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Document and Entity Information
9 Months Ended
Sep. 08, 2012
Oct. 10, 2012
Document Documentand Entity Information [Abstract]
Document Type 10-Q
Amendment Flag false
Document Period End Date Sep 8, 2012
Document Fiscal Year Focus 2012
Document Fiscal Period Focus Q3
Trading Symbol PEP
Entity Registrant Name PEPSICO INC
Entity Central Index Key 0000077476
Current Fiscal Year End Date --12-29
Entity Filer Category Large Accelerated Filer
Entity Common Stock, Shares Outstanding 1,546,853,502
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CONDENSED CONSOLIDATED STATEMENT OF INCOME (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Sep. 08, 2012
Sep. 03, 2011
Net Revenue $ 16,652 $ 17,582 $ 45,538 $ 46,346
Cost of sales 7,833 8,452 21,637 21,862
Selling, general and administrative expenses 5,992 6,186 16,920 16,995
Amortization of intangible assets 27 38 82 103
Operating Profit 2,800 2,906 6,899 7,386
Interest expense (204) (205) (611) (584)
Interest income and other 23 (4) 47 33
Income before income taxes 2,619 2,697 6,335 6,835
Provision for income taxes 706 686 1,788 1,775
Net income 1,913 2,011 4,547 5,060
Less: Net income attributable to noncontrolling interests 11 11 30 32
Net Income Attributable to PepsiCo $ 1,902 $ 2,000 $ 4,517 $ 5,028
Net Income Attributable to PepsiCo per Common Share
Basic $ 1.22 $ 1.27 $ 2.89 $ 3.18
Diluted $ 1.21 $ 1.25 $ 2.86 $ 3.14
Weighted-average common shares outstanding
Basic 1,556 [1] 1,578 [1] 1,562 [1] 1,581 [1]
Diluted 1,575 [1] 1,599 [1] 1,580 [1] 1,603 [1]
Cash dividends declared per common share $ 0.5375 $ 0.515 $ 1.59 $ 1.51
[1] Weighted-average common shares outstanding (in millions).
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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Sep. 08, 2012
Sep. 03, 2011
Net Income $ 1,913 $ 2,011 $ 4,547 $ 5,060
Other Comprehensive Income/(Loss)
Currency translation adjustment 530 (515) (14) 939
Cash flow hedges, net of tax:
Net derivative losses (15) [1] (46) [1] (40) [1] (63) [1]
Reclassification of net losses to net income 13 [2] 4 [2] 37 [2] 11 [2]
Pension and retiree medical, net of tax:
Reclassification of net losses to net income 23 [3] 26 [3] 109 [3] 49 [3]
Remeasurement of net liabilities    [4]    [4] 7 [4]    [4]
Unrealized gains/(losses) on securities, net of tax (1) [5] (18) [5] 2 [5] (20) [5]
Other       36 (17)
Total Other Comprehensive Income/(Loss) 550 (549) 137 899
Comprehensive Income 2,463 1,462 4,684 5,959
Comprehensive income attributable to noncontrolling interests (11) (8) (24) (101)
Comprehensive Income Attributable to PepsiCo $ 2,452 $ 1,454 $ 4,660 $ 5,858
[1] Net of tax expense of $2 million and tax benefits of $10 million for the 12 and 36 weeks in 2012, respectively. Net of tax benefits of $27 million and $21 million for the 12 and 36 weeks in 2011, respectively.
[2] Net of tax benefits of $7 million and $21 million for the 12 and 36 weeks in 2012, respectively. Net of tax expense of $3 million and $8 million for the 12 and 36 weeks in 2011, respectively.
[3] Net of tax benefits of $17 million and $61 million for the 12 and 36 weeks in 2012, respectively. Net of tax benefits of $12 million and $26 million for the 12 and 36 weeks in 2011, respectively.
[4] Net of tax expense of $4 million for the 36 weeks in 2012.
[5] Net of tax benefits of $6 million and $7 million for the 12 and 36 weeks in 2011, respectively.
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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Parenthetical) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Sep. 08, 2012
Sep. 03, 2011
Net derivative (losses)/gains, Tax Effect $ 2 $ (27) $ (10) $ (21)
Reclassification of net losses to net income, Tax Effect (7) 3 (21) 8
Reclassification of losses/(gains) to net income, Tax Effect (17) (12) (61) (26)
Remeasurement of net liabilities, Tax Effect 4
Unrealized gains/(losses) on securities, Tax Effect $ (6) $ (7)
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Operating Activities
Net income $ 4,547 $ 5,060
Depreciation and amortization 1,837 1,877
Stock-based compensation expense 193 222
Restructuring and impairment charges 193   
Cash payments for restructuring charges (243) (1)
Merger and integration charges 7 174
Cash payments for merger and integration charges (57) (293)
Restructuring and other charges related to the transaction with Tingyi (Cayman Islands) Holding Corp. (Tingyi) 163   
Cash payments for restructuring and other charges related to the transaction with Tingyi (98)   
Excess tax benefits from share-based payment arrangements (89) (56)
Pension and retiree medical plan contributions (1,253) (185)
Pension and retiree medical plan expenses 414 389
Deferred income taxes and other tax charges and credits 283 132
Change in accounts and notes receivable (1,300) (1,643)
Change in inventories (234) (466)
Change in prepaid expenses and other current assets (83) (54)
Change in accounts payable and other current liabilities 281 142
Change in income taxes payable 736 936
Other, net (179) (400)
Net Cash Provided by Operating Activities 5,118 5,834
Investing Activities
Capital spending (1,409) (1,962)
Sales of property, plant and equipment 58 46
Acquisition of Wimm-Bill-Dann Foods OJSC (WBD), net of cash and cash equivalents acquired    (2,428)
Investment in WBD    (164)
Cash payments related to the transaction with Tingyi (298)   
Other acquisitions and investments in noncontrolled affiliates (76) (160)
Divestitures 7 10
Short-term investments, by original maturity
More than three months - maturities    14
Three months or less, net (21) (48)
Other investing, net 11 (3)
Net Cash Used for Investing Activities (1,728) (4,695)
Financing Activities
Proceeds from issuances of long-term debt 5,207 3,000
Payments of long-term debt (1,357) (1,596)
Debt repurchase    (771)
Short-term borrowings, by original maturity
More than three months - proceeds 53 224
More than three months - payments (213) (274)
Three months or less, net (2,034) 106
Cash dividends paid (2,470) (2,349)
Share repurchases - common (2,328) (1,929)
Share repurchases - preferred (5) (5)
Proceeds from exercises of stock options 927 724
Excess tax benefits from share-based payment arrangements 89 56
Acquisition of noncontrolling interests (15) (1,327)
Other financing (18) (2)
Net Cash Used for Financing Activities (2,164) (4,143)
Effect of exchange rate changes on cash and cash equivalents 16 144
Net Increase/(Decrease) in Cash and Cash Equivalents 1,242 (2,860)
Cash and Cash Equivalents, Beginning of Year 4,067 5,943
Cash and Cash Equivalents, End of Period $ 5,309 $ 3,083
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CONDENSED CONSOLIDATED BALANCE SHEET (USD $)
In Millions, unless otherwise specified
Sep. 08, 2012
Dec. 31, 2011
Current Assets
Cash and cash equivalents $ 5,309 $ 4,067
Short-term investments 402 358
Accounts and notes receivable, less allowance: 9/12 - $156, 12/11 - $157 7,998 6,912
Inventories
Raw materials 1,930 1,883
Work-in-process 253 207
Finished goods 1,722 1,737
Inventory, Net, Total 3,905 3,827
Prepaid expenses and other current assets 1,656 2,277
Total Current Assets 19,270 17,441
Property, Plant and Equipment 34,920 35,140
Accumulated Depreciation (16,390) (15,442)
Property, Plant and Equipment, Net, Total 18,530 19,698
Amortizable Intangible Assets, net 1,799 1,888
Goodwill 16,701 16,800
Other Nonamortizable Intangible Assets 14,511 14,557
Nonamortizable Intangible Assets 31,212 31,357
Investments in Noncontrolled Affiliates 1,585 1,477
Other Assets 1,621 1,021
Total Assets 74,017 72,882
Current Liabilities
Short-term obligations 4,211 6,205
Accounts payable and other current liabilities 11,722 11,757
Income taxes payable 287 192
Total Current Liabilities 16,220 18,154
Long-term Debt Obligations 23,732 20,568
Other Liabilities 7,551 8,266
Deferred Income Taxes 4,930 4,995
Total Liabilities 52,433 51,983
Commitments and Contingencies      
Preferred Stock, par value 41 41
PepsiCo Common Shareholders' Equity
Common stock, par value 1 2/3 cents per share: Authorized 3,600 shares, issued 9/12 and 12/11 - 1,865 shares 31 31
Capital in excess of par value 4,179 4,461
Retained earnings 42,332 40,316
Accumulated other comprehensive loss (6,086) (6,229)
Total PepsiCo Common Shareholders' Equity 21,560 20,704
Noncontrolling interests 145 311
Total Equity 21,584 20,899
Total Liabilities and Equity 74,017 72,882
Preferred Stock
Current Liabilities
Repurchased Preferred Stock (162) (157)
PepsiCo Common Shareholders' Equity
Less: repurchased common stock, at cost: 9/12 - 314 shares, 12/11 - 301 shares (162) (157)
Total Equity 41
Common Stock
Current Liabilities
Repurchased Preferred Stock (18,896) (17,875)
PepsiCo Common Shareholders' Equity
Less: repurchased common stock, at cost: 9/12 - 314 shares, 12/11 - 301 shares (18,896) (17,875)
Total Equity $ 31
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CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $)
In Millions, except Per Share data, unless otherwise specified
Sep. 08, 2012
Dec. 31, 2011
Accounts and notes receivable, allowance $ 156 $ 157
Preferred Stock, no par value      
Common stock, Par value $ 0.0167 $ 0.0167
Common stock, Authorized 3,600 3,600
Common stock, Issued 1,865 1,865
Repurchased common stock, shares 314 301
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CONDENSED CONSOLIDATED STATEMENT OF EQUITY (USD $)
In Millions, unless otherwise specified
Total
Preferred Stock
Repurchased Preferred Stock
Common Stock
Capital in Excess of Par Value
Retained Earnings
Accumulated Other Comprehensive Loss
Repurchased Common Stock
Noncontrolling Interests
Balance, beginning of year at Dec. 25, 2010 $ (150) $ 4,527 $ 37,090 $ (3,630) $ (16,745) $ 312
Balance, beginning of year, shares at Dec. 25, 2010 (0.6) (284)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Redemptions (5)
Stock-based compensation expense 222
Stock option exercises/RSUs converted (303) [1] 948
Withholding tax on RSUs converted (54)
Other 14
Net income attributable to PepsiCo 5,028 5,028
Cash dividends declared - common (2,388)
Cash dividends declared - preferred (1)
Cash dividends declared - RSUs (15)
Currency translation adjustment 870 69
Cash flow hedges, net of tax:
Net derivative losses (63) [2] (63)
Reclassification of net losses to net income 11 [3] 11
Pension and retiree medical, net of tax:
Reclassification of net losses to net income 49 [4] 49
Remeasurement of net liabilities    [5]   
Unrealized gains/(losses) on securities, net of tax (20) [6] (20)
Other (17) 107
Share repurchases (in shares) (30)
Share repurchases (1,970)
Stock option exercises/RSUs converted (in shares) 15
Other (in shares) 2
Net income attributable to noncontrolling interests (32) 32
Distributions to noncontrolling interests (10)
Acquisitions and divestitures 23
Balance, end of period at Sep. 03, 2011 24,003 41 (155) 31 4,406 39,714 (2,800) (17,660) 426
Total Common Shareholders' Equity at Sep. 03, 2011 23,691
Balance, end of period, shares at Sep. 03, 2011 (0.8) (0.6) (1,865) (297)
Balance, beginning of year at Dec. 31, 2011 20,899 (157) 4,461 40,316 (6,229) (17,875) 311
Balance, beginning of year, shares at Dec. 31, 2011 (0.6) (301)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Redemptions (5)
Stock-based compensation expense 193
Stock option exercises/RSUs converted (384) [1] 1,225
Withholding tax on RSUs converted (65)
Other (26)
Net income attributable to PepsiCo 4,517 4,517
Cash dividends declared - common (2,482)
Cash dividends declared - preferred (1)
Cash dividends declared - RSUs (18)
Currency translation adjustment (8) (6)
Cash flow hedges, net of tax:
Net derivative losses (40) [2] (40)
Reclassification of net losses to net income 37 [3] 37
Pension and retiree medical, net of tax:
Reclassification of net losses to net income 109 [4] 109
Remeasurement of net liabilities 7 [5] 7
Unrealized gains/(losses) on securities, net of tax 2 [6] 2
Other 36 141
Share repurchases (in shares) (35)
Share repurchases (2,387)
Stock option exercises/RSUs converted (in shares) 20
Other (in shares) 2
Net income attributable to noncontrolling interests (30) 30
Distributions to noncontrolling interests (15)
Acquisitions and divestitures (175)
Balance, end of period at Sep. 08, 2012 21,584 41 (162) 31 4,179 42,332 (6,086) (18,896) 145
Total Common Shareholders' Equity at Sep. 08, 2012 $ 21,560
Balance, end of period, shares at Sep. 08, 2012 (0.8) (0.6) (1,865) (314)
[1] Includes total tax benefits of $57 million in 2012 and $35 million in 2011.
[2] Net of tax expense of $2 million and tax benefits of $10 million for the 12 and 36 weeks in 2012, respectively. Net of tax benefits of $27 million and $21 million for the 12 and 36 weeks in 2011, respectively.
[3] Net of tax benefits of $7 million and $21 million for the 12 and 36 weeks in 2012, respectively. Net of tax expense of $3 million and $8 million for the 12 and 36 weeks in 2011, respectively.
[4] Net of tax benefits of $17 million and $61 million for the 12 and 36 weeks in 2012, respectively. Net of tax benefits of $12 million and $26 million for the 12 and 36 weeks in 2011, respectively.
[5] Net of tax expense of $4 million for the 36 weeks in 2012.
[6] Net of tax benefits of $6 million and $7 million for the 12 and 36 weeks in 2011, respectively.
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CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Stock option exercises/RSUs converted, tax benefits $ 57 $ 35
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Basis of Presentation
9 Months Ended
Sep. 08, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Our Divisions
Basis of Presentation
 
Our Condensed Consolidated Statements of Income and Comprehensive Income for the 12 and 36 weeks ended September 8, 2012 and September 3, 2011, our Condensed Consolidated Statements of Cash Flows for the 36 weeks ended September 8, 2012 and September 3, 2011, our Condensed Consolidated Balance Sheet as of September 8, 2012 and our Condensed Consolidated Statements of Equity for the 36 weeks ended September 8, 2012 and September 3, 2011 have not been audited. These statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation. The results for the 12 and 36 weeks are not necessarily indicative of the results expected for the full year.
While our North America results are reported on a period calendar basis, most of our international operations report on a monthly calendar basis for which the months of June, July and August are reflected in our third quarter results.
In the first quarter of 2011, Quaker Foods North America (QFNA) changed its method of accounting for certain U.S. inventories from the last-in, first-out (LIFO) method to the average cost method. This change was considered preferable by management as we believe that the average cost method of accounting for all U.S. foods inventories improves our financial reporting by better matching revenues and expenses and better reflecting the current value of inventory. In addition, the change from the LIFO method to the average cost method enhances the comparability of QFNA’s financial results with our other food businesses, as well as with peer companies where the average cost method is widely used. The impact of this change on consolidated net income in the first quarter of 2011 was approximately $9 million (or less than a penny per share).
Our significant interim accounting policies include the recognition of a pro rata share of certain estimated annual sales incentives, and certain advertising and marketing costs, in proportion to revenue and volume, as applicable, and the recognition of income taxes using an estimated annual effective tax rate. Raw materials, direct labor and plant overhead, as well as purchasing and receiving costs, costs directly related to production planning, inspection costs and raw material handling facilities, are included in cost of sales. The costs of moving, storing and delivering finished product are included in selling, general and administrative expenses.
The following information is unaudited. Tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Certain reclassifications were made to the prior year’s amounts to conform to the 2012 presentation. This report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.
Our Divisions
We are organized into four business units, as follows:
1.
PepsiCo Americas Foods (PAF), which includes Frito-Lay North America (FLNA), Quaker Foods North America (QFNA) and all of our Latin American food and snack businesses (LAF);
2.
PepsiCo Americas Beverages (PAB), which includes all of our North American and Latin American beverage businesses;
3.
PepsiCo Europe, which includes all beverage, food and snack businesses in Europe and South Africa; and
4.
PepsiCo Asia, Middle East and Africa (AMEA), which includes all beverage, food and snack businesses in AMEA, excluding South Africa.
Our four business units comprise six reportable segments (also referred to as divisions), as follows:

FLNA,
QFNA,
LAF,
PAB,
Europe, and
AMEA.
 
12 Weeks Ended
 
36 Weeks Ended
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

Net Revenue
 
 
 
 
 
 
 
FLNA
$
3,269

 
$
3,173

 
$
9,472

 
$
9,167

QFNA
615

 
614

 
1,821

 
1,837

LAF
1,883

 
1,841

 
5,066

 
4,757

PAB
5,530

 
5,947

 
15,330

 
16,107

Europe
3,691

 
3,909

 
9,153

 
9,329

AMEA
1,664

 
2,098

 
4,696

 
5,149

 
$
16,652

 
$
17,582

 
$
45,538

 
$
46,346

 
 
 
 
 
 
 
 
 
12 Weeks Ended
 
36 Weeks Ended
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

Operating Profit
 
 
 
 
 
 
 
FLNA
$
917

 
$
918

 
$
2,532

 
$
2,545

QFNA
154

 
177

 
495

 
558

LAF
219

 
275

 
673

 
720

PAB
837

 
992

 
2,202

 
2,533

Europe
483

 
514

 
1,017

 
984

AMEA
317

 
285

 
630

 
730

Total division
2,927

 
3,161

 
7,549

 
8,070

Corporate Unallocated
 
 
 
 
 
 
 
Net impact of mark-to-market on commodity hedges
121

 
(53
)
 
126

 
(31
)
Restructuring and impairment charges
(7
)
 

 
(8
)
 

Merger and integration charges
2

 
(10
)
 

 
(64
)
Other
(243
)
 
(192
)
 
(768
)
 
(589
)
 
$
2,800

 
$
2,906

 
$
6,899

 
$
7,386


 
 
Total Assets
 
9/8/2012


12/31/2011

FLNA
$
6,075


$
6,120

QFNA
1,223


1,174

LAF
4,734


4,731

PAB
31,925


31,187

Europe
18,959


18,479

AMEA
5,669


6,048

Total division
68,585


67,739

Corporate(a)
5,432


5,143


$
74,017


$
72,882

 
 
 
 
(a)
Corporate assets consist principally of cash and cash equivalents, short-term investments, derivative instruments and property, plant and equipment.
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Acquisitions and Divestitures
9 Months Ended
Sep. 08, 2012
Business Combinations [Abstract]
Acquisitions and Divestitures
Acquisitions and Divestitures
WBD
On February 3, 2011, we acquired the ordinary shares, including shares underlying American Depositary Shares (ADS) and Global Depositary Shares (GDS), of WBD, a company incorporated in the Russian Federation, which represented in the aggregate approximately 66% of WBD’s outstanding ordinary shares, pursuant to the purchase agreement dated December 1, 2010 between PepsiCo and certain selling shareholders of WBD for approximately $3.8 billion in cash. The acquisition of those shares increased our total ownership to approximately 77%, giving us a controlling interest in WBD. Under the guidance on accounting for business combinations, once a controlling interest is obtained, we are required to recognize and measure 100% of the identifiable assets acquired, liabilities assumed and noncontrolling interests at their full fair values. Our fair market valuations of the identifiable assets acquired and liabilities assumed have been completed and the final valuations did not materially differ from those fair values reported as of December 31, 2011.
On March 10, 2011, we commenced tender offers in Russia and the U.S. for all remaining outstanding ordinary shares and ADSs of WBD for 3,883.70 Russian rubles per ordinary share and 970.925 Russian rubles per ADS, respectively. The Russian offer was made to all holders of ordinary shares and the U.S. offer was made to all holders of ADSs. We completed the Russian offer on May 19, 2011 and the U.S. offer on May 16, 2011. After completion of the offers, we paid approximately $1.3 billion for WBD’s ordinary shares (including shares underlying ADSs) and increased our total ownership of WBD to approximately 98.6%.
On June 30, 2011, we elected to exercise our squeeze-out rights under Russian law with respect to all remaining WBD ordinary shares not already owned by us. Therefore, under Russian law, all remaining WBD shareholders were required to sell their ordinary shares (including those underlying ADSs) to us at the same price that was offered to WBD shareholders in the Russian tender offer. Accordingly, all registered holders of ordinary shares on August 15, 2011 (including the ADS depositary) received 3,883.70 Russian rubles per ordinary share. After completion of the squeeze-out in September 2011 (during our fourth quarter), we paid approximately $79 million for WBD’s ordinary shares (including shares underlying ADSs) and increased our total ownership to 100% of WBD.
Tingyi-Asahi Beverages Holding Co Ltd
On March 31, 2012 , we completed a transaction with Tingyi. Under the terms of the agreement, we contributed our company-owned and joint venture bottling operations in China to Tingyi’s beverage subsidiary, Tingyi-Asahi Beverages Holding Co Ltd (TAB), and received as consideration a 5% indirect equity interest in TAB. As a result of this transaction, TAB is now our franchise bottler in China. We also have a call option to increase our indirect holding in TAB to 20% by 2015. We recorded restructuring and other charges of $137 million ($163 million after-tax or $0.10 per share), primarily consisting of employee-related charges, in our second quarter 2012 results. This charge is reflected in items affecting comparability (see “Items Affecting Comparability” in Management’s Discussion and Analysis of Financial Condition and Results of Operations).
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Intangible Assets
9 Months Ended
Sep. 08, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets Disclosure [Text Block]
Intangible Assets
 
9/8/2012

 
12/31/2011

Amortizable intangible assets, net
 
 
 
Acquired franchise rights
$
932

 
$
916

Reacquired franchise rights
110

 
110

Brands
1,432

 
1,417

Other identifiable intangibles
701

 
777

 
3,175

 
3,220

Accumulated amortization
(1,376
)
 
(1,332
)
 
$
1,799

 
$
1,888






The change in the book value of nonamortizable intangible assets is as follows:
 
 
Balance
 
Acquisitions/
Divestitures
 
Translation
and Other
 
Balance

12/31/2011
 
 
 
9/8/2012
FLNA

 

 

 

Goodwill
$
311

 
$

 
$
7

 
$
318

Brands
30

 

 
2

 
32


341

 

 
9

 
350

 
 
 
 
 
 
 
 
QFNA

 

 

 

Goodwill
175

 

 

 
175

 
 
 
 
 
 
 
 
LAF

 

 

 

Goodwill
793

 
(83
)
 
(17
)
 
693

Brands
157

 
109

 
(15
)
 
251


950

 
26

 
(32
)
 
944

 
 
 
 
 
 
 
 
PAB

 

 

 

Goodwill
9,932

 
23

 
42

 
9,997

Reacquired franchise rights
7,342

 
(33
)
 
42

 
7,351

Acquired franchise rights
1,562

 
9

 
3

 
1,574

Brands
168

 

 
(17
)
 
151


19,004

 
(1
)
 
70

 
19,073

 
 
 
 
 
 
 
 
Europe

 

 

 

Goodwill
4,900

 
78

 
(16
)
 
4,962

Reacquired franchise rights
732

 

 
(2
)
 
730

Acquired franchise rights
218

 

 
(5
)
 
213

Brands
4,178

 
(96
)
 
(21
)
(a) 
4,061


10,028

 
(18
)
 
(44
)
 
9,966

 
 
 
 
 
 
 
 
AMEA

 

 

 

Goodwill
689

 
(142
)
 
9

 
556

Brands
170

 
(24
)
 
2

 
148


859

 
(166
)
 
11

 
704

 
 
 
 
 
 
 
 
Total goodwill
16,800

 
(124
)
 
25

 
16,701

Total reacquired franchise rights
8,074

 
(33
)
 
40

 
8,081

Total acquired franchise rights
1,780

 
9

 
(2
)
 
1,787

Total brands
4,703

 
(11
)
 
(49
)
 
4,643


$
31,357

 
$
(159
)
 
$
14

 
$
31,212

 
 
 
 
 
 
 
 

(a) In the 12 and 36 weeks ended September 8, 2012, we recorded an impairment charge of $23 million, primarily related to our business operations in Greece.
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Stock-Based Compensation
9 Months Ended
Sep. 08, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation
Stock-Based Compensation
In the 12 weeks ended September 8, 2012, we recognized stock-based compensation expense of $69 million ($68 million recorded as stock-based compensation expense and $1 million included in merger and integration charges). In the 36 weeks ended September 8, 2012, we recognized stock-based compensation expense of $188 million ($193 million recorded as stock-based compensation expense, $2 million included in merger and integration charges and income of $7 million included in restructuring and impairment charges). In the 12 weeks ended September 3, 2011, we recognized stock-based compensation expense of $77 million ($76 million recorded as stock-based compensation expense and $1 million included in merger and integration charges). In the 36 weeks ended September 3, 2011, we recognized stock-based compensation expense of $232 million ($222 million recorded as stock-based compensation expense and $10 million included in merger and integration charges).
In the 12 weeks ended September 8, 2012, our grants of stock options and restricted stock units (RSU) were nominal. In the 36 weeks ended September 8, 2012, we granted 3.6 million stock options and 4.3 million RSUs at weighted-average grant prices of $66.94 and $66.51, respectively, under the terms of our 2007 Long-Term Incentive Plan. In the 12 weeks ended September 3, 2011, our grants of stock options and RSUs were nominal. In the 36 weeks ended September 3, 2011, we granted 6.8 million stock options and 5.2 million RSUs at weighted-average grant prices of $64.28 and $63.88, respectively, under the terms of our 2007 Long-Term Incentive Plan.
Our weighted-average Black-Scholes fair value assumptions are as follows: 
 
36 Weeks Ended
 
9/8/2012

 
9/3/2011

Expected life
6 years

 
6 years

Risk free interest rate
1.3
%
 
2.5
%
Expected volatility(a)
17
%
 
16
%
Expected dividend yield
3.0
%
 
2.9
%

(a)
Reflects movements in our stock price over the most recent historical period equivalent to the expected life.
In the 36 weeks ended September 8, 2012, as part of our 2007 Long-Term Incentive Plan, we granted a nominal amount of PepsiCo equity performance units (PEPUnits) to certain executive officers. These PEPUnits are earned based on achievement of a cumulative net income performance target and provide an opportunity to earn shares of PepsiCo Common Stock with a value that adjusts based upon absolute changes in PepsiCo’s stock price as well as PepsiCo’s Total Shareholder Return relative to the S&P 500 over a three-year performance period.
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Pension and Retiree Medical Benefits
9 Months Ended
Sep. 08, 2012
Compensation and Retirement Disclosure [Abstract]
Pension and Retiree Medical Benefits
Pension and Retiree Medical Benefits
The components of net periodic benefit cost for pension and retiree medical plans are as follows:
 
 
12 Weeks Ended
 
Pension
 
Retiree Medical
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
U.S.
 
International
 
 
Service cost
$
93

 
$
80

 
$
23

 
$
22

 
$
12

 
$
12

Interest cost
124

 
127

 
27

 
28

 
15

 
20

Expected return on plan assets
(183
)
 
(163
)
 
(34
)
 
(32
)
 
(5
)
 
(3
)
Amortization of prior service cost/(benefit)
4

 
3

 

 
1

 
(6
)
 
(6
)
Amortization of experience loss
60

 
34

 
13

 
10

 

 
2

 
98

 
81

 
29

 
29

 
16

 
25

Settlement/Curtailment gain

 

 
(2
)
 

 

 

Special termination benefits
2

 

 

 

 

 

Total expense
$
100

 
$
81

 
$
27

 
$
29

 
$
16

 
$
25

 
 
 
 
 
 
 
 
 
 
 
 
 
36 Weeks Ended
 
Pension
 
Retiree Medical
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
U.S.
 
International
 
 
Service cost
$
282

 
$
242

 
$
65

 
$
62

 
$
35

 
$
35

Interest cost
370

 
379

 
75

 
77

 
45

 
61

Expected return on plan assets
(550
)
 
(487
)
 
(95
)
 
(89
)
 
(15
)
 
(10
)
Amortization of prior service cost/(benefit)
12

 
10

 
1

 
2

 
(18
)
 
(19
)
Amortization of experience loss
179

 
101

 
35

 
26

 

 
8

 
293

 
245

 
81

 
78

 
47

 
75

Settlement/Curtailment (gain)/loss
(7
)
 
(9
)
 
1

 

 

 

Special termination benefits
6

 
10

 

 

 
4

 
1

Total expense
$
292

 
$
246

 
$
82

 
$
78

 
$
51

 
$
76


During the first quarter of 2012, as part of our ongoing program to reduce volatility associated with our pension plans, we made discretionary contributions of $860 million to our pension plans and $140 million to our retiree medical plans.
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Income Taxes
9 Months Ended
Sep. 08, 2012
Income Tax Disclosure [Abstract]
Income Taxes
Income Taxes
A rollforward of our reserves for all federal, state and foreign tax jurisdictions is as follows:
 
 
9/8/2012

 
12/31/2011

Balance, beginning of year
$
2,167

 
$
2,022

Additions for tax positions related to the current year
190

 
233

Additions for tax positions from prior years
101

 
147

Reductions for tax positions from prior years
(25
)
 
(46
)
Settlement payments
(10
)
 
(156
)
Statute of limitations expiration

 
(15
)
Translation and other
5

 
(18
)
Balance, end of period
$
2,428

 
$
2,167



On September 20, 2012, during our fourth quarter, the U.S. Tax Court issued a decision in our favor in the tax court trial related to classification of financial instruments for the 1998-2002 audit cycle.  This decision remains subject to appeal by the U.S. government.
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Net Income Attributable to PepsiCo per Common Share
9 Months Ended
Sep. 08, 2012
Earnings Per Share [Abstract]
Net Income Attributable to PepsiCo per Common Share
Net Income Attributable to PepsiCo per Common Share
The computations of basic and diluted net income attributable to PepsiCo per common share are as follows: 
 
12 Weeks Ended
 
9/8/2012

9/3/2011
 
Income

Shares(a)

Income

Shares(a)
Net income attributable to PepsiCo
$
1,902




$
2,000



Preferred shares:







Dividends







Redemption premium
(1
)



(1
)


Net income available for PepsiCo common shareholders
$
1,901


1,556


$
1,999


1,578

Basic net income attributable to PepsiCo per common share
$
1.22




$
1.27



Net income available for PepsiCo common shareholders
$
1,901


1,556


$
1,999


1,578

Dilutive securities:







Stock options and RSUs(b)


18




20

ESOP convertible preferred stock
1


1


1


1

Diluted
$
1,902


1,575


$
2,000


1,599

Diluted net income attributable to PepsiCo per common share
$
1.21




$
1.25



 

36 Weeks Ended
 
9/8/2012

9/3/2011
 
Income

Shares(a)

Income

Shares(a)
Net income attributable to PepsiCo
$
4,517




$
5,028



Preferred shares:







Dividends
(1
)



(1
)


Redemption premium
(4
)



(4
)


Net income available for PepsiCo common shareholders
$
4,512


1,562


$
5,023


1,581

Basic net income attributable to PepsiCo per common share
$
2.89




$
3.18



Net income available for PepsiCo common shareholders
$
4,512


1,562


$
5,023


1,581

Dilutive securities:







Stock options and RSUs(b)


17




21

ESOP convertible preferred stock
5


1


5


1

Diluted
$
4,517


1,580


$
5,028


1,603

Diluted net income attributable to PepsiCo per common share
$
2.86




$
3.14



 
 
 
 
 
 
 
 
(a)
Weighted-average common shares outstanding (in millions).
(b)
Options to purchase 0.6 million and 13.5 million shares, respectively, for the 12 and 36 weeks in 2012 were not included in the calculation of earnings per share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $72.26 and $67.51, respectively. Options to purchase 22.1 million and 21.2 million shares, respectively, for the 12 and 36 weeks in 2011 were not included in the calculation of earnings per share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $67.67 and $67.46, respectively.
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Debt Obligations and Commitments
9 Months Ended
Sep. 08, 2012
Debt Obligations and Commitments [Abstract]
Debt Obligations and Commitments
Debt Obligations and Commitments
In the first quarter of 2012, we issued:
$750 million of 0.750% senior notes maturing in 2015;
$1.250 billion of 2.750% senior notes maturing in 2022; and
$750 million of 4.000% senior notes maturing in 2042.
In the third quarter of 2012, we issued:
$900 million of 0.700% senior notes maturing in 2015;
$1.000 billion of 1.250% senior notes maturing in 2017; and
$600 million of 3.600% senior notes maturing in 2042.
The net proceeds from the issuances of the above notes were used for general corporate purposes, including the repayment of commercial paper.
In the second quarter of 2012, we extended the termination date of our four-year unsecured revolving credit agreement (Four-Year Credit Agreement) from June 14, 2015 to June 14, 2016 and the termination date of our 364-day unsecured revolving credit agreement (364-Day Credit Agreement) from June 12, 2012 to June 11, 2013. Funds borrowed under the Four-Year Credit Agreement and the 364-Day Credit Agreement may be used for general corporate purposes of PepsiCo and its subsidiaries, including, but not limited to, working capital, capital investments and acquisitions.
As of September 8, 2012, we had $0.9 billion of commercial paper outstanding.
Long-Term Contractual Commitments(a) 
 
 
Payments Due by Period
 
Total

 
2012

 
2013 –
2014

 
2015 –
2016

 
2017 and
beyond

Long-term debt obligations(b)
$
22,989

 
$

 
$
4,153

 
$
5,093

 
$
13,743

Interest on debt obligations(c)
8,882

 
300

 
1,656

 
1,311

 
5,615

Operating leases
1,754

 
142

 
680

 
388

 
544

Purchasing commitments
2,450

 
394

 
1,664

 
331

 
61

Marketing commitments
2,364

 
78

 
596

 
540

 
1,150

 
$
38,439

 
$
914

 
$
8,749

 
$
7,663

 
$
21,113

 
 
 
 
 
 
 
 
 
 
(a)
Reflects non-cancelable commitments as of September 8, 2012 based on foreign exchange rates in effect on the balance sheet date and excludes any reserves for uncertain tax positions as we are unable to reasonably predict the ultimate amount or timing of settlement.
(b)
Excludes $3,054 million related to current maturities of long-term debt, $390 million related to the fair value step-up of debt acquired in connection with our acquisitions of The Pepsi Bottling Group, Inc. (PBG) and PepsiAmericas, Inc. (PAS), and $353 million related to the increase in carrying value of long-term debt reflecting the gains on our fair value interest rate swaps.
(c)
Interest payments on floating-rate debt are estimated using interest rates effective as of September 8, 2012.
Most long-term contractual commitments, except for our long-term debt obligations, are not recorded on our balance sheet. Non-cancelable operating leases primarily represent building leases. Non-cancelable purchasing commitments are primarily for packaging materials, sugar and other sweeteners, oranges and orange juice. Non-cancelable marketing commitments are primarily for sports marketing. Bottler funding to independent bottlers is not reflected in our long-term contractual commitments as it is negotiated on an annual basis. Accrued liabilities for pension and retiree medical plans are not reflected in our long-term contractual commitments because they do not represent expected future cash outflows. See Pension and Retiree Medical Benefits for additional information regarding our pension and retiree medical obligations.
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Restructuring, Impairment and Integration Charges
9 Months Ended
Sep. 08, 2012
Restructuring and Related Activities [Abstract]
Restructuring, Impairment and Integration Charges
Restructuring, Impairment and Integration Charges
In the 12 weeks ended September 8, 2012, we incurred restructuring and impairment charges of $83 million ($59 million after-tax or $0.04 per share) in conjunction with our multi-year productivity plan (Productivity Plan), including $8 million recorded in the FLNA segment, $1 million recorded in the QFNA segment, $29 million recorded in the LAF segment, $33 million recorded in the PAB segment, $6 million recorded in the AMEA segment, $7 million recorded in corporate unallocated expenses and income of $1 million recorded in the Europe segment representing adjustments of previously recorded amounts. In the 36 weeks ended September 8, 2012, we incurred restructuring and impairment charges of $193 million ($139 million after-tax or $0.09 per share) in conjunction with our Productivity Plan, including $40 million recorded in the FLNA segment, $7 million recorded in the QFNA segment, $41 million recorded in the LAF segment, $76 million recorded in the PAB segment, $23 million recorded in the AMEA segment, $8 million recorded in corporate unallocated expenses and income of $2 million recorded in the Europe segment representing adjustments of previously recorded amounts. All of these net charges were recorded in selling, general and administrative expenses. The majority of cash payments related to these charges are expected to be paid by the end of 2012. The Productivity Plan includes actions in every aspect of our business that we believe will strengthen our complementary food, snack and beverage businesses by leveraging new technologies and processes across PepsiCo’s operations, go-to-market and information systems; heightening the focus on best practice sharing across the globe; consolidating manufacturing, warehouse and sales facilities; and implementing simplified organization structures, with wider spans of control and fewer layers of management. The Productivity Plan is expected to enhance PepsiCo’s cost-competitiveness, provide a source of funding for future brand-building and innovation initiatives, and serve as a financial cushion for potential macroeconomic uncertainty beyond 2012.
A summary of our Productivity Plan activity in 2012 is as follows:
 
 
Severance and Other
Employee Costs
 
Asset
Impairment
 
Other
Costs
 
Total
Liability as of December 31, 2011
$
249

 
$

 
$
27

 
$
276

2012 restructuring and impairment charges
51

 
57

 
85

 
193

Cash payments
(173
)
 

 
(70
)
 
(243
)
Non-cash charges
(7
)
 
(57
)
 
(2
)
 
(66
)
Liability as of September 8, 2012
$
120

 
$

 
$
40

 
$
160


In the 12 weeks ended September 8, 2012, we incurred merger and integration charges of $2 million ($2 million after-tax with a nominal amount per share) related to our acquisition of WBD, including $4 million recorded in the Europe segment and income of $2 million recorded in corporate unallocated expenses representing adjustments of previously recorded amounts. In the 36 weeks ended September 8, 2012, we incurred merger and integration charges of $7 million ($6 million after-tax with a nominal amount per share) related to our acquisition of WBD, all of which were recorded in the Europe segment. These charges were recorded in selling, general and administrative expenses. The majority of cash payments related to these charges are expected to be paid by the end of 2012.
In the 12 weeks ended September 3, 2011, we incurred merger and integration charges of $61 million ($53 million after-tax or $0.03 per share) related to our acquisitions of PBG, PAS and WBD, including $24 million recorded in the PAB segment, $11 million recorded in the Europe segment, $10 million recorded in corporate unallocated expenses and $16 million recorded in interest expense. In the 36 weeks ended September 3, 2011, we incurred merger and integration charges of $174 million ($147 million after-tax or $0.09 per share) related to our acquisitions of PBG, PAS and WBD, including $77 million recorded in the PAB segment, $17 million recorded in the Europe segment, $64 million recorded in corporate unallocated expenses and $16 million recorded in interest expense. All of these net charges, other than the interest expense portion, were recorded in selling, general and administrative expenses. These charges also include closing costs and advisory fees related to our acquisition of WBD. Substantially all cash payments related to these charges were paid by the end of 2011.
A summary of our merger and integration activity in 2012 is as follows:
 
 
Severance and Other
Employee Costs
 
Other Costs
 
Total
Liability as of December 31, 2011
$
98

 
$
7

 
$
105

2012 merger and integration charges
2

 
5

 
7

Cash payments
(50
)
 
(7
)
 
(57
)
Non-cash charges
(6
)
 

 
(6
)
Liability as of September 8, 2012
$
44

 
$
5

 
$
49

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Financial Instruments
9 Months Ended
Sep. 08, 2012
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Financial Instruments
Financial Instruments
We are exposed to market risks arising from adverse changes in:
commodity prices, affecting the cost of our raw materials and energy,
foreign exchange rates and currency restrictions, and
interest rates.
In the normal course of business, we manage these risks through a variety of strategies, including productivity initiatives, global purchasing programs and hedging strategies. Our hedging strategies include the use of derivatives. Certain derivatives are designated as either cash flow or fair value hedges and qualify for hedge accounting treatment, while others do not qualify and are marked to market through earnings. Cash flows from derivatives used to manage commodity, foreign exchange or interest risks are classified as operating activities. We classify both the earnings and cash flow impact from these derivatives consistent with the underlying hedged item. See “Our Business Risks” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for further unaudited information on our business risks.
For cash flow hedges, changes in fair value are deferred in accumulated other comprehensive loss within common shareholders’ equity until the underlying hedged item is recognized in net income. For fair value hedges, changes in fair value are recognized immediately in earnings, consistent with the underlying hedged item. Hedging transactions are limited to an underlying exposure. As a result, any change in the value of our derivative instruments would be substantially offset by an opposite change in the value of the underlying hedged items. Hedging ineffectiveness and a net earnings impact occur when the change in the value of the hedge does not offset the change in the value of the underlying hedged item. If the derivative instrument is terminated, we continue to defer the related gain or loss and then include it as a component of the cost of the underlying hedged item. Upon determination that the underlying hedged item will not be part of an actual transaction, we recognize the related gain or loss in net income immediately.
We also use derivatives that do not qualify for hedge accounting treatment. We account for such derivatives at market value with the resulting gains and losses reflected in our income statement. We do not use derivative instruments for trading or speculative purposes. We perform assessments of our counterparty credit risk regularly, including a review of credit ratings, credit default swap rates and potential nonperformance of the counterparty. Based on our most recent assessment of our counterparty credit risk, we consider this risk to be low. In addition, we enter into derivative contracts with a variety of financial institutions that we believe are creditworthy in order to reduce our concentration of credit risk.
Commodity Prices
We are subject to commodity price risk because our ability to recover increased costs through higher pricing may be limited in the competitive environment in which we operate. This risk is managed through the use of fixed-price purchase orders, pricing agreements and derivatives. In addition, risk to our supplies of certain raw materials is mitigated through purchases from multiple geographies and suppliers. We use derivatives, with terms of no more than three years, to economically hedge price fluctuations related to a portion of our anticipated commodity purchases, primarily for metals, energy and agricultural products. For those derivatives that qualify for hedge accounting, any ineffectiveness is recorded immediately in corporate unallocated expenses. Ineffectiveness is not material. During the next 12 months, we expect to reclassify net losses of $23 million related to these hedges from accumulated other comprehensive loss into net income. Derivatives used to hedge commodity price risk that do not qualify for hedge accounting are marked to market each period and reflected in our income statement.
Our open commodity derivative contracts that qualify for hedge accounting had a face value of $488 million as of September 8, 2012 and $586 million as of September 3, 2011.
Our open commodity derivative contracts that do not qualify for hedge accounting had a face value of $636 million as of September 8, 2012 and $537 million as of September 3, 2011.
Foreign Exchange
Financial statements of foreign subsidiaries are translated into U.S. dollars using period-end exchange rates for assets and liabilities and weighted-average exchange rates for revenues and expenses. Adjustments resulting from translating net assets are reported as a separate component of accumulated other comprehensive loss within common shareholders’ equity as currency translation adjustment.
We enter into derivatives, primarily forward contracts with terms of no more than two years, to manage our exposure to foreign currency transaction risk. Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses in our income statement as incurred.
Our foreign currency derivatives had a total face value of $2.5 billion as of September 8, 2012 and September 3, 2011. During the next 12 months, we expect to reclassify net losses of $17 million related to foreign currency contracts that qualify for hedge accounting from accumulated other comprehensive loss into net income. Additionally, ineffectiveness is not material. For foreign currency derivatives that do not qualify for hedge accounting treatment, all losses and gains were offset by changes in the underlying hedged items, resulting in no net material impact on earnings.
Interest Rates
We centrally manage our debt and investment portfolios considering investment opportunities and risks, tax consequences and overall financing strategies. We use various interest rate derivative instruments including, but not limited to, interest rate swaps, cross currency interest rate swaps, Treasury locks and swap locks to manage our overall interest expense and foreign exchange risk. These instruments effectively change the interest rate and currency of specific debt issuances. Certain of our fixed rate indebtedness has been swapped to floating rates. The notional amount, interest payment and maturity date of the interest rate and cross-currency swaps match the principal, interest payment and maturity date of the related debt. Our Treasury locks and swap locks are entered into to protect against unfavorable interest rate changes relating to forecasted debt transactions.
The notional amounts of the interest rate derivative instruments outstanding as of September 8, 2012 and September 3, 2011 were $7.3 billion and $8.9 billion, respectively. For those interest rate derivative instruments that qualify for cash flow hedge accounting, any ineffectiveness is recorded immediately. Ineffectiveness is not material. During the next 12 months, we expect to reclassify net losses of $23 million related to these hedges from accumulated other comprehensive loss into net income.
As of September 8, 2012, approximately 26% of total debt, after the impact of the related interest rate derivative instruments, was exposed to variable rates, compared to 38% as of December 31, 2011.
Fair Value Measurements
The fair values of our financial assets and liabilities as of September 8, 2012 and September 3, 2011 are categorized as follows:
 
 
2012
 
2011
 
Assets(a)
 
Liabilities(a)
 
Assets(a)
 
Liabilities(a)
Available-for-sale securities(b)
$
61

 
$

 
$
61

 
$

Short-term investments – index funds(c)
$
164

 
$

 
$
159

 
$

Prepaid forward contracts(d)
$
41

 
$

 
$
38

 
$

Deferred compensation(e)
$

 
$
503

 
$

 
$
519

Derivatives designated as fair value hedging instruments:
 
 
 
 
 
 
Interest rate derivatives(f)
$
293

 
$

 
$
428

 
$

Derivatives designated as cash flow hedging instruments:
 
 
 
 
Foreign exchange contracts(g)
$
10

 
$
31

 
$
12

 
$
23

Interest rate derivatives(f)

 

 

 
56

Commodity contracts(h)
13

 
38

 
28

 
17

 
$
23

 
$
69

 
$
40

 
$
96

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
Foreign exchange contracts(g)
$
30

 
$
6

 
$
5

 
$
19

Interest rate derivatives(f)
128

 
159

 
104

 
140

Commodity contracts(h)
84

 
25

 
24

 
30

 
$
242

 
$
190

 
$
133

 
$
189

Total derivatives at fair value
$
558

 
$
259

 
$
601

 
$
285

Total
$
824

 
$
762

 
$
859

 
$
804

 
 
 
 
 
 
 
 
(a)
Financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets, with the exception of available-for-sale securities and short-term investments. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities. Unless specifically indicated, all financial assets and liabilities are categorized as Level 2 assets or liabilities.
(b)
Based on the price of common stock. Categorized as a Level 1 asset.
(c)
Based on price changes in index funds used to manage a portion of market risk arising from our deferred compensation liability. Categorized as a Level 1 asset.
(d)
Based primarily on the price of our common stock.
(e)
Based on the fair value of investments corresponding to employees’ investment elections. As of September 8, 2012 and September 3, 2011, $11 million and $43 million, respectively, are categorized as Level 1 liabilities. The remaining balances are categorized as Level 2 liabilities.
(f)
Based on LIBOR forward rates.
(g)
Based on recently reported market transactions of spot and forward rates.
(h)
Based on recently reported market transactions, primarily swap arrangements.
The fair value of our debt obligations as of September 8, 2012 was $30 billion, based upon prices of similar instruments in the marketplace.

The effective portion of the pre-tax (gains)/losses on our derivative instruments are categorized in the tables below.
 
12 Weeks Ended
 
Fair Value/Non-
designated Hedges
 
Cash Flow Hedges
 
(Gains)/Losses
Recognized in
Income Statement(a)
 
Losses/(Gains)
Recognized in
Accumulated Other
Comprehensive Loss
 
Losses/(Gains)
Reclassified from
Accumulated Other
Comprehensive Loss
into Income
Statement(b)
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

Foreign exchange contracts
$
(9
)
 
$
7

 
$
41

 
$
(9
)
 
$
(6
)
 
$
9

Interest rate derivatives
(5
)
 
(84
)
 

 
42

 
6

 
4

Commodity contracts
(99
)
 
29

 
(28
)
 
40

 
20

 
(12
)
Total
$
(113
)
 
$
(48
)
 
$
13

 
$
73

 
$
20

 
$
1

 
 
36 Weeks Ended
 
Fair Value/Non-
designated Hedges
 
Cash Flow Hedges
 
(Gains)/Losses
Recognized in
Income Statement(a)
 
Losses/(Gains)
Recognized in
Accumulated Other
Comprehensive Loss
 
Losses/(Gains)
Reclassified from
Accumulated Other
Comprehensive Loss
into Income
Statement(b)
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

Foreign exchange contracts
$
(16
)
 
$
8

 
$
37

 
$
28

 
$
(4
)
 
$
30

Interest rate derivatives
3

 
(162
)
 
4

 
71

 
15

 
10

Commodity contracts
(76
)
 
(17
)
 
9

 
(15
)
 
47

 
(37
)
Total
$
(89
)
 
$
(171
)
 
$
50

 
$
84

 
$
58

 
$
3

 
 
 
 
 
 
 
 
 
 
 
 
(a)
Interest rate derivatives gains/losses are primarily from fair value hedges and are included in interest expense. These gains/losses are substantially offset by increases/decreases in the value of the underlying debt, which are also included in interest expense. All other gains/losses are from non-designated hedges and are included in corporate unallocated expenses.
(b)
Interest rate losses are included in interest expense. All other gains/losses are primarily included in cost of sales.
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Recent Accounting Pronouncements
9 Months Ended
Sep. 08, 2012
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recent Accounting Pronouncements
Recent Accounting Pronouncements

In the second quarter of 2010, the Patient Protection and Affordable Care Act (PPACA) was signed into law. The PPACA changes the tax treatment related to an existing retiree drug subsidy (RDS) available to sponsors of retiree health benefit plans that provide a benefit that is at least actuarially equivalent to the benefits under Medicare Part D. As a result of the PPACA, RDS payments will effectively become taxable in tax years beginning in 2013, by requiring the amount of the subsidy received to be offset against our deduction for health care expenses. The provisions of the PPACA required us to record the effect of this tax law change beginning in our second quarter of 2010, and consequently we recorded a one-time related tax charge of $41 million in the second quarter of 2010. In the first quarter of 2012, we began pre-paying funds within our
401(h) voluntary employee beneficiary associations (VEBA) trust to fully cover prescription drug benefit liabilities for Medicare eligible retirees. As a result, the receipt of future Medicare subsidy payments for prescription drugs will not be taxable and, consequently, we recorded a $55 million tax benefit reflecting this change in the first quarter of 2012.
In June 2011, the Financial Accounting Standards Board (FASB) amended its accounting guidance on the presentation of comprehensive income in financial statements to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items that are recorded in other comprehensive income. The new accounting guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The provisions of the guidance were effective as of the beginning of our 2012 fiscal year. Accordingly, we have presented the components of net income and other comprehensive income for the 12 and 36 weeks ended September 8, 2012 and September 3, 2011 as two separate but consecutive statements. In June 2012, the FASB issued a new proposal that would require an entity to provide enhanced footnote disclosures to explain the effect of reclassification adjustments on other comprehensive income by component and provide a tabular disclosure in the footnotes showing the effect of items reclassified from accumulated other comprehensive income on the line items of net income. We will continue to monitor the FASB’s activities related to the proposed guidance.
In September 2011, the FASB issued new accounting guidance that permits an entity to first assess qualitative factors of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. An entity would continue to perform the historical first step of the impairment test if it fails the qualitative assessment, while no further analysis would be required if it passes. The provisions of the new guidance were effective for, and had no impact on, our 2012 annual goodwill impairment test results.
In December 2011, the FASB issued new disclosure requirements that are intended to enhance current disclosures on offsetting financial assets and liabilities. The new disclosures require an entity to disclose both gross and net information about financial instruments eligible for offset on the balance sheet and instruments and transactions subject to an agreement similar to a master netting arrangement. The provisions of the new disclosure requirements are effective as of the beginning of our 2014 fiscal year. We are currently evaluating the impact of the new guidance on our financial statements.
In July 2012, the FASB issued new accounting guidance that permits an entity to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform a quantitative impairment test. An entity would continue to calculate the fair value of an indefinite-lived intangible asset if the asset fails the qualitative assessment, while no further analysis would be required if it passes. The provisions of the new guidance are effective as of the beginning of our 2013 fiscal year; we do not expect the new guidance to have an impact on the 2013 impairment test results.
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Basis of Presentation (Tables)
9 Months Ended
Sep. 08, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Segment Reporting Information, By Segment
Our four business units comprise six reportable segments (also referred to as divisions), as follows:

FLNA,
QFNA,
LAF,
PAB,
Europe, and
AMEA.
 
12 Weeks Ended
 
36 Weeks Ended
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

Net Revenue
 
 
 
 
 
 
 
FLNA
$
3,269

 
$
3,173

 
$
9,472

 
$
9,167

QFNA
615

 
614

 
1,821

 
1,837

LAF
1,883

 
1,841

 
5,066

 
4,757

PAB
5,530

 
5,947

 
15,330

 
16,107

Europe
3,691

 
3,909

 
9,153

 
9,329

AMEA
1,664

 
2,098

 
4,696

 
5,149

 
$
16,652

 
$
17,582

 
$
45,538

 
$
46,346

 
 
 
 
 
 
 
 
 
12 Weeks Ended
 
36 Weeks Ended
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

Operating Profit
 
 
 
 
 
 
 
FLNA
$
917

 
$
918

 
$
2,532

 
$
2,545

QFNA
154

 
177

 
495

 
558

LAF
219

 
275

 
673

 
720

PAB
837

 
992

 
2,202

 
2,533

Europe
483

 
514

 
1,017

 
984

AMEA
317

 
285

 
630

 
730

Total division
2,927

 
3,161

 
7,549

 
8,070

Corporate Unallocated
 
 
 
 
 
 
 
Net impact of mark-to-market on commodity hedges
121

 
(53
)
 
126

 
(31
)
Restructuring and impairment charges
(7
)
 

 
(8
)
 

Merger and integration charges
2

 
(10
)
 

 
(64
)
Other
(243
)
 
(192
)
 
(768
)
 
(589
)
 
$
2,800

 
$
2,906

 
$
6,899

 
$
7,386

Segment Reporting Information By Total Assets
 
Total Assets
 
9/8/2012


12/31/2011

FLNA
$
6,075


$
6,120

QFNA
1,223


1,174

LAF
4,734


4,731

PAB
31,925


31,187

Europe
18,959


18,479

AMEA
5,669


6,048

Total division
68,585


67,739

Corporate(a)
5,432


5,143


$
74,017


$
72,882

 
 
 
 
(a)
Corporate assets consist principally of cash and cash equivalents, short-term investments, derivative instruments and property, plant and equipment.
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Intangible Assets (Tables)
9 Months Ended
Sep. 08, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Amortizable Intangible Assets
Intangible Assets
 
9/8/2012

 
12/31/2011

Amortizable intangible assets, net
 
 
 
Acquired franchise rights
$
932

 
$
916

Reacquired franchise rights
110

 
110

Brands
1,432

 
1,417

Other identifiable intangibles
701

 
777

 
3,175

 
3,220

Accumulated amortization
(1,376
)
 
(1,332
)
 
$
1,799

 
$
1,888

Schedule Of Change In Book Value Of Nonamortizable Intangible Assets
The change in the book value of nonamortizable intangible assets is as follows:
 
 
Balance
 
Acquisitions/
Divestitures
 
Translation
and Other
 
Balance

12/31/2011
 
 
 
9/8/2012
FLNA

 

 

 

Goodwill
$
311

 
$

 
$
7

 
$
318

Brands
30

 

 
2

 
32


341

 

 
9

 
350

 
 
 
 
 
 
 
 
QFNA

 

 

 

Goodwill
175

 

 

 
175

 
 
 
 
 
 
 
 
LAF

 

 

 

Goodwill
793

 
(83
)
 
(17
)
 
693

Brands
157

 
109

 
(15
)
 
251


950

 
26

 
(32
)
 
944

 
 
 
 
 
 
 
 
PAB

 

 

 

Goodwill
9,932

 
23

 
42

 
9,997

Reacquired franchise rights
7,342

 
(33
)
 
42

 
7,351

Acquired franchise rights
1,562

 
9

 
3

 
1,574

Brands
168

 

 
(17
)
 
151


19,004

 
(1
)
 
70

 
19,073

 
 
 
 
 
 
 
 
Europe

 

 

 

Goodwill
4,900

 
78

 
(16
)
 
4,962

Reacquired franchise rights
732

 

 
(2
)
 
730

Acquired franchise rights
218

 

 
(5
)
 
213

Brands
4,178

 
(96
)
 
(21
)
(a) 
4,061


10,028

 
(18
)
 
(44
)
 
9,966

 
 
 
 
 
 
 
 
AMEA

 

 

 

Goodwill
689

 
(142
)
 
9

 
556

Brands
170

 
(24
)
 
2

 
148


859

 
(166
)
 
11

 
704

 
 
 
 
 
 
 
 
Total goodwill
16,800

 
(124
)
 
25

 
16,701

Total reacquired franchise rights
8,074

 
(33
)
 
40

 
8,081

Total acquired franchise rights
1,780

 
9

 
(2
)
 
1,787

Total brands
4,703

 
(11
)
 
(49
)
 
4,643


$
31,357

 
$
(159
)
 
$
14

 
$
31,212

 
 
 
 
 
 
 
 

(a) In the 12 and 36 weeks ended September 8, 2012, we recorded an impairment charge of $23 million, primarily related to our business operations in Greece.
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Stock-Based Compensation (Tables)
9 Months Ended
Sep. 08, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule Of Weighted-Average Black-Scholes Fair Value Assumptions
Our weighted-average Black-Scholes fair value assumptions are as follows: 
 
36 Weeks Ended
 
9/8/2012

 
9/3/2011

Expected life
6 years

 
6 years

Risk free interest rate
1.3
%
 
2.5
%
Expected volatility(a)
17
%
 
16
%
Expected dividend yield
3.0
%
 
2.9
%
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Pension and Retiree Medical Benefits (Tables)
9 Months Ended
Sep. 08, 2012
Compensation and Retirement Disclosure [Abstract]
Components Of Benefit Expense
The components of net periodic benefit cost for pension and retiree medical plans are as follows:
 
 
12 Weeks Ended
 
Pension
 
Retiree Medical
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
U.S.
 
International
 
 
Service cost
$
93

 
$
80

 
$
23

 
$
22

 
$
12

 
$
12

Interest cost
124

 
127

 
27

 
28

 
15

 
20

Expected return on plan assets
(183
)
 
(163
)
 
(34
)
 
(32
)
 
(5
)
 
(3
)
Amortization of prior service cost/(benefit)
4

 
3

 

 
1

 
(6
)
 
(6
)
Amortization of experience loss
60

 
34

 
13

 
10

 

 
2

 
98

 
81

 
29

 
29

 
16

 
25

Settlement/Curtailment gain

 

 
(2
)
 

 

 

Special termination benefits
2

 

 

 

 

 

Total expense
$
100

 
$
81

 
$
27

 
$
29

 
$
16

 
$
25

 
 
 
 
 
 
 
 
 
 
 
 
 
36 Weeks Ended
 
Pension
 
Retiree Medical
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
U.S.
 
International
 
 
Service cost
$
282

 
$
242

 
$
65

 
$
62

 
$
35

 
$
35

Interest cost
370

 
379

 
75

 
77

 
45

 
61

Expected return on plan assets
(550
)
 
(487
)
 
(95
)
 
(89
)
 
(15
)
 
(10
)
Amortization of prior service cost/(benefit)
12

 
10

 
1

 
2

 
(18
)
 
(19
)
Amortization of experience loss
179

 
101

 
35

 
26

 

 
8

 
293

 
245

 
81

 
78

 
47

 
75

Settlement/Curtailment (gain)/loss
(7
)
 
(9
)
 
1

 

 

 

Special termination benefits
6

 
10

 

 

 
4

 
1

Total expense
$
292

 
$
246

 
$
82

 
$
78

 
$
51

 
$
76

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Income Taxes (Tables)
9 Months Ended
Sep. 08, 2012
Income Tax Disclosure [Abstract]
Reserves Rollforward
A rollforward of our reserves for all federal, state and foreign tax jurisdictions is as follows:
 
 
9/8/2012

 
12/31/2011

Balance, beginning of year
$
2,167

 
$
2,022

Additions for tax positions related to the current year
190

 
233

Additions for tax positions from prior years
101

 
147

Reductions for tax positions from prior years
(25
)
 
(46
)
Settlement payments
(10
)
 
(156
)
Statute of limitations expiration

 
(15
)
Translation and other
5

 
(18
)
Balance, end of period
$
2,428

 
$
2,167

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Net Income Attributable to PepsiCo per Common Share (Tables)
9 Months Ended
Sep. 08, 2012
Earnings Per Share [Abstract]
Basic And Diluted Net Income Attributable To PepsiCo Per Common Share
Net Income Attributable to PepsiCo per Common Share
The computations of basic and diluted net income attributable to PepsiCo per common share are as follows: 
 
12 Weeks Ended
 
9/8/2012

9/3/2011
 
Income

Shares(a)

Income

Shares(a)
Net income attributable to PepsiCo
$
1,902




$
2,000



Preferred shares:







Dividends







Redemption premium
(1
)



(1
)


Net income available for PepsiCo common shareholders
$
1,901


1,556


$
1,999


1,578

Basic net income attributable to PepsiCo per common share
$
1.22




$
1.27



Net income available for PepsiCo common shareholders
$
1,901


1,556


$
1,999


1,578

Dilutive securities:







Stock options and RSUs(b)


18




20

ESOP convertible preferred stock
1


1


1


1

Diluted
$
1,902


1,575


$
2,000


1,599

Diluted net income attributable to PepsiCo per common share
$
1.21




$
1.25



 

36 Weeks Ended
 
9/8/2012

9/3/2011
 
Income

Shares(a)

Income

Shares(a)
Net income attributable to PepsiCo
$
4,517




$
5,028



Preferred shares:







Dividends
(1
)



(1
)


Redemption premium
(4
)



(4
)


Net income available for PepsiCo common shareholders
$
4,512


1,562


$
5,023


1,581

Basic net income attributable to PepsiCo per common share
$
2.89




$
3.18



Net income available for PepsiCo common shareholders
$
4,512


1,562


$
5,023


1,581

Dilutive securities:







Stock options and RSUs(b)


17




21

ESOP convertible preferred stock
5


1


5


1

Diluted
$
4,517


1,580


$
5,028


1,603

Diluted net income attributable to PepsiCo per common share
$
2.86




$
3.14



 
 
 
 
 
 
 
 
(a)
Weighted-average common shares outstanding (in millions).
(b)
Options to purchase 0.6 million and 13.5 million shares, respectively, for the 12 and 36 weeks in 2012 were not included in the calculation of earnings per share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $72.26 and $67.51, respectively. Options to purchase 22.1 million and 21.2 million shares, respectively, for the 12 and 36 weeks in 2011 were not included in the calculation of earnings per share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $67.67 and $67.46, respectively.
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Debt Obligations and Commitments (Tables)
9 Months Ended
Sep. 08, 2012
Debt Obligations and Commitments [Abstract]
Schedule Of Long-Term Contractual Commitments
Long-Term Contractual Commitments(a) 
 
 
Payments Due by Period
 
Total

 
2012

 
2013 –
2014

 
2015 –
2016

 
2017 and
beyond

Long-term debt obligations(b)
$
22,989

 
$

 
$
4,153

 
$
5,093

 
$
13,743

Interest on debt obligations(c)
8,882

 
300

 
1,656

 
1,311

 
5,615

Operating leases
1,754

 
142

 
680

 
388

 
544

Purchasing commitments
2,450

 
394

 
1,664

 
331

 
61

Marketing commitments
2,364

 
78

 
596

 
540

 
1,150

 
$
38,439

 
$
914

 
$
8,749

 
$
7,663

 
$
21,113

 
 
 
 
 
 
 
 
 
 
(a)
Reflects non-cancelable commitments as of September 8, 2012 based on foreign exchange rates in effect on the balance sheet date and excludes any reserves for uncertain tax positions as we are unable to reasonably predict the ultimate amount or timing of settlement.
(b)
Excludes $3,054 million related to current maturities of long-term debt, $390 million related to the fair value step-up of debt acquired in connection with our acquisitions of The Pepsi Bottling Group, Inc. (PBG) and PepsiAmericas, Inc. (PAS), and $353 million related to the increase in carrying value of long-term debt reflecting the gains on our fair value interest rate swaps.
(c)
Interest payments on floating-rate debt are estimated using interest rates effective as of September 8, 2012.
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Restructuring, Impairment and Integration Charges (Tables)
9 Months Ended
Sep. 08, 2012
Restructuring and Related Activities [Abstract]
Summary Of Productivity Plan Activity
A summary of our Productivity Plan activity in 2012 is as follows:
 
 
Severance and Other
Employee Costs
 
Asset
Impairment
 
Other
Costs
 
Total
Liability as of December 31, 2011
$
249

 
$

 
$
27

 
$
276

2012 restructuring and impairment charges
51

 
57

 
85

 
193

Cash payments
(173
)
 

 
(70
)
 
(243
)
Non-cash charges
(7
)
 
(57
)
 
(2
)
 
(66
)
Liability as of September 8, 2012
$
120

 
$

 
$
40

 
$
160

Schedule Of Merger And Integration Activity
A summary of our merger and integration activity in 2012 is as follows:
 
 
Severance and Other
Employee Costs
 
Other Costs
 
Total
Liability as of December 31, 2011
$
98

 
$
7

 
$
105

2012 merger and integration charges
2

 
5

 
7

Cash payments
(50
)
 
(7
)
 
(57
)
Non-cash charges
(6
)
 

 
(6
)
Liability as of September 8, 2012
$
44

 
$
5

 
$
49

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Financial Instruments (Tables)
9 Months Ended
Sep. 08, 2012
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Fair Values of Financial Assets and Liabilities
The fair values of our financial assets and liabilities as of September 8, 2012 and September 3, 2011 are categorized as follows:
 
 
2012
 
2011
 
Assets(a)
 
Liabilities(a)
 
Assets(a)
 
Liabilities(a)
Available-for-sale securities(b)
$
61

 
$

 
$
61

 
$

Short-term investments – index funds(c)
$
164

 
$

 
$
159

 
$

Prepaid forward contracts(d)
$
41

 
$

 
$
38

 
$

Deferred compensation(e)
$

 
$
503

 
$

 
$
519

Derivatives designated as fair value hedging instruments:
 
 
 
 
 
 
Interest rate derivatives(f)
$
293

 
$

 
$
428

 
$

Derivatives designated as cash flow hedging instruments:
 
 
 
 
Foreign exchange contracts(g)
$
10

 
$
31

 
$
12

 
$
23

Interest rate derivatives(f)

 

 

 
56

Commodity contracts(h)
13

 
38

 
28

 
17

 
$
23

 
$
69

 
$
40

 
$
96

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
Foreign exchange contracts(g)
$
30

 
$
6

 
$
5

 
$
19

Interest rate derivatives(f)
128

 
159

 
104

 
140

Commodity contracts(h)
84

 
25

 
24

 
30

 
$
242

 
$
190

 
$
133

 
$
189

Total derivatives at fair value
$
558

 
$
259

 
$
601

 
$
285

Total
$
824

 
$
762

 
$
859

 
$
804

 
 
 
 
 
 
 
 
(a)
Financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets, with the exception of available-for-sale securities and short-term investments. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities. Unless specifically indicated, all financial assets and liabilities are categorized as Level 2 assets or liabilities.
(b)
Based on the price of common stock. Categorized as a Level 1 asset.
(c)
Based on price changes in index funds used to manage a portion of market risk arising from our deferred compensation liability. Categorized as a Level 1 asset.
(d)
Based primarily on the price of our common stock.
(e)
Based on the fair value of investments corresponding to employees’ investment elections. As of September 8, 2012 and September 3, 2011, $11 million and $43 million, respectively, are categorized as Level 1 liabilities. The remaining balances are categorized as Level 2 liabilities.
(f)
Based on LIBOR forward rates.
(g)
Based on recently reported market transactions of spot and forward rates.
(h)
Based on recently reported market transactions, primarily swap arrangements
Effective Portion Of Pre-Tax (Gains)/Losses On Derivative Instruments
The effective portion of the pre-tax (gains)/losses on our derivative instruments are categorized in the tables below.
 
12 Weeks Ended
 
Fair Value/Non-
designated Hedges
 
Cash Flow Hedges
 
(Gains)/Losses
Recognized in
Income Statement(a)
 
Losses/(Gains)
Recognized in
Accumulated Other
Comprehensive Loss
 
Losses/(Gains)
Reclassified from
Accumulated Other
Comprehensive Loss
into Income
Statement(b)
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

Foreign exchange contracts
$
(9
)
 
$
7

 
$
41

 
$
(9
)
 
$
(6
)
 
$
9

Interest rate derivatives
(5
)
 
(84
)
 

 
42

 
6

 
4

Commodity contracts
(99
)
 
29

 
(28
)
 
40

 
20

 
(12
)
Total
$
(113
)
 
$
(48
)
 
$
13

 
$
73

 
$
20

 
$
1

 
 
36 Weeks Ended
 
Fair Value/Non-
designated Hedges
 
Cash Flow Hedges
 
(Gains)/Losses
Recognized in
Income Statement(a)
 
Losses/(Gains)
Recognized in
Accumulated Other
Comprehensive Loss
 
Losses/(Gains)
Reclassified from
Accumulated Other
Comprehensive Loss
into Income
Statement(b)
 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

 
9/8/2012

 
9/3/2011

Foreign exchange contracts
$
(16
)
 
$
8

 
$
37

 
$
28

 
$
(4
)
 
$
30

Interest rate derivatives
3

 
(162
)
 
4

 
71

 
15

 
10

Commodity contracts
(76
)
 
(17
)
 
9

 
(15
)
 
47

 
(37
)
Total
$
(89
)
 
$
(171
)
 
$
50

 
$
84

 
$
58

 
$
3

 
 
 
 
 
 
 
 
 
 
 
 
(a)
Interest rate derivatives gains/losses are primarily from fair value hedges and are included in interest expense. These gains/losses are substantially offset by increases/decreases in the value of the underlying debt, which are also included in interest expense. All other gains/losses are from non-designated hedges and are included in corporate unallocated expenses.
(b)
Interest rate losses are included in interest expense. All other gains/losses are primarily included in cost of sales.
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Basis of Presentation and Our Divisions - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Mar. 19, 2011
Sep. 08, 2012
segment
business_unit
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Change in accounting method (LIFO to average cost), effect on net income $ 9
Business Segments 4
Reportable Business Segment 6
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Segment Reporting Information by Segment (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Sep. 08, 2012
Sep. 03, 2011
Segment Reporting Information [Line Items]
Net Revenue $ 16,652 $ 17,582 $ 45,538 $ 46,346
Operating Profit 2,800 2,906 6,899 7,386
FLNA
Segment Reporting Information [Line Items]
Net Revenue 3,269 3,173 9,472 9,167
Operating Profit 917 918 2,532 2,545
QFNA
Segment Reporting Information [Line Items]
Net Revenue 615 614 1,821 1,837
Operating Profit 154 177 495 558
LAF
Segment Reporting Information [Line Items]
Net Revenue 1,883 1,841 5,066 4,757
Operating Profit 219 275 673 720
PAB
Segment Reporting Information [Line Items]
Net Revenue 5,530 5,947 15,330 16,107
Operating Profit 837 992 2,202 2,533
Europe
Segment Reporting Information [Line Items]
Net Revenue 3,691 3,909 9,153 9,329
Operating Profit 483 514 1,017 984
AMEA
Segment Reporting Information [Line Items]
Net Revenue 1,664 2,098 4,696 5,149
Operating Profit 317 285 630 730
Total Division
Segment Reporting Information [Line Items]
Operating Profit 2,927 3,161 7,549 8,070
Corporate Unallocated Net Impact Of Mark To Market On Commodity Hedges
Segment Reporting Information [Line Items]
Operating Profit 121 (53) 126 (31)
Corporate Unallocated Restructuring And Impairment Charges
Segment Reporting Information [Line Items]
Operating Profit (7)    (8)   
Corporate Unallocated Merger And Integration Charges
Segment Reporting Information [Line Items]
Operating Profit 2 (10)    (64)
Corporate Unallocated Other
Segment Reporting Information [Line Items]
Operating Profit $ (243) $ (192) $ (768) $ (589)
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Segment Reporting Information by Total Assets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 08, 2012
Dec. 31, 2011
Segment Reporting Information [Line Items]
Total Assets $ 74,017 $ 72,882
FLNA
Segment Reporting Information [Line Items]
Total Assets 6,075 6,120
QFNA
Segment Reporting Information [Line Items]
Total Assets 1,223 1,174
LAF
Segment Reporting Information [Line Items]
Total Assets 4,734 4,731
PAB
Segment Reporting Information [Line Items]
Total Assets 31,925 31,187
Europe
Segment Reporting Information [Line Items]
Total Assets 18,959 18,479
AMEA
Segment Reporting Information [Line Items]
Total Assets 5,669 6,048
Total Division
Segment Reporting Information [Line Items]
Total Assets 68,585 67,739
Corporate
Segment Reporting Information [Line Items]
Total Assets $ 5,432 [1] $ 5,143 [1]
[1] Corporate assets consist principally of cash and cash equivalents, short-term investments, derivative instruments and property, plant and equipment.
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Acquisitions and Divestitures - Additional Information (Detail)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 1 Months Ended 4 Months Ended 9 Months Ended
Sep. 08, 2012
USD ($)
Sep. 08, 2012
USD ($)
Sep. 03, 2011
USD ($)
Jun. 16, 2012
Tab
Jun. 16, 2012
Tab
Call Option Latest Use Date 2015
May 19, 2011
Wbd
USD ($)
Feb. 03, 2011
Wbd
USD ($)
Dec. 31, 2011
Wbd
USD ($)
Aug. 15, 2011
Wbd
RUB
Mar. 10, 2011
Wbd
ADS
RUB
Sep. 08, 2012
Tingyi
USD ($)
Business Acquisition [Line Items]
Cash paid for entity $ 1,300 $ 3,800 $ 79
Ownership in WBD after acquisition 98.60% 77.00% 100.00%
Outstanding common stock ownership percentage 66.00%
Price paid per ordinary share in Russian rubles 3,883.7 3,883.7
Tender offer for all outstanding American Depositary Share in Russian rubles 970.925
Indirect Equity Interest Percentage 5.00%
Call Option For Indirect Equity Percentage 20.00%
Restructuring and other charges 137
Restructuring and other charges, after-tax $ 163    $ 163
Restructuring and other charges, after-tax per share $ 0.04 $ 0.09 $ 0.1
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Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 08, 2012
Dec. 31, 2011
Indefinite-lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross $ 3,175 $ 3,220
Accumulated amortization (1,376) (1,332)
Amortizable Intangible Assets, net 1,799 1,888
Acquired franchise rights
Indefinite-lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross 932 916
Reacquired Franchise Rights
Indefinite-lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross 110 110
Brands
Indefinite-lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross 1,432 1,417
Other Intangible Assets
Indefinite-lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross $ 701 $ 777
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Change in Book Value of Nonamortizable Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 08, 2012
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning $ 31,357
Acquisitions/ Divestitures (159)
Translation and Other 14
Balance, End 31,212 31,212
Goodwill
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 16,800
Acquisitions/ Divestitures (124)
Translation and Other 25
Balance, End 16,701 16,701
Brands
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 4,703
Acquisitions/ Divestitures (11)
Translation and Other (49)
Balance, End 4,643 4,643
Reacquired Franchise Rights
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 8,074
Acquisitions/ Divestitures (33)
Translation and Other 40
Balance, End 8,081 8,081
Acquired franchise rights
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 1,780
Acquisitions/ Divestitures 9
Translation and Other (2)
Balance, End 1,787 1,787
FLNA
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 341
Acquisitions/ Divestitures   
Translation and Other 9
Balance, End 350 350
FLNA | Goodwill
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 311
Acquisitions/ Divestitures   
Translation and Other 7
Balance, End 318 318
FLNA | Brands
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 30
Acquisitions/ Divestitures   
Translation and Other 2
Balance, End 32 32
QFNA | Goodwill
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 175
Acquisitions/ Divestitures   
Translation and Other   
Balance, End 175 175
LAF
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 950
Acquisitions/ Divestitures 26
Translation and Other (32)
Balance, End 944 944
LAF | Goodwill
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 793
Acquisitions/ Divestitures (83)
Translation and Other (17)
Balance, End 693 693
LAF | Brands
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 157
Acquisitions/ Divestitures 109
Translation and Other (15)
Balance, End 251 251
PAB
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 19,004
Acquisitions/ Divestitures (1)
Translation and Other 70
Balance, End 19,073 19,073
PAB | Goodwill
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 9,932
Acquisitions/ Divestitures 23
Translation and Other 42
Balance, End 9,997 9,997
PAB | Brands
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 168
Acquisitions/ Divestitures   
Translation and Other (17)
Balance, End 151 151
PAB | Reacquired Franchise Rights
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 7,342
Acquisitions/ Divestitures (33)
Translation and Other 42
Balance, End 7,351 7,351
PAB | Acquired franchise rights
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 1,562
Acquisitions/ Divestitures 9
Translation and Other 3
Balance, End 1,574 1,574
Europe
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 10,028
Acquisitions/ Divestitures (18)
Translation and Other (44)
Balance, End 9,966 9,966
Europe | Goodwill
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 4,900
Acquisitions/ Divestitures 78
Translation and Other (16)
Balance, End 4,962 4,962
Europe | Brands
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 4,178
Acquisitions/ Divestitures (96)
Translation and Other (21) [1]
Balance, End 4,061 4,061
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) 23 23
Europe | Reacquired Franchise Rights
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 732
Acquisitions/ Divestitures   
Translation and Other (2)
Balance, End 730 730
Europe | Acquired franchise rights
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 218
Acquisitions/ Divestitures   
Translation and Other (5)
Balance, End 213 213
AMEA
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 859
Acquisitions/ Divestitures (166)
Translation and Other 11
Balance, End 704 704
AMEA | Goodwill
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 689
Acquisitions/ Divestitures (142)
Translation and Other 9
Balance, End 556 556
AMEA | Brands
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning 170
Acquisitions/ Divestitures (24)
Translation and Other 2
Balance, End $ 148 $ 148
[1] In the 12 and 36 weeks ended September 8, 2012, we recorded an impairment charge of $23 million, primarily related to our business operations in Greece.
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Stock-Based Compensation - Additional Information (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Sep. 08, 2012
Sep. 03, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized stock-based compensation expense $ 69 $ 77 $ 188 $ 232
Stock-based compensation expense 68 76 193 222
Merger and integration costs included in stock-based compensation 1 1 2 10
Restructuring and impairment charges (income) $ (7)
Stock options granted 3.6 6.8
RSUs issued 4.3 5.2
Weighted-average grant price, Options $ 66.94 $ 64.28
Restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant price, RSUs $ 66.51 $ 63.88
Performance Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity performance granted performance period 3 years
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Weighted Average Black Scholes Fair Value Assumptions (Detail)
9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Expected life 6 years 6 years
Risk free interest rate 1.30% 2.50%
Expected volatility 17.00% [1] 16.00% [1]
Expected dividend yield 3.00% 2.90%
[1] Reflects movements in our stock price over the most recent historical period equivalent to the expected life.
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Components of Net Periodic Benefit Cost for Pension and Retiree Medical Plans (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Sep. 08, 2012
Sep. 03, 2011
U.S.
Defined Benefit Plan Disclosure [Line Items]
Service cost $ 93 $ 80 $ 282 $ 242
Interest cost 124 127 370 379
Expected return on plan assets (183) (163) (550) (487)
Amortization of prior service cost/(benefit) 4 3 12 10
Amortization of experience loss 60 34 179 101
Gross total 98 81 293 245
Settlement/Curtailment (gain)/loss       (7) (9)
Special termination benefits 2    6 10
Total expense 100 81 292 246
International
Defined Benefit Plan Disclosure [Line Items]
Service cost 23 22 65 62
Interest cost 27 28 75 77
Expected return on plan assets (34) (32) (95) (89)
Amortization of prior service cost/(benefit)    1 1 2
Amortization of experience loss 13 10 35 26
Gross total 29 29 81 78
Settlement/Curtailment (gain)/loss (2)    1   
Special termination benefits            
Total expense 27 29 82 78
Retiree Medical
Defined Benefit Plan Disclosure [Line Items]
Service cost 12 12 35 35
Interest cost 15 20 45 61
Expected return on plan assets (5) (3) (15) (10)
Amortization of prior service cost/(benefit) (6) (6) (18) (19)
Amortization of experience loss    2    8
Gross total 16 25 47 75
Settlement/Curtailment (gain)/loss            
Special termination benefits       4 1
Total expense $ 16 $ 25 $ 51 $ 76
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Pension and Retiree Medical Benefits - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 24, 2012
Compensation and Retirement Disclosure [Abstract]
Discretionary, pension contributions $ 860
Retiree medical plans $ 140
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Rollforward of Reserves for Federal State and Foreign Tax Jurisdictions (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 08, 2012
Dec. 31, 2011
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance, beginning of year $ 2,167 $ 2,022
Additions for tax positions related to the current year 190 233
Additions for tax positions from prior years 101 147
Reductions for tax positions from prior years (25) (46)
Settlement payments (10) (156)
Statute of limitations expiration    (15)
Translation and other 5 (18)
Balance, end of period $ 2,428 $ 2,167
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Basic and Diluted Net Income Attributable to PepsiCo (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Sep. 08, 2012
Sep. 03, 2011
Earnings Per Share [Abstract]
Net income attributable to PepsiCo $ 1,902 $ 2,000 $ 4,517 $ 5,028
Dividends       (1) (1)
Redemption premium (1) (1) (4) (4)
Net income available for PepsiCo common shareholders - Value 1,901 1,999 4,512 5,023
Net income available for PepsiCo common shareholders - Shares 1,556 [1] 1,578 [1] 1,562 [1] 1,581 [1]
Basic net income attributable to PepsiCo per common share (in dollars per share) $ 1.22 $ 1.27 $ 2.89 $ 3.18
Stock options and RSUs - Shares 18 [1],[2] 20 [1],[2] 17 [1],[2] 21 [1],[2]
ESOP convertible preferred stock - Value 1 1 5 5
ESOP convertible preferred stock - Shares 1 [1] 1 [1] 1 [1] 1 [1]
Diluted shares - Value $ 1,902 $ 2,000 $ 4,517 $ 5,028
Diluted shares - Shares 1,575 [1] 1,599 [1] 1,580 [1] 1,603 [1]
Diluted net income attributable to PepsiCo per common share (in dollars per share) $ 1.21 $ 1.25 $ 2.86 $ 3.14
[1] Weighted-average common shares outstanding (in millions).
[2] Options to purchase 0.6 million and 13.5 million shares, respectively, for the 12 and 36 weeks in 2012 were not included in the calculation of earnings per share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $72.26 and $67.51, respectively. Options to purchase 22.1 million and 21.2 million shares, respectively, for the 12 and 36 weeks in 2011 were not included in the calculation of earnings per share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $67.67 and $67.46, respectively.
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Basic and Diluted Net Income Attributable to PepsiCo (Parenthetical) (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Sep. 08, 2012
Sep. 03, 2011
Earnings Per Share [Abstract]
Out-of-the-money options excluded from earnings per share 0.6 22.1 13.5 21.2
Out-of-the-money options average exercise price $ 72.26 $ 67.67 $ 67.51 $ 67.46
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Debt Obligations and Commitments - Additional Information (Detail) (USD $)
Sep. 08, 2012
Jun. 16, 2012
Extended Unsecured Revolving Credit Agreement Ending June 2016 [Member]
Jun. 16, 2012
Extended Unsecured Revolving Credit Agreement Ending June 2013 [Member]
Mar. 24, 2012
0.750% Senior Notes Due 2015 [Member]
Mar. 24, 2012
2.750% Senior Notes Due 2022 [Member]
Mar. 24, 2012
4.000% Senior Notes Due 2042 [Member]
Sep. 08, 2012
0.700% Senior Notes Due 2015 [Member]
Sep. 08, 2012
1.250% Senior Notes Due 2017 [Member]
Sep. 08, 2012
3.600% Senior Notes Due 2042 [Member]
Debt Instrument [Line Items]
Fixed and floating rate notes issued $ 750,000,000 $ 1,250,000,000 $ 750,000,000 $ 900,000,000 $ 1,000,000,000 $ 600,000,000
Interest rate on debt 0.75% 2.75% 4.00% 0.70% 1.25% 3.60%
Debt instrument, term of agreement 4 years 364 days
Commercial paper outstanding $ 900,000,000
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Long Term Contractual Commitments (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 08, 2012
Debt Instrument [Line Items]
Total Long Term Contractual Commitments $ 38,439 [1]
Long-Term Debt Obligations
Debt Instrument [Line Items]
Long-term debt obligations 22,989 [1],[2]
Interest On Debt Obligations
Debt Instrument [Line Items]
Interest on debt obligations 8,882 [1],[3]
Operating Leases
Debt Instrument [Line Items]
Operating leases 1,754 [1]
Purchasing Commitments
Debt Instrument [Line Items]
Purchasing commitments 2,450 [1]
Marketing Commitments
Debt Instrument [Line Items]
Marketing commitments 2,364 [1]
Payments Due By Period 2012
Debt Instrument [Line Items]
Total Long Term Contractual Commitments 914 [1]
Payments Due By Period 2012 | Interest On Debt Obligations
Debt Instrument [Line Items]
Interest on debt obligations 300 [1],[3]
Payments Due By Period 2012 | Operating Leases
Debt Instrument [Line Items]
Operating leases 142 [1]
Payments Due By Period 2012 | Purchasing Commitments
Debt Instrument [Line Items]
Purchasing commitments 394 [1]
Payments Due By Period 2012 | Marketing Commitments
Debt Instrument [Line Items]
Marketing commitments 78 [1]
Payments Due By Period 2013-2014
Debt Instrument [Line Items]
Total Long Term Contractual Commitments 8,749 [1]
Payments Due By Period 2013-2014 | Long-Term Debt Obligations
Debt Instrument [Line Items]
Long-term debt obligations 4,153 [1],[2]
Payments Due By Period 2013-2014 | Interest On Debt Obligations
Debt Instrument [Line Items]
Interest on debt obligations 1,656 [1],[3]
Payments Due By Period 2013-2014 | Operating Leases
Debt Instrument [Line Items]
Operating leases 680 [1]
Payments Due By Period 2013-2014 | Purchasing Commitments
Debt Instrument [Line Items]
Purchasing commitments 1,664 [1]
Payments Due By Period 2013-2014 | Marketing Commitments
Debt Instrument [Line Items]
Marketing commitments 596 [1]
Payments Due By Period 2015-2016
Debt Instrument [Line Items]
Total Long Term Contractual Commitments 7,663 [1]
Payments Due By Period 2015-2016 | Long-Term Debt Obligations
Debt Instrument [Line Items]
Long-term debt obligations 5,093 [1],[2]
Payments Due By Period 2015-2016 | Interest On Debt Obligations
Debt Instrument [Line Items]
Interest on debt obligations 1,311 [1],[3]
Payments Due By Period 2015-2016 | Operating Leases
Debt Instrument [Line Items]
Operating leases 388 [1]
Payments Due By Period 2015-2016 | Purchasing Commitments
Debt Instrument [Line Items]
Purchasing commitments 331 [1]
Payments Due By Period 2015-2016 | Marketing Commitments
Debt Instrument [Line Items]
Marketing commitments 540 [1]
Payments Due By Period 2017 And Beyond
Debt Instrument [Line Items]
Total Long Term Contractual Commitments 21,113 [1]
Payments Due By Period 2017 And Beyond | Long-Term Debt Obligations
Debt Instrument [Line Items]
Long-term debt obligations 13,743 [1],[2]
Payments Due By Period 2017 And Beyond | Interest On Debt Obligations
Debt Instrument [Line Items]
Interest on debt obligations 5,615 [1],[3]
Payments Due By Period 2017 And Beyond | Operating Leases
Debt Instrument [Line Items]
Operating leases 544 [1]
Payments Due By Period 2017 And Beyond | Purchasing Commitments
Debt Instrument [Line Items]
Purchasing commitments 61 [1]
Payments Due By Period 2017 And Beyond | Marketing Commitments
Debt Instrument [Line Items]
Marketing commitments $ 1,150 [1]
[1] Reflects non-cancelable commitments as of September 8, 2012 based on foreign exchange rates in effect on the balance sheet date and excludes any reserves for uncertain tax positions as we are unable to reasonably predict the ultimate amount or timing of settlement.
[2] Excludes $3,054 million related to current maturities of long-term debt, $390 million related to the fair value step-up of debt acquired in connection with our acquisitions of The Pepsi Bottling Group, Inc. (PBG) and PepsiAmericas, Inc. (PAS), and $353 million related to the increase in carrying value of long-term debt reflecting the gains on our fair value interest rate swaps.
[3] Interest payments on floating-rate debt are estimated using interest rates effective as of September 8, 2012.
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Long Term Contractual Commitments (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 08, 2012
Debt Instrument [Line Items]
Long-term debt obligations, 2012 $ 3,054
Increase in carrying value of long-term debt 353
Pbg And Pas Acquisition
Debt Instrument [Line Items]
Fair value step-up of debt acquired in connection with our acquisitions of PBG and PAS $ 390
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Restructuring Impairment and Integration Charges - Additional Information (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Sep. 08, 2012
Sep. 03, 2011
Restructuring Cost and Reserve [Line Items]
Restructuring and impairment charges, after tax $ 59 $ 139
Restructuring and impairment charges, after tax impact per share $ 0.04 $ 0.09
Restructuring and impairment charges (income) (7)
Merger and integration charges 7 174
Productivity Plan
Restructuring Cost and Reserve [Line Items]
Restructuring and impairment charges (income) 83 193
FLNA
Restructuring Cost and Reserve [Line Items]
Restructuring and impairment charges (income) 8 40
QFNA
Restructuring Cost and Reserve [Line Items]
Restructuring and impairment charges (income) 1 7
LAF
Restructuring Cost and Reserve [Line Items]
Restructuring and impairment charges (income) 29 41
PAB
Restructuring Cost and Reserve [Line Items]
Restructuring and impairment charges (income) 33 76
Merger and integration charges 24 77
AMEA
Restructuring Cost and Reserve [Line Items]
Restructuring and impairment charges (income) 6 23
Corporate Unallocated Expenses
Restructuring Cost and Reserve [Line Items]
Restructuring and impairment charges (income) 7 8
Restructuring income representing adjustments of previous recorded amounts (2)
Merger and integration charges 10 64
Europe
Restructuring Cost and Reserve [Line Items]
Restructuring income representing adjustments of previous recorded amounts (1) (2)
Merger and integration charges 4 11 17
Wimm Bill Dann Acquisition
Restructuring Cost and Reserve [Line Items]
Merger and integration charges 2 7
Merger and integration charges after-tax 2 6
PBG, PAS And WBD Acquisitions
Restructuring Cost and Reserve [Line Items]
Merger and integration charges 61 174
Merger and integration charges after-tax 53 147
Merger and integration charges, after-tax impact per share $ 0.03 $ 0.09
Interest Expense [Member]
Restructuring Cost and Reserve [Line Items]
Merger and integration charges $ 16 $ 16
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Productivity Plan Activity (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 08, 2012
Restructuring Reserve [Roll Forward]
2012 restructuring and impairment charges $ (7)
Productivity Plan
Restructuring Reserve [Roll Forward]
Liability as of December 31, 2011 276
2012 restructuring and impairment charges 83 193
Cash payments (243)
Non-cash charges (66)
Liability as of September 8, 2012 160 160
Productivity Plan | Severance And Other Employee Costs
Restructuring Reserve [Roll Forward]
Liability as of December 31, 2011 249
2012 restructuring and impairment charges 51
Cash payments (173)
Non-cash charges (7)
Liability as of September 8, 2012 120 120
Productivity Plan | Asset Impairment
Restructuring Reserve [Roll Forward]
Liability as of December 31, 2011   
2012 restructuring and impairment charges 57
Cash payments   
Non-cash charges (57)
Liability as of September 8, 2012      
Productivity Plan | Other Costs
Restructuring Reserve [Roll Forward]
Liability as of December 31, 2011 27
2012 restructuring and impairment charges 85
Cash payments (70)
Non-cash charges (2)
Liability as of September 8, 2012 $ 40 $ 40
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Merger and Integration Activity (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Restructuring Reserve [Roll Forward]
Liability as of December 31, 2011 $ 105
2012 merger and integration charges 7 174
Cash payments (57) (293)
Non-cash charges (6)
Liability as of September 8, 2012 49
Severance And Other Employee Costs
Restructuring Reserve [Roll Forward]
Liability as of December 31, 2011 98
2012 merger and integration charges 2
Cash payments (50)
Non-cash charges (6)
Liability as of September 8, 2012 44
Other Costs
Restructuring Reserve [Roll Forward]
Liability as of December 31, 2011 7
2012 merger and integration charges 5
Cash payments (7)
Liability as of September 8, 2012 $ 5
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Financial Instruments - Additional Information (Detail) (USD $)
9 Months Ended
Sep. 08, 2012
Dec. 31, 2011
Sep. 03, 2011
Derivative Instruments, Gain (Loss) [Line Items]
Debt obligations $ 30,000,000,000
Commodity contracts
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Maturity Term 3 years
Expected reclassification of net gains (losses) related to hedge from accumulated OCI into net income within the next 12 months (23,000,000)
Face value of open commodity derivative contracts qualified for hedging 488,000,000 586,000,000
Face value of open commodity derivative contracts not qualified for hedging 636,000,000 537,000,000
Foreign Exchange Contract
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Maturity Term 2 years
Expected reclassification of net gains (losses) related to hedge from accumulated OCI into net income within the next 12 months (17,000,000)
Foreign currency derivatives at face value, net 2,500,000,000 2,500,000,000
Interest rate derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Expected reclassification of net gains (losses) related to hedge from accumulated OCI into net income within the next 12 months (23,000,000)
Notional amount of interest rate derivatives $ 7,300,000,000 $ 8,900,000,000
Percentage of total debt, net of related interest rate derivatives, exposed to variable interest rates 26.00% 38.00%
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Fair Values of Financial Assets and Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 08, 2012
Sep. 03, 2011
Derivatives, Fair Value [Line Items]
Available-for-sale securities $ 61 [1],[2] $ 61 [1],[2]
Short-term investments - index funds 164 [1],[3] 159 [1],[3]
Prepaid forward contracts 41 [1],[4] 38 [1],[4]
Total derivatives at fair value 558 [1] 601 [1]
Total Financial Assets at fair value 824 [1] 859 [1]
Deferred compensation 503 [1],[5] 519 [1],[5]
Total derivatives at fair value 259 [1] 285 [1]
Total Financial Liabilities at fair Value 762 [1] 804 [1]
Derivatives Designated As Fair Value Hedging Instruments Assets
Derivatives, Fair Value [Line Items]
Interest rate derivatives 293 [1],[6] 428 [1],[6]
Derivatives Designated As Hedging Instruments Assets
Derivatives, Fair Value [Line Items]
Foreign exchange contracts 10 [1],[7] 12 [1],[7]
Commodity contracts 13 [1],[8] 28 [1],[8]
Derivatives designated as hedging instruments, Assets, Total 23 [1] 40 [1]
Derivatives Not Designated As Hedging Instruments Assets
Derivatives, Fair Value [Line Items]
Foreign exchange contracts 30 [1],[7] 5 [1],[7]
Interest rate derivatives 128 [1],[6] 104 [1],[6]
Commodity contracts 84 [1],[8] 24 [1],[8]
Derivatives not designated as hedging instruments, Assets, Total 242 [1] 133 [1]
Derivatives Designated As Hedging Instruments Liabilities
Derivatives, Fair Value [Line Items]
Foreign exchange contracts 31 [1],[7] 23 [1],[7]
Interest rate derivatives    [1],[6] 56 [1],[6]
Commodity contracts 38 [1],[8] 17 [1],[8]
Derivatives designated as hedging instruments, Liabilities, Total 69 [1] 96 [1]
Derivatives Not Designated As Hedging Instruments Liabilities
Derivatives, Fair Value [Line Items]
Foreign exchange contracts 6 [1],[7] 19 [1],[7]
Interest rate derivatives 159 [1],[6] 140 [1],[6]
Commodity contracts 25 [1],[8] 30 [1],[8]
Derivatives not designated as hedging instruments, Liabilities, Total $ 190 [1] $ 189 [1]
[1] Financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets, with the exception of available-for-sale securities and short-term investments. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities. Unless specifically indicated, all financial assets and liabilities are categorized as Level 2 assets or liabilities.
[2] Based on the price of common stock. Categorized as a Level 1 asset.
[3] Based on price changes in index funds used to manage a portion of market risk arising from our deferred compensation liability. Categorized as a Level 1 asset.
[4] Based primarily on the price of our common stock.
[5] Based on the fair value of investments corresponding to employees’ investment elections. As of September 8, 2012 and September 3, 2011, $11 million and $43 million, respectively, are categorized as Level 1 liabilities. The remaining balances are categorized as Level 2 liabilities.
[6] Based on LIBOR forward rates.
[7] Based on recently reported market transactions of spot and forward rates.
[8] Based on recently reported market transactions, primarily swap arrangements.
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Fair Values of Financial Assets and Liabilities (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 08, 2012
Sep. 03, 2011
Derivatives, Fair Value [Line Items]
Deferred compensation, Liabilities $ 503 [1],[2] $ 519 [1],[2]
Level 1 Fair Values Of Assets And Liabilities
Derivatives, Fair Value [Line Items]
Deferred compensation, Liabilities $ 11 $ 43
[1] Financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets, with the exception of available-for-sale securities and short-term investments. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities. Unless specifically indicated, all financial assets and liabilities are categorized as Level 2 assets or liabilities.
[2] Based on the fair value of investments corresponding to employees’ investment elections. As of September 8, 2012 and September 3, 2011, $11 million and $43 million, respectively, are categorized as Level 1 liabilities. The remaining balances are categorized as Level 2 liabilities.
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Effective Portion of Pre Tax Gains and Losses on Derivative Instruments (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 08, 2012
Sep. 03, 2011
Sep. 08, 2012
Sep. 03, 2011
Fair Value/Non-designated Hedges
Derivatives, Fair Value [Line Items]
(Gains) /Losses Recognized in Income Statement $ (113) [1] $ (48) [1] $ (89) [1] $ (171) [1]
Fair Value/Non-designated Hedges | Foreign exchange contracts
Derivatives, Fair Value [Line Items]
(Gains) /Losses Recognized in Income Statement (9) [1] 7 [1] (16) [1] 8 [1]
Fair Value/Non-designated Hedges | Interest rate derivatives
Derivatives, Fair Value [Line Items]
(Gains) /Losses Recognized in Income Statement (5) [1] (84) [1] 3 [1] (162) [1]
Fair Value/Non-designated Hedges | Commodity contracts
Derivatives, Fair Value [Line Items]
(Gains) /Losses Recognized in Income Statement (99) [1] 29 [1] (76) [1] (17) [1]
Cash Flow Hedges
Derivatives, Fair Value [Line Items]
Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss 13 73 50 84
Losses/(Gains)Reclassified from Accumulated Other Comprehensive Loss into Income Statement 20 [2] 1 [2] 58 [2] 3 [2]
Cash Flow Hedges | Foreign exchange contracts
Derivatives, Fair Value [Line Items]
Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss 41 (9) 37 28
Losses/(Gains)Reclassified from Accumulated Other Comprehensive Loss into Income Statement (6) [2] 9 [2] (4) [2] 30 [2]
Cash Flow Hedges | Interest rate derivatives
Derivatives, Fair Value [Line Items]
Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss    42 4 71
Losses/(Gains)Reclassified from Accumulated Other Comprehensive Loss into Income Statement 6 [2] 4 [2] 15 [2] 10 [2]
Cash Flow Hedges | Commodity contracts
Derivatives, Fair Value [Line Items]
Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss (28) 40 9 (15)
Losses/(Gains)Reclassified from Accumulated Other Comprehensive Loss into Income Statement $ 20 [2] $ (12) [2] $ 47 [2] $ (37) [2]
[1] Interest rate derivatives gains/losses are primarily from fair value hedges and are included in interest expense. These gains/losses are substantially offset by increases/decreases in the value of the underlying debt, which are also included in interest expense. All other gains/losses are from non-designated hedges and are included in corporate unallocated expenses.
[2] Interest rate losses are included in interest expense. All other gains/losses are primarily included in cost of sales.
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Recent Accounting Pronouncements - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 24, 2012
Jun. 12, 2010
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
One-time related tax charge $ 41
Prescription drug benefit subsidy, income tax benefit $ 55
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