs...................... - (1,541) Canceled.................................. (3,443) (2,218) ------ ------ Outstanding at December 31, 1994........................ 39,805 42,776 Granted................................... 8,218 4,977 Exercised................................. (5,722) (4,868) Surrendered for PSUs...................... - (101) Canceled.................................. (2,939) (1,815) ------ ------ Outstanding at December 30, 1995........................ 39,362 40,969 ====== ====== Exercisable at December 30, 1995........................ 16,932 15,804 ====== ====== Option prices per share Exercised during 1993................... $17.58 to $36.75 $4.11 to $36.31 Exercised during 1994................... $17.58 to $36.75 $4.11 to $38.75 Exercised during 1995................... $17.58 to $46.00 $7.69 to $41.81 Outstanding at year-end 1995.......................... $17.58 to $46.00 $7.69 to $51.19 NOTE 16 - STOCK OFFERING BY AN UNCONSOLIDATED AFFILIATE In 1993, PepsiCo entered into an arrangement with the principal shareholders of Buenos Aires Embotelladora S.A. (BAESA), a franchised bottler which currently has operations in Brazil, Argentina, Chile, Uruguay and Costa Rica, to form a joint venture. |
- ------------------------------------------------------------------------------ INDUSTRY SEGMENTS - NET SALES (page 1 of 5) - ------------------------------------------------------------------------------ Growth Rate 1990-1995(a) 1995 1994 1993 1992 1991 - ------------------------------------------------------------------------------ Beverages: U.S. 7% $ 6,977 $ 6,541 $ 5,918 $ 5,485 $ 5,171 International 19% 3,571 3,146 2,720 2,121 1,744 ------- ------- ------- ------- ------- 10% 10,548 9,687 8,638 7,606 6,915 ------- ------- ------- ------- ------- Snack Foods: U.S. 10% 5,495 5,011 4,365 3,950 3,738 International 19% 3,050 3,253 2,662 2,182 1,512 ------- ------- ------- ------- ------- 12% 8,545 8,264 7,027 6,132 5,250 ------- ------- ------- ------- ------- Restaurants: U.S. 11% 9,202 8,694 8,026 7,115 6,258 International 25% 2,126 1,827 1,330 1,117 869 ------- ------- ------- ------- ------- 13% 11,328 10,521 9,356 8,232 7,127 ------- ------- ------- ------- ------- COMBINED SEGMENTS U.S. 9% 21,674 20,246 18,309 16,550 15,167 International 20% 8,747 8,226 6,712 5,420 4,125 ------- ------- ------- ------- ------- 12% $30,421 $28,472 $25,021 $21,970 $19,292 ======= ======= ======= ======= ======= - ------------------------------------------------------------------------------ BY U.S. |
- ------------------------------------------------------------------------------ INDUSTRY SEGMENTS - OPERATING PROFIT (b) (page 2 of 5) - ------------------------------------------------------------------------------ Growth Rate 1990-1995(a) 1995 1994 1993 1992 1991 - ------------------------------------------------------------------------------ Beverages: U.S. 11% $1,145 $1,022 $ 937 $ 686 $ 746 International 19% 164 195 172 113 117 ------ ------ ------ ------ ------ 12% 1,309 1,217 1,109 799 863 ------ ------ ------ ------ ------ Snack Foods: U.S. 9% 1,132 1,025 901 776 617 International 14% 300 352 289 209 140 ------ ------ ------ ------ ------ 10% 1,432 1,377 1,190 985 757 ------ ------ ------ ------ ------ Restaurants: U.S. 10% 451 659 685 598 480 International 8% (21) 71 93 120 96 ------ ------ ------ ------ ------ 9% 430 730 778 718 576 ------ ------ ------ ------ ------ Combined Segments U.S. 10% 2,728 2,706 2,523 2,060 1,843 International 14% 443 618 554 442 353 ------ ------ ------ ------ ------ 10% 3,171 3,324 3,077 2,502 2,196 Equity (Loss) Income (3) 38 30 40 32 Unallocated Expenses, net (181) (161) (200) (171) (116) ------ ------ ------ ------ ------ Operating Profit 11% $2,987 $3,201 $2,907 $2,371 $2,112 ====== ====== ====== ====== ====== - ------------------------------------------------------------------------------ BY U.S. |
- ----------------------------------------------------------------------- GEOGRAPHIC AREAS (c) (page 3 of 5) - ----------------------------------------------------------------------- NET SALES ----------------------------- 1995 1994 1993 - ----------------------------------------------------------------------- United States $21,674 $20,246 $18,309 Europe 2,783 2,177 1,819 Mexico 1,228 2,023 1,614 Canada 1,299 1,244 1,206 Other 3,437 2,782 2,073 ------- ------- ------- COMBINED SEGMENTS $30,421 $28,472 $25,021 ======= ======= ======= - ----------------------------------------------------------------------- SEGMENT OPERATING PROFIT (LOSS) ------------------------------- 1995(d) 1994 1993 - ----------------------------------------------------------------------- United States $ 2,728 $ 2,706 $ 2,523 Europe (65) 17 47 Mexico 80 261 223 Canada 86 82 102 Other 342 258 182 ------- ------- ------- COMBINED SEGMENTS $ 3,171 $ 3,324 $ 3,077 ======= ======= ======= - ----------------------------------------------------------------------- IDENTIFIABLE ASSETS ------------------------------ 1995 1994 1993 - ----------------------------------------------------------------------- United States $14,505 $14,218 $13,590 Europe 3,127 3,062 2,666 Mexico 637 995 1,217 Canada 1,344 1,342 1,364 Other 2,629 2,196 1,675 ------- ------- ------- COMBINED SEGMENTS 22,242 21,813 20,512 Investments in Unconsolidated Affiliates 1,635 1,295 1,091 Corporate 1,555 1,684 2,103 ------- ------- ------- $25,432 $24,792 $23,706 ======= ======= ======= - ---------------------------------------------------------------------- (c) The results of centralized concentrate manufacturing operations in Puerto Rico and Ireland have been allocated based upon sales to the respective geographic areas. |
KPMG Peat Marwick LLP New York, New York February 6, 1996 - ----------------------------------------------------------------------- SELECTED QUARTERLY FINANCIAL DATA (page 1 of 4) ($ in millions except per share amounts, unaudited) PepsiCo, Inc. and Subsidiaries - ----------------------------------------------------------------------- First Quarter (12 Weeks) 1995 1994 - ----------------------------------------------------------------------- Net sales...................................... $ 6,191 5,729 Gross profit................................... $ 3,169 2,944 Operating profit............................... $ 629 550 Income before income taxes and cumulative effect of accounting changes.................. $ 496 438 Provision for income taxes..................... $ 175 155 Income before cumulative effect of accounting changes............................ $ 321 283 Cumulative effect of accounting changes (e).... $ - (32) Net income..................................... $ 321 251 Income (charge) per share Income before cumulative effect of accounting changes.......................... $ 0.40 0.35 Cumulative effect of accounting changes (e)................................. $ - (0.04) Net income per share........................... $ 0.40 0.31 Cash dividends declared per share.............. $ 0.18 0.16 Stock price per share (f) High......................................... $ 41 42 1/2 Low.......................................... $33 7/8 35 3/4 Close........................................ $40 1/4 37 5/8 - -------------------------------------------------------------------------------- (e) Represented the cumulative net effect related to years prior to 1994 of adopting SFAS 112, "Employers' Accounting for Postemployment Benefits," and the change to a preferred method for calculating the market-related value of pension plan assets. |
- -------------------------------------------------------------------------- SELECTED QUARTERLY FINANCIAL DATA (page 2 of 4) ($ in millions except per share amounts, unaudited) PepsiCo, Inc. and Subsidiaries - -------------------------------------------------------------------------- Second Quarter (12 Weeks) 1995 1994(a) - -------------------------------------------------------------------------- Net sales...................................... $ 7,286 6,557 Gross profit................................... $ 3,735 3,420 Operating profit............................... $ 869 785 Income before income taxes..................... $ 735 672 Provision for income taxes..................... $ 248 225 Net income .................................... $ 487 447 Net income per share........................... $ 0.61 0.55 Cash dividends declared per share.............. $ 0.20 0.18 Stock price per share (f) High......................................... $ 49 37 3/4 Low.......................................... $37 7/8 29 7/8 Close........................................ $46 5/8 31 1/8 - -------------------------------------------------------------------------------- (a) Included an $18 gain ($17 after-tax or $0.02 per share) arising from a public share offering by BAESA, an unconsolidated franchised bottling affiliate in South America. |
- ---------------------------------------------------------------------- SELECTED QUARTERLY FINANCIAL DATA (page 3 of 4) ($ in millions except per share amounts, unaudited) PepsiCo, Inc. and Subsidiaries - ----------------------------------------------------------------------- Third Quarter (12 Weeks) 1995 1994 - ----------------------------------------------------------------------- Net sales...................................... $ 7,693 7,064 Gross profit................................... $ 3,942 3,684 Operating profit............................... $ 1,031 962 Income before income taxes..................... $ 901 830 Provision for income taxes..................... $ 284 289 Net income .................................... $ 617 541 Net income per share........................... $ 0.77 0.68 Cash dividends declared per share.............. $ 0.20 0.18 Stock price per share (f) High......................................... $47 7/8 34 5/8 Low.......................................... $43 1/4 29 1/4 Close........................................ $45 3/4 33 3/4 - ----------------------------------------------------------------------- Fourth Quarter (16/17 Weeks) (d) 1995(b)(c) 1994 - ----------------------------------------------------------------------- Net sales...................................... $ 9,251 9,122 Gross profit................................... $ 4,689 4,709 Operating profit............................... $ 458 904 Income before income taxes..................... $ 300 724 Provision for income taxes..................... $ 119 211 Net income .................................... $ 181 513 Net income per share........................... $ 0.22 0.64 Cash dividends declared per share.............. $ 0.20 0.18 Stock price per share (f) High......................................... $58 3/4 37 3/8 Low.......................................... $45 5/8 32 1/4 Close........................................ $55 7/8 36 1/4 - ----------------------------------------------------------------------- (b) Included the initial, noncash charge of $520 ($384 after-tax or $0.48 per share) upon adoption of SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," at the beginning of the fourth quarter. |
- ------------------------------------------------------------------------- SELECTED QUARTERLY FINANCIAL DATA (page 4 of 4) ($ in millions except per share amounts, unaudited) PepsiCo, Inc. and Subsidiaries - ------------------------------------------------------------------------- Full Year (52/53 Weeks)(d) 1995(b)(c) 1994(a) - ------------------------------------------------------------------------- Net sales...................................... $30,421 28,472 Gross profit................................... $15,535 14,757 Operating profit............................... $ 2,987 3,201 Income before income taxes and cumulative effect of accounting changes.................. $ 2,432 2,664 Provision for income taxes..................... $ 826 880 Income before cumulative effect of accounting changes............................ $ 1,606 1,784 Cumulative effect of accounting changes (e).... $ - (32) Net income..................................... $ 1,606 1,752 Income (charge) per share Income before cumulative effect of accounting changes.......................... $ 2.00 2.22 Cumulative effect of accounting changes (e)................................. $ - (0.04) Net income per share........................... $ 2.00 2.18 Cash dividends declared per share.............. $ 0.78 0.70 Stock price per share (f) High......................................... $58 3/4 42 1/2 Low.......................................... $33 7/8 29 1/4 Close........................................ $55 7/8 36 1/4 - ----------------------------------------------------------------------- (a) Included an $18 gain ($17 after-tax or $0.02 per share) arising from a public share offering by BAESA, an unconsolidated franchised bottling affiliate in South America. |
- ------------------------------------------------------------------------------ SELECTED FINANCIAL DATA (Page 1 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries - ------------------------------------------------------------------------------ Growth Rates --------------------------- Compounded Annual ----------------- ------- 10-Year 5-Year 1-Year 1985-95 1990-95 1994-95 ------- ------- ------- SUMMARY OF OPERATIONS Net sales................................. 15% 12% 7% Operating profit.......................... 14% 8% (7)% Gain on stock offering by an unconsolidated affiliate (j)............. Interest expense, net..................... Income from continuing operations before income taxes and cumulative effect of accounting changes 14% 8% (9)% Income from continuing operations before cumulative effect of accounting changes....................... 14% 8% (10)% Cumulative effect of accounting changes (k).............................. Net income (l)............................ 11% 8% (8)% CASH FLOW DATA (m) Provided by operating activities.......... 16% 12% 1% Capital spending.......................... 11% 12% (7)% Operating free cash flow.................. 43% 12% 12% Dividends paid............................ 14% 15% 11% Purchases of treasury stock............... Acquisitions and investments in unconsolidated affiliates................ |
Historical cost net debt ratio (r)........ Employees................................. 12% 9% 2% - ------------------------------------------------------------------------------ SELECTED FINANCIAL DATA (Page 2 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries - ------------------------------------------------------------------------------ 1995(a)(b) 1994(c)(d) 1993(e) - ------------------------------------------------------------------------------ SUMMARY OF OPERATIONS Net sales................................. $30,421 28,472 25,021 Operating profit.......................... $ 2,987 3,201 2,907 Gain on stock offering by an unconsolidated affiliate (j)............. - 18 - Interest expense, net..................... (555) (555) (484) ------- ------- ------- Income from continuing operations before income taxes and cumulative effect of accounting changes............. $ 2,432 2,664 2,423 ======= ======= ======= Income from continuing operations before cumulative effect of accounting changes....................... $ 1,606 1,784 1,588 Cumulative effect of accounting changes (k).............................. $ - (32) - Net income (l)............................ $ 1,606 1,752 1,588 CASH FLOW DATA (m) Provided by operating activities.......... $ 3,742 3,716 3,134 Capital spending.......................... 2,104 2,253 1,982 ------- ------- ------- Operating free cash flow.................. $ 1,638 1,463 1,152 ======= ======= ======= Dividends paid............................ $ 599 540 462 Purchases of treasury stock............... $ 541 549 463 Acquisitions and investments in unconsolidated affiliates................ $ 466 316 1,011 PER SHARE DATA AND OTHER SHARE INFORMATION Income from continuing operations before cumulative effect of accounting changes....................... $ 2.00 2.22 1.96 Cumulative effect of accounting changes (k).............................. $ - (0.04) - Net income (l)............................ $ 2.00 2.18 1.96 Cash dividends declared................... $ 0.780 0.700 0.610 Book value per share at year-end.......... $ 9.28 8.68 7.93 Market price per share at year-end........ $55 7/8 36 1/4 41 7/8 Number of shares repurchased.............. 12.3 15.0 12.4 Shares outstanding at year-end............ 788 790 799 Average shares outstanding used to calculate income (charge) per share (n)................................ 804 804 810 BALANCE SHEET Total assets.............................. $25,432 24,792 23,706 Long-term debt............................ $ 8,509 8,841 7,443 Total debt (o) ........................... $ 9,215 9,519 9,634 Shareholders' equity...................... $ 7,313 6,856 6,339 STATISTICS Return on average shareholders' equity (p)............................... 23% 27 27 Market net debt ratio (q)................. 18% 26 22 Historical cost net debt ratio (r)........ 46% 49 50 Employees................................. 480,000 471,000 423,000 - -------------------------------------------------------------------------- SELECTED FINANCIAL DATA (Page 3 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries - -------------------------------------------------------------------------- 1992(f)(g) 1991(h) 1990(i) - -------------------------------------------------------------------------- SUMMARY OF OPERATIONS Net sales................................. $21,970 19,292 17,516 Operating profit.......................... 2,371 2,112 2,042 Gain on stock offering by an unconsolidated affiliate (j)............. - - 118 Interest expense, net..................... (472) (452) (506) ------- ------- ------- Income from continuing operations before income taxes and cumulative effect of accounting changes............. $ 1,899 1,660 1,654 ======= ======= ======= Income from continuing operations before cumulative effect of accounting changes....................... $ 1,302 1,080 1,091 Cumulative effect of accounting changes (k).............................. $ (928) - - Net income (l) ........................... $ 374 1,080 1,077 CASH FLOW DATA (m) Provided by operating activities.......... $ 2,712 2,430 2,110 Capital spending.......................... 1,550 1,458 1,180 ------- ------- ------- Operating free cash flow.................. $ 1,162 972 930 ======= ======= ======= Dividends paid............................ $ 396 343 294 Purchases of treasury stock............... $ 32 195 148 Acquisitions and investments in unconsolidated affiliates................ $ 1,210 641 631 PER SHARE DATA AND OTHER SHARE INFORMATION Income from continuing operations before cumulative effect of accounting changes....................... $ 1.61 1.35 1.37 Cumulative effect of accounting changes (k) ............................. $ (1.15) - - Net income (l) ........................... $ 0.46 1.35 1.35 Cash dividends declared................... $ 0.510 0.460 0.383 Book value per share at year-end.......... $ 6.70 7.03 6.22 Market price per share at year-end........ $42 1/4 33 3/4 25 3/4 Number of shares repurchased.............. 1.0 6.4 6.3 Shares outstanding at year-end............ 799 789 788 Average shares outstanding used to calculate income (charge) per share (n)................................ 807 803 799 BALANCE SHEET Total assets.............................. $20,951 18,775 17,143 Long-term debt............................ $ 7,965 7,806 5,900 Total debt (o) ........................... $ 8,672 8,034 7,526 Shareholders' equity...................... $ 5,356 5,545 4,904 STATISTICS Return on average shareholders' equity (p) .............................. 24% 21 25 Market net debt ratio (q) ................ 19% 21 24 Historical cost net debt ratio (r) ....... 49% 51 51 Employees................................. 372,000 338,000 308,000 - ----------------------------------------------------------------------- SELECTED FINANCIAL DATA (Page 4 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries - -------------------------------------------------------------------------- 1989 1988(d) 1987 - -------------------------------------------------------------------------- SUMMARY OF OPERATIONS Net sales................................. $15,049 12,381 11,018 Operating profit.......................... $ 1,773 1,342 1,128 Gain on stock offering by an unconsolidated affiliate (j) ............ - - - Interest expense, net..................... (433) (222) (182) ------- ------- ------- Income from continuing operations before income taxes and cumulative effect of accounting changes............. $ 1,340 1,120 946 ======= ======= ======= Income from continuing operations before cumulative effect of accounting changes....................... $ 901 762 605 Cumulative effect of accounting changes (k) ............................. $ - - - Net income (l) ........................... $ 901 762 595 CASH FLOW DATA (m) Provided by operating activities.......... $ 1,886 1,895 1,335 Capital spending.......................... 944 726 771 ------- ------- ------- Operating free cash flow.................. $ 942 1,169 564 ======= ======= ======= Dividends paid............................ $ 242 199 172 Purchases of treasury stock............... $ - 72 19 Acquisitions and investments in unconsolidated affiliates................ $ 3,297 1,416 372 PER SHARE DATA AND OTHER SHARE INFORMATION Income from continuing operations before cumulative effect of accounting changes....................... $ 1.13 0.97 0.77 Cumulative effect of accounting changes (k) ............................. $ - - - Net income (l) ........................... $ 1.13 0.97 0.76 Cash dividends declared................... $ 0.320 0.267 0.223 Book value per share at year-end.......... $ 4.92 4.01 3.21 Market price per share at year-end........ $21 3/8 13 1/8 11 1/4 Number of shares repurchased.............. - 6.2 1.9 Shares outstanding at year-end............ 791 788 781 Average shares outstanding used to calculate income (charge) per share (n)................................ 796 790 789 BALANCE SHEET Total assets.............................. $15,127 11,135 9,023 Long-term debt............................ $ 6,077 2,656 2,579 Total debt (o) ........................... $ 6,943 4,107 3,225 Shareholders' equity...................... $ 3,891 3,161 2,509 STATISTICS Return on average shareholders' equity (p) .............................. 26% 27 27 Market net debt ratio (q) ................ 26% 24 22 Historical cost net debt ratio (r) ....... 54% 43 41 Employees................................. 266,000 235,000 225,000 - ----------------------------------------------------------------------- SELECTED FINANCIAL DATA (Page 5 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries - ----------------------------------------------------------------------- 1986 1985 - ----------------------------------------------------------------------- SUMMARY OF OPERATIONS Net sales................................. $ 9,017 7,585 Operating profit.......................... 829 782 Gain on stock offering by an unconsolidated affiliate (j)............. - - Interest expense, net..................... (139) (99) ------- ------- Income from continuing operations before income taxes and cumulative effect of accounting changes............. $ 690 683 ======= ======= Income from continuing operations before cumulative effect of accounting changes....................... $ 464 427 Cumulative effect of accounting changes (k).............................. $ - - Net income (l)............................ $ 458 544 CASH FLOW DATA (m) Provided by operating activities.......... $ 1,212 817 Capital spending.......................... 859 770 ------- ------- Operating free cash flow.................. $ 353 47 ======= ======= Dividends paid............................ $ 160 161 Purchases of treasury stock............... $ 158 458 Acquisitions and investments in unconsolidated affiliates................ $ 1,680 160 PER SHARE DATA AND OTHER SHARE INFORMATION Income from continuing operations before cumulative effect of accounting changes....................... $ 0.59 0.51 Cumulative effect of accounting changes (k).............................. $ - - Net income (l)............................ $ 0.58 0.65 Cash dividends declared................... $ 0.209 0.195 Book value per share at year-end.......... $ 2.64 2.33 Market price per share at year-end........ $ 8 3/4 7 7/8 Number of shares repurchased.............. 20.2 66.0 Shares outstanding at year-end............ 781 789 Average shares outstanding used to calculate income (charge) per share (n)................................ 787 842 BALANCE SHEET Total assets.............................. $ 8,027 5,889 Long-term debt............................ $ 2,633 1,162 Total debt (o) ........................... $ 2,865 1,506 Shareholders' equity...................... $ 2,059 1,838 STATISTICS Return on average shareholders' equity (p) .............................. 24% 23 Market net debt ratio (q) ................ 28% 15 Historical cost net debt ratio (r)........ 46% 30 Employees................................. 241,000 150,000 - -------------------------------------------------------------------------------- SELECTED FINANCIAL DATA (Page 6 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries - -------------------------------------------------------------------------------- All share and per share amounts reflect three-for-one stock splits in 1990 and 1986. |
PEPSICO, INC. AND SUBSIDIARIES SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FISCAL YEARS ENDED DECEMBER 30, 1995, DECEMBER 31, 1994 AND DECEMBER 25, 1993 (IN MILLIONS) Additions --------------------------- Balance Charged Deduct- Balance at to ions at beginning costs and Other from end of year expenses additions reserves of year -------- -------- --------- -------- -------- (1) (2) Deductions from assets: 1995 (52 weeks) - --------------- Allowance for doubtful accounts $151 $ 49 $ 6 $ 56 $150 ==== ==== === ==== ==== Deferred tax assets valuation allowance $319 $150 $ 29 $ - $498 ==== ==== ==== ==== ==== 1994 (53 weeks) - --------------- Allowance for doubtful accounts $128 $ 59 $ 8 $ 44 $151 ==== ==== ==== ==== ==== Deferred tax assets valuation allowance $249 $ 69 $ 1 $ - $319 ==== ==== ==== ==== ==== 1993 (52 weeks) - --------------- Allowance for doubtful accounts $112 $ 44 $ 17 $ 45 $128 ==== ==== ==== ==== ==== Deferred tax asstes valuation allowance $181 $ 68 $ - $ - $249 ==== ==== ==== ==== ==== (1) Other additions principally related to acquisitions and reclassifications. |
SIGNATURE TITLE DATE /s/ D. WAYNE CALLOWAY Chairman of the Board and March 28, 1995 D. Wayne Calloway Chief Executive Officer /s/ ROBERT G. DETTMER Executive Vice President March 28, 1995 Robert G. Dettmer and Chief Financial Officer /s/ ROBERT L. CARLETON Senior Vice President and March 28, 1995 Robert L. Carleton Controller (Chief Accounting Officer) /s/ ROGER A. ENRICO Vice Chairman of the March 28, 1995 Roger A. Enrico Board, Chairman and Chief Executive Officer, PepsiCo Worldwide Restaurants, and Director /s/ JOHN F. AKERS Director March 28, 1995 John F. Akers /s/ ROBERT E. ALLEN Director March 28, 1995 Robert E. Allen /s/ JOHN J. MURPHY Director March 28, 1995 John J. Murphy /s/ ANDRALL E. PEARSON Director March 28, 1995 Andrall E. Pearson S-2 /s/ SHARON PERCY Director March 28, 1995 ROCKEFELLER Sharon Percy Rockefeller /s/ ROGER B. SMITH Director March 28, 1995 Roger B. Smith /s/ ROBERT H. STEWART, III Director March 28, 1995 Robert H. Stewart, III /s/ FRANKLIN A. THOMAS Director March 28, 1995 Franklin A. Thomas /s/ P. ROY VAGELOS Director March 28, 1995 P. Roy Vagelos /s/ ARNOLD WEBER Director March 28, 1995 Arnold R. Weber PepsiCo, Inc. and Subsidiaries FINANCIAL INFORMATION FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K FISCAL YEAR ENDED DECEMBER 31, 1994 PEPSICO, INC. AND SUBSIDIARIES INDEX TO FINANCIAL INFORMATION Item 14(a)(1)-(2) Page Reference Item 14(a)(1) Financial Statements Consolidated Statement of Income for the fiscal years December 31, 1994, December 25, 1993 and December 26, 1992 Consolidated Balance Sheet at December 31, 1994 and December 25, 1993 Consolidated Statement of Cash Flows for the fiscal years ended December 31, 1994, December 25, 1993 and December 26, 1992 Consolidated Statement of Shareholders' Equity for the fiscal years ended December 31, 1994, December 25, 1993 and December 26, 1992 Notes to Consolidated Financial Statements Management's Responsibility for Financial Statements Report of Independent Auditors, KPMG Peat Marwick LLP Selected Quarterly Financial Data Selected Financial Data Item 14(a)(2) Financial Statement Schedules II Valuation and Qualifying Accounts and Reserves for the fiscal years ended December 31, 1994, December 25, 1993 and December 26, 1992 All other financial statements and schedules have been omitted since the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the above listed financial statements or the notes thereto. |
_______________________________________________________________________________ Consolidated Statement of Income (in millions except per share amounts) PepsiCo, Inc. and Subsidiaries Fifty-three weeks ended December 31, 1994 and fifty-two weeks ended December 25, 1993 and December 26, 1992 1994 1993 1992 _______________________________________________________________________________ Net Sales $28,472.4 $25,020.7 $21,970.0 Costs and Expenses, net Cost of sales 13,715.4 11,946.1 10,611.7 Selling, general and administrative expenses 11,243.6 9,864.4 8,721.2 Amortization of intangible assets 312.2 303.7 265.9 Operating Profit 3,201.2 2,906.5 2,371.2 Gain on joint venture stock offering 17.8 - - Interest expense (645.0) (572.7) (586.1) Interest income 90.4 88.7 113.7 Income Before Income Taxes and Cumulative Effect of Accounting Changes 2,664.4 2,422.5 1,898.8 Provision for Income Taxes 880.4 834.6 597.1 Income Before Cumulative Effect of Accounting Changes 1,784.0 1,587.9 1,301.7 Cumulative Effect of Accounting Changes Postemployment benefits (net of income tax benefit of $29.3) (55.3) - - Pension assets (net of income tax expense of $14.5) 23.3 - - Postretirement benefits other than pensions (net of income tax benefit of $218.6) - - (356.7) Income taxes - - (570.7) Net Income $ 1,752.0 $ 1,587.9 $ 374.3 Income (Charge) Per Share Before cumulative effect of accounting changes $ 2.22 $ 1.96 $ 1.61 Cumulative effect of accounting changes Postemployment benefits (0.07) - - Pension assets 0.03 - - Postretirement benefits other than pensions - - (0.44) Income taxes - - (0.71) Net Income Per Share $ 2.18 $ 1.96 $ 0.46 Average shares outstanding used to calculate income (charge) per share 803.6 810.1 806.7 _______________________________________________________________________________ See accompanying Notes to Consolidated Financial Statements. |
_______________________________________________________________________________ _____________________________________________________________________________ Consolidated Balance Sheet (in millions except per share amount) PepsiCo, Inc. and Subsidiaries December 31, 1994 and December 25, 1993 1994 1993 _____________________________________________________________________________ ASSETS Current Assets Cash and cash equivalents $ 330.7 $ 226.9 Short-term investments, at cost 1,157.4 1,573.8 1,488.1 1,800.7 Accounts and notes receivable, less allowance: $150.6 in 1994 and $128.3 in 1993 2,050.9 1,883.4 Inventories 970.0 924.7 Prepaid expenses, taxes and other current assets 563.2 499.8 Total Current Assets 5,072.2 5,108.6 Investments in Affiliates 1,295.2 1,090.5 Property, Plant and Equipment, net 9,882.8 8,855.6 Intangible Assets, net 7,842.1 7,929.5 Other Assets 699.7 721.6 Total Assets $24,792.0 $23,705.8 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $ 1,451.6 $ 1,390.0 Accrued compensation and benefits 753.5 726.0 Short-term borrowings 678.5 2,191.2 Income taxes payable 671.7 823.7 Accrued marketing 546.2 400.9 Other current liabilities 1,168.9 1,043.1 Total Current Liabilities 5,270.4 6,574.9 Long-term Debt 8,840.5 7,442.6 Other Liabilities 1,852.1 1,342.0 Deferred Income Taxes 1,972.9 2,007.6 Shareholders' Equity Capital stock, par value 1 2/3 cents per share: authorized 1,800.0 shares, issued 863.1 shares 14.4 14.4 Capital in excess of par value 934.4 879.5 Retained earnings 7,739.1 6,541.9 Currency translation adjustment and other (470.6) (183.9) 8,217.3 7,251.9 Less: Treasury stock, at cost: 73.2 shares and 64.3 shares in 1994 and 1993, respectively (1,361.2) (913.2) Total Shareholders' Equity 6,856.1 6,338.7 Total Liabilities and Shareholders' Equity $24,792.0 $23,705.8 ____________________________________________________________________________ See accompanying Notes to Consolidated Financial Statements. |
_____________________________________________________________________________ ___________________________________________________________________________ Consolidated Statement of Cash Flows (page 1 of 2) (in millions) PepsiCo, Inc. and Subsidiaries Fifty-three weeks ended December 31, 1994 and fifty-two weeks ended December 25, 1993 and December 26, 1992 1994 1993 1992 ___________________________________________________________________________ Cash Flows - Operating Activities Income before cumulative effect of accounting changes $ 1,784.0 $ 1,587.9 $ 1,301.7 Adjustments to reconcile income before cumulative effect of accounting changes to net cash provided by operating activities: Depreciation and amortization 1,576.5 1,444.2 1,214.9 Deferred income taxes (66.9) 83.3 (52.0) Other noncash charges and credits, net 391.1 344.8 315.6 Changes in operating working capital, excluding effects of acquisitions: Accounts and notes receivable (111.8) (161.0) (45.7) Inventories (101.6) (89.5) (11.8) Prepaid expenses, taxes and other current assets 1.2 3.3 (27.4) Accounts payable 30.4 143.2 (102.0) Income taxes payable 54.4 (125.1) (16.9) Other current liabilities 158.7 (96.7) 135.2 Net change in operating working capital 31.3 (325.8) (68.6) Net Cash Provided by Operating Activities 3,716.0 3,134.4 2,711.6 Cash Flows - Investing Activities Acquisitions and investments in affiliates (315.8) (1,011.2) (1,209.7) Capital spending (2,253.2) (1,981.6) (1,549.6) Proceeds from sales of property, plant and equipment 55.3 72.5 89.0 Short-term investments, by original maturity: More than three months-purchases (218.6) (578.7) (1,174.8) More than three months-maturities 649.5 846.0 1,371.8 Three months or less, net (9.9) (8.3) (249.4) Other, net (268.3) (109.4) (30.8) Net Cash Used for Investing Activities $(2,361.0) $(2,770.7) $(2,753.5) ____________________________________________________________________________ (Continued on following page) ___________________________________________________________________________ Consolidated Statement of Cash Flows (page 2 of 2) (in millions) PepsiCo, Inc. and Subsidiaries Fifty-three weeks ended December 31, 1994 and fifty-two weeks ended December 25, 1993 and December 26, 1992 1994 1993 1992 ___________________________________________________________________________ Cash Flows - Financing Activities Proceeds from issuances of long-term debt $ 1,285.2 $ 710.8 $ 1,092.7 Payments of long-term debt (1,179.5) (1,201.9) (616.3) Short-term borrowings, by original maturity: More than three months-proceeds 1,303.8 3,033.6 911.2 More than three months-payments (1,727.7) (2,791.6) (2,062.6) Three months or less, net 113.8 839.0 1,075.3 Cash dividends paid (540.2) (461.6) (395.5) Purchases of treasury stock (549.1) (463.5) (32.0) Proceeds from exercises of stock options 97.4 68.6 82.8 Other, net (43.5) (36.7) (30.9) Net Cash (Used for) Provided by Financing Activities (1,239.8) (303.3) 24.7 Effect of Exchange Rate Changes on Cash and Cash Equivalents (11.4) (3.4) 0.4 Net Increase (Decrease) in Cash and Cash Equivalents 103.8 57.0 (16.8) Cash and Cash Equivalents - Beginning of Year 226.9 169.9 186.7 Cash and Cash Equivalents - End of Year $ 330.7 $ 226.9 $ 169.9 ___________________________________________________________________________ Supplemental Cash Flow Information Cash Flow Data Interest paid $ 591.1 549.5 574.7 Income taxes paid $ 663.1 675.6 519.7 Schedule of Noncash Investing and Financing Activities Liabilities assumed in connection with acquisitions $ 223.5 897.0 383.8 Issuance of treasury stock and debt for acquisitions $ 38.8 364.5 189.5 Book value of net assets exchanged for investment in affiliates $ - 60.8 86.7 ___________________________________________________________________________ See accompanying Notes to Consolidated Financial Statements. |
___________________________________________________________________________ Consolidated Statement of Shareholders' Equity (page 1 of 2) (in millions except per share amounts) PepsiCo, Inc. and Subsidiaries Fifty-three weeks ended December 31, 1994 and fifty-two weeks ended December 25, 1993 and December 26, 1992 Capital Stock Issued Treasury Shares Amount Shares Amount Shareholders' Equity, December 28, 1991 863.1 $14.4 (74.0) $ (745.9) 1992 Net income - - - - Cash dividends declared (per share-$0.51) - - - - Currency translation adjustment - - - - Shares issued in connection with acquisitions - - 4.3 44.2 Stock option exercises, including tax benefits of $57.5 - - 6.3 65.3 Purchases of treasury stock - - (1.0) (32.0) Other - - 0.1 1.4 Shareholders' Equity, December 26, 1992 863.1 $14.4 (64.3) $ (667.0) 1993 Net income - - - - Cash dividends declared (per share-$0.61) - - - - Currency translation adjustment - - - - Purchases of treasury stock - - (12.4) (463.5) Shares issued in connection with acquisitions - - 8.9 170.2 Stock option exercises, including tax benefits of $23.4 - - 3.4 46.0 Pension liability adjustment, net of deferred taxes of $5.1 - - - - Other - - 0.1 1.1 Shareholders' Equity, December 25, 1993 863.1 $14.4 (64.3) $ (913.2) 1994 Net income - - - - Cash dividends declared (per share-$0.70) - - - - Currency translation adjustment - - - - Purchases of treasury stock - - (15.0) (549.1) Stock option exercises, including tax benefits of $27.1 - - 4.9 80.8 Shares issued in connection with acquisitions - - 0.9 15.1 Pension liability adjustment, net of deferred taxes of $5.1 - - - - Other - - 0.3 5.2 Shareholders' Equity, December 31, 1994 863.1 $14.4 (73.2) $(1,361.2) (Continued on following page) Consolidated Statement of Shareholders' Equity (page 2 of 2) (in millions except per share amounts) PepsiCo, Inc. and Subsidiaries Fifty-three weeks ended December 31, 1994 and fifty-two weeks ended December 25, 1993 and December 26, 1992 Capital Currency in Translation Excess of Retained Adjustment Par Value Earnings and Other Total Shareholders' Equity, December 28, 1991 $476.6 $5,470.0 $ 330.3 $5,545.4 1992 Net income - 374.3 - 374.3 Cash dividends declared (per share-$0.51) - (404.6) - (404.6) Currency translation adjustment - - (429.3) (429.3) Shares issued in connection with acquisitions 115.3 - - 159.5 Stock option exercises, including tax benefits of $57.5 74.9 - - 140.2 Purchases of treasury stock - - - (32.0) Other 0.8 - - 2.2 Shareholders' Equity, December 26, 1992 $667.6 $5,439.7 $ (99.0) $5,355.7 1993 Net income - 1,587.9 - 1,587.9 Cash dividends declared (per share-$0.61) - (485.7) - (485.7) Currency translation adjustment - - (77.0) (77.0) Purchases of treasury stock - - - (463.5) Shares issued in connection with acquisitions 164.6 - - 334.8 Stock option exercises, including tax benefits of $23.4 46.1 - - 92.1 Pension liability adjustment, net of deferred taxes of $5.1 - - (7.9) (7.9) Other 1.2 - - 2.3 Shareholders' Equity, December 25, 1993 $879.5 $6,541.9 $(183.9) $6,338.7 1994 Net income - 1,752.0 - 1,752.0 Cash dividends declared (per share-$0.70) - (554.8) - (554.8) Currency translation adjustment - - (294.6) (294.6) Purchases of treasury stock - - - (549.1) Stock option exercises, including tax benefits of $27.1 44.5 - - 125.3 Shares issued in connection with acquisitions 13.7 - - 28.8 Pension liability adjustment, net of deferred taxes of $5.1 - - 7.9 7.9 Other (3.3) - - 1.9 Shareholders' Equity, December 31, 1994 $934.4 $7,739.1 $(470.6) $6,856.1 See accompanying Notes to Consolidated Financial Statements. |
_______________________________________________________________________ INDUSTRY SEGMENTS - NET SALES (page 1 of 7) (dollars in millions) _______________________________________________________________________ 5-Year Compounded Growth Rate 1989 - 1994 1994 1993 1992 _______________________________________________________________________ Beverages: Domestic 7.2% $ 6,541.2 $ 5,918.1 $ 5,485.2 International 22.2% 3,146.3 2,720.1 2,120.4 10.9% 9,687.5 8,638.2 7,605.6 Snack Foods: Domestic 9.3% 5,011.3 4,365.3 3,950.4 International 32.0% 3,253.1 2,661.5 2,181.7 15.5% 8,264.4 7,026.8 6,132.1 Restaurants: Domestic 13.2% 8,693.9 8,025.7 7,115.4 International 26.4% 1,826.6 1,330.0 1,116.9 14.9% 10,520.5 9,355.7 8,232.3 Combined Segments: Domestic 10.1% 20,246.4 18,309.1 16,551.0 International 26.6% 8,226.0 6,711.6 5,419.0 13.6% $28,472.4 $25,020.7 $21,970.0 _______________________________________________________________________ 1991 1990 _______________________________________________________________________ Beverages: Domestic $ 5,171.5 $ 5,034.5 International 1,743.7 1,488.5 6,915.2 6,523.0 Snack Foods: Domestic 3,737.9 3,471.5 International 1,512.2 1,295.3 5,250.1 4,766.8 Restaurants: Domestic 6,258.4 5,540.9 International 868.5 684.8 7,126.9 6,225.7 Combined Segments: Domestic 15,167.8 14,046.9 International 4,124.4 3,468.6 $19,292.2 $17,515.5 _______________________________________________________________________ ______________________________________________________________________ INDUSTRY SEGMENTS - OPERATING PROFITS (page 2 of 7) (dollars in millions) _______________________________________________________________________ 5-Year Compounded Growth Rate 1989 - 1994(a) 1994 1993 1992 _______________________________________________________________________ Beverages: Domestic 12.1% $ 1,022.3 $ 936.9 $ 686.3 International 20.0% 194.7 172.1 112.3 13.2% 1,217.0 1,109.0 798.6 Snack Foods: Domestic 8.9% 1,025.1 900.7 775.5 International 27.1% 351.8 288.9 209.2 12.2% 1,376.9 1,189.6 984.7 Restaurants: Domestic 12.2% 658.8 685.1 597.8 International 4.3% 71.5 92.9 120.7 11.3% 730.3 778.0 718.5 Combined Segments: Domestic 11.1% 2,706.2 2,522.7 2,059.6 International 20.6% 618.0 553.9 442.2 12.3% 3,324.2 3,076.6 2,501.8 Equity Income 37.8 30.1 40.1 Unallocated Expenses, net (160.8) (200.2) (170.7) Operating Profit 12.6% $ 3,201.2 $ 2,906.5 $ 2,371.2 _______________________________________________________________________ (a) Growth rates exclude the impact of previously disclosed 1989 unusual items affecting international beverages and domestic Taco Bell and KFC. |
_______________________________________________________________________ INDUSTRY SEGMENTS - OPERATING PROFITS (page 3 of 7) (dollars in millions) _______________________________________________________________________ 1991 1990 _______________________________________________________________________ Beverages: Domestic $ 746.2 $ 673.8 International 117.1 93.8 863.3 767.6 Snack Foods: Domestic 616.6 732.3 International 140.1 160.3 756.7 892.6 Restaurants: Domestic 479.4 447.2 International 96.2 75.2 575.6 522.4 Combined Segments: Domestic 1,842.2 1,853.3 International 353.4 329.3 2,195.6 2,182.6 Equity Income 32.2 30.1 Unallocated Expenses, net (116.0) (170.6) Operating Profit $ 2,111.8 $ 2,042.1 _______________________________________________________________________ _______________________________________________________________________ NET SALES BY RESTAURANT CHAIN (page 4 of 7) (dollars in millions) _______________________________________________________________________ 5-Year Compounded Growth Rate 1989 - 1994 1994 1993 1992 _______________________________________________________________________ Pizza Hut 12.8% $ 4,474.4 $4,128.7 $3,603.5 Taco Bell 18.3% 3,401.4 2,901.3 2,460.0 KFC 14.7% 2,644.7 2,325.7 2,168.8 14.9% $10,520.5 $9,355.7 $8,232.3 _______________________________________________________________________ 1991 1990 _______________________________________________________________________ Pizza Hut $3,258.3 $2,949.9 Taco Bell 2,038.1 1,745.5 KFC 1,830.5 1,530.3 $7,126.9 $6,225.7 _______________________________________________________________________ OPERATING PROFITS BY RESTAURANT CHAIN _______________________________________________________________________ 5 Year Compounded Growth Rate 1989 - 1994(a) 1994 1993 1992 _______________________________________________________________________ Pizza Hut 7.5% $ 294.8 $ 372.1 $ 335.4 Taco Bell 18.7% 270.3 253.1 214.3 KFC 9.0% 165.2 152.8 168.8 11.3% $ 730.3 $ 778.0 $ 718.5 _______________________________________________________________________ 1991 1990 _______________________________________________________________________ Pizza Hut $ 314.5 $ 245.9 Taco Bell 180.6 149.6 KFC 80.5 126.9 $ 575.6 $ 522.4 _______________________________________________________________________ (a) Growth rates exclude the impact of previously disclosed 1989 unusual items affecting international beverages and domestic Taco Bell and KFC. |
_______________________________________________________________________ GEOGRAPHIC AREAS(b) (page 5 of 7) (dollars in millions) _______________________________________________________________________ Net Sales 1994 1993 1992 _______________________________________________________________________ United States $20,246.4 $18,309.1 $16,551.0 Europe 2,177.1 1,819.0 1,349.0 Mexico 2,022.8 1,613.4 1,234.6 Canada 1,244.3 1,206.1 979.6 Other 2,781.8 2,073.1 1,855.8 $28,472.4 $25,020.7 $21,970.0 _______________________________________________________________________ Segment Operating Profits 1994 1993 1992 _______________________________________________________________________ United States $ 2,706.2 $ 2,522.7 $ 2,059.6 Europe 16.7 47.4 52.6 Mexico 261.4 223.1 172.1 Canada 81.6 101.7 78.9 Other 258.3 181.7 138.6 $ 3,324.2 $ 3,076.6 $ 2,501.8 _______________________________________________________________________ Identifiable Assets 1994 1993 1992 _______________________________________________________________________ United States $14,218.4 $13,589.5 $11,957.0 Europe 3,062.0 2,666.1 1,948.4 Mexico 994.7 1,217.1 1,054.6 Canada 1,342.1 1,364.0 1,340.6 Other 2,195.6 1,675.1 1,282.0 Combined Segments 21,812.8 20,511.8 17,582.6 Corporate 2,979.2 3,194.0 3,368.6 $24,792.0 $23,705.8 $20,951.2 ______________________________________________________________________ (b) The results of centralized concentrate manufacturing operations in Puerto Rico and Ireland have been allocated based upon sales to the respective areas. |
_______________________________________________________________________ INDUSTRY SEGMENTS (page 6 of 7) (dollars in millions) _______________________________________________________________________ 5-Year Compounded Growth Rate Amortization of Intangible Assets 1989 - 1994 1994 1993 1992 _______________________________________________________________________ Beverages 7.6% $ 164.8 $ 157.4 $ 137.6 Snack Foods 17.8% 42.0 40.9 40.5 Restaurants 28.9% 105.4 105.4 87.8 14.0% $ 312.2 $ 303.7 $ 265.9 By Restaurant Chain: Pizza Hut 31.6% $ 41.5 $ 44.7 $ 33.3 Taco Bell 22.9% 26.9 23.0 16.4 KFC 31.2% 37.0 37.7 38.1 28.9% $ 105.4 $ 105.4 $ 87.8 _______________________________________________________________________ _______________________________________________________________________ 5 Year Compounded Growth Rate Depreciation Expense 1989 - 1994 1994 1993 1992 _______________________________________________________________________ Beverages 14.9% $ 385.4 $ 358.5 $ 290.6 Snack Foods 11.7% 297.0 279.2 251.2 Restaurants 17.5% 538.8 457.2 374.3 Corporate 7.0 6.6 6.9 15.0% $1,228.2 $1,101.5 $ 923.0 By Restaurant Chain: Pizza Hut 17.8% $ 218.6 $ 193.4 $ 150.5 Taco Bell 18.1% 156.0 124.6 101.5 KFC 16.7% 164.2 139.2 122.3 17.5% $ 538.8 $ 457.2 $ 374.3 _______________________________________________________________________ 5 Year Compounded Growth Rate Identifiable Assets 1989 - 1994 1994 1993 1992 _______________________________________________________________________ Beverages 9.1% $ 9,566.0 $ 9,105.2 $ 7,857.5 Snack Foods 8.8% 5,043.9 4,994.5 4,628.0 Restaurants 18.6% 7,202.9 6,412.1 5,097.1 Corporate 2,979.2 3,194.0 3,368.6 10.4% $24,792.0 $23,705.8 $20,951.2 By Restaurant Chain: Pizza Hut 20.9% $ 2,536.4 $ 2,232.9 $ 1,676.8 Taco Bell 21.1% 2,390.7 2,075.9 1,523.7 KFC 14.2% 2,275.8 2,103.3 1,896.6 18.6% $ 7,202.9 $ 6,412.1 $ 5,097.1 _______________________________________________________________________ _______________________________________________________________________ INDUSTRY SEGMENTS (page 7 of 7) (dollars in millions) _______________________________________________________________________ 5-Year Compounded Growth Rate Capital Spending (c) 1989 - 1994 1994 1993 1992 _______________________________________________________________________ Beverages 20.4% $ 677.1 $ 491.3 $ 343.7 Snack Foods 15.6% 532.1 491.4 446.2 Restaurants 20.3% 1,072.0 1,004.4 757.2 Corporate 7.2 20.8 18.0 19.0% $2,288.4 $2,007.9 $1,565.1 Domestic 13.7% $1,492.6 $1,388.0 $1,069.0 International 35.7% 795.8 619.9 496.1 19.0% $2,288.4 $2,007.9 $1,565.1 By Restaurant Chain: Pizza Hut 19.3% $ 389.0 $ 295.0 $ 212.8 Taco Bell 35.4% 473.4 459.4 339.0 KFC 5.6% 209.6 250.0 205.4 20.3% $1,072.0 $1,004.4 $ 757.2 _______________________________________________________________________ Acquisitions and Investments in Affiliates (d) 1994 1993 1992 _______________________________________________________________________ Beverages $ 195.0 $ 711.5 $ 717.5 Snack Foods 11.8 75.5 201.3 Restaurants 147.8 588.7 480.4 $ 354.6 $1,375.7 $1,399.2 Domestic $ 87.8 $ 757.3 $ 549.5 International 266.8 618.4 849.7 $ 354.6 $1,375.7 $1,399.2 By Restaurant Chain: Pizza Hut $ 94.6 $ 312.9 $ 247.7 Taco Bell 32.3 186.8 72.4 KFC 20.9 89.0 160.3 $ 147.8 $ 588.7 $ 480.4 ______________________________________________________________________ (c) Included noncash amounts related to capital leases, largely in the restaurant segment, of $35.2 in 1994, $26.3 in 1993 and $15.5 in 1992. |
Note 9 - Short-term Borrowings and Long-term Debt ______________________________________________________________________________ 1994 1993 ______________________________________________________________________________ Short-term Borrowings Commercial paper (5.4% and 3.3%) (A) $ 2,254.4 $ 3,535.0 Current maturities of long-term debt issuances (A) 987.5 1,183.1 Notes (5.4% and 3.5%) (A) 1,492.4 394.0 Other borrowings (6.5% and 6.3%) 444.2 529.1 Amount reclassified to long-term debt (B) (4,500.0) (3,450.0) $ 678.5 $ 2,191.2 Long-term Debt Short-term borrowings, reclassified (B) $ 4,500.0 $ 3,450.0 Notes due 1995 through 2008 (6.6% and 6.5%) (A) 3,724.7 3,873.8 Euro notes, 8% due 1997 250.0 - Zero coupon notes, $795 million due 1995-2012 (14.6% and 14.4% annual yield to maturity) 219.2 327.2 Japanese yen 3.3% bonds due 1997 (D) 200.8 - Swiss franc perpetual Foreign Interest Payment bonds (C) 213.0 212.2 Swiss franc 5 1/4% bearer bonds due 1995 (D) 99.7 90.1 Swiss franc 7 1/8% notes due 1994 (D) - 69.8 Capital lease obligations (See Note 11) 298.2 291.4 Other, due 1995-2015 (8.1% and 6.6%) 322.4 311.2 9,828.0 8,625.7 Less current maturities of long-term debt issuances (987.5) (1,183.1) $ 8,840.5 $ 7,442.6 ______________________________________________________________________________ The interest rates in the above table indicate, where applicable, the weighted average rates at year-end 1994 and 1993, respectively. |
The net pension expense for domestic company-sponsored plans included the following components: ______________________________________________________________________________ 1994 1993 1992 ______________________________________________________________________________ Service cost of benefits earned $ 69.8 $ 57.1 $ 52.3 Interest cost on projected benefit obligation 84.0 75.6 72.0 Return on plan assets: Actual loss (gain) 19.7 (161.5) (61.3) Deferred (loss) gain (130.5) 70.9 (26.2) (110.8) (90.6) (87.5) Amortization of net transition gain (19.0) (19.0) (19.0) Net other amortization 9.1 8.8 8.2 $ 33.1 $ 31.9 $ 26.0 _____________________________________________________________________ The net pension expense (income) for international company-sponsored plans included the following components: ______________________________________________________________________________ 1994 1993 1992 ______________________________________________________________________________ Service cost of benefits earned $ 15.0 $ 12.4 $ 8.6 Interest cost on projected benefit obligation 15.4 15.0 10.9 Return on plan assets: Actual loss (gain) 8.1 (40.8) (36.0) Deferred (loss) gain (32.5) 20.4 18.6 (24.4) (20.4) (17.4) Amortization of net transition (gain) loss (0.2) 0.3 - Net other amortization 1.7 1.7 (6.5) $ 7.5 $ 9.0 $ (4.4) ______________________________________________________________________________ Inclusion of the plans in Mexico and Japan increased the 1994 and 1993 pension expense by $7.9 million and $5.5 million, respectively. |
Reconciliations of the funded status of the domestic plans to the pension liability are as follows: Assets Exceed Accumulated Benefits Accumulated Benefits Exceed Assets 1994 1993 1994 1993 ______________________________________________________________________________ Actuarial present value of benefit obligation: Vested benefits $ (774.0) $ (726.0) $(21.6) $(192.8) Nonvested benefits (97.4) (99.0) (1.6) (28.3) Accumulated benefit obligation (871.4) (825.0) (23.2) (221.1) Effect of projected compensation increases (111.1) (131.6) (47.6) (41.7) Projected benefit obligation (982.5) (956.6) (70.8) (262.8) Plan assets at fair value 1,133.0 1,018.7 2.8 185.2 Plan assets in excess of (less than) projected benefit obligation 150.5 62.1 (68.0) (77.6) Unrecognized prior service cost 30.6 11.7 30.0 49.9 Unrecognized net (gain) loss (71.3) 16.0 3.7 26.1 Unrecognized net transition (gain) loss (73.1) (89.0) 0.3 (2.8) Adjustment required to recognize minimum liability - - - (33.0) Prepaid (accrued) pension liability $ 36.7 $ 0.8 $(34.0) $ (37.4) _____________________________________________________________________________ Reconciliations of the funded status of the international plans to the pension liability are as follows: Assets Exceed Accumulated Benefits Accumulated Benefits Exceed Assets 1994 1993 1994 1993 ___________________________________________________________________________ Actuarial present value of benefit obligation: Vested benefits $(124.4) $(138.8) $(22.8) $(28.0) Nonvested benefits (2.3) (3.4) (7.4) (5.4) Accumulated benefit obligation (126.7) (142.2) (30.2) (33.4) Effect of projected compensation increases (24.1) (22.9) (10.1) (18.4) Projected benefit obligation (150.8) (165.1) (40.3) (51.8) Plan assets at fair value 213.4 221.7 15.5 17.3 Plan assets in excess of (less than) projected benefit obligation 62.6 56.6 (24.8) (34.5) Unrecognized prior service cost 3.5 3.2 0.3 0.5 Unrecognized net loss (gain) 14.0 11.9 (3.1) 7.7 Unrecognized net transition (gain) loss (1.8) (2.6) 4.9 8.1 Adjustment required to recognize minimum liability - - - (4.3) Prepaid (accrued) pension liability $ 78.3 $ 69.1 $(22.7) $(22.5) ___________________________________________________________________________ The assumptions used to compute the domestic information above were as follows: 1994 1993 1992 ______________________________________________________________________________ Discount rate - pension expense 7.0% 8.2 8.4 Expected long-term rate of return on plan assets 10.0% 10.0 10.0 Discount rate - projected benefit obligation 9.0% 7.0 8.2 Future compensation growth rate 3.3%-7.0% 3.3-7.0 3.3-7.0 ______________________________________________________________________________ The assumptions used to compute the international information above were as follows: 1994 1993 1992 ______________________________________________________________________________ Discount rate - pension expense 7.3% 9.0 9.5 Expected long-term rate of return on plan assets 11.3% 10.8 10.8 Discount rate - projected benefit obligation 9.3% 7.4 9.0 Future compensation growth rate 3.0%-8.5% 3.5-8.5 5.0-7.0 ______________________________________________________________________________ The discount rates and rates of return for the international plans represent weighted averages. |
The annual accrual activity, including asset valuation allowances, and the related components were as follows: ______________________________________________________________________________ 1994 1993 1992 ______________________________________________________________________________ Annual Accrual Activity Balance - Beginning of year $121.7 $ 253.2 $112.6 New restructuring charges - - 193.5 New restructuring accruals - purchase price adjustments (A) - - 41.5 Accretion of interest on net present value of severance 2.8 6.9 - Cash payments (50.6) (122.8) (83.5) Asset write-offs (4.0) (9.1) (10.3) Change in estimates (28.7) (6.5) (0.6) Balance - End of year $ 41.2 $ 121.7 $253.2 Accrual Components Facility closings/fixed asset disposals $ 3.0 $ 13.9 $ 35.3 Employee terminations (A) 36.1 103.2 153.9 Relocation of employees and equipment 0.7 2.2 29.1 Nonrecurring costs of redesigning core business processes (B) - 0.7 25.3 Other 1.4 1.7 9.6 Balance - End of year (C) $ 41.2 $ 121.7 $253.2 ______________________________________________________________________________ (A) Included amounts for termination of employees of an acquired beverage bottling business in Spain accounted for as a purchase. |
Reconciliation of the U.S. federal statutory tax rate to PepsiCo's effective tax rate on pretax income, based on the dollar impact of these major components on the provision for income taxes, was as follows: _______________________________________________________________________________ 1994 1993 1992 _______________________________________________________________________________ U.S. federal statutory tax rate 35.0% 35.0% 34.0% State income tax, net of federal tax benefit 3.2 2.9 2.3 Effect of lower taxes on foreign income (including Puerto Rico and Ireland) (5.4) (3.3) (5.0) Adjustment to the beginning-of- the-year deferred tax assets valuation allowance (1.3) - - Reduction of prior year foreign accruals - (2.0) - Effect of 1993 tax legislation on deferred income taxes - 1.1 - Nondeductible amortization of domestic goodwill 0.8 0.8 0.9 Other, net 0.7 - (0.8) Effective tax rate 33.0% 34.5% 31.4% _____________________________________________________________________________ Detail of the 1994 and 1993 deferred tax liabilities (assets) was as follows: ______________________________________________________________________________ 1994 1993 ______________________________________________________________________________ Intangible assets other than nondeductible goodwill $ 1,627.8 $ 1,551.0 Property, plant and equipment 506.4 552.3 Safe harbor leases 171.2 177.5 Zero coupon notes 110.6 103.5 Other 336.7 549.0 Gross deferred tax liabilities 2,752.7 2,933.3 Net operating loss carryforwards (306.0) (241.5) Postretirement benefits (248.3) (268.0) Self-insurance reserves (71.2) (10.8) Deferred state income taxes (69.1) (39.9) Restructuring accruals (15.8) (42.0) Various accrued liabilities and other (551.2) (686.8) Gross deferred tax assets (1,261.6) (1,289.0) Deferred tax assets valuation allowance 319.3 249.0 Net deferred tax liability $ 1,810.4 $ 1,893.3 Included in: Prepaid expenses, taxes and other current assets $ (166.9) $ (138.2) Other current liabilities 4.4 23.9 Deferred income taxes 1,972.9 2,007.6 $ 1,810.4 $ 1,893.3 ______________________________________________________________________________ The valuation allowance related to deferred tax assets increased by $70.3 million in 1994 primarily resulting from additions related to current year net operating losses, partially offset by reversals related to prior year net operating losses. |
1994, 1993 and 1992 activity for the stock option plans included: ______________________________________________________________________________ (options in thousands) Long-Term ______________________________________________________________________________ Outstanding at December 28, 1991 23,801 27,834 Granted 8,477 12,653 Exercised (1,155) (5,155) Surrendered for PSUs - (503) Canceled (2,327) (1,839) Outstanding at December 26, 1992 28,796 32,990 Granted 9,121 2,834 Exercised (1,958) (1,412) Surrendered for PSUs - (96) Canceled (2,524) (966) Outstanding at December 25, 1993 33,435 33,350 Granted 11,633 16,237 Exercised (1,820) (3,052) Surrendered for PSUs - (1,541) Canceled (3,443) (2,218) Outstanding at December 31, 1994 39,805 42,776 Exercisable at December 31, 1994 16,115 18,439 Option prices per share: Exercised during 1994 $17.58 to $36.75 $4.11 to $38.75 Exercised during 1993 $17.58 to $36.75 $4.11 to $36.31 Exercised during 1992 $17.58 to $35.25 $4.11 to $29.88 Outstanding at year-end 1994 $17.58 to $36.75 $7.69 to $42.81 ______________________________________________________________________________ Note 19 - Contingencies PepsiCo is subject to various claims and contingencies related to lawsuits, taxes, environmental and other matters arising out of the normal course of business. |
KPMG Peat Marwick LLP New York, New York February 7, 1995 ______________________________________________________________________________ Selected Quarterly Financial Data (page 1 of 3) (in millions except per share amounts, unaudited) PepsiCo, Inc. and Subsidiaries First Quarter (12 Weeks) 1994 (a) 1993 ______________________________________________________________________________ Net sales $5,728.9 5,091.6 Gross profit $2,944.4 2,641.4 Operating profit $ 550.5 506.0 Income before income taxes and cumulative effect of accounting changes $ 438.4 391.6 Provision for income taxes $ 155.6 131.2 Income before cumulative effect of accounting changes $ 282.8 260.4 Cumulative effect of accounting changes (b) $ (32.0) - Net income $ 250.8 260.4 Income (charge) per share: Income before cumulative effect of accounting changes $ 0.35 0.32 Cumulative effect of accounting changes (b) $ (0.04) - Net income per share $ 0.31 0.32 ______________________________________________________________________________ Second Quarter (12 Weeks) 1994 (a)(c) 1993 ______________________________________________________________________________ Net sales $6,557.0 5,890.3 Gross profit $3,419.5 3,102.8 Operating profit $ 785.0 750.4 Income before income taxes $ 672.2 635.7 Provision for income taxes $ 225.7 208.9 Net income $ 446.5 426.8 Net income per share $ 0.55 0.53 ______________________________________________________________________________ (a) Included the current year benefit of changing the method for calculating the market-related value of plan assets used in determining the return-on-asset component of annual pension expense and the cumulative net unrecognized gain or loss subject to amortization, which reduced full-year pension expense by $35.1 ($21.6 after-tax or $0.03 per share). |
______________________________________________________________________________ Selected Quarterly Financial Data (page 2 of 3) (in millions except per share amounts, unaudited) PepsiCo, Inc. and Subsidiaries Third Quarter (12 Weeks) 1994 (a) 1993 (d) ______________________________________________________________________________ Net sales $ 7,064.0 6,316.4 Gross profit $ 3,684.0 3,322.1 Operating profit $ 961.7 851.6 Income before income taxes $ 830.3 736.5 Provision for income taxes $ 288.9 278.3 Net income $ 541.4 458.2 Net income per share $ 0.68 0.56 ______________________________________________________________________________ Fourth Quarter (17/16 Weeks) (e) 1994 (a) 1993 ______________________________________________________________________________ Net sales $ 9,122.5 7,722.4 Gross profit $ 4,709.1 4,008.3 Operating profit $ 904.0 798.5 Income before income taxes $ 723.5 658.7 Provision for income taxes $ 210.2 216.2 Net income $ 513.3 442.5 Net income per share $ 0.64 0.55 ______________________________________________________________________________ (a) Included the current year benefit of changing the method for calculating the market-related value of plan assets used in determining the return-on-asset component of annual pension expense and the cumulative net unrecognized gain or loss subject to amortization, which reduced full-year pension expense by $35.1 ($21.6 after-tax or $0.03 per share). |
______________________________________________________________________________ Selected Quarterly Financial Data (page 3 of 3) (in millions except per share amounts, unaudited) PepsiCo, Inc. and Subsidiaries Full Year (53/52 Weeks) (e) 1994 (a)(c) 1993 (d) ______________________________________________________________________________ Net sales $28,472.4 25,020.7 Gross profit $14,757.0 13,074.6 Operating profit $ 3,201.2 2,906.5 Income before income taxes and cumulative effect of accounting changes $ 2,664.4 2,422.5 Provision for income taxes $ 880.4 834.6 Income before cumulative effect of accounting changes $ 1,784.0 1,587.9 Cumulative effect of accounting changes (b) $ (32.0) - Net income $ 1,752.0 1,587.9 Income (charge) per share: Income before cumulative effect of accounting changes $ 2.22 1.96 Cumulative effect of accounting changes (b) $ (0.04) - Net income per share $ 2.18 1.96 ______________________________________________________________________________ (a) Included the current year benefit of changing the method for calculating the market-related value of plan assets used in determining the return-on-asset component of annual pension expense and the cumulative net unrecognized gain or loss subject to amortization, which reduced full-year pension expense by $35.1 ($21.6 after-tax or $0.03 per share). |
____________________________________________________________________________ Selected Financial Data (Page 1 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries ____________________________________________________________________________ Growth Rates Compounded Annual 10-Year 5-Year 1-Year 1984-94 1989-94 1993-94 Summary of Operations Net sales 15.0% 13.6% 13.8% Cost of sales and operating expenses - - - Operating profit 18.6% 12.5% 10.1% Gain on joint venture stock offering(h) - - - Interest expense - - - Interest income - - - Income from continuing operations before income taxes and cumulative effect of accounting changes 19.2% 14.7% 10.0% Provision for income taxes - - - Income from continuing operations before cumulative effect of accounting changes 20.3% 14.6% 12.3% Cumulative effect of accounting changes (i) - - - Net income (j) 23.5% 14.2% 10.3% Per Share Data Income from continuing operations before cumulative effect of accounting changes 21.0% 14.5% 13.3% Cumulative effect of accounting changes (i) - - - Net income (j) 24.2% 14.0% 11.2% Cash dividends declared 14.2% 16.9% 14.8% Average shares and equivalents outstanding - - - Cash Flow Data (k) Net cash provided by continuing operations 14.2% 14.5% 18.6% Cash acquisitions and investments in affiliates - - - Cash capital spending 15.0% 19.0% 13.7% Cash dividends paid 13.3% 17.4% 17.0% Year-End Position Total assets 17.7% 10.4% 4.6% Long-term debt 29.5% 7.8% 18.8% Total debt (l) 25.9% 6.5% (1.2)% Shareholders' equity - - - Per share 14.8% 12.0% 9.3% Market price per share 22.9% 11.1% (13.4)% Shares outstanding - - - Employees 12.1% 12.1% 11.3% Statistics Return on average shareholders' equity (m) Market net debt ratio (n) Historical cost net debt ratio (o) ____________________________________________________________________________ Selected Financial Data (Page 2 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries ____________________________________________________________________________ 1994(a)(b) 1993(c) 1992(d) ____________________________________________________________________________ Summary of Operations Net sales $28,472.4 25,020.7 21,970.0 Cost of sales and operating expenses 25,271.2 22,114.2 19,598.8 Operating profit 3,201.2 2,906.5 2,371.2 Gain on joint venture stock offering(h) 17.8 - - Interest expense (645.0) (572.7) (586.1) Interest income 90.4 88.7 113.7 Income from continuing operations before income taxes and cumulative effect of accounting changes 2,664.4 2,422.5 1,898.8 Provision for income taxes 880.4 834.6 597.1 Income from continuing operations before cumulative effect of accounting changes $ 1,784.0 1,587.9 1,301.7 Cumulative effect of accounting changes (i) $ (32.0) - (927.4) Net income (j) $ 1,752.0 1,587.9 374.3 Per Share Data Income from continuing operations before cumulative effect of accounting changes $ 2.22 1.96 1.61 Cumulative effect of accounting changes (i) $ (0.04) - (1.15) Net income (j) $ 2.18 1.96 0.46 Cash dividends declared $ 0.700 0.610 0.510 Average shares and equivalents outstanding 803.6 810.1 806.7 Cash Flow Data (k) Net cash provided by continuing operations $ 3,716.0 3,134.4 2,711.6 Cash acquisitions and investments in affiliates $ 315.8 1,011.2 1,209.7 Cash capital spending $ 2,253.2 1,981.6 1,549.6 Cash dividends paid $ 540.2 461.6 395.5 Year-End Position Total assets $24,792.0 23,705.8 20,951.2 Long-term debt $ 8,840.5 7,442.6 7,964.8 Total debt (l) $ 9,519.0 9,633.8 8,671.6 Shareholders' equity $ 6,856.1 6,338.7 5,355.7 Per share $ 8.68 7.94 6.70 Market price per share $ 36 1/4 41 7/8 42 1/4 Shares outstanding 789.9 798.8 798.8 Employees 471,000 423,000 372,000 Statistics Return on average shareholders' equity (m) 27.0% 27.2 23.9 Market net debt ratio (n) 26% 22 19 Historical cost net debt ratio (o) 49% 50 49 _____________________________________________________________________________ Selected Financial Data (Page 3 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries _____________________________________________________________________________ 1991(e) 1990(f) 1989 _____________________________________________________________________________ Summary of Operations Net sales $19,292.2 17,515.5 15,049.2 Cost of sales and operating expenses 17,180.4 15,473.4 13,276.6 Operating profit 2,111.8 2,042.1 1,772.6 Gain on joint venture stock offering(h) - 118.2 - Interest expense (613.7) (686.0) (607.9) Interest income 161.6 179.5 175.3 Income from continuing operations before income taxes and cumulative effect of accounting changes 1,659.7 1,653.8 1,340.0 Provision for income taxes 579.5 563.2 438.6 Income from continuing operations before cumulative effect of accounting changes $ 1,080.2 1,090.6 901.4 Cumulative effect of accounting changes (i) $ - - - Net income (j) $ 1,080.2 1,076.9 901.4 Per Share Data Income from continuing operations before cumulative effect of accounting changes $ 1.35 1.37 1.13 Cumulative effect of accounting changes (i) $ - - - Net income (j) $ 1.35 1.35 1.13 Cash dividends declared $ 0.460 0.383 0.320 Average shares and equivalents outstanding 802.5 798.7 796.0 Cash Flow Data (k) Net cash provided by continuing operations $ 2,430.3 2,110.0 1,885.9 Cash acquisitions and investments in affiliates $ 640.9 630.6 3,296.6 Cash capital spending $ 1,457.8 1,180.1 943.8 Cash dividends paid $ 343.2 293.9 241.9 Year-End Position Total assets $18,775.1 17,143.4 15,126.7 Long-term debt $ 7,806.2 5,899.6 6,076.5 Total debt (l) $ 8,034.4 7,526.1 6,942.8 Shareholders' equity $ 5,545.4 4,904.2 3,891.1 Per share $ 7.03 6.22 4.92 Market price per share $ 33 3/4 25 3/4 21 3/8 Shares outstanding 789.1 788.4 791.1 Employees 338,000 308,000 266,000 Statistics Return on average shareholders' equity (m) 20.7% 24.8 25.6 Market net debt ratio (n) 21% 24 26 Historical cost net debt ratio (o) 51% 51 54 ____________________________________________________________________________ Selected Financial Data (Page 4 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries ____________________________________________________________________________ 1988(b) 1987 1986 ____________________________________________________________________________ Summary of Operations Net sales $12,381.4 11,018.1 9,017.1 Cost of sales and operating expenses 11,039.6 9,890.5 8,187.9 Operating profit 1,341.8 1,127.6 829.2 Gain on joint venture stock offering(h) - - - Interest expense (342.4) (294.6) (261.4) Interest income 120.5 112.6 122.7 Income from continuing operations before income taxes and cumulative effect of accounting changes 1,119.9 945.6 690.5 Provision for income taxes 357.7 340.5 226.7 Income from continuing operations before cumulative effect of accounting changes $ 762.2 605.1 463.8 Cumulative effect of accounting changes (i) $ - - - Net income (j) $ 762.2 594.8 457.8 Per Share Data Income from continuing operations before cumulative effect of accounting changes $ 0.97 0.77 0.59 Cumulative effect of accounting changes (i) $ - - - Net income (j) $ 0.97 0.76 0.58 Cash dividends declared $ 0.267 0.223 0.209 Average shares and equivalents outstanding 790.4 789.3 786.5 Cash Flow Data (k) Net cash provided by continuing operations $ 1,894.5 1,334.5 1,212.2 Cash acquisitions and investments in affiliates $ 1,415.5 371.5 1,679.9 Cash capital spending $ 725.8 770.5 858.5 Cash dividends paid $ 199.0 172.0 160.4 Year-End Position Total assets $11,135.3 9,022.7 8,027.1 Long-term debt $ 2,656.0 2,579.2 2,632.6 Total debt (l) $ 4,107.0 3,225.1 2,865.3 Shareholders' equity $ 3,161.0 2,508.6 2,059.1 Per share $ 4.01 3.21 2.64 Market price per share $ 13 1/8 11 1/4 8 3/4 Shares outstanding 788.4 781.2 781.0 Employees 235,000 225,000 214,000 Statistics Return on average shareholders' equity(m) 26.9% 26.5 23.8 Market net debt ratio (n) 24% 22 28 Historical cost net debt ratio (o) 43% 41 46 ____________________________________________________________________________ Selected Financial Data (Page 5 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries ____________________________________________________________________________ 1985 1984(g) ____________________________________________________________________________ Summary of Operations Net sales $7,584.5 7,058.6 Cost of sales and operating expenses 6,802.4 6,479.3 Operating profit 782.1 579.3 Gain on joint venture stock offering(h) - - Interest expense (195.2) (204.9) Interest income 96.4 86.1 Income from continuing operations before income taxes and cumulative effect of accounting changes 683.3 460.5 Provision for income taxes 256.7 180.5 Income from continuing operations before cumulative effect of accounting changes $ 426.6 280.0 Cumulative effect of accounting changes (i) $ - - Net income (j) $ 543.7 212.5 Per Share Data Income from continuing operations before cumulative effect of accounting changes $ 0.51 0.33 Cumulative effect of accounting changes (i) $ - - Net income (j) $ 0.65 0.25 Cash dividends declared $ 0.195 0.185 Average shares and equivalents outstanding 842.1 862.4 Cash Flow Data (k) Net cash provided by continuing operations $ 817.3 981.5 Cash acquisitions and investments in affiliates $ 160.0 - Cash capital spending $ 770.3 555.8 Cash dividends paid $ 161.1 154.6 Year-End Position Total assets $5,889.3 4,876.9 Long-term debt $1,162.0 668.1 Total debt (l) $1,506.1 948.9 Shareholders' equity $1,837.7 1,853.4 Per share $ 2.33 2.19 Market price per share $ 7 7/8 4 5/8 Shares outstanding 789.4 845.2 Employees 150,000 150,000 Statistics Return on average shareholders' equity(m) 23.1% 15.4 Market net net debt ratio (n) 15% 12 Historical cost net debt ratio (o) 30% 17 ___________________________________________________________________________ Selected Financial Data (Page 6 of 7) (in millions except per share and employee amounts, unaudited) PepsiCo, Inc. and Subsidiaries ___________________________________________________________________________ All share and per share amounts reflect three-for-one stock splits in 1990 and 1986. |
PPG’s business is comprised of two reportable business segments: Performance Coatings and Industrial Coatings as described below: 2020 PPG ANNUAL REPORT AND FORM 10-K 3 PERFORMANCE COATINGS Strategic Business UnitProductsPrimary End-usesMain Distribution Methods Primary Brands Aerospace CoatingsCoatings, sealants, transparencies, transparent armor, adhesives, engineered materials, packaging and chemical management services for the aerospace industryCommercial, military, regional jet and general aviation aircraftDirect to customers and company-owned distribution networkPPG® Architectural Coatings Americas and Asia PacificPaints, wood stains, adhesives and purchased sundriesPainting and maintenance contractors and consumers for decoration and maintenance of residential and commercial building structuresCompany-owned stores, home centers and other regional or national consumer retail outlets, paint dealers, concessionaires, independent distributors and direct to consumersPPG®, GLIDDEN®, COMEX®, OLYMPIC®, DULUX® (in Canada), SIKKENS®, PPG PITTSBURGH PAINTS®, MULCO®, FLOOD®, LIQUID NAILS®, SICO®, RENNER®, TAUBMANS®, WHITE KNIGHT®, BRISTOL®, HOMAX® among others Architectural Coatings Europe, Middle East and Africa (EMEA)SIGMA®, HISTOR®, SEIGNEURIE®, GUITTET®, PEINTURES GAUTHIER®, RIPOLIN®, JOHNSTONE’S®, LEYLAND®, PRIMALEX®, DEKORAL®, TRILAK®, PROMINENT PAINTS®, GORI®, BONDEX®, and DANKE!® among others Automotive Refinish CoatingsCoatings, solvents, adhesives, sealants, sundries, softwareAutomotive and commercial transport/fleet repair and refurbishing, light industrial coatings and specialty coatings for signsIndependent distributors and direct to customersPPG®, SEM®, SPRINT® Protective and Marine CoatingsCoatings and finishes for the protection of metals and structuresMetal fabricators, heavy duty maintenance contractors and manufacturers of ships, bridges and rail carsDirect to customers, company-owned architectural coatings stores, independent distributors and concessionairesPPG® Traffic SolutionsPaints, thermoplastics, pavement marking products and other advanced technologies for pavement markingGovernment, commercial infrastructure, painting and maintenance contractors, militaryDirect to customers, government agencies and independent distributorsEnnis-Flint® Segment OverviewThis reportable business segment primarily supplies a variety of protective and decorative coatings, sealants and finishes along with pavement marking products, paint strippers, stains and related chemicals, as well as transparencies and transparent armor. |
Cost of sales, exclusive of depreciation and amortization 2020 PPG ANNUAL REPORT AND 10-K 16 Cost of sales, exclusive of depreciation and amortization, decreased $876 million due to the following: ● Lower sales volumes ● Foreign currency translation ● Restructuring and other cost savings Partially offset by: ● Cost of sales attributable to acquired businesses ● General cost inflation Selling, general and administrative expenses Selling, general and administrative expenses decreased $215 million primarily due to: ● Cost savings initiatives, including restructuring actions Partially offset by: ● Wage and other cost inflation ● Charge for potential uncollectible accounts related to COVID-19 incurred in the first quarter of 2020 ● Selling, general and administrative expenses from acquired businesses Other charges and other income Interest expense, net of Interest income Interest expense, net of Interest income increased $15 million in 2020 versus 2019 primarily due to the $1.5 billion 364-day term loan credit agreement entered into in April 2020. |
Such factors include statements related to expected effects on our business of the COVID-19 pandemic, global economic conditions, increasing price and product competition by our competitors, fluctuations in cost and availability of raw materials, the ability to achieve selling price increases, the ability to recover margins, customer inventory levels, our ability to maintain favorable supplier relationships and arrangements, the timing of and the realization of anticipated cost savings from restructuring and other initiatives, the ability to identify additional cost savings opportunities, difficulties in integrating acquired businesses and achieving expected synergies therefrom, economic and political conditions in the markets we serve, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions, the effectiveness of our internal control over financial reporting, the results of governmental investigations and the unpredictability of existing and possible future litigation. |
2019 PPG ANNUAL REPORT AND FORM 10-K 7 PERFORMANCE COATINGS Strategic Business Unit Products Primary End-uses Main Distribution Methods Primary Brands Automotive Refinish Coatings Coatings, solvents, adhesives, sealants, sundries, software Automotive and commercial transport/fleet repair and refurbishing, light industrial coatings and specialty coatings for signs Independent distributors and direct to customers PPG®, SEM® Aerospace Coatings Coatings, sealants, transparencies, transparent armor, adhesives, engineered materials, packaging and chemical management services for the aerospace industry Commercial, military, regional jet and general aviation aircraft Direct to customers and company-owned distribution network PPG® Protective and Marine Coatings Coatings and finishes for the protection of metals and structures Metal fabricators, heavy duty maintenance contractors and manufacturers of ships, bridges and rail cars Direct to customers, company-owned architectural coatings stores, independent distributors and concessionaires PPG® Architectural Coatings Americas and Asia Pacific Paints, wood stains, adhesives and purchased sundries Painting and maintenance contractors and consumers for decoration and maintenance of residential and commercial building structures Company-owned stores, home centers and other regional or national consumer retail outlets, paint dealers, concessionaires, independent distributors and direct to consumers PPG®, GLIDDEN®, COMEX®, OLYMPIC®, DULUX® (in Canada), SIKKENS®, PPG PITTSBURGH PAINTS®, MULCO®, FLOOD®, LIQUID NAILS®, SICO®, RENNER®, TAUBMANS®, WHITE KNIGHT®, BRISTOL®, HOMAX® among others Architectural Coatings Europe, Middle East and Africa (EMEA) SIGMA®, HISTOR®, SEIGNEURIE®, GUITTET®, PEINTURES GAUTHIER®, RIPOLIN®, JOHNSTONE’S®, LEYLAND®, PRIMALEX®, DEKORAL®, TRILAK®, PROMINENT PAINTS®, GORI®, BONDEX®, and DANKE!® among others Segment Overview This reportable business segment primarily supplies a variety of protective and decorative coatings, sealants and finishes along with paint strippers, stains and related chemicals, as well as transparencies and transparent armor. |
Such factors include global economic conditions, increasing price and product competition by foreign and domestic competitors, fluctuations in cost and availability of raw materials, the ability to achieve selling price increases, the ability to recover margins, customer inventory levels, our ability to maintain favorable supplier relationships and arrangements, the timing of and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings opportunities, difficulties in integrating acquired businesses and achieving expected synergies therefrom, economic and political conditions in the markets we serve, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions, the effectiveness of our internal control over financial reporting, the results of governmental investigations and the unpredictability of existing and possible future litigation. |
2018 PPG ANNUAL REPORT AND FORM 10-K 15 PERFORMANCE COATINGS Strategic Business Unit Products Primary End-uses Main Distribution Methods Brands Automotive Refinish Coatings Coatings, solvents, adhesives, sundries, software Automotive and commercial transport/fleet repair and refurbishing, light industrial coatings and specialty coatings for signs Independent distributors and direct to customers PPG®, SEM® Aerospace Coatings Coatings, sealants, transparencies, transparent armor, adhesives, packaging and chemical management services for the aerospace industry Commercial, military, regional jet and general aviation aircraft Direct to customers and company-owned distribution network PPG® Protective and Marine Coatings Coatings and finishes for the protection of metals and structures Metal fabricators, heavy duty maintenance contractors and manufacturers of ships, bridges and rail cars Direct to customers, company-owned architectural coatings stores, independent distributors and concessionaires PPG® Architectural Coatings Americas and Asia Pacific Paints, wood stains and purchased sundries Painting and maintenance contractors and consumers for decoration and maintenance of residential and commercial building structures Company-owned stores, home centers and other regional or national consumer retail outlets, paint dealers, concessionaires, independent distributors and direct to consumers PPG®, GLIDDEN®, COMEX®, OLYMPIC®, DULUX® (in Canada), SIKKENS®, PPG PITTSBURGH PAINTS®, MULCO®, FLOOD®, LIQUID NAILS®, SICO®, RENNER®, TAUBMANS®, WHITE KNIGHT®, BRISTOL®, HOMAX® among others Architectural Coatings Europe, Middle East and Africa (EMEA) SIGMA®, HISTOR®, SEIGNEURIE®, GUITTET®, PEINTURES GAUTHIER®, RIPOLIN®, JOHNSTONE’S®, LEYLAND®, PRIMALEX®, DEKORAL®, TRILAK®, PROMINENT PAINTS®, GORI®, BONDEX®, and DANKE!® among others Major Competitive Factors Product performance, technology, quality, technical and customer service, price, customer productivity, distribution, and brand recognition Global Competitors Akzo Nobel N.V., Axalta Coating Systems Ltd., BASF Corporation, Benjamin Moore, Chromology, Hempel A/S, Kansai Paints, the Jotun Group, Masco Corporation, Nippon Paint; RPM International Inc, the Sherwin-Williams Company and Tikkurila Oyj 2018 Strategic Acquisitions SEM Products, Inc. |
Such factors include global economic conditions, increasing price and product competition by foreign and domestic competitors, fluctuations 2018 PPG ANNUAL REPORT AND FORM 10-K 43 in cost and availability of raw materials, the ability to achieve selling price increases, the ability to recover margins, customer inventory levels, our ability to maintain favorable supplier relationships and arrangements, the timing of and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings opportunities, difficulties in integrating acquired businesses and achieving expected synergies therefrom, economic and political conditions in the markets we serve, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions, the effectiveness of our internal control over financial reporting, including the identification of additional control deficiencies, further expenditures related to our restatement, the results of governmental actions relating to pending investigations, the results of shareholder actions relating to the restatement of our financial statements and the unpredictability of existing and possible future litigation. |
In addition to the steps set forth above, the Company has also taken other remedial measures as described below: • The Company re-emphasized (1) its commitment to ethical standards, (2) the requirements of the Company’s Code of Ethics, (3) reporting obligations and (4) non-retaliation policy for complaints; • The Company enhanced its corporate finance department by adding personnel with responsibility for areas identified in the investigation and enhanced segregation of duties in the finance department; • The Company enhanced policies and procedures relating to the preparation, approval and entry of journal entries; • The Company enhanced its process to evaluate and adjust certain significant expense accruals; • The Company enhanced its policies and procedures relating to inventory standard cost revaluations; 2018 PPG ANNUAL REPORT AND FORM 10-K 93 • The Company enhanced its policies and procedures concerning accounting entries related to discontinued operations; • The Company now requires additional annual/onboarding education for finance staff; • The Company will conduct additional periodic risk assessments and targeted internal audit reviews; and • The Company separated the financial forecasting process from financial accounting. |
Independent distributors and direct to customers PPG® Aerospace Coatings Coatings, sealants, transparencies, transparent armor, packaging and chemical management services for the aerospace industry Commercial, military, regional jet and general aviation aircraft Direct to customers and company-owned distribution network PPG® Protective and Marine Coatings Coatings and finishes for the protection of metals and structures Metal fabricators, heavy duty maintenance contractors and manufacturers of ships, bridges and rail cars Company-owned architectural coatings stores, independent distributors, concessionaires and direct to customers PPG® Architectural Coatings Americas and Asia Pacific Coatings and purchased sundries Painting and maintenance contractors and consumers for decoration and maintenance of residential and commercial building structures Company-owned stores, home centers and other regional or national consumer retail outlets, paint dealers, concessionaires, independent distributors and direct to customers PPG®, GLIDDEN®, COMEX®, OLYMPIC®, DULUX® (in Canada), SIKKENS®, PPG PITTSBURGH PAINTS®, MULCO®, FLOOD®, LIQUID NAILS®, SICO®, CIL®, RENNER®, TAUBMANS®, WHITE KNIGHT®, BRISTOL®, HOMAX® among others. |
Such factors include the impacts of the natural disasters in Mexico, Puerto Rico and the U.S., and their length and severity, any currently unanticipated future impacts from the natural disasters, global economic conditions, increasing price and product competition by foreign and domestic competitors, fluctuations in cost and availability of raw materials, the ability to increase selling price, the ability to recover margins, our ability to maintain favorable supplier relationships and arrangements, the timing of and the realization of anticipated cost savings from restructuring initiatives, difficulties in integrating acquired businesses and achieving expected synergies therefrom, economic and political conditions in the markets we serve, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions and the unpredictability of existing and possible future litigation. |
2016 PPG ANNUAL REPORT AND FORM 10-K 19 Cost of sales, exclusive of depreciation and amortization Selling, general and administrative expenses 2016 vs. 2015 Selling, general and administrative expenses increased $38 million (+1%) primarily due to: ● Pension settlement charge of $46 million associated with the divestiture of the European fiber glass business ● Selling, general and administrative expenses from acquired businesses ● Overhead cost inflation Partially offset by: ● Foreign currency translation ● Restructuring cost savings 2015 vs. 2014 Selling, general and administrative expenses decreased $73 million (2%) due to the following: ● Foreign currency translation ● Restructuring cost savings Partially offset by: ● Selling, general and administrative expenses from acquired businesses ● Overhead cost inflation Other costs and income Interest expense, net of Interest income Interest expense, net of Interest income increased $13 million in 2016 versus 2015 as interest income decreased year-over-year due to lower interest rates and lower average cash deposits on hand. |
Such factors include global economic conditions, increasing price and product competition by foreign and domestic competitors, fluctuations in cost and availability of raw materials, the ability to maintain favorable supplier relationships and arrangements, difficulties in integrating acquired businesses and achieving expected synergies therefrom, economic and political conditions in international markets, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions, the unpredictability of existing and possible future litigation, including litigation that could result if the proposed asbestos settlement does not become effective, the realization of anticipated cost savings from restructuring initiatives, and PPG's ability to integrate the Comex business acquisition and to achieve anticipated synergies. |
Such factors include global economic conditions, increasing price and product competition by foreign and domestic competitors, fluctuations in cost and availability of raw materials, the ability to maintain favorable supplier relationships and arrangements, difficulties in integrating acquired businesses and achieving expected synergies therefrom, economic and political conditions in international markets, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions, the unpredictability of existing and possible future litigation, including litigation that could result if the proposed asbestos settlement does not become effective, the realization of anticipated cost savings from restructuring initiatives, the effect of the sale of the Company's 51% ownership interest in Transitions Optical, PPG's ability to integrate the North American architectural coatings business acquisition and to achieve anticipated synergies. |
These risks arise from various factors, including, but not limited to, fluctuating demand and prices for our lime and limestone products, including as a result of downturns in the economy and in the construction, industrial, steel and oil and gas services industries, and reduced demand from coal-fired utility plants, increased competitive pressures from other lime producers, changes in legislation and regulations, including Environmental Laws, health and safety regulations and requirements to renew or obtain operating permits, our ability to produce and store quantities of lime and limestone products sufficient in amount and quality to meet customer demands and specifications, the success of our modernization, expansion and development strategies, the uncertainty of our ability to sell our increased lime capacity from the kiln at our St. Clair facility at acceptable prices, our ability to execute our strategies and complete projects on time and within budget, our ability to integrate, refurbish and/or improve acquired facilities, including the facilities acquired as a result of the Carthage acquisition, our access to capital, volatile costs, especially fuel, electricity, transportation and freight costs, inclement weather and the effects of seasonal trends. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to maintain and increase its revenues and manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including meeting the Company’s operating and capital needs, including possible acquisitions and paying dividends, and conditions in the credit and equity markets, including the ability of the Company’s customers to meet their obligations; (iv) interruptions to operations and increased expenses at the Company’s facilities resulting from changes in mining methods or conditions, variability of chemical or physical properties of the Company’s limestone and its impact on process equipment and product quality, inclement weather conditions, natural disasters, accidents, IT systems failures or disruptions, including due to cyber-security incidents or ransomware attacks, utility disruptions, or regulatory requirements; (v) volatile coal, petroleum coke, diesel, natural gas, electricity, transportation and freight costs and the consistent availability of trucks, truck drivers and rail cars to deliver the Company’s products to its customers and solid fuels to its plants on a timely basis at competitive prices; (vi) unanticipated delays or cost overruns in completing modernization and expansion and development projects; (vii) the Company’s ability to expand its lime and limestone operations through projects and acquisitions of businesses with related or similar operations, including the Carthage acquisition, and the Company’s ability to obtain any required financing for such projects and acquisitions, and to sell any resulting increased production at acceptable prices; (viii) inadequate demand and/or prices for the Company’s lime and limestone products due to increased competition from competitors, increasing competition for certain customer accounts, conditions in the U.S. economy, recessionary pressures in, and the impact of government policies on, particular industries, including oil and gas services, utility plants, steel, construction, and industrial, effects of governmental fiscal and budgetary constraints, including the level of highway construction and infrastructure funding, changes to tax law, legislative impasses, extended governmental shutdowns, trade wars, tariffs, economic and regulatory uncertainties under state governments and the recently elected United States Administration and Congress, and inability to continue to maintain or increase prices for the Company’s products, including passing through the increased costs of transportation; (ix) ongoing and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change, health and safety, and other ESG and sustainability considerations, and those that could impact the Company’s ability to continue or renew its operating permits or successfully secure new permits in connection with its modernization and expansion and development projects; (xi) estimates of reserves and remaining lives of reserves; (xii) the ongoing impact of the COVID-19 pandemic, including decreased demand, lower prices, and increased costs, and the risk of non-compliance with health and safety protocols and social distancing guidelines, on the Company’s financial condition, results of operations, cash flows, and competitive position; (xiii) the impact of social or political unrest; (xiv) risks relating to mine safety, and reclamation and remediation; and (xv) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Quarterly Reports on Form 10-Q. |
As of December 31, 2020, future minimum payments under operating leases that were either non-cancelable or subject to significant penalty upon cancellation, including future minimum payments under renewal options that the Company is reasonably certain to exercise, were as follows (in thousands): United States Lime & Minerals, Inc. Notes to Consolidated Financial Statements (Continued) (dollars in thousands, except per share amounts) Years Ended December 31, 2020, 2019 and 2018 Supplemental cash flow information pertaining to the Company’s leasing activity for the years ended December 31, 2020 and 2019 was as follows (in thousands): (5) Comprehensive Income The components of comprehensive income for the years ended December 31 are as follows: (6) Income Taxes Income tax expense (benefit) for the years ended December 31 is as follows: A reconciliation of income taxes computed at the federal statutory rate to income tax expense (benefit) for the years ended December 31 is as follows: The research and development tax credits in 2019 and 2018 were primarily associated with the construction of the kiln at St. Clair. |
These risks arise from various factors, including, but not limited to, fluctuating demand and prices for our lime and limestone products, including as a result of downturns in the economy and in the construction, industrial, steel and oil and gas services industries, and reduced demand from coal-fired utility plants, increased competitive pressures from other lime producers, changes in legislation and regulations, including Environmental Laws, health and safety regulations and requirements to renew or obtain operating permits, our ability to produce and store quantities of lime and limestone products sufficient in amount and quality to meet customer demands and specifications, the success of our modernization, expansion and development strategies, the uncertainty of our ability to sell our increased lime capacity from the new kiln at our St. Clair facility at acceptable prices, our ability to execute our strategies and complete projects on time and within budget, our ability to integrate, refurbish and/or improve acquired facilities, our access to capital, volatile costs, especially fuel, electricity, transportation and freight costs, inclement weather and the effects of seasonal trends. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to maintain and increase its revenues and manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including meeting the Company’s operating and capital needs, including for possible acquisitions, repurchasing the Company’s common stock and paying dividends, and conditions in the credit and equity markets, including the ability of the Company’s customers to meet their obligations; (iv) interruptions to operations and increased expenses at the Company’s facilities resulting from changes in mining methods or conditions, variability of chemical or physical properties of the Company’s limestone and its impact on process equipment and product quality, inclement weather conditions, natural disasters, accidents, IT systems failures or disruptions, including due to cyber-security incidents or regulatory requirements; (v) volatile coal, petroleum coke, diesel, natural gas, electricity, transportation and freight costs and the consistent availability of trucks, truck drivers and rail cars to deliver the Company’s products to its customers and solid fuels to its plants on a timely basis at competitive prices; (vi) unanticipated delays or cost overruns in completing modernization and expansion and development projects; (vii) the Company’s ability to expand its Lime and Limestone Operations through projects and acquisitions of businesses with related or similar operations, including obtaining financing for such projects and acquisitions, and to sell any resulting increased production at acceptable prices; (viii) inadequate demand and/or prices for the Company’s lime and limestone products due to increased competition from competitors, increasing competition for certain customer accounts, conditions in the U.S. economy, recessionary pressures in, and the impact of government policies on, particular industries, including construction, steel, industrial and oil and gas services, reduced demand from utility plants, effects of governmental fiscal and budgetary constraints, including the level of highway construction and infrastructure funding, changes to tax law, legislative impasses, extended government shutdowns, trade wars, tariffs, economic and regulatory uncertainties under state governments and the United States Administration and Congress, and inability to continue to maintain or increase prices for the Company’s products, including passing through the increased costs of transportation; (ix) ongoing and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change and health and safety and those that could impact the Company’s ability to continue or renew its operating permits or successfully secure new permits in connection with its modernization and expansion and development projects; (xi) estimates of reserves and remaining lives of reserves; and (xii) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Quarterly Reports on Form 10-Q. |
These risks arise from various factors, including, but not limited to, fluctuating demand and prices for our lime and limestone products, including as a result of downturns in the economy and in the construction, industrial, steel and oil and gas services industries, and reduced demand from coal-fired utility plants, increased competitive pressures from other lime producers, changes in legislation and regulations, including Environmental Laws, health and safety regulations and requirements to renew or obtain operating permits, our ability to produce and store quantities of lime and limestone products sufficient in amount and quality to meet customer demands and specifications, the success of our modernization, expansion and development strategies, the uncertainty of the product output from the vertical kiln technology being deployed at the St. Clair facility, including our ability to sell our increased lime capacity at acceptable prices, our ability to execute our strategies and complete projects on time and within budget, our ability to integrate, refurbish and/or improve acquired facilities, our access to capital, volatile costs, especially fuel, electricity, transportation and freight costs, inclement weather and the effects of seasonal trends. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to maintain and increase its revenues and manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including meeting the Company’s operating and capital needs, including for the modernization and expansion and development project at St. Clair and possible acquisitions, repurchasing the Company’s common stock and paying dividends, and conditions in the credit and equity markets, including the ability of the Company’s customers to meet their obligations; (iv) interruptions to operations and increased expenses at the Company’s facilities resulting from changes in mining methods or conditions, variability of chemical or physical properties of the Company’s limestone and its impact on process equipment and product quality, inclement weather conditions, natural disasters, accidents, IT systems failures or disruptions, including due to cyber-security incidents or regulatory requirements; (v) volatile coal, petroleum coke, diesel, natural gas, electricity, transportation and freight costs and the consistent availability of trucks, truck drivers and rail cars to deliver the Company’s products to its customers and solid fuels to its plants on a timely basis at competitive prices; (vi) unanticipated delays or cost overruns in completing modernization and expansion and development projects, including the Company’s St. Clair kiln project that is estimated to cost approximately $50 million in total; (vii) the Company’s ability to expand its Lime and Limestone Operations through projects and acquisitions of businesses with related or similar operations, including obtaining financing for such projects and acquisitions, and to sell any resulting increased production at acceptable prices; (viii) inadequate demand and/or prices for the Company’s lime and limestone products due to increased competition from competitors, increasing competition for certain customer accounts, conditions in the U.S. economy, recessionary pressures in, and the impact of government policies on particular industries, including construction, steel, industrial and oil and gas services, reduced demand from utility plants, effects of governmental fiscal and budgetary constraints, including the level of highway construction and infrastructure funding, the impact of tax reform, legislative impasses, extended government shutdowns, trade wars, tariffs, economic and regulatory uncertainties under state governments and the United States Administration and Congress, and inability to continue to maintain or increase prices for the Company’s products, including passing through the increased costs of transportation; (ix) uncertainties of prices and regulations with respect to the Company’s Natural Gas Interests, including the absence of drilling activities on the Company’s O & G Properties, any risks the Company may experience with the change in the operators of the wells drilled on the O&G Properties, inability to explore for new reserves, unitization of existing wells, declines in production rates and plugging and abandoning of existing wells; (x) ongoing and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change and health and safety and those that could impact the Company’s ability to continue or renew its operating permits or successfully secure new permits in connection with its modernization and expansion and development projects; (xi) estimates of reserves and remaining lives of reserves; and (xii) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s Quarterly Reports on Form 10-Q. |
These risks arise from various factors, including, but not limited to, fluctuating demand and prices for our lime and limestone products, including as a result of downturns in the economy and in the construction, industrial, steel and oil and gas services industries, and reduced demand from coal-fired utility plants, increased competitive pressures from other lime producers, changes in legislation and regulations, including Environmental Laws, health and safety regulations and requirements to renew or obtain operating permits, our ability to produce and store quantities of lime and limestone products sufficient in amount and quality to meet customer demands and specifications, the success of our modernization, expansion and development strategies, the uncertainty of the product output from the shaft kiln technology being deployed at the St. Clair facility, including our ability to sell our increased lime capacity at acceptable prices, our ability to execute our strategies and complete projects on time and within budget, our ability to integrate, refurbish and/or improve acquired facilities, our access to capital, volatile costs, especially fuel, electricity, transportation and freight costs, inclement weather and the effects of seasonal trends. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to maintain and increase its revenues and manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including meeting the Company’s operating and capital needs, including for the modernization and expansion and development project at St. Clair and possible acquisitions, repurchasing the Company’s common stock and paying dividends, and conditions in the credit and equity markets, including the ability of the Company’s customers to meet their obligations; (iv) interruptions to operations and increased expenses at the Company’s facilities resulting from changes in mining methods or conditions, variability of chemical or physical properties of the Company’s limestone and its impact on process equipment and product quality, inclement weather conditions, natural disasters, accidents, IT systems failures or disruptions, including due to cybersecurity incidents, or regulatory requirements; (v) volatile coal, petroleum coke, diesel, natural gas, electricity, transportation and freight costs and the consistent availability of trucks, truck drivers and rail cars to deliver the Company’s products to its customers and solid fuels to its plants on a timely basis; (vi) unanticipated delays or cost overruns in completing modernization and expansion and development projects, including the Company’s St. Clair kiln project that is estimated to cost approximately $50 million in total; (vii) the Company’s ability to expand its Lime and Limestone Operations through projects and acquisitions of businesses with related or similar operations, including obtaining financing for such projects and acquisitions, and to sell any resulting increased production at acceptable prices; (viii) inadequate demand and/or prices for the Company’s lime and limestone products due to conditions in the U.S. economy, recessionary pressures in particular industries, including construction, steel, industrial and oil and gas services, reduced demand from utility plants, increased competition from competitors, effects of governmental fiscal and budgetary constraints, including the level of highway construction and infrastructure funding, the impact of tax reform, legislative impasses and economic and regulatory uncertainties under state governments and the United States Administration and Congress, and inability to continue to maintain or increase prices for the Company’s products; (ix) uncertainties of prices and regulations with respect to the Company’s Natural Gas Interests, including the absence of drilling activities on the Company’s O & G Properties, the change in the operator of the wells drilled on the O&G Properties, inability to explore for new reserves, unitization of existing wells, declines in production rates and plugging and abandoning of existing wells; (x) ongoing and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change and health and safety and those that could impact the Company’s ability to continue or renew its operating permits or successfully secure new permits in connection with its modernization and expansion and development projects; and (xi) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the SEC, including the Company’s Quarterly Reports on Form 10-Q. |
These risks arise from various factors, including, but not limited to, fluctuating demand and prices for our lime and limestone products, including as a result of downturns in the economy and in the construction, industrial, steel and oil and gas services industries, and reduced demand from coal-fired utility plants, increased competitive pressures from other lime producers, changes in legislation and regulations, including Environmental Laws, health and safety regulations and requirements to renew or obtain operating permits, our ability to produce and store quantities of lime and limestone products sufficient in amount and quality to meet customer demands and specifications, the success of our modernization, expansion and development strategies, including our ability to sell our increased lime capacity at acceptable prices, our ability to execute our strategies and complete projects on time and within budget, our ability to integrate, refurbish and/or improve acquired facilities, our access to capital, volatile costs, especially fuel, electricity, transportation and freight costs, inclement weather and the effects of seasonal trends. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to maintain and increase its revenues and manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including meeting the Company’s operating and capital needs, including for the modernization and expansion and development project at St. Clair and possible acquisitions, repurchasing the Company’s common stock and paying dividends, conditions in the credit and equity markets, including the ability of the Company’s customers to meet their obligations; (iv) interruptions to operations and increased expenses at the Company’s facilities resulting from changes in mining methods or conditions, variability of chemical or physical properties of the Company’s limestone and its impact on process equipment and product quality, inclement weather conditions, natural disasters, accidents, IT systems failures or disruptions, including due to cybersecurity incidents, or regulatory requirements; (v) volatile coal, petroleum coke, diesel, natural gas, electricity, transportation and freight costs and the consistent availability of trucks and rail cars to deliver the Company’s products to its customers and solid fuels to its plants on a timely basis; (vi) unanticipated delays or cost overruns in completing modernization and expansion and development projects, including the Company’s St. Clair kiln project that is estimated to cost approximately $50 million over the next two years; (vii) the Company’s ability to expand its Lime and Limestone Operations through projects and acquisitions of businesses with related or similar operations, including obtaining financing for such projects and acquisitions, and to sell any resulting increased production at acceptable prices; (viii) inadequate demand and/or prices for the Company’s lime and limestone products due to conditions in the U.S. economy, recessionary pressures in particular industries, including construction, steel, industrial and oil and gas services, reduced demand from utility plants, increased competition from competitors, effects of governmental fiscal and budgetary constraints, including the level of highway construction funding, and legislative impasses and economic and regulatory uncertainties under the new Administration and Congress, and inability to continue to maintain or increase prices for the Company’s products; (ix) uncertainties of prices and regulations with respect to the Company’s Natural Gas Interests, including the absence of drilling activities on the Company’s O & G Properties, inability to explore for new reserves, unitization of existing wells, declines in production rates and plugging and abandoning of existing wells; (x) ongoing and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change and health and safety and those that could impact the Company’s ability to continue or renew its operating permits or successfully secure new permits in connection with its modernization and expansion and development projects; and (xi) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the SEC, including the Company’s Quarterly Reports on Form 10-Q. |
These risks arise from various factors, including, but not limited to, fluctuating demand for our lime and limestone products, including as a result of downturns in the economy and construction, industrial and steel industries, and possible reduced demand from coal-fired utility plants, increased competitive pressures from other lime producers, changes in legislation and regulations, including Environmental Laws, health and safety regulations and requirements to renew or obtain operating permits, our ability to produce and store quantities of lime and limestone products sufficient in amount and quality to meet customer demands and specifications, the success of our modernization, expansion and development strategies, including our ability to sell our increased lime capacity at acceptable prices, our ability to execute our strategies and complete projects on time and within budget, our ability to integrate, refurbish and/or improve acquired facilities, our access to capital, volatile costs, especially fuel, electricity, transportation and freight costs, inclement weather and the effects of seasonal trends. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to maintain and increase its revenues and manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including meeting the Company’s operating and capital needs, including for possible modernization and expansion and development projects and acquisitions, repurchasing the Company’s common stock and paying dividends, conditions in the credit and equity markets, including the ability of the Company’s customers to meet their obligations; (iv) interruptions to operations and increased expenses at the Company’s facilities resulting from changes in mining methods or conditions, variability of chemical or physical properties of the Company’s limestone and its impact on process equipment and product quality, inclement weather conditions, natural disasters, accidents, IT systems failures or disruptions, including due to cybersecurity incidents, or regulatory requirements; (v) volatile coal, petroleum coke, diesel, natural gas, electricity, transportation and freight costs and the consistent availability of trucks and rail cars to deliver the Company’s products to its customers and solid fuels to its plants on a timely basis; (vi) unanticipated delays, technical feasibility issues or cost overruns in completing modernization and expansion and development projects; (vii) the Company’s ability to expand its Lime and Limestone Operations through acquisitions of businesses with related or similar operations, including obtaining financing for such acquisitions, and to successfully integrate acquired operations and sell any resulting increased production at acceptable prices; (viii) inadequate demand and/or prices for the Company’s lime and limestone products due to conditions in the U.S. economy, recessionary pressures in particular industries, including construction, steel, industrial and oil and gas services, reduced demand from utility plants, increased competition from competitors, effects of governmental fiscal and budgetary constraints, including the level of highway construction funding, and legislative impasses, and inability to continue to increase or maintain prices for the Company’s products; (ix) uncertainties of prices and regulations with respect to the Company’s Natural Gas Interests, including the absence of drilling activities on the Company’s O & G Properties, inability to explore for new reserves, unitization of existing wells, declines in production rates and plugging and abandoning of existing wells; (x) ongoing and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change and health and safety and those that could impact the Company’s ability to continue or renew its operating permits or successfully secure new permits in connection with its modernization and expansion and development projects; and (xi) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the SEC, including the Company’s Quarterly Reports on Form 10-Q. |
Reports of Independent Registered Public Accounting Firm Consolidated Financial Statements: Consolidated Balance Sheets as of December 31, 2015 and 2014 Consolidated Statements of Income for the Years Ended December 31, 2015, 2014 and 2013 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2015, 2014 and 2013 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2015, 2014 and 2013 Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013 Notes to Consolidated Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders United States Lime & Minerals, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of United States Lime & Minerals, Inc. and Subsidiaries (the “Company”) as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2015. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company's plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company's discretion; (ii) the Company's plans and results of operations will be affected by its ability to maintain and manage its growth; (iii) the Company's ability to meet short-term and long-term liquidity demands, including servicing the Company's debt, including repaying its term loans, meeting the Company's operating and capital needs, including for possible modernization and expansion and development projects and acquisitions, and paying dividends, conditions in the credit and equity markets, and changes in interest rates, including the ability of the Company's customers and the counterparty to the Company's interest rate hedges to meet their obligations; (iv) interruptions to operations and increased expenses at the Company's facilities resulting from changes in mining methods or conditions, variability of chemical or physical properties of the Company's limestone and its impact on process equipment and product quality, inclement weather conditions, natural disasters, accidents, IT systems failures or disruptions, including due to cybersecurity incidents, or regulatory requirements; (v) volatile coal, petroleum coke, diesel, natural gas, electricity, transportation and freight costs and the consistent availability of trucks and rail cars to deliver the Company's products to its customers and solid fuels to its plants on a timely basis; (vi) unanticipated delays, difficulties in financing, technical feasibility issues or cost overruns in completing modernization and expansion and development projects; (vii) the Company's ability to expand its Lime and Limestone Operations through acquisitions of businesses with related or similar operations, including obtaining financing for such acquisitions, and to successfully integrate acquired operations and sell any resulting increased production at acceptable prices; (viii) inadequate demand and/or prices for the Company's lime and limestone products due to conditions in the U.S. economy, recessionary pressures in particular industries, including highway, road and building construction, steel, and oil and gas services, effects of governmental fiscal and budgetary constraints, including the level of highway construction funding, and legislative impasses, and inability to continue to increase or maintain prices for the Company's products; (ix) uncertainties of development, production, pipeline capacity, prices and regulations with respect to the Company's Natural Gas Interests, including the absence of drilling activities on the Company's O & G Properties, unitization of existing wells, inability to explore for new reserves, declines in production rates and plugging and abandoning of existing wells; (x) ongoing and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change and health and safety and those that could impact the Company's ability to continue or renew its operating permits or successfully secure new permits in connection with its modernization and expansion and development projects; and (xi) other risks and uncertainties set forth in this Report or indicated from time to time in the Company's filings with the SEC, including the Company's Quarterly Reports on Form 10-Q. |
Reports of Independent Registered Public Accounting Firm Consolidated Financial Statements: Consolidated Balance Sheets as of December 31, 2014 and 2013 Consolidated Statements of Income for the Years Ended December 31, 2014, 2013 and 2012 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2014, 2013 and 2012 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2014, 2013 and 2012 Consolidated Statements of Cash Flows for the Years Ended December 31, 2014, 2013 and 2012 Notes to Consolidated Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders United States Lime & Minerals, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of United States Lime & Minerals, Inc. and Subsidiaries (the "Company") as of December 31, 2014 and 2013, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2014. |
United States Lime & Minerals, Inc. Notes to Consolidated Financial Statements (Continued) (dollars in thousands, except share and per share amounts) Years Ended December 31, 2014, 2013 and 2012 (6) Employee Retirement Plans (Continued) The following table sets forth the funded status at December 31 of the Plan accrued pension benefit obligation: The liability recognized for the Plan on the Company's Consolidated Balance Sheets at December 31 consists of the following: The weighted-average assumptions used in the measurement of the Corson Plan benefit obligation at December 31 are as follows: United States Lime & Minerals, Inc. Notes to Consolidated Financial Statements (Continued) (dollars in thousands, except share and per share amounts) Years Ended December 31, 2014, 2013 and 2012 (6) Employee Retirement Plans (Continued) The following table provides the components of the Plan net periodic benefit cost: The Company expects benefit payments of $128 in 2015, $127 in 2016, $128 in 2017, $133 in 2018, $140 in 2019 and $722 for years 2020-2024. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company's plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company's discretion; (ii) the Company's plans and results of operations will be affected by its ability to maintain and manage its growth; (iii) the Company's ability to meet short-term and long-term liquidity demands, including servicing the Company's debt and meeting the Company's operating and capital needs, conditions in the credit and equity markets, and changes in interest rates on the Company's debt, including the ability of the Company's customers and the counterparty to the Company's interest rate hedges to meet their obligations; (iv) interruptions to operations and increased expenses at its facilities resulting from changes in mining methods or conditions, inclement weather conditions, natural disasters, accidents, IT systems failures or disruptions, including due to cybersecurity incidents, or regulatory requirements; (v) increased coal, petroleum coke, diesel, natural gas, electricity, transportation and freight costs; (vi) unanticipated delays, difficulties in financing, or cost overruns in completing, modernization and expansion and development projects; (vii) the Company's ability to expand its Lime and Limestone Operations through acquisitions of businesses with related or similar operations, including obtaining financing for such acquisitions, and to successfully integrate acquired operations and sell the increased production at acceptable prices; (viii) inadequate demand and/or prices for the Company's lime and limestone products due to the state of the U.S. economy, recessionary pressures in particular industries, including highway, road and building related construction, steel, and oil and gas services, effects of governmental fiscal and budgetary constraints and legislative impasses, and inability to continue to increase or maintain prices for the Company's products; (ix) uncertainties of development, production, pipeline capacity and prices with respect to the Company's Natural Gas Interests, including the absence of drilling activities on the Company's O & G Properties, unitization of existing wells, inability to explore for new reserves, declines in production rates and plugging and abandoning of existing wells; (x) ongoing and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change and health and safety and those that could impact the Company's ability to continue or renew its operating permits; and (xi) other risks and uncertainties set forth in this Report or indicated from time to time in the Company's filings with the SEC, including the Company's Quarterly Reports on Form 10-Q. |
Reports of Independent Registered Public Accounting Firm Consolidated Financial Statements: Consolidated Balance Sheets as of December 31, 2013 and 2012 Consolidated Statements of Income for the Years Ended December 31, 2013, 2012 and 2011 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2013, 2012 and 2011 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2013, 2012 and 2011 Consolidated Statements of Cash Flows for the Years Ended December 31, 2013, 2012 and 2011 Notes to Consolidated Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders United States Lime & Minerals, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of United States Lime & Minerals, Inc. and Subsidiaries (the "Company") as of December 31, 2013 and 2012, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2013. |
United States Lime & Minerals, Inc. Notes to Consolidated Financial Statements (Continued) (dollars in thousands, except share and per share amounts) Years Ended December 31, 2013, 2012 and 2011 (6) Employee Retirement Plans (Continued) The following table sets forth the funded status at December 31 of the Corson Plan accrued pension benefit obligation: The net liability recognized for the Corson Plan on the Company's Consolidated Balance Sheets at December 31 consists of the following: The weighted-average assumptions used in the measurement of the Corson Plan benefit obligation at December 31 are as follows: The following table provides the components of the Corson Plan net periodic benefit cost: United States Lime & Minerals, Inc. Notes to Consolidated Financial Statements (Continued) (dollars in thousands, except share and per share amounts) Years Ended December 31, 2013, 2012 and 2011 (6) Employee Retirement Plans (Continued) The Company expects benefit payments of $122 in 2014, $128 in 2015, $127 in 2016, $128 in 2017, $133 in 2018 and $718 for years 2019-2023. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company's plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company's discretion; (ii) the Company's plans and results of operations will be affected by its ability to maintain and manage its growth; (iii) the Company's ability to meet short-term and long-term liquidity demands, including servicing the Company's debt and meeting the Company's operating and capital needs, conditions in the credit and equity markets, and changes in interest rates on the Company's debt, including the ability of the Company's customers and the counterparty to the Company's interest rate hedges to meet their obligations; (iv) interruptions to operations and increased expenses at its facilities resulting from changes in mining methods or conditions, inclement weather conditions, natural disasters, accidents, IT systems failures or disruptions or regulatory requirements; (v) increased fuel, electricity, transportation and freight costs; (vi) unanticipated delays, difficulties in financing, or cost overruns in completing modernization, expansion and development projects; (vii) the Company's ability to expand its Lime and Limestone Operations through acquisitions of businesses with related or similar operations, including obtaining financing for such acquisitions, and to successfully integrate acquired operations and sell the increased production at acceptable prices; (viii) inadequate demand and/or prices for the Company's lime and limestone products due to the state of the U.S. economy, recessionary pressures in particular industries, including highway, road and housing related construction, steel, and oil and gas services, and inability to continue to increase or maintain prices for the Company's products; (ix) uncertainties of development, production, pipeline capacity and prices with respect to the Company's Natural Gas Interests, including the reduction, suspension or termination of drilling activities pursuant to the Company's O & G Lease and Drillsite Agreement, unitization of existing wells, inability to explore for new reserves, declines in production rates and plugging and abandoning of existing wells; (x) ongoing and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change and health and safety and those that could impact the Company's ability to continue or renew its operating permits; and (xi) other risks and uncertainties set forth in this Report or indicated from time to time in the Company's filings with the SEC, including the Company's Quarterly Reports on Form 10-Q. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company's plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company's discretion; (ii) the Company's plans and results of operations will be affected by its ability to maintain and manage its growth; (iii) the Company's ability to meet short-term and long-term liquidity demands, including servicing the Company's debt, conditions in the credit and equity markets, and changes in interest rates on the Company's debt, including the ability of the Company's customers and the counterparty to the Company's interest rate hedges to meet their obligations; (iv) interruptions to operations and increased expenses at its facilities resulting from inclement weather conditions, accidents, IT systems failures or disruptions, or regulatory requirements; (v) increased fuel, electricity, transportation and freight costs; (vi) unanticipated delays, difficulties in financing, or cost overruns in completing construction projects; (vii) the Company's ability to expand its Lime and Limestone Operations through acquisitions of businesses with related or similar operations, including obtaining financing for such acquisitions, and to successfully integrate acquired operations; (viii) inadequate demand and/or prices for the Company's lime and limestone products due to the state of the U.S. economy, recessionary pressures in particular industries, including highway and housing related construction and steel, and inability to continue to increase or maintain prices for the Company's products; (ix) the uncertainties of development, production, pipeline capacity and prices with respect to the Company's Natural Gas Interests, including reduced drilling activities pursuant to the Company's O & G Lease and Drillsite Agreement, unitization of existing wells, inability to explore for new reserves and declines in production rates; (x) on-going and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change and health and safety; and (xi) other risks and uncertainties set forth in this Report or indicated from time to time in the Company's filings with the SEC, including the Company's Quarterly Reports on Form 10-Q. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to maintain and manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including servicing the Company’s debt, conditions in the credit and equity markets, and changes in interest rates on the Company’s debt, including the ability of the Company’s customers and the counterparty to the Company’s interest rate hedges to meet their obligations; (iv) interruptions to operations and increased expenses at its facilities resulting from inclement weather conditions, accidents or regulatory requirements; (v) increased fuel, electricity, transportation and freight costs; (vi) unanticipated delays, difficulties in financing, or cost overruns in completing construction projects; (vii) the Company’s ability to expand its Lime and Limestone Operations through acquisitions of businesses with related or similar operations, including obtaining financing for such acquisitions, and to successfully integrate acquired operations; (viii) inadequate demand and/or prices for the Company’s lime and limestone products due to the state of the U.S. economy, recessionary pressures in particular industries, including highway and housing related construction and steel, and inability to continue to increase or maintain prices for the Company’s products; (ix) the uncertainties of development, production, pipeline capacity and prices with respect to the Company’s Natural Gas Interests, including reduced drilling activities pursuant to the Company’s O & G Lease and Drillsite Agreement, unitization of existing wells, inability to explore for new reserves and declines in production rates; (x) on-going and possible new regulations, investigations, enforcement actions and costs, legal expenses, penalties, fines, assessments, litigation, judgments and settlements, taxes and disruptions and limitations of operations, including those related to climate change and health and safety; and (xi) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the SEC, including the Company’s Quarterly Reports on Form 10-Q. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to maintain and manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including servicing the Company’s debt, conditions in the credit and equity markets, and changes in interest rates on the Company’s debt, including the ability of the counterparty to the Company’s interest rate hedges to meet its obligations; (iv) inclement weather conditions; (v) increased fuel, electricity, transportation and freight costs; (vi) unanticipated delays, difficulties in financing, or cost overruns in completing construction projects; (vii) the Company’s ability to expand its Lime and Limestone Operations through acquisitions, including obtaining financing for such acquisitions, and to successfully integrate acquired operations; (viii) inadequate demand and/or prices for the Company’s lime and limestone products due to the state of the U.S. economy, recessionary pressures in particular industries, including construction, housing and steel, and inability to continue to increase prices for the Company’s products; (ix) the uncertainties of development, production and prices with respect to the Company’s Natural Gas Interests, including reduced drilling activities pursuant to the Company’s O&G Agreement and Drillsite Agreement, unitization of existing wells, inability to explore for new reserves and declines in production rates; (x) on-going and possible new environmental and other regulatory costs, taxes and limitations on operations, including those related to climate change; and (xi) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the SEC. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject to change at any time at the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to maintain and manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including servicing the Company’s debt, conditions in the credit markets, volatility in the equity markets, and changes in interest rates on the Company’s debt, including the ability of the counterparty to the Company’s interest rate hedges to meet its obligations; (iv) inclement weather conditions; (v) increased fuel, electricity, transportation and freight costs; (vi) unanticipated delays, difficulties in financing, or cost overruns in completing construction projects; (vii) the Company’s ability to expand its Lime and Limestone Operations through acquisitions, including obtaining financing for such acquisitions, and to successfully integrate acquired operations; (viii) inadequate demand and/or prices for the Company’s lime and limestone products, including the additional lime production from the Company’s third kiln in Arkansas, due to the state of the U.S. economy, recessionary pressures in particular industries, including construction and steel, and inability to continue to increase prices for the Company’s products; (ix) the uncertainties of development, production and prices with respect to the Company’s Natural Gas Interests, including reduced drilling activities pursuant to the Company’s Lease Agreement and Drillsite Agreement, inability to explore for new reserves and declines in production rates; (x) on-going and possible new environmental and other regulatory costs, taxes and limitations on operations, including those related to climate change; and (xi) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the SEC. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject to change at any time in the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including servicing the Company’s debt; (iv) inclement weather conditions; (v) increased fuel, electricity and transportation costs; (vi) unanticipated delays or cost overruns in completing construction projects; (vii) the Company’s ability to successfully integrate acquired operations; (viii) inadequate demand and/or prices for the Company’s lime and limestone products, including the additional lime production from the Company’s third kiln in Arkansas; (ix) the uncertainties of development, production and prices with respect to the Company’s Natural Gas Interests; (x) on-going and possible new environmental and other regulatory costs, taxes, and limitations on operations; and (xi) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the SEC. |
The Company cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including without limitation the following: (i) the Company’s plans, strategies, objectives, expectations, and intentions are subject to change at any time in the Company’s discretion; (ii) the Company’s plans and results of operations will be affected by its ability to manage its growth; (iii) the Company’s ability to meet short-term and long-term liquidity demands, including servicing the Company’s debt; (iv) inclement weather conditions; (v) increased fuel, electricity and transportation costs; (vi) unanticipated delays or cost overruns in completing construction projects; (vii) the Company’s ability to successfully integrate acquired operations; (viii) reduced demand for the Company’s lime and limestone products, including the additional lime production from the Company’s third kiln in Arkansas; (ix) the uncertainties of development, recovery and prices with respect to the Company’s natural gas interests; and (x) other risks and uncertainties set forth in this Report or indicated from time to time in the Company’s filings with the Securities and Exchange Commission. |
ARONSON, FETRIDGE & WEIGLE Rockville, Maryland February 1, 1994 -F2- UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands) See accompanying notes to consolidated financial statements -F3- UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) (dollars in thousands) See accompanying notes to consolidated financial statements -F4- UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share amounts) See accompanying notes to consolidated financial statements -F5- UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (dollars in thousands) Years ended December 31, 1995, 1994 and 1993 See accompanying notes to consolidated financial statements -F6- UNITED STATES LIME & MINERALS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) See accompanying notes to consolidated financial statements. |
Numerous competitive factors could impair our ability to maintain our current profitability, including the following: •our inability to obtain expected customer retention levels or profitability; •we compete with many other transportation and logistics service providers, some of which have greater capital resources or lower cost structures than we do; •our inability to compete with new entrants in the transportation and logistics market that may offer similar services at lower cost or have greater technological capabilities; •customers may choose to provide the services we provide for themselves; •our competitors may periodically reduce their prices to gain business, especially during times of declining economic growth, which may limit our ability to maintain or increase prices or impede our ability to maintain our profitability or grow our market share or profitability; •many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress rates or result in the loss of some of our business to competitors; •the continuing trend toward consolidation in the trucking industry may result in larger carriers with greater financial resources than we have; •advances in technology require increased investments to remain competitive, and our customers may not be willing to accept higher prices to cover the cost of these investments; and •because cost of capital is a significant competitive factor, any increase in either the cost of our debt or equity as a result of reductions in our debt rating or stock price volatility could have a significant impact on our competitive position. |
Other compliance issues we may face include: •companies we acquire may not have historically maintained internal controls, policies or procedures to monitor compliance with the regulatory and legal requirements consistent with our standards; •our operations in Canada, Europe and Mexico may expose us to liability for failure to comply with local laws and regulatory requirements of foreign jurisdictions, which may vary significantly from country to country, including local tax laws, and anti-bribery laws; •compliance with environmental laws and regulations, including regulations imposed by the EPA on exhaust emissions and increasingly stringent regulations related to climate change, which may impose restrictions on our activities or require us to take certain actions, all of which may, over time, increase our costs and adversely affect our business and results of operations; •compliance with health and safety laws and regulations imposed by OSHA as well as state and local governments; and •compliance with new laws or regulations that may change the employee/independent contractor classification of independent contractors doing business with us, which could cause us to incur additional exposure under federal and state tax and employment laws. |
This Annual Report contains forward-looking statements including, but not limited to, statements regarding: •our expectations regarding the impact of COVID-19 on our business and financial results including revenue and cash flow; •our expectations in our FMS business segment regarding anticipated ChoiceLease revenue, fleet growth and earnings and commercial rental revenue and demand; •our expectations in our SCS and DTS business segments regarding anticipated operating revenue, trends, earnings, sales activity and growth rates; •our expectations of the long-term residual values of revenue earning equipment; •the expected pricing for used vehicles; •our expectations of cash flow from operating activities, free cash flow, and capital expenditures through the end of 2021; •the adequacy of our accounting estimates and reserves for pension expense, compensation expense and employee benefit plan obligations, depreciation and residual value guarantees, goodwill impairment, accounting changes, and income taxes; •our expected future contractual cash obligations and commitments; •the adequacy of our fair value estimates of employee incentive awards under our share-based compensation plans, publicly traded debt and other debt; •our ability to fund all of our operating, investing and financial needs for the foreseeable future through internally generated funds and outside funding sources; •our expected level of use and availability of outside funding sources, anticipated future payments under debt and lease agreements, and risk of losses resulting from counterparty default under hedging and derivative agreements; •the anticipated impact of fuel price and exchange rate fluctuations; •our expectations as to return on pension plan assets, future pension expense and estimated contributions; •our expectations regarding the scope and anticipated outcomes with respect to certain claims, proceedings and lawsuits; •the ultimate disposition of estimated environmental liabilities; •our ability to access commercial paper and other available debt financing in the capital markets; •the size and impact of our strategic investments; •our expectations regarding the achievement of our return on equity improvement initiatives; •our expectations regarding the diminishing impact of prior residual value estimate changes on return on equity improvement; •our expectations regarding maintenance costs and the benefits of maintenance cost initiatives; •our expectations regarding the benefits of terminating lease insurance; •our expectations regarding the adequacy of credit reserves; •the status of our unrecognized tax benefits related to the U.S. federal, state and foreign tax positions; ITEM 7. |
Other compliance issues we may face include: • companies we acquire may not have historically maintained internal controls, policies or procedures to monitor compliance with the regulatory and legal requirements consistent with our standards; • our operations in Canada, Europe and Mexico may expose us to liability for failure to comply with local laws and regulatory requirements of foreign jurisdictions, which may vary significantly from country to country, including local tax laws, and anti-bribery laws; • compliance with environmental laws and regulations, including regulations imposed by the EPA on exhaust emissions and increasingly stringent regulations related to climate change, which may impose restrictions on our activities or require us to take certain actions, all of which may, over time, increase our costs and adversely affect our business and results of operations; • compliance with health and safety laws and regulations imposed by OSHA; and • compliance with new laws or regulations that may change the employee/independent contractor classification of independent contractors doing business with us, which could cause us to incur additional exposure under federal and state tax and employment laws. |
Numerous competitive factors could impair our ability to maintain our current profitability, including the following: • our inability to obtain expected customer retention levels or profitability; • we compete with many other transportation and logistics service providers, some of which have greater capital resources or lower cost structures than we do; • our inability to compete with new entrants in the transportation and logistics market that may offer similar services at lower cost or have greater technological capabilities; • customers may choose to provide the services we provide for themselves; • our competitors may periodically reduce their prices to gain business, especially during times of declining economic growth, which may limit our ability to maintain or increase prices or impede our ability to maintain our profitability or grow our market share or profitability; • many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress rates or result in the loss of some of our business to competitors; • the continuing trend toward consolidation in the trucking industry may result in larger carriers with greater financial resources than we have; • advances in technology require increased investments to remain competitive, and our customers may not be willing to accept higher prices to cover the cost of these investments; and • because cost of capital is a significant competitive factor, any increase in either the cost of our debt or equity as a result of reductions in our debt rating or stock price volatility could have a significant impact on our competitive position. |
This Annual Report contains forward-looking statements including, but not limited to, statements regarding: • our expectations in our FMS business segment regarding anticipated ChoiceLease revenue and fleet growth and commercial rental revenue and demand; • our expectations in our SCS and DTS business segments regarding anticipated operating revenue trends, sales activity and growth rates; • our expectations of the long-term residual values of revenue earning equipment; • the anticipated increase in NLE vehicles in inventory through the end of the year; • the expected pricing and inventory levels for used vehicles; • our expectations of operating cash flow, free cash flow, and capital expenditures through the end of 2020; • the adequacy of our accounting estimates and reserves for pension expense, compensation expense and employee benefit plan obligations, depreciation and residual value guarantees, goodwill impairment, accounting changes, and income taxes; • our expected future contractual cash obligations and commitments; • the adequacy of our fair value estimates of employee incentive awards under our share-based compensation plans, publicly traded debt and other debt; • our ability to fund all of our operating, investing and financial needs for the foreseeable future through internally generated funds and outside funding sources; • our expected level of use and availability of outside funding sources, anticipated future payments under debt and lease agreements, and risk of losses resulting from counterparty default under hedging and derivative agreements; • the anticipated impact of fuel price and exchange rate fluctuations; • our expectations as to return on pension plan assets, future pension expense and estimated contributions; • our expectations regarding the scope and anticipated outcomes with respect to certain claims, proceedings and lawsuits; • the ultimate disposition of estimated environmental liabilities; • our expectations about the need to repatriate foreign cash to the U.S.; • our ability to access commercial paper and other available debt financing in the capital markets; • our expected cost savings from workforce reductions and restructuring actions; • the size and impact of our strategic investments; • our expectations regarding restructuring charges; • the status of our unrecognized tax benefits related to the U.S. federal, state and foreign tax positions; • our estimates for self-insurance loss reserves; • our expectations regarding the completion and ultimate outcome of certain tax audits; and • the anticipated impact of recent accounting pronouncements. |
Other compliance failures we may face include: • companies we acquire may not have historically maintained internal controls, policies or procedures to monitor compliance with the regulatory and legal requirements consistent with our standards; • our operations in Canada, Europe, Mexico and Singapore may expose us to liability for failure to comply with local laws and regulatory requirements of foreign jurisdictions, which may vary significantly from country to country, including local tax laws, and anti-bribery laws; • compliance with environmental laws and regulations, including regulations imposed by the U.S. Environmental Protection Agency (EPA) on exhaust emissions and increasingly stringent regulations related to climate change, which may impose restrictions on our activities or require us to take certain actions, all of which may, over time, increase our costs and adversely affect our business and results of operations; and • compliance with health and safety laws and regulations imposed by the Occupational Safety and Health Administration (OSHA). |
Numerous competitive factors could impair our ability to maintain our current profitability, including the following: • our inability to obtain expected customer retention levels or sales growth targets; • we compete with many other transportation and logistics service providers, some of which have greater capital resources or lower cost structures than we do; • our inability to compete with new entrants in the transportation and logistics market that may offer similar services at lower cost or have greater technological capabilities; • customers may choose to provide the services we provide for themselves; • our competitors may periodically reduce their prices to gain business, especially during times of declining economic growth, which may limit our ability to maintain or increase prices or impede our ability to maintain or grow our market share; • many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress rates or result in the loss of some of our business to competitors; • the continuing trend toward consolidation in the trucking industry may result in larger carriers with greater financial resources than we have; • advances in technology require increased investments to remain competitive, and our customers may not be willing to accept higher prices to cover the cost of these investments; and • because cost of capital is a significant competitive factor, any increase in either the cost of our debt or equity as a result of reductions in our debt rating or stock price volatility could have a significant impact on our competitive position. |
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