##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 29, 2007
 o
    
    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 001-15019
 PEPSIAMERICAS, INC.
  Delaware
    
    13-6167838(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification Number)4000 Dain Rauscher Plaza, 60 South Sixth Street 
Minneapolis, Minnesota
    
    55402(Address of principal executive offices)
    
    (Zip Code)
  (Registrants telephone number, including area code)
  þ o
  þ o o
  o þ




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##### 



PEPSIAMERICAS, INC.
FORM 10-Q
THIRD QUARTER 2007
 TABLE OF CONTENTS
 PagePART I FINANCIAL INFORMATIONItem 1.Financial StatementsCondensed Consolidated Statements of Income
    
    
    2Condensed Consolidated Balance Sheets
    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3.Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 4.Controls and Procedures
    
    
    34PART II OTHER INFORMATIONItem 1.Legal Proceedings
    
    
    35Item 1A.Risk Factors
    
    
    35Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    35Item 5.Other Information
    
    
    35Item 6.Exhibits
    
    
    35SIGNATURE
    
    
    36EXHIBIT INDEX
    
    
    37Shareholder AgreementAmended and Restated Stock Purchase AgreementAmended and Restated Stock Purchase AgreementCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 PEPSIAMERICAS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (unaudited and in millions, except per share data)
 Third Quarter
    
    
    First Nine Months2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    1,183.1
    
    
    $
    1,064.2
    
    
    $
    3,342.2
    
    
    $
    2,977.9Cost of goods sold
    
    
    699.2
    
    
    
    630.6
    
    
    
    1,977.0
    
    
    
    1,767.0Gross profit
    
    
    483.9
    
    
    
    433.6
    
    
    
    1,365.2
    
    
    
    1,210.9Selling, delivery and administrative expenses
    
    
    342.6
    
    
    
    323.6
    
    
    
    1,017.5
    
    
    
    928.5Special charges
    
    
    1.3
    
    
    
    
    
    
    
    4.1
    
    
    
    2.2Operating income
    
    
    140.0
    
    
    
    110.0
    
    
    
    343.6
    
    
    
    280.2Interest expense, net
    
    
    27.3
    
    
    
    27.0
    
    
    
    79.1
    
    
    
    74.5Other (expense) income, net
    
    
    (1.5
    )
    
    
    (0.1
    )
    
    
    1.4
    
    
    
    (4.1
    )Income from continuing operations before income taxes, minority interest, and equity in net earnings of nonconsolidated companies
    
    
    111.2
    
    
    
    82.9
    
    
    
    265.9
    
    
    
    201.6Income taxes
    
    
    39.0
    
    
    
    30.0
    
    
    
    93.4
    
    
    
    75.1Minority interest
    
    
    (0.7
    )
    
    
    
    
    
    
    (0.3
    )
    
    
    0.1Equity in net earnings of nonconsolidated companies
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    5.6Income from continuing operations
    
    
    71.5
    
    
    
    53.1
    
    
    
    172.2
    
    
    
    132.2Loss from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    2.1
    
    
    
    Net income
    
    $
    71.5
    
    
    $
    53.1
    
    
    $
    170.1
    
    
    $
    132.2Weighted average common shares:Basic
    
    
    126.6
    
    
    
    126.6
    
    
    
    126.1
    
    
    
    128.2Incremental effect of stock options and awards
    
    
    2.4
    
    
    
    1.8
    
    
    
    2.3
    
    
    
    2.0Diluted
    
    
    129.0
    
    
    
    128.4
    
    
    
    128.4
    
    
    
    130.2Earnings per share:Basic:Income from continuing operations
    
    $
    0.56
    
    
    $
    0.42
    
    
    $
    1.37
    
    
    $
    1.03Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (0.02
    )
    
    
    Total
    
    $
    0.56
    
    
    $
    0.42
    
    
    $
    1.35
    
    
    $
    1.03Diluted:Income from continuing operations
    
    $
    0.55
    
    
    $
    0.41
    
    
    $
    1.34
    
    
    $
    1.02Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (0.02
    )
    
    
    Total
    
    $
    0.55
    
    
    $
    0.41
    
    
    $
    1.32
    
    
    $
    1.02Cash dividends declared per share
    
    $
    0.13
    
    
    $
    0.125
    
    
    $
    0.39
    
    
    $
    0.375
  2




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PEPSIAMERICAS, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (unaudited and in millions, except per share data)
 End ofThird
    
    
    End ofQuarter
    
    
    Fiscal Year2007
    
    
    2006ASSETS:Current assets:Cash and cash equivalents
    
    $
    172.6
    
    
    $
    93.1Receivables, net
    
    
    322.6
    
    
    
    267.1Inventories:Raw materials and supplies
    
    
    126.6
    
    
    
    104.2Finished goods
    
    
    152.9
    
    
    
    128.8Total inventories
    
    
    279.5
    
    
    
    233.0Other current assets
    
    
    107.3
    
    
    
    81.9Total current assets
    
    
    882.0
    
    
    
    675.1Property and equipment
    
    
    2,718.1
    
    
    
    2,576.4Accumulated depreciation
    
    
    (1,464.8
    )
    
    
    (1,437.7
    )Net property and equipment
    
    
    1,253.3
    
    
    
    1,138.7Goodwill
    
    
    2,418.3
    
    
    
    2,027.1Intangible assets, net
    
    
    407.1
    
    
    
    299.9Other assets
    
    
    68.0
    
    
    
    66.6Total assets
    
    $
    5,028.7
    
    
    $
    4,207.4LIABILITIES AND SHAREHOLDERS EQUITY:Current liabilities:Short-term debt, including current maturities of long-term debt
    
    $
    192.5
    
    
    $
    212.9Payables
    
    
    217.8
    
    
    
    189.4Other current liabilities
    
    
    327.8
    
    
    
    291.5Total current liabilities
    
    
    738.1
    
    
    
    693.8Long-term debt
    
    
    1,841.1
    
    
    
    1,490.2Deferred income taxes
    
    
    256.1
    
    
    
    243.1Minority interest
    
    
    235.4
    
    
    
    0.1Other liabilities
    
    
    185.2
    
    
    
    175.6Total liabilities
    
    
    3,255.9
    
    
    
    2,602.8Shareholders equity:Preferred stock ($0.01 par value, 12.5 million shares authorized; no shares issued)
    
    
    
    
    
    
    Common stock ($0.01 par value, 350 million shares authorized; 137.6 million shares issued - 2007 and 2006)
    
    
    1,284.7
    
    
    
    1,283.4Retained income
    
    
    645.8
    
    
    
    525.4Accumulated other comprehensive income
    
    
    58.9
    
    
    
    21.7Treasury stock, at cost (10.1 million shares and 10.6 million shares, respectively)
    
    
    (216.6
    )
    
    
    (225.9
    )Total shareholders equity
    
    
    1,772.8
    
    
    
    1,604.6Total liabilities and shareholders equity
    
    $
    5,028.7
    
    
    $
    4,207.4
  3




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PEPSIAMERICAS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited and in millions)
 First Nine Months2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    170.1
    
    
    $
    132.2Loss from discontinued operations
    
    
    (2.1
    )
    
    
    Income from continuing operations
    
    
    172.2
    
    
    
    132.2Adjustments to reconcile to net cash provided by operating activities of continuing operations:Depreciation and amortization
    
    
    145.5
    
    
    
    146.2Deferred income taxes
    
    
    (0.9
    )
    
    
    3.5Special charges
    
    
    4.1
    
    
    
    2.2Cash outlays related to special charges
    
    
    (12.5
    )
    
    
    (2.0
    )Pension contributions
    
    
    (0.7
    )
    
    
    (10.0
    )Equity in net earnings of nonconsolidated companies
    
    
    
    
    
    
    (5.6
    )Excess tax benefits from share-based payment arrangements
    
    
    (9.2
    )
    
    
    (6.4
    )Gain on sale of non-core property
    
    
    (10.2
    )
    
    
    Gain on sale of investment
    
    
    
    
    
    
    (0.9
    )Marketable securities impairment
    
    
    4.0
    
    
    
    Other
    
    
    21.7
    
    
    
    14.8Changes in assets and liabilities, exclusive of acquisitions:Increase in receivables
    
    
    (19.9
    )
    
    
    (62.7
    )Increase in inventories
    
    
    (11.9
    )
    
    
    (25.0
    )Increase in payables
    
    
    10.9
    
    
    
    6.2Net change in other assets and liabilities
    
    
    35.4
    
    
    
    34.5Net cash provided by operating activities of continuing operations
    
    
    328.5
    
    
    
    227.0CASH FLOWS FROM INVESTING ACTIVITIES:Capital investments
    
    
    (143.3
    )
    
    
    (127.7
    )Franchises and companies acquired, net of cash acquired
    
    
    (543.9
    )
    
    
    (88.5
    )Purchase of equity investment
    
    
    (2.3
    )
    
    
    Proceeds from sales of property
    
    
    27.8
    
    
    
    6.8Proceeds from sales of investment
    
    
    
    
    
    
    0.9Net cash used in investing activities
    
    
    (661.7
    )
    
    
    (208.5
    )CASH FLOWS FROM FINANCING ACTIVITIES:Net borrowings of short-term debt
    
    
    (2.0
    )
    
    
    84.6Proceeds from issuance of long-term debt
    
    
    298.2
    
    
    
    247.4Repayment of long-term debt
    
    
    (38.9
    )
    
    
    (134.7
    )Contribution from joint venture minority shareholder
    
    
    216.8
    
    
    
    Treasury stock purchases
    
    
    (59.4
    )
    
    
    (150.7
    )Excess tax benefits from share-based payment arrangements
    
    
    9.2
    
    
    
    6.4Issuance of common stock
    
    
    48.2
    
    
    
    23.0Cash dividends
    
    
    (48.6
    )
    
    
    (43.3
    )Net cash provided by financing activities
    
    
    423.5
    
    
    
    32.7Net operating cash flows used in discontinued operations
    
    
    (7.5
    )
    
    
    (11.5
    )Effects of exchange rate changes on cash and cash equivalents
    
    
    (3.3
    )
    
    
    (1.3
    )Change in cash and cash equivalents
    
    
    79.5
    
    
    
    38.4Cash and cash equivalents at beginning of fiscal year
    
    
    93.1
    
    
    
    116.0Cash and cash equivalents at end of third quarter
    
    $
    172.6
    
    
    $
    154.4
  4




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PEPSIAMERICAS, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited)
 1. Significant Accounting Policies
 Quarterly reporting.
 Fiscal year. st
 rd
  Use of accounting estimates.
 Earnings per share.
  Third Quarter
    
    First Nine Months2007
    
    2006
    
    2007
    
    2006Shares under options outstanding
    
    
    
    
    
    
    1,338,700
    
    
    
    
    
    
    
    Weighted-average exercise price per share
    
    $
    
    
    
    $
    22.63
    
    
    $
    
    
    
    $
    Shares under nonvested restricted stock awards
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    941,956Weighted-average grant date fair value per share
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    24.31
 Reclassifications.
 5




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Recently Issued Accounting Pronouncements.
    2. Special Charges
    2007 ChargesBeginning of fiscal year 2007
    
    $
    11.1Special charges
    
    
    4.1Payment of special charges
    
    
    (12.5
    )End of the first nine months of 2007
    
    $
    2.7
  6




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3. Interest Expense, Net
  Third Quarter
    
    
    First Nine Months2007
    
    
    2006
    
    
    2007
    
    
    2006Interest expense
    
    $
    28.0
    
    
    $
    27.9
    
    
    $
    81.0
    
    
    $
    77.5Interest income
    
    
    (0.7
    )
    
    
    (0.9
    )
    
    
    (1.9
    )
    
    
    (3.0
    )Interest expense, net
    
    $
    27.3
    
    
    $
    27.0
    
    
    $
    79.1
    
    
    $
    74.5
 4. Income Taxes
     Jurisdiction
    
    Subject to ExaminationFederal
    
    
    2005-2006Illinois
    
    
    1999-2006Indiana
    
    
    2003-2006Iowa
    
    
    2003-2006Romania
    
    
    2002-2006Poland
    
    
    2001-2006Czech Republic
    
    
    2003-2006
  7




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5. Comprehensive Income
  Third Quarter
    
    
    First Nine Months2007
    
    
    2006
    
    
    2007
    
    
    2006Net income
    
    $
    71.5
    
    
    $
    53.1
    
    
    $
    170.1
    
    
    $
    132.2Foreign currency translation adjustment
    
    
    19.3
    
    
    
    5.3
    
    
    
    36.2
    
    
    
    13.4Net unrealized investment and hedging gains
    
    
    0.6
    
    
    
    3.3
    
    
    
    1.0
    
    
    
    Comprehensive income
    
    $
    91.4
    
    
    $
    61.7
    
    
    $
    207.3
    
    
    $
    145.6
  6. Goodwill and Intangible Assets
  CentralU.S.
    
    
    Europe
    
    
    Caribbean
    
    
    TotalBalance at beginning of fiscal year 2007
    
    $
    1,825.2
    
    
    $
    185.7
    
    
    $
    16.2
    
    
    $
    2,027.1Acquisitions
    
    
    
    
    
    
    482.1
    
    
    
    
    
    
    
    482.1Purchase accounting adjustments
    
    
    (1.2
    )
    
    
    (104.3
    )
    
    
    
    
    
    
    (105.5
    )Foreign currency translation adjustment
    
    
    
    
    
    
    14.7
    
    
    
    (0.1
    )
    
    
    14.6Balance at end of first nine months of 2007
    
    $
    1,824.0
    
    
    $
    578.2
    
    
    $
    16.1
    
    
    $
    2,418.3
  End of Third
    
    
    End of FiscalQuarter 2007
    
    
    Year 2006Intangible assets subject to amortization:Gross carrying amountFranchise and distribution agreements
    
    $
    3.3
    
    
    $
    3.3Customer relationships and lists
    
    
    24.2
    
    
    
    8.0Other
    
    
    2.9
    
    
    
    2.9Total
    
    $
    30.4
    
    
    $
    14.2Accumulated amortizationFranchise and distribution agreements
    
    $
    (1.0
    )
    
    $
    (0.9
    )Customer relationships and lists
    
    
    (4.1
    )
    
    
    (1.3
    )Other
    
    
    (0.8
    )
    
    
    (0.6
    )Total
    
    $
    (5.9
    )
    
    $
    (2.8
    )Intangible assets subject to amortization, net
    
    $
    24.5
    
    
    $
    11.4Intangible assets not subject to amortization:Franchise and distribution agreements
    
    $
    382.6
    
    
    $
    288.5Total intangible assets, net
    
    $
    407.1
    
    
    $
    299.9
  8




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7. Acquisitions
      8. Debt
   9




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9. Financial Instruments
  Cash Flow Hedges.
  First Nine Months2007
    
    
    2006Unrealized losses on derivatives at beginning of fiscal year
    
    $
    (3.3
    )
    
    $
    (2.4
    )Deferral of net derivative losses in accumulated other
comprehensive income
    
    
    (0.2
    )
    
    
    (0.5
    )Reclassification of net derivative gains (losses)
to earnings
    
    
    0.7
    
    
    
    (0.4
    )Unrealized losses on derivatives at end of first nine months
    
    $
    (2.8
    )
    
    $
    (3.3
    )
 Fair Value Hedges.
 Derivatives not Designated as Hedges.
 10




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End of
    
    End of FiscalThird Quarter
    
    Year2007
    
    2006Unrealized gains:Commodities
    
    $
    2.5
    
    
    $
    Interest rate instruments
    
    
    6.1
    
    
    
    8.2Unrealized losses:Commodities
    
    $
    (0.1
    )
    
    $
    (0.6
    )Interest rate instruments
    
    
    (6.1
    )
    
    
    (6.8
    )
 10. Pension and Other Postretirement Benefit Plans
  Third Quarter
    
    
    First Nine Months2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    0.8
    
    
    $
    0.9
    
    
    $
    2.4
    
    
    $
    2.8Interest cost
    
    
    2.6
    
    
    
    2.5
    
    
    
    7.9
    
    
    
    7.6Expected return on plan assets
    
    
    (3.7
    )
    
    
    (3.5
    )
    
    
    (11.1
    )
    
    
    (10.4
    )Amortization of prior service cost
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.2
    
    
    
    0.2Amortization of net loss
    
    
    0.7
    
    
    
    1.0
    
    
    
    2.1
    
    
    
    2.9Net periodic pension cost
    
    $
    0.5
    
    
    $
    1.0
    
    
    $
    1.5
    
    
    $
    3.1
  11. Share-Based Compensation
   12. Supplemental Cash Flow Information
  First Nine Months2007
    
    2006Interest paid
    
    $
    73.5
    
    
    $
    74.0Interest received
    
    
    1.9
    
    
    
    3.0Income taxes paid, net of refunds
    
    
    91.4
    
    
    
    63.5
 11




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13. Environmental and Other Commitments and Contingencies
 Current Operations .
   Discontinued Operations  Remediation.
     12




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Discontinued Operations-Insurance.
   Cooper Industries,
LLC v. PepsiAmericas, Inc., et al.,
  13




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Discontinued Operations-Product Liability and Toxic Tort Claims.
 14. Segment Reporting
   Third QuarterNet Sales
    
    
    Operating Income2007
    
    
    2006
    
    
    2007
    
    
    2006U.S.
    
    $
    877.9
    
    
    $
    841.5
    
    
    $
    90.8
    
    
    $
    90.1Central Europe
    
    
    238.2
    
    
    
    157.2
    
    
    
    46.3
    
    
    
    18.0Caribbean
    
    
    67.0
    
    
    
    65.5
    
    
    
    2.9
    
    
    
    1.9Total
    
    $
    1,183.1
    
    
    $
    1,064.2
    
    
    $
    140.0
    
    
    $
    110.0
 First Nine MonthsNet Sales
    
    
    Operating Income2007
    
    
    2006
    
    
    2007
    
    
    2006U.S.
    
    $
    2,572.7
    
    
    $
    2,462.0
    
    
    $
    265.0
    
    
    $
    263.7Central Europe
    
    
    588.2
    
    
    
    337.5
    
    
    
    76.9
    
    
    
    14.7Caribbean
    
    
    181.3
    
    
    
    178.4
    
    
    
    1.7
    
    
    
    1.8Total
    
    $
    3,342.2
    
    
    $
    2,977.9
    
    
    $
    343.6
    
    
    $
    280.2
 15. Related Party Transactions
    14




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 FORWARD-LOOKING STATEMENTS
   CRITICAL ACCOUNTING POLICIES
  Recoverability of Goodwill and Intangible Assets with Indefinite Lives.
    Environmental Liabilities.
 16




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Income Taxes.
  Casualty Insurance Costs.
  17




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RESULTS OF OPERATIONS
 BUSINESS OVERVIEW
  volume Constant territory Net pricing Cost of goods sold per unit
 Seasonality
  Items Impacting Comparability
 Acquisitions
    18




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Special Charges
  Marketable Securities Impairment
  Gain on Sale of Non-Core Property
  Financial Results
    2007 Outlook
   19




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RESULTS OF OPERATIONS
2007 THIRD QUARTER COMPARED WITH 2006 THIRD QUARTER
  Volume
  As reported
    
    2007
    
    2006U.S.
    
    
    (1.6
    %)
    
    
    0.6
    %Central Europe
    
    
    25.2
    %
    
    
    50.5
    %Caribbean
    
    
    (4.5
    %)
    
    
    3.8
    %Worldwide
    
    
    4.3
    %
    
    
    9.0
    %
 Constant territory
    
    2007
    
    2006U.S.
    
    
    (1.6
    %)
    
    
    0.6
    %Central Europe
    
    
    4.4
    %
    
    
    13.1
    %Caribbean
    
    
    (4.5
    %)
    
    
    3.8
    %Worldwide
    
    
    (0.4
    %)
    
    
    2.8
    %
     20




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##### Table of Contents



Net Sales
  Net Sales
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    877.9
    
    
    $
    841.5
    
    
    
    4.3
    %Central Europe
    
    
    238.2
    
    
    
    157.2
    
    
    
    51.5
    %Caribbean
    
    
    67.0
    
    
    
    65.5
    
    
    
    2.3
    %Worldwide
    
    $
    1,183.1
    
    
    $
    1,064.2
    
    
    
    11.2
    %
 Net Pricing Growth (Decline)as reported
    
    2007
    
    2006U.S.
    
    
    5.2
    %
    
    
    1.3
    %Central Europe
    
    
    22.1
    %
    
    
    8.3
    %Caribbean
    
    
    6.9
    %
    
    
    4.6
    %Worldwide
    
    
    6.5
    %
    
    
    (0.2
    %)
 Net Pricing Growthconstantterritory
    
    2007
    
    2006U.S.
    
    
    5.2
    %
    
    
    1.3
    %Central Europe
    
    
    21.8
    %
    
    
    8.5
    %Caribbean
    
    
    6.9
    %
    
    
    4.6
    %Worldwide
    
    
    7.4
    %
    
    
    1.5
    %
     21




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##### Table of Contents



Cost of Goods Sold
  Cost of Goods Sold
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    521.1
    
    
    $
    490.8
    
    
    
    6.2
    %Central Europe
    
    
    128.8
    
    
    
    91.5
    
    
    
    40.8
    %Caribbean
    
    
    49.3
    
    
    
    48.3
    
    
    
    2.1
    %Worldwide
    
    $
    699.2
    
    
    $
    630.6
    
    
    
    10.9
    %
 Cost of Goods Sold per UnitIncreaseas reported
    
    2007
    
    2006U.S.
    
    
    6.7
    %
    
    
    4.0
    %Central Europe
    
    
    12.9
    %
    
    
    7.2
    %Caribbean
    
    
    5.8
    %
    
    
    7.2
    %Worldwide
    
    
    5.8
    %
    
    
    2.2
    %
 Cost of Goods Sold per UnitIncrease constant territory
    
    2007
    
    2006U.S.
    
    
    6.7
    %
    
    
    4.0
    %Central Europe
    
    
    11.7
    %
    
    
    8.2
    %Caribbean
    
    
    5.8
    %
    
    
    7.2
    %Worldwide
    
    
    6.9
    %
    
    
    4.1
    %
     22




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##### Table of Contents



Selling, Delivery and Administrative Expenses
  SD&A Expenses
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    264.7
    
    
    $
    260.6
    
    
    
    1.6
    %Central Europe
    
    
    63.1
    
    
    
    47.7
    
    
    
    32.3
    %Caribbean
    
    
    14.8
    
    
    
    15.3
    
    
    
    (3.3
    %)Worldwide
    
    $
    342.6
    
    
    $
    323.6
    
    
    
    5.9
    %
 SD&A as Percent of Net Sales
    
    2007
    
    2006U.S.
    
    
    30.2
    %
    
    
    31.0
    %Central Europe
    
    
    26.5
    %
    
    
    30.3
    %Caribbean
    
    
    22.1
    %
    
    
    23.4
    %Worldwide
    
    
    29.0
    %
    
    
    30.4
    %
     Special Charges
  Operating Income
  2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    90.8
    
    
    $
    90.1
    
    
    
    0.8
    %Central Europe
    
    
    46.3
    
    
    
    18.0
    
    
    
    157.2
    %Caribbean
    
    
    2.9
    
    
    
    1.9
    
    
    
    52.6
    %Worldwide
    
    $
    140.0
    
    
    $
    110.0
    
    
    
    27.3
    %
  23




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##### Table of Contents



Interest Expense and Other Expenses
   Income Taxes
  Equity in Net Earnings of Nonconsolidated Companies
  Net Income
  24




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##### Table of Contents



RESULTS OF OPERATIONS
2007 FIRST NINE MONTHS COMPARED WITH 2006 FIRST NINE MONTHS
  Volume
  As reported
    
    2007
    
    2006U.S.
    
    
    (1.6
    %)
    
    
    0.9
    %Central Europe
    
    
    46.9
    %
    
    
    24.0
    %Caribbean
    
    
    (4.9
    %)
    
    
    1.1
    %Worldwide
    
    
    6.7
    %
    
    
    4.3
    %
 Constant territory
    
    2007
    
    2006U.S.
    
    
    (1.6
    %)
    
    
    0.9
    %Central Europe
    
    
    8.5
    %
    
    
    9.7
    %Caribbean
    
    
    (4.9
    %)
    
    
    1.1
    %Worldwide
    
    
    (0.1
    %)
    
    
    2.2
    %
     25




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##### Table of Contents



Net Sales
  Net Sales
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    2,572.7
    
    
    $
    2,462.0
    
    
    
    4.5
    %Central Europe
    
    
    588.2
    
    
    
    337.5
    
    
    
    74.3
    %Caribbean
    
    
    181.3
    
    
    
    178.4
    
    
    
    1.6
    %Worldwide
    
    $
    3,342.2
    
    
    $
    2,977.9
    
    
    
    12.2
    %
 Net Pricing Growthas reported
    
    2007
    
    2006U.S.
    
    
    5.5
    %
    
    
    1.3
    %Central Europe
    
    
    20.1
    %
    
    
    4.0
    %Caribbean
    
    
    6.2
    %
    
    
    5.5
    %Worldwide
    
    
    5.2
    %
    
    
    0.7
    %
 Net Pricing Growthconstantterritory
    
    2007
    
    2006U.S.
    
    
    5.5
    %
    
    
    1.3
    %Central Europe
    
    
    19.1
    %
    
    
    3.8
    %Caribbean
    
    
    6.2
    %
    
    
    5.5
    %Worldwide
    
    
    6.6
    %
    
    
    1.3
    %
     26




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##### Table of Contents



Cost of Goods Sold
  Cost of Goods Sold
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    1,510.6
    
    
    $
    1,432.7
    
    
    
    5.4
    %Central Europe
    
    
    331.7
    
    
    
    201.8
    
    
    
    64.4
    %Caribbean
    
    
    134.7
    
    
    
    132.5
    
    
    
    1.7
    %Worldwide
    
    $
    1,977.0
    
    
    $
    1,767.0
    
    
    
    11.9
    %
 Cost of Goods Sold per UnitIncreaseas reported
    
    2007
    
    2006U.S.
    
    
    6.1
    %
    
    
    4.3
    %Central Europe
    
    
    12.1
    %
    
    
    2.7
    %Caribbean
    
    
    5.7
    %
    
    
    6.5
    %Worldwide
    
    
    4.3
    %
    
    
    3.3
    %
 Cost of Goods Sold per UnitIncreaseconstant territory
    
    2007
    
    2006U.S.
    
    
    6.1
    %
    
    
    4.3
    %Central Europe
    
    
    11.8
    %
    
    
    3.2
    %Caribbean
    
    
    5.7
    %
    
    
    6.5
    %Worldwide
    
    
    6.1
    %
    
    
    4.0
    %
     27




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##### Table of Contents



Selling, Delivery and Administrative Expenses
  SD&A Expenses
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    793.2
    
    
    $
    765.6
    
    
    
    3.6
    %Central Europe
    
    
    179.4
    
    
    
    118.8
    
    
    
    51.0
    %Caribbean
    
    
    44.9
    
    
    
    44.1
    
    
    
    1.8
    %Worldwide
    
    $
    1,017.5
    
    
    $
    928.5
    
    
    
    9.6
    %
 SD&A as Percent of Net Sales
    
    2007
    
    2006U.S.
    
    
    30.8
    %
    
    
    31.1
    %Central Europe
    
    
    30.5
    %
    
    
    35.2
    %Caribbean
    
    
    24.8
    %
    
    
    24.7
    %Worldwide
    
    
    30.4
    %
    
    
    31.2
    %
     Special Charges
  28




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##### Table of Contents



Operating Income
  2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    265.0
    
    
    $
    263.7
    
    
    
    0.5
    %Central Europe
    
    
    76.9
    
    
    
    14.7
    
    
    
    423.1
    %Caribbean
    
    
    1.7
    
    
    
    1.8
    
    
    
    (5.6
    %)Worldwide
    
    $
    343.6
    
    
    $
    280.2
    
    
    
    22.6
    %
     Interest Expense and Other Expenses
   Income Taxes
  Equity in Net Earnings of Nonconsolidated Companies
  29




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##### Table of Contents



Loss on Discontinued Operations
  Net Income
  LIQUIDITY AND CAPITAL RESOURCES
 Operating Activities.
 Investing Activities.
    Financing
Activities.
   30




---



##### Table of Contents



Discontinued operations.
  RELATED PARTY TRANSACTIONS
  31




---



##### Table of Contents



32




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Commodity Prices
   Interest Rates
  Currency Exchange Rates
   33




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
   34




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (c)
    
    Our share repurchase program activity for each of the three months and the quarter
ended September 29, 2007 was as follows:
 Total
    
    Total Number of
    
    Maximum NumberNumber of
    
    Shares Purchased
    
    of Shares that MayShares
    
    as Part of Publicly
    
    Yet Be PurchasedPurchased
    
    Announced Plans
    
    Under the Plans orPeriod
    
    (1)
    
    or Programs (2)
    
    Programs (3)July 1  July 28, 2007
    
    
    
    
    32,840,500
    
    
    
    7,159,500July 29  August 25, 2007
    
    
    
    
    32,840,500
    
    
    
    7,159,500August 26  September 29, 2007
    
    
    
    
    32,840,500
    
    
    
    7,159,500For the Quarter Ended Sept. 29, 2007
    
    
 
 (1)
    
    Represents shares purchased in open-market transactions pursuant to our
publicly announced repurchase program.(2)
    
    Represents cumulative shares purchased under previously announced share
repurchase authorizations by the Board of Directors. Share repurchases began in 1999
under an authorization for 15 million shares announced on November 19, 1999. These
amounts are not included in the table above. On December 19, 2002, the Board of
Directors authorized the repurchase of 20 million additional shares. The Board of
Directors later authorized the repurchase of 20 million additional shares as
announced on July 21, 2005. Share repurchase activity for the
last two authorizations is included in the table
above.(3)
    
    As noted above, on July 21, 2005 we announced that our Board of Directors
authorized the repurchase of 20 million additional shares under a previously
authorized repurchase program. This repurchase authorization does not have a
scheduled expiration date. 
 Item 5. Other Information
 (a)
    
    Item 8.01. Other Events. On October 25, 2007, our Board of Directors declared a
dividend of $0.13 per share on PepsiAmericas common stock. The dividend is payable January
2, 2008 to shareholders of record on December 14, 2007. Our Board of Directors reviews the
dividend policy on a quarterly basis.
 
 Item 6. Exhibits
  35




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##### Table of Contents



SIGNATURE
  PEPSIAMERICAS, INC.Dated: November 1, 2007
    By:
    /s/ ALEXANDER H. WAREAlexander H. WareExecutive Vice President and Chief
Financial Officer
(As Principal Financial Officer,
Chief
 Accounting Officer and Duly Authorized Officer
of PepsiAmericas, Inc.) 36




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##### Table of Contents



EXHIBIT INDEX
 3.1
    
    Restated Certificate of Incorporation (incorporated by reference to the Companys Registration Statement on Form S-8 (File No. 333-64292) filed on June 29, 2001).3.2
    
    By-Laws, as amended and restated on December 14, 2006 (incorporated by reference to the Companys Current Report on Form 8-K (File No. 001-15019) filed on December 18, 2006).4.1
    
    Form of 5.75% Note due 2012 (incorporated by reference to the Companys Current Report on Form 8-K (File No. 001-15019) filed on July 12, 2007).10.1
    
    Shareholder Agreement between PAS Luxembourg s.a.r.l. and Linkbay Limited (PepsiCo Cyprus) and Sandora Holdings, B.V. dated as of August 14, 2007.10.2
    
    Amended and Restated Stock Purchase Agreement by and among PepsiAmericas, Inc., PepsiCo, Inc., Igor Yevgenovych Bezzub, and Raimondas Tumenas dated as of August 17, 2007.10.3
    
    Amended and Restated Stock Purchase Agreement by and among PepsiAmericas, Inc., PepsiCo, Sergiy Oleksandrovych Sypko, Olena Mykhailivna Sypko, Oleksiy Sergiyovich Sypko and Andriy Serviyovich Sypko dated as of August 17, 2007.10.4
    
    Underwriting Agreement by and among PepsiAmericas, Inc., Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated, as representatives of the several underwriters, dated July 11, 2007 (incorporated by reference to the Companys Current Report on Form 8-K (File No. 001-15019) filed on July 12, 2007).31.1
    
    Chief Executive Officer Certification pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Chief Financial Officer Certification pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 37