-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PTeIChCMiyH8nXVGJTGztnFCHLJfYA9xAQd3SsaUktORg+OxTky5dMlyfBNH9Mz1 sECXCXi6pe0AyQqmqtsSOw== 0000077476-97-000026.txt : 19971023 0000077476-97-000026.hdr.sgml : 19971023 ACCESSION NUMBER: 0000077476-97-000026 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970906 FILED AS OF DATE: 19971022 SROS: CSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEPSICO INC CENTRAL INDEX KEY: 0000077476 STANDARD INDUSTRIAL CLASSIFICATION: BEVERAGES [2080] IRS NUMBER: 131584302 STATE OF INCORPORATION: NC FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-01183 FILM NUMBER: 97699258 BUSINESS ADDRESS: STREET 1: 700 ANDERSON HILL RD CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9142532000 MAIL ADDRESS: STREET 1: 700 ANDERSON HILL ROAD CITY: PURCHASE STATE: NY ZIP: 10577-1444 FORMER COMPANY: FORMER CONFORMED NAME: PEPSI COLA CO DATE OF NAME CHANGE: 19700903 10-Q 1 QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 6, 1997 (12 and 36 Weeks Ended) OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-1183 PEPSICO, INC. (Exact name of registrant as specified in its charter) North Carolina 13-1584302 (State or other jurisdiction of (I.R.S. Employer incorporate or organization) Identification No.) 700 Anderson Hill Road Purchase, New York 10577 (Address of principal executive offices) (Zip Code) 914-253-2000 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO Number of shares of Capital Stock outstanding as of October 3, 1997: 1,517,085,909 PEPSICO, INC. AND SUBSIDIARIES INDEX Page No. Part I Financial Information Condensed Consolidated Statement of Income - 12 and 36 weeks ended September 6, 1997 and September 7, 1996 2 Condensed Consolidated Statement of Cash Flows - 36 weeks ended September 6, 1997 and September 7, 1996 3 Condensed Consolidated Balance Sheet - September 6, 1997 and December 28, 1996 4-5 Notes to Condensed Consolidated 6-8 Financial Statements Pro Forma Financial Statements - Condensed Consolidated Statement of Income - 36 weeks ended September 6, 1997 and 52 weeks ended December 28, 1996 9-10 - Condensed Consolidated Balance Sheet 11 - Notes to Pro Forma Financial Statements 12 Management's Analysis of Operations, Cash Flows and Financial Condition 13-25 Independent Accountants' Review Report 26 Part II Other Information and Signatures 27-29 - -1- PART I - FINANCIAL INFORMATION PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF INCOME (in millions except per share amounts, unaudited) 12 Weeks Ended 36 Weeks Ended 9/6/97 9/7/96 9/6/97 9/7/96 Net Sales $5,362 $5,159 $14,661 $14,287 Costs and Expenses, net Cost of sales 2,179 2,158 5,969 5,936 Selling, general and administrative expenses 2,209 2,230 6,303 6,180 Amortization of intangible assets 45 48 139 142 Unusual items - 390 304 390 Operating Profit 929 333 1,946 1,639 Interest expense (123) (134) (358) (399) Interest income 31 22 54 67 Income from Continuing Operations Before Income Taxes 837 221 1,642 1,307 Provision for Income Taxes 286 211 597 563 Income from Continuing Operations 551 10 1,045 744 Income from Discontinued Operations, net of tax 107 134 696 377 Net Income $ 658 $ 144 $ 1,741 $ 1,121 Income per share Continuing Operations $ 0.35 $ 0.01 $ 0.66 $ 0.46 Discontinued Operations 0.07 0.08 0.45 0.23 Net Income Per Share $ 0.42 $ 0.09 $ 1.11 $ 0.69 Cash Dividends Declared Per Share $0.125 $0.115 $ 0.365 $ 0.33 Average Shares Outstanding Used To Calculate Income Per Share 1,566 1,607 1,575 1,613 See accompanying notes. - -2- PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (in millions, unaudited) 36 Weeks Ended 9/6/97 9/7/96 Cash Flows - Operating Activities Income From Continuing Operations $ 1,045 $ 744 Adjustments to reconcile income from con- tinuing operations to net cash provided by operating activities Depreciation and amortization 746 730 Noncash portion of unusual charges 220 390 Deferred income taxes 112 13 Other noncash charges and credits, net 166 231 Changes in operating working capital, excluding effects of acquisitions and dispositions Accounts and notes receivable (360) (415) Inventories 11 (119) Prepaid expenses, deferred income taxes and other current assets (96) (28) Accounts payable and other current liabilities - (46) Income taxes payable 208 174 Net change in operating working capital (237) (434) Net Cash Provided by Operating Activities 2,052 1,674 Cash Flows - Investing Activities Capital spending (957) (1,091) Acquisitions and investments in unconsolidated affiliates (58) (33) Sales of businesses 85 - Sales of property, plant and equipment - 27 Short-term investments, by original maturity More than three months - purchases (162) (103) More than three months - maturities 141 179 Three months or less, net (1,649) (94) Other, net (5) (170) Net Cash Used for Investing Activities (2,605) (1,285) Cash Flows - Financing Activities Proceeds from issuances of long-term debt 2 1,679 Payments of long-term debt (1,457) (1,043) Short-term borrowings, by original maturity More than three months - proceeds 127 651 More than three months - payments (159) (1,536) Three months or less, net 2,358 600 Cash dividends paid (545) (496) Share repurchases (1,643) (1,051) Proceeds from exercises of stock options 279 239 Other, net - (6) Net Cash Used for Financing Activities (1,038) (963) Net Cash Provided by Discontinued Operations 1,791 605 Effect of Exchange Rate Changes on Cash and Cash Equivalents (5) (1) Net Increase in Cash and Cash Equivalents 195 30 Cash and Cash Equivalents - Beginning of year 307 284 Cash and Cash Equivalents - End of period $ 502 $ 314 See accompanying notes. - -3- PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (in millions) ASSETS (Unaudited) 9/6/97 12/28/96 Current Assets Cash and cash equivalents $ 502 $ 307 Short-term investments, at cost............ 1,975 289 2,477 596 Accounts and notes receivable, less allowance: 9/97 - $138, 12/96 - $166 2,331 2,276 Inventories Raw materials and supplies 404 484 Finished goods 371 369 775 853 Prepaid expenses, deferred income taxes and other current assets 638 225 Total Current Assets 6,221 3,950 Property, Plant and Equipment 10,892 10,908 Accumulated Depreciation (4,885) (4,822) 6,007 6,086 Intangible Assets, net 5,799 6,036 Investments in Unconsolidated Affiliates 1,195 1,147 Other Assets 469 491 Net Assets of Discontinued Operations 3,350 4,450 Total Assets $23,041 $22,160 Continued on next page. - -4- PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (continued) (in millions except per share amount) LIABILITIES AND SHAREHOLDERS' EQUITY Unaudited 9/6/97 12/28/96 Current Liabilities Short-term borrowings $ 5,350 $ - Accounts payable and other current liabilities 3,503 3,378 Income taxes payable 490 413 Total Current Liabilities 9,343 3,791 Long-term Debt 3,584 8,174 Other Liabilities 2,120 1,997 Deferred Income Taxes 1,649 1,575 Shareholders' Equity Capital stock, par value 1 2/3 cents per share: authorized 3,600 shares, issued 9/97 and 12/96 - 1,726 shares 29 29 Capital in excess of par value 1,305 1,201 Retained earnings 10,366 9,184 Currency translation adjustment (1,035) (768) 10,665 9,646 Less: Treasury Stock, at Cost: 9/97 - 209 shares, 12/96 - 181 shares (4,320) (3,023) Total Shareholders' Equity 6,345 6,623 Total Liabilities and Shareholders' Equity $23,041 $22,160 See accompanying notes. - -5- PEPSICO, INC. AND SUBSIDIARIES (unaudited) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (1) Our Condensed Consolidated Balance Sheet at September 6, 1997 and the Condensed Consolidated Statement of Income for the 12 and 36 weeks ended September 6, 1997 and September 7, 1996 and the Condensed Consolidated Statement of Cash Flows for the 36 weeks ended September 6, 1997 and September 7, 1996 have not been audited, but have been prepared in conformity with the accounting principles applied in our 1996 Annual Report on Form 10-K (Annual Report) for the year ended December 28, 1996. In our opinion, this information includes all material adjustments, which are of a normal and recurring nature, necessary for a fair presentation. The results for the 12 and 36 weeks are not necessarily indicative of the results expected for the year. Certain reclassifications were made to prior year amounts to conform with the current presentation, including classifying our Restaurants segment as a discontinued operation. See Note 5. (2) Unusual items included in continuing operations were composed of the following: ($ in millions) 36 Weeks Ended 12 and 36 Weeks Ended 9/6/97 9/7/96 Beverages -North America $ 52 $ - -International 180 390 Snack Foods -North America 10 - -International 62 - Net loss $ 304 $ 390 After-tax loss* $ 240 $ 376 Per share* $ 0.15 $0.23 *Reflected the full-year after-tax impact. The 1997 unusual items related to decisions to dispose of assets, improve productivity and strengthen the international bottler structure. The 1996 unusual items primarily related to the impairment of assets. (3) Through the 36 weeks ended September 6, 1997, we repurchased 46.6 million shares of our capital stock at a cost of $1.6 billion. From September 7, 1997 through October 17, 1997, we repurchased 2.2 million shares at a cost of $85 million. (4) Supplemental Cash Flow Information ($ in millions) 36 Weeks Ended 9/6/97 9/7/96 Interest paid $357 $403 Income taxes paid $352 $324 - -6- (5) Discontinued Operations - Our Restaurants segment was composed of our core restaurant businesses of Pizza Hut, Taco Bell and KFC, PepsiCo Foods Systems (PFS), our restaurant distribution operation, and several non-core U.S. restaurant businesses. On January 23, 1997, we announced our intention to pursue a plan to spin off our restaurant businesses to our shareholders as an independent publicly-traded company (Distribution) and explore selling PFS separately. We sold PFS in the second quarter of this year. On August 14, 1997, our Board of Directors approved a formal plan to spin off the restaurant businesses to our shareholders and announced the receipt of all necessary regulatory approvals, including the ruling from the Internal Revenue Service that the spin-off would be tax free to us and our shareholders. The spin-off was effective October 6, 1997 (Distribution Date). Owners of PepsiCo capital stock as of September 19, 1997 received one share of common stock of TRICON Global Restaurants, Inc. (TRICON), the new company, for every ten shares of PepsiCo capital stock. The condensed consolidated financial statements of PepsiCo have been restated to reflect our Restaurants segment as a discontinued operation. Income from discontinued restaurant operations was as follows: 12 weeks ended 36 weeks ended 9/6/97 9/7/96 9/6/97 9/7/96 Net Sales $ 2,317 $ 2,738 $ 7,482 $ 7,920 Costs and expenses (2,106) (2,512) (6,772) (7,281) Unusual items (37) - 408 (26) Interest expense (4) (6) (17) (20) Provision for income taxes (63) (86) (405) (216) Income from discontinued operations $ 107 $ 134 $ 696 $ 377 Interest expense included amounts directly related to the Restaurants segment; it did not include an allocation of PepsiCo interest or G&A expense. Unusual items included in discontinued operations were composed of: 12 Weeks Ended 36 Weeks Ended 9/6/97 9/6/97 9/7/96 PFS gain $ 500 Non-core impairment charges $ (15) (54) $ (26) Spin-related costs (22) (38) Net (loss)/gain $ (37) $ 408 $ (26) After-tax* $ (34) $ 220 $ (17) Per share* $(0.02) $ 0.14 $(0.01) *Reflected the full-year after-tax impact. - -7- The net assets of the discontinued restaurant operations are carried in "Net Assets of Discontinued Operations" in the Condensed Consolidated Balance Sheet. The components are as follows: 9/6/97 12/28/96 Current assets $ 897 $ 1,190 Current liabilities (1,604) (1,381) Net current liabilities (707) (191) Property, plant and equipment 3,600 4,105 Other non-current assets 1,330 1,507 Non-current liabilities (873) (971) Net non-current assets 4,057 4,641 Net Assets of Discontinued Operations $ 3,350 $ 4,450 As of September 6, 1997 we received $91 million in cash and a $14 million note from the sale of three of our non-core restaurant businesses: Chevys Mexican Restaurants, East Side Mario's, and Hot'n Now. The remaining carrying amount of the assets held for disposal (and classified in current assets above) was $123 million. D'Angelo Sandwich Shops and California Pizza Kitchen were sold early in the fourth quarter of 1997 for $96 million in cash, which equaled their carrying amount on September 6,1997. On October 6, 1997, we received from TRICON $4.5 billion in cash as repayment of certain amounts due and a dividend just prior to the Distribution. We used $3.7 billion to pay down short-term borrowings. - -8- PEPSICO, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (in millions except per share amounts, unaudited) 36 Weeks Ended Historical Pro Forma Pro Forma 9/6/97 Adjustments 9/6/97 Net Sales $14,661 $14,661 Costs and Expenses, net Cost of sales 5,969 5,969 Selling, general and administrative expenses 6,303 6,303 Amortization of intangible assets 139 139 Unusual items 304 304 Operating Profit 1,946 1,946 Interest expense (358) $ 138(a) (220) Interest income 54 - 54 Income from Continuing Operations Before Income Taxes 1,642 138(a) 1,780 Provision for Income Taxes 597 51(b) 648 Income from Continuing Operations 1,045 87 1,132 Income from Discontinued Operations, net of tax 696 (696)(c) - Net Income $ 1,741 $(609) $ 1,132 Income per share Continuing Operations $ 0.66 $ 0.72 Discontinued Operations 0.45 - Net Income Per Share $ 1.11 $ 0.72 Average Shares Outstanding Used To Calculate Income Per Share 1,575 1,575 See accompanying Notes to Unaudited Pro Forma Financial Statements. - -9- PEPSICO, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (in millions except per share amounts, unaudited) 52 Weeks Ended Historical Pro Forma Pro Forma 12/28/96 Adjustments 12/28/96 Net Sales $20,364 $20,364 Costs and Expenses, net Cost of sales 8,479 8,479 Selling, general and administrative expenses 9,063 9,063 Amortization of intangible assets 206 206 Unusual items 576 576 Operating Profit 2,040 2,040 Interest expense (565) $ 200(a) (365) Interest income 91 - 91 Income from Continuing Operations Before Income Taxes 1,566 200(a) 1,766 Provision for Income Taxes 728 74(b) 802 Income from Continuing Operations 838 126 964 Income from Discontinued Operations, net of tax 311 (311)(c) - Net Income $ 1,149 $(185) $ 964 Income per share Continuing Operations $ 0.52 $ 0.60 Discontinued Operations 0.20 - Net Income Per Share $ 0.72 $ 0.60 Average Shares Outstanding Used To Calculate Income Per Share 1,606 1,606 See accompanying Notes to Unaudited Pro Forma Financial Statements. - -10- PEPSICO, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (in millions) Historical Pro Forma Pro Forma 9/6/97 Adjustments 9/6/97 Assets Cash and cash equivalents $ 502 $ - $ 502 Short-term investments, at cost 1,975 800(a) 2,775 Other current assets 3,744 - 3,744 Total Current Assets 6,221 800 7,021 Investments in unconsolidated affiliates 1,195 - 1,195 Property, plant and equipment, net 6,007 - 6,007 Intangible assets, net 5,799 - 5,799 Other assets 469 - 469 Net assets of discontinued operations 3,350 (4,500)(a) - 1,150 (b) Total Assets $23,041 $(2,550) $20,491 Liabilities and Shareholders' Equity Short-term borrowings $ 5,350 $(3,700)(a) $ 1,650 Other current liabilities 3,993 3,993 Total Current Liabilities 9,343 (3,700) 5,643 Long-term debt 3,584 - 3,584 Other liabilities 2,120 - 2,120 Deferred income taxes 1,649 - 1,649 Total Liabilities 16,696 (3,700) 12,996 Shareholders' Equity 6,345 1,150 (b) 7,495 Total Liabilities and Shareholders' Equity $23,041 $(2,550) $20,491 See accompanying Notes to Unaudited Pro Forma Financial Statements. - -11- NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS The historical condensed consolidated financial statements have been restated to reflect our Restaurants segment as discontinued operations. See Note 5 to the Condensed Consolidated Financial Statements. The Pro Forma Condensed Consolidated Financial Statements should be read in conjunction with the historical financial statements contained in this Form 10-Q. The pro forma condensed consolidated financial information is presented for informational purposes only. Note 1 - The pro forma adjustments to the accompanying historical condensed consolidated statement of income for the 36 weeks ended September 6, 1997 and the 52 weeks ended December 28, 1996 were: (a) To reduce net interest expense to reflect the effect of reducing short- term borrowings by $3.7 billion with an average interest rate of 5.4% as of the beginning of each respective year. We received a $4.5 billion cash distribution from TRICON just prior to the spin-off and used $3.7 billion of it to repay short-term debt. The 5.4%, reflected an average interest rate we paid on our commercial paper debt for the respective periods. (b) To reflect the estimated tax impact for the pro forma adjustment in Note 1(a) above. (c) To eliminate discontinued operations. Note 2 - The pro forma adjustments to the accompanying historical condensed consolidated balance sheet at September 6, 1997 were: (a) To reduce debt and increase short-term investments as a result of the cash distribution of $4.5 billion received from TRICON. (b) To eliminate net assets of discontinued operations net of the $4.5 billion cash distribution against retained earnings. - -12- MANAGEMENT'S ANALYSIS OF OPERATIONS, CASH FLOWS AND FINANCIAL CONDITION Overview In the second quarter of 1997, we sold our investment in PepsiCo Foods Systems (PFS), our restaurant distribution operation, for $830 million in cash resulting in a pre-tax gain of $500 million. All of our non-core restaurant businesses, with the exception of D'Angelo Sandwich Shops (D'Angelo) and California Pizza Kitchen (CPK), were sold by the end of the third quarter. These last two non-core restaurant businesses were sold early in the fourth quarter. On August 14, 1997 we announced that our Board of Directors approved a formal plan to spin off our restaurant businesses to our shareholders. Under the plan, owners of PepsiCo capital stock as of September 19, 1997 received one share of common stock of the new restaurant company, TRICON Global Restaurants, Inc. (TRICON), for every ten shares of PepsiCo capital stock. The spin-off was completed on October 6,1997. As a result, the sales, costs and expenses, assets and liabilities, and cash flows of our Restaurants segment have been classified as discontinued operations in our financial statements. Accordingly, the discussions that follow have been restated to reflect the continuing operations of our packaged goods businesses. In the following discussion, volume is the estimated dollar effect of the year-over-year change in case sales by company-owned bottling operations and concentrate unit sales to franchisees in Beverages, and pound or kilo sales of salty and sweet snacks in Snack Foods. Effective net pricing includes price changes and the effect of product, package and country mix. Analysis of Consolidated Operations Net sales rose $203 million or 4% in the quarter and $374 million or 3% year-to-date. The increases reflected net volume gains partially offset by the impact of unfavorable currency translation. Cost of sales as a percent of net sales decreased 1.2 points to 40.6% for the quarter and .8 points to 40.7% year-to-date. The declines were primarily due to higher pricing by North American Snack Foods, as well as higher effective net pricing in International Snack Foods, year-to-date. Selling, general and administrative expenses (SG&A) declined slightly in the quarter and grew at a slower rate than sales year-to-date. SG&A includes selling and distribution expenses (S&D), advertising and marketing expenses (A&M), general and administrative expenses (G&A), other income and expense and equity income or loss from investments in unconsolidated affiliates. G&A grew significantly faster than sales for the quarter and year-to-date, driven by information systems-related spending and customer focus leadership training partially offset by savings from a prior year - -13- restructuring and the consolidation of certain administrative functions. A&M grew at a slower rate than sales for both the quarter and year-to-date, while S&D grew at a slower rate than sales in the quarter but slightly higher year-to-date. Equity income from our investments in unconsolidated affiliates, compared to losses a year ago, primarily reflected the absence of losses from our Latin American bottler, Buenos Aires Embotelladora S.A. (BAESA). Other income and expense reflected increased foreign exchange losses of $3 million and $11 million for the quarter and year-to-date, respectively. Amortization of intangible assets declined 6% and 2% to $45 million and $139 million in the quarter and year-to-date, respectively. The decline accelerated in the quarter, primarily reflecting the impact of writing-off intangible assets as part of the unusual charges recorded at the end of the third quarter of 1996. Unusual items produced a net charge of $304 million year-to-date compared to a $390 million charge taken in the third quarter of 1996. See Note 2. Operating Profit ($ in millions) 12 Weeks Ended 36 Weeks Ended % % 9/6/97 9/7/96 Change 9/6/97 9/7/96 Change Reported $929 $333 NM $1,946 $1,639 19 Ongoing* $929 $723 28 $2,250 $2,029 11 * Excluded the effect of the unusual items described in Note 2. ___________________________________________________________________________ Reported operating profit increased $596 million and $307 million for the quarter and year-to-date, respectively. Ongoing operating profit increased $206 million for the quarter and $221 million year-to-date. The increase reflected the volume gains. Interest Expense, net declined $20 million or 18% in the quarter and $28 million or 8% year-to-date. Interest expense declined for both the quarter and year-to-date reflecting lower average debt levels, partially offset by increased interest rates. Interest income increased in the quarter, primarily reflecting higher average investment levels due to the cash proceeds received from the sale of PFS. However, year-to-date interest income declined due to lower average investment levels. This decline resulted from a 1996 change in the tax law which eliminated a tax exemption on investment income in Puerto Rico, effective for us December 1, 1996. Accordingly, as our investments matured in Puerto Rico, the proceeds were repatriated and used to reduce debt. - -14- Provision for Income Taxes ($ in millions) 12 Weeks Ended 36 Weeks Ended 9/6/97 9/7/96 9/6/97 9/7/96 Provision for Income Taxes $ 286 $ 211 $ 597 $ 563 Effective tax rate Reported 34.2% 95.5% 36.4% 43.1% Ongoing* 34.4% 38.8% 34.0% 34.7% * Excluded the effect of the unusual items. ___________________________________________________________________________ The 1997 reported effective tax rate decreased 61.3 points in the quarter and 6.7% year-to-date, primarily reflecting the effect of the unusual items. Income from Continuing Operations and Income Per Share ($ in millions except per share amounts) 12 Weeks Ended 36 Weeks Ended % % 9/6/97 9/7/96 Change 9/6/97 9/7/96 Change Income from con- tinuing operations Reported $ 551 $ 10 NM $1,045 $ 744 40 Ongoing* $ 551 $ 374 47 $1,280 $1,108 16 Income per share from continuing operations Reported $0.35 $0.01 NM** $ 0.66 $0.46 44** Ongoing* $0.35 $0.23 51** $ 0.81 $0.69 18** * Excluded the effect of unusual items. **The percentage change in Income Per Share was calculated by using Income Per Share calculated to four decimal places to eliminate the effects of rounding. ___________________________________________________________________________ Income from Discontinued Operations and Income Per Share ($ in millions except per share amounts) 12 Weeks Ended 36 Weeks Ended % % 9/6/97 9/7/96 Change 9/6/97 9/7/96 Change Income from dis- continued opera- tions $ 107 $ 134 (20) $696 $377 85 Income per share from discontinued operations $0.07 $0.08 (18)* $0.45 $0.23 89* * The percentage change in Income Per Share was calculated by using Income Per Share calculated to four decimal places to eliminate the effects of rounding. ___________________________________________________________________________ - -15- Income from Discontinued Operations reflected the operating results of TRICON's core restaurant businesses of Pizza Hut, KFC and Taco Bell, as well as PFS, its restaurant distribution operation sold in the second quarter, and several non-core U.S. restaurant businesses through their respective disposal dates. Operating results included expenses associated with the spin-off and interest expense directly related to the Restaurants segment; it did not include an allocation of PepsiCo interest expense or G&A. It also included the 1997 gain from the sale of PFS as well as charges associated with the disposal of non-core businesses. Chevys Mexican Restaurants (Chevys), East Side Mario's (ESM), and Hot 'n Now (HNN) were sold in the first half of 1997. Subsequent to the quarter, D'Angelo Sandwich Shops (D'Angelo) and California Pizza Kitchen (CPK) were sold. Net Income ($ in millions except per share amounts) 12 Weeks Ended 36 Weeks Ended % % 9/6/97 9/7/96 Change 9/6/97 9/7/96 Change Net Income $ 658 $ 144 NM $1,741 $1,121 55 Net Income Per Share $0.42 $0.09 NM $ 1.11 $ 0.69 59* Average Shares Outstanding Used to Calculate Net Income Per Share 1,566 1,607 (3) 1,575 1,613 (2) * The percentage change in Net Income Per Share was calculated by using Net Income per share calculated to four decimal places to eliminate the effects of rounding. ___________________________________________________________________________ - -16- PEPSICO, INC. AND SUBSIDIARIES SUPPLEMENTAL SCHEDULE OF NET SALES AND OPERATING PROFIT (a) MANAGEMENT BASIS ($ in millions, unaudited) Net Sales Operating Profit % % Change B/(W) 12 Weeks Ended Change 12 Weeks Ended As On- 9/6/97 9/7/96 B/(W) 9/6/97 9/7/96 Rept'd going (b) (b) (c) Beverages - -N.A. $2,071 $2,032 2 $ 425 $ 435 (2) (2) - -Int'l 799 791 1 75 (468) NM NM 2,870 2,823 2 500 (33) NM 40 Snack Foods - -N.A. 1,714 1,622 6 378 333 14 14 - -Int'l 778 714 9 90 72 25 25 2,492 2,336 7 468 405 16 16 Combined Segments $5,362 $5,159 4 968 372 NM 27 Unallocated Expenses (39) (39) - - Operating Profit $ 929 $ 333 NM 28 NM - Not Meaningful Notes: (a) This schedule should be read in conjunction with Management's Analysis beginning on page 19 and reflects the continuing operations of our Beverages and Snack Foods segments. Prior year amounts have been restated to reflect the effects of classifying the operating results of our Restaurants segment as discontinued operations. (b) Included International Beverages' 1996 unusual impairment charges of $390 million. (c) Excluded the effects of International Beverages' 1996 unusual impairment charges. -17- PEPSICO, INC. AND SUBSIDIARIES SUPPLEMENTAL SCHEDULE OF NET SALES AND OPERATING PROFIT (a) MANAGEMENT BASIS ($ in millions, unaudited) Net Sales Operating Profit % % Change B/(W) 36 Weeks Ended Change 36 Weeks Ended As On- 9/6/97 9/7/96 B/(W) 9/6/97 9/7/96 Rept'd going (b) (b) (b) (c) Beverages - -N.A. $ 5,557 $5,502 1 $1,029 $1,084 (5) - - -Int'l 1,903 2,053 (7) (121) (433) 72 NM 7,460 7,555 (1) 908 651 39 10 Snack Foods - -N.A. 4,905 4,652 5 985 881 12 13 - -Int'l 2,296 2,080 10 196 226 (13) 14 7,201 6,732 7 1,181 1,107 7 13 Combined Segments $14,661 $14,287 3 2,089 1,758 19 11 Unallocated Expenses (143) (119) (20) (20) Operating Profit $1,946 $1,639 19 11 NM - Not Meaningful Notes: a) This schedule should be read in conjunction with Management's Analysis beginning on page 19 and reflects the continuing operations of our Beverages and Snack Foods segments. Prior year amounts have been restated to reflect the effects of classifying the operating results of our Restaurants segment as discontinued operations. (b) Included the following unusual charges: 1997 1996 Beverages - N.A. $ 52 $ - - Int'l 180 390 Snack Foods - N.A. 10 - - Int'l 62 - $304 $390 (c) Excluded the effects of the unusual items described in note (b) above. - -18- Segments of The Business Beverages ($ in millions) 12 Weeks Ended 36 Weeks Ended % % 9/6/97 9/7/96 Change 9/6/97 9/7/96 Change Net Sales N.A. $2 071 $2,032 2 $5,557 $5,502 1 Int'l 799 791 1 1,903 2,053 (7) $2 870 $2,823 2 $7 460 $7,555 (1) Operating Profit Reported N.A. $ 425 $ 435 (2) $1 029 $1,084 (5) Int'l 75 (468) NM (121) (433) 72 $ 500 $ (33) NM $ 908 $ 651 39 Ongoing* N.A. $ 425 $ 435 (2) $1,081 $1,084 - Int'l 75 (78) NM 59 (43) NM $ 500 $ 357 40 $1,140 $1,041 10 NM - Not Meaningful * Excluded unusual net charges of $232 ($52-North America, $180-Int'l) year-to-date in 1997 and $390 (Int'l) in both the 1996 quarter and year- to-date. See Note 2. _________________________________________________________________________ System bottler case sales (BCS) is our standard volume measure. It represents Pepsi Corporate brands as well as brands we have the right to produce, distribute and market nationally. Third quarter BCS included the months of June, July and August, consistent with prior years. North America Sales increased $39 million and $55 million in the quarter and year-to- date, respectively. The increases reflected volume growth, led by packaged goods, partially offset by lower effective net pricing. The decrease in effective net pricing, primarily in take-home packaged products, reflected an intensely competitive environment. BCS increased 4% for both the quarter and year-to-date, reflecting double-digit growth by Mountain Dew. Non-carbonated soft drink products, led by Aquafina bottled water and Lipton Brisk, grew at a double-digit rate for both the quarter and year-to-date. Our concentrate shipments to franchisees grew faster than their BCS growth in the quarter but were slightly slower year-to-date. Reported operating profit declined $10 million for the quarter and $55 million year-to-date. Ongoing operating profit declined $10 million in the quarter and $3 million year-to-date. Both periods reflected the lower - -19- effective net pricing, higher S&D and increased A&M. S&D grew significantly faster than sales, but at the same rate as volume for both the quarter and year-to-date. A&M grew faster than sales in the quarter but grew significantly slower than volume year-to-date. These unfavorable items were partially offset in the quarter and year-to-date by volume gains, lower packaging and commodity costs and reduced G&A expenses. The lower G&A expenses primarily reflected savings from centralizing certain accounting functions. The change in profit for both the quarter and year- to-date was hampered by lapping a 1996 gain on the sale of an investment in a bottling cooperative. International Sales increased $8 million in the quarter and declined $150 million year-to- date. Increased volume, led by concentrate, was substantially offset by unfavorable currency translation effects in the quarter. The year-to-date decline was due to unfavorable currency translation effects, primarily driven by Spain and Japan. BCS increased 4% in the quarter but year-to-date was even with the prior year. Excluding the impact of the loss of our Venezuelan bottler in August 1996, BCS increased 5% in the quarter and 2% year-to-date. These increases reflected double-digit growth by our China and India Business Units and, solid single-digit growth by our Middle East Business Unit in the quarter and by our Asia Business Unit year-to-date. These advances were partially offset year-to-date by a decline in our Russia Business Unit. Our concentrate shipments to franchisees increased significantly faster than their BCS growth in the quarter because of low concentrate shipments last year. Year-to-date, both concentrate shipments to franchisees and their BCS remained about even with the prior year. Reported operating results increased $543 million for the quarter and $312 million year-to-date. Ongoing operating results increased $153 million and $102 million in the quarter and year-to-date, respectively. The increase in ongoing operating results in the quarter reflected the higher volume, equity income from our investments in unconsolidated affiliates compared to equity losses a year ago, primarily due to the absence of losses from BAESA and lower G&A expenses. The increase year-to- date was driven by equity income compared to equity losses a year ago and lower G&A expenses, partially offset by lower effective net pricing for packaged products. The lower G&A expenses reflected our fourth quarter 1996 restructuring and is consistent with the $50 million of savings expected this year. See Cautionary Statements on page 25. - -20- Snack Foods ($ in millions) 12 Weeks Ended 36 Weeks Ended % % 9/6/97 9/7/96 Change 9/6/97 9/7/96 Change Net Sales N.A. $1,714 $1,622 6 $4,905 $4,652 5 Int'l 778 714 9 2,296 2,080 10 $2,492 $2,336 7 $7,201 $6,732 7 Operating Profit Reported N.A. $ 378 $ 333 14 $ 985 $ 881 12 Int'l 90 72 25 196 226 (13) $ 468 $ 405 16 $1,181 $1,107 7 Ongoing* N.A. $ 378 $ 333 14 $ 995 $ 881 13 Int'l 90 72 25 258 226 14 $ 468 $ 405 16 $1,253 $1,107 13 * Excluded unusual net charges of $72 (N.A.-$10, Int'l-$62) year-to-date for worldwide productivity initiatives and the disposal of assets. See Note 2. ___________________________________________________________________________ North America Sales grew $92 million for the quarter and $253 million year-to-date reflecting increased volume and higher pricing taken on most major brands in the fourth quarter of 1996. Pound volume advanced 4% and 3% for the quarter and year-to-date, respectively. Excluding their low-fat and no-fat versions, core brand growth was led by strong double-digit growth in Doritos brand tortilla chips for the quarter, which drove its year-to-date high single-digit growth and, for both the quarter and year-to-date, high single-digit growth in Lay's brand potato chips and double-digit growth by Tostitos brand tortilla chips. Although low-fat and no-fat snacks depressed the growth rate slightly for the quarter and year-to-date, Baked Lay's brand potato chips and Tostitos brand salsa continued to enjoy double-digit growth for both periods. Reported operating profit grew $45 million for the quarter and $104 million year-to-date. Ongoing operating profit rose $45 million and $114 million for the quarter and year-to-date, respectively. The ongoing profit increase reflected the higher pricing and volume growth partially offset by increased manufacturing costs and G&A expenses. - -21- International Sales increased $64 million for the quarter and $216 million year-to-date. The sales increase reflected volume gains and, year-to-date, higher effective net pricing. Kilo growth is reported on a systemwide basis, which includes both consolidated businesses and unconsolidated affiliates operating for at least one year. Salty snack kilos rose 11% for the quarter and year-to- date, led by strong double-digit growth by Sabritas and Brazil, while sweet snack kilos declined 2% and 9%, respectively. Reported operating profit increased $18 million for the quarter, while decreasing $30 million year-to-date. Ongoing operating profit for the same periods increased $18 million and $32 million, respectively. The increase in the quarter primarily reflected volume gains and lower manufacturing costs partially offset by increased S&D expenses. Year-to-date, inflation- driven higher effective net pricing and volume gains were partially offset by increased operating, manufacturing and G&A costs, primarily in Mexico. Ongoing operating profit also benefited from a gain on a sale of a flour mill. - -22- Cash Flows and Financial Condition Please refer to our 1996 Annual Report on Form 10-K for information regarding our liquidity. Net cash provided by operating activities increased $378 million or 23% to $2.1 billion. The increase reflected a $181 million increase in income before all noncash charges and credits, driven by a $301 million increase in income from continuing operations, and a decrease in operating working capital cash outflows of $197 million. The reduced cash use for operating working capital primarily reflected a small reduction in inventories compared to an increase last year and no change in accounts payable and accrued liabilities compared to a decline in the prior year. The change in inventories primarily reflected lapping unusually high inventory balances last year and lower purchases this year. The change in accounts payable and accrued liabilities was primarily due to timing of payments. Net cash used for investing activities more than doubled to $2.6 billion. The increase primarily reflected a $1.7 billion increase in our investment portfolio partially offset by a $134 million or 12% decline in capital spending by Snack Foods. As discussed in Consolidated Financial Condition on page 24, the increase in the investment portfolio reflected our decision to use a portion of the cash distribution we anticipated receiving from our restaurant businesses prior to their spin-off in the fourth quarter to repay short-term debt. Accordingly, excess cash was invested. Net cash used for financing activities increased $75 million or 8% to $1 billion. The increase was primarily due to increased share repurchases of $592 million offset by $520 million of increased net debt proceeds. Our share repurchase activity was as follows: 36 Weeks Ended ($ and shares in millions) 9/6/97 9/7/96 Cost $1,643 $1,051 Number of shares repurchased 46.6 33.9 % of shares outstanding at beginning of year 3.0% 2.2% Net cash provided by discontinued operations almost tripled to $1.8 billion. The significant increase reflected the cash proceeds associated with the sale of PFS and the non-core businesses, the effects of refranchising restaurants (including the New Zealand IPO) and other operating increases. In addition, subsequent to the end of the quarter, but prior to the TRICON spin-off, we received a $4.5 billion cash payment from our restaurant companies. - -23- Free cash flow is the primary measure we use internally to evaluate our cash flow performance. 36 Weeks Ended ($ in millions) 9/6/97 9/7/96 Net cash provided by operating activities $2,052 $ 1,674 Cash dividends paid (545) (496) Investing activities Capital spending (957) (1,091) Sales of businesses 85 - Sales of property, plant and equipment - 27 Other, net (5) (170) Free cash flow: Continuing operations 630 (56) Discontinued operations 1,791 605 $2,421 $ 549 Free cash flow increased $1.9 billion primarily reflecting $1.2 billion of increased cash provided by discontinued operations. The $686 million increase from continuing operations primarily reflected increased cash from operating activities and reduced capital spending. Consolidated Financial Condition Operating working capital, which excludes short-term investments and short- term borrowing, was $253 million at the end of the third quarter 1997, compared to a negative $130 million at year-end 1996. The $383 million swing in operating working capital was primarily the effects of reclassifying the reduced carrying amount of the International Beverages assets held for disposal to prepaid expenses, deferred income taxes and other current assets. Increased cash and cash equivalents and Notes and Accounts Receivable were partially offset by increased accounts payable and other current liabilities and income taxes payable. Subsequent to the end of the quarter but prior to the spin-off, we received the $4.5 billion cash distribution from TRICON and used $3.7 billion to repay a portion of our short-term debt. Because it was not cost effective to prepay any of our other outstanding debt, the balance of the TRICON payment, along with the cash proceeds from the sale of PFS and the non-core businesses, the New Zealand IPO and other excess cash, were invested in a short-term investment portfolio and will be used to fund our future operating and other investment opportunities, including the repurchase of PepsiCo shares. - -24- Cautionary Statements From time to time, in written reports and oral statements, we discuss our expectations regarding future performance of the Company. These "forward- looking statements" are based on currently available competitive, financial and economic data and our operating plans. They are also inherently uncertain, and investors must recognize that events could turn out to be significantly different from what we had expected. In addition, as disclosed on page 20, the forecasted annual savings of $50 million in 1997 related to the 1996 International Beverages restructuring charge assumes that the facilities are vacated and employees are terminated within the time frames used to develop the estimate. - -25- Independent Accountants' Review Report The Board of Directors PepsiCo, Inc. We have reviewed the accompanying condensed consolidated balance sheet of PepsiCo, Inc. and Subsidiaries as of September 6, 1997 and the related condensed consolidated statement of income for the twelve and thirty-six weeks ended September 6, 1997 and September 7, 1996, and the condensed consolidated statement of cash flows for the thirty-six weeks ended September 6, 1997 and September 7, 1996. These financial statements are the responsibility of PepsiCo, Inc.'s management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical review procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of PepsiCo, Inc. and Subsidiaries as of December 28, 1996, and the related consolidated statements of income, shareholders' equity, and cash flows for the year then ended not presented herein; and in our report dated February 4, 1997, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 28, 1996, is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Our report, referred to above, contains an explanatory paragraph that states that PepsiCo, Inc. in 1995 adopted the provisions of the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long- Lived Assets to Be Disposed Of," and in 1994 adopted the provisions of the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" and changed its method for calculating the market-related value of pension plan assets used in the determination of pension expense. KPMG Peat Marwick LLP New York, New York October 21, 1997 - -26- PART II - OTHER INFORMATION AND SIGNATAURES Item 6. Exhibits and Reports on Form 8-K (a) Exhibits See Index to Exhibits on page 29. (b) Reports on Form 8-K None - -27- Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned. PEPSICO, INC. (Registrant) Date: October 21, 1997 Sean F. Orr Senior Vice President and Controller Date: October 21, 1997 Lawrence F. Dickie Vice President, Associate General Counsel and Assistant Secretary - -28- INDEX TO EXHIBITS ITEM 6 (a) EXHIBITS Exhibit 11 Computation of Net Income Per Share of Capital Stock - Primary and Fully Diluted Exhibit 12 Computation of Ratio of Earnings to Fixed Charges Exhibit 15 Letter from KPMG Peat Marwick LLP regarding Unaudited Interim Financial Information (Accountants' Acknowledgment) Exhibit 27 Financial Data Schedule - -29- EX-11 2 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 PEPSICO, INC. AND SUBSIDIARIES Computation of Net Income Per Share of Capital Stock - Primary (page 1 of 2) (in millions except per share amounts, unaudited) 12 Weeks Ended 36 Weeks Ended 9/6/97 9/7/96 9/6/97 9/7/96 Shares outstanding at beginning of period 1,531 1,565 1,545 1,576 Weighted average of shares issued during the period for exercise of stock options, conversion of debentures and payment of compensation awards 3 3 9 10 Shares repurchased (weighted) (10) (4) (20) (17) Dilutive shares contingently issuable upon exercise of stock options, conversion of debentures and payment of compensation awards, net of shares assumed to have been purchased for treasury (at the average price) with assumed proceeds from exercise of stock options and compensation awards 42 43 41 44 Total shares - primary 1,566 1,607 1,575 1,613 Income from Continuing Operations $ 551 $ 10 $1,045 $ 744 Income from Discontinued Operations 107 134 696 377 Net Income $ 658 $ 144 $1,741 $1,121 Income per share - primary Continuing Operations $ 0.35 $ 0.01 $ 0.66 $ 0.46 Discontinued Operations 0.07 0.08 0.45 0.23 Net Income Per Share $ 0.42 $ 0.09 $ 1.11 $ 0.69 - -30- PEPSICO, INC. AND SUBSIDIARIES Computation of Net Income Per Share of Capital Stock - Fully Diluted (page 2 of 2) (in millions except per share amounts, unaudited) 12 Weeks Ended 36 Weeks Ended 9/6/97 9/7/96 9/6/97 9/7/96 Shares outstanding at beginning of period 1,531 1,565 1,545 1,576 Shares issued during the period for exercise of stock options, conversion of debentures and payment of compensation awards 6 5 19 17 Shares repurchased (weighted) (10) (4) (20) (17) Dilutive shares contingently issuable upon exercise of stock options, conversion of debentures and payment of compensation awards, net of shares assumed to have been purchased for treasury (at the higher of average or quarter-end price) with assumed proceeds from exercise of stock options and compensation awards 41 43 39 42 Total shares - fully diluted 1,568 1,609 1,583 1,618 Income from Continuing Operations $ 551 $ 10 $1,045 $ 744 Income from Discontinued Operations 107 134 696 377 Net Income $ 658 $ 144 $1,741 $1,121 Income per share - fully diluted Continuing Operations $ 0.35 $ 0.01 $ 0.66 $ 0.46 Discontinued Operations 0.07 0.08 0.44 0.23 Net Income Per Share $ 0.42 $ 0.09 $ 1.10 $ 0.69 - -31- EX-12 3 STATEMENT RE COMPUTATION OF RATIOS EXHIBIT 12 PEPSICO, INC. AND SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges (in millions except ratio amounts, unaudited) 36 Weeks Ended 9/6/97 9/7/96 Earnings: (b) Income from continuing operations before income taxes....... $1,642 $1,307 Joint ventures and minority interests, net.................. (34) 214 Amortization of capitalized interest........................ 3 3 Interest expense................. 358 399 Interest portion of rent expense (a)..................... 35 30 Earnings available for fixed charges......................... $2,004 $1,953 Fixed Charges: Interest expense................. $ 358 399 Capitalized interest............. 8 9 Interest portion of rent expense (a).................... 35 30 Total fixed charges............ $ 401 $ 438 Ratio of Earnings to Fixed Charges ............ 5.00 4.46 (a) One-third of net rent expense is the portion deemed representative of the interest factor. (b) Included unusual charges of $304 and $390 in the 36 weeks ended September 6, 1997 and September 7, 1996, respectively, (see Note 2). Excluding these items, the ratio of earnings to fixed charges for the 36 weeks ended September 6, 1997 and September 7, 1996 would have been 5.76 and 5.35, respectively. - -32- EX-15 4 LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION EXHIBIT 15 Accountants' Acknowledgment The Board of Directors PepsiCo, Inc. We hereby acknowledge our awareness of the use of our report dated October 21, 1997 included within the Quarterly Report on Form 10-Q of PepsiCo, Inc. for the twelve and thirty-six weeks ended September 6, 1997, and incorporated by reference in the following Registration Statements and in the related Prospectuses: Registration Description Statement Number Form S-3 PepsiCo SharePower Stock Option Plan for PCDC Employees 33-42121 $500,000,000 Euro-Medium-Term Notes 33-8677 $32,500,000 Puerto Rico Industrial, Medical and Environmental Pollution Control Facilities Financing Authority Adjustable Rate Industrial Revenue Bonds 33-53232 Extension of the PepsiCo SharePower Stock Option Plan to Employees of Snack Ventures Europe, a joint venture between PepsiCo Foods International and General Mills, Inc. 33-50685 $4,587,000,000 Debt Securities and Warrants 33-64243 Form S-8 PepsiCo SharePower Stock Option Plan 33-35602, 33-29037, 33-42058, 33-51496, 33-54731 & 33-66150 1988 Director Stock Plan 33-22970 1979 Incentive Plan and the 1987 Incentive Plan 33-19539 1994 Long-Term Incentive Plan 33-54733 1995 Stock Option Incentive Plan 33-61731 & 333-09363 1979 Incentive Plan 2-65410 PepsiCo, Inc. Long Term Savings Program 2-82645, 33-51514 & 33-60965 Restaurant Deferred Compensation Plan 333-01377 Pursuant to Rule 436(c) of the Securities Act of 1933, such report is not considered a part of a registration statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Act. KPMG Peat Marwick LLP New York, New York October 21, 1997 - -33- EX-27 5 FINANCIAL DATA SCHEDULE FOR THIRD QUARTER 10-Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PEPSICO, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE 36 WEEKS ENDED SEPTEMBER 6, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000077476 PepsiCo, Inc. 1,000,000 Dec-28-1996 Sep-6-1997 9-MOS 502 1,975 2,469 138 775 6,221 10,892 4,885 23,041 9,343 3,584 29 0 0 6,316 23,041 14,661 14,661 5,969 5,969 0 39 358 1,642 597 1,045 696 0 0 1,741 1.11 1.10
-----END PRIVACY-ENHANCED MESSAGE-----