##### 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 27, 2008
 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 RBC Plaza, 60 South Sixth StreetMinneapolis, Minnesota
    
    55402(Address of principal executive offices)
    
    (Zip Code)
 
  þ o
  Large accelerated filer þAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o  o þ




---



##### 



PEPSIAMERICAS, INC.
FORM 10-Q
THIRD QUARTER 2008
 TABLE OF CONTENTS
 PagePART I
    
    FINANCIAL INFORMATION
    
    
    2Item 1.
    
    Financial Statements
    
    
    2Condensed 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
    
    
    18Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    38Item 4.
    
    Controls and Procedures
    
    
    39PART II
    
    OTHER INFORMATION
    
    
    40Item 1.
    
    Legal Proceedings
    
    
    40Item 1A.
    
    Risk Factors
    
    
    40Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    40Item 5.
    
    Other Information
    
    
    41Item 6.
    
    Exhibits
    
    
    41SIGNATURES
    
    
    
    
    
    
    42EXHIBIT INDEX
    
    
    
    
    
    
    43EX-31.1EX-31.2EX-32.1EX-32.2




---



##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 PEPSIAMERICAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited and in millions, except per share data)
 
 Item 1. Financial Statements
 Third Quarter
    
    
    First Nine Months2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    1,327.5
    
    
    $
    1,183.1
    
    
    $
    3,767.0
    
    
    $
    3,342.2Cost of goods sold
    
    
    785.3
    
    
    
    699.2
    
    
    
    2,254.2
    
    
    
    1,977.0Gross profit
    
    
    542.2
    
    
    
    483.9
    
    
    
    1,512.8
    
    
    
    1,365.2Selling, delivery and administrative expenses
    
    
    388.8
    
    
    
    342.6
    
    
    
    1,123.0
    
    
    
    1,017.5Special charges
    
    
    7.1
    
    
    
    1.3
    
    
    
    7.7
    
    
    
    4.1Operating income
    
    
    146.3
    
    
    
    140.0
    
    
    
    382.1
    
    
    
    343.6Interest expense, net
    
    
    27.5
    
    
    
    27.3
    
    
    
    85.6
    
    
    
    79.1Other (expense) income, net
    
    
    (1.4
    )
    
    
    (1.5
    )
    
    
    (1.6
    )
    
    
    1.4Income from continuing operations before
income taxes, minority
interest, and equity in net loss of
nonconsolidated companies
    
    
    117.4
    
    
    
    111.2
    
    
    
    294.9
    
    
    
    265.9Income taxes
    
    
    31.7
    
    
    
    39.0
    
    
    
    87.4
    
    
    
    93.4Minority interest
    
    
    (3.3
    )
    
    
    (0.7
    )
    
    
    (9.0
    )
    
    
    (0.3
    )Equity in net loss of nonconsolidated companies
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.7
    )
    
    
    Income from continuing operations
    
    
    82.3
    
    
    
    71.5
    
    
    
    197.8
    
    
    
    172.2Loss from discontinued operations, net of tax
    
    
    9.2
    
    
    
    
    
    
    
    9.2
    
    
    
    2.1Net income
    
    $
    73.1
    
    
    $
    71.5
    
    
    $
    188.6
    
    
    $
    170.1Weighted average common shares:Basic
    
    
    124.6
    
    
    
    126.6
    
    
    
    125.7
    
    
    
    126.1Incremental effect of stock options and awards
    
    
    1.7
    
    
    
    2.4
    
    
    
    1.7
    
    
    
    2.3Diluted
    
    
    126.3
    
    
    
    129.0
    
    
    
    127.4
    
    
    
    128.4Earnings per share:Basic:Income from continuing operations
    
    $
    0.66
    
    
    $
    0.56
    
    
    $
    1.57
    
    
    $
    1.37Loss from discontinued operations
    
    
    (0.07
    )
    
    
    
    
    
    
    (0.07
    )
    
    
    (0.02
    )Total
    
    $
    0.59
    
    
    $
    0.56
    
    
    $
    1.50
    
    
    $
    1.35Diluted:Income from continuing operations
    
    $
    0.65
    
    
    $
    0.55
    
    
    $
    1.55
    
    
    $
    1.34Loss from discontinued operations
    
    
    (0.07
    )
    
    
    
    
    
    
    (0.07
    )
    
    
    (0.02
    )Total
    
    $
    0.58
    
    
    $
    0.55
    
    
    $
    1.48
    
    
    $
    1.32Cash dividends declared per share
    
    $
    0.135
    
    
    $
    0.13
    
    
    $
    0.405
    
    
    $
    0.39
  2




---



##### Table of Contents



PEPSIAMERICAS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in millions, except per share data)
 End of First
    
    
    End ofNine Months
    
    
    Fiscal Year2008
    
    
    2007ASSETS:Current assets:Cash and cash equivalents
    
    $
    265.3
    
    
    $
    189.7Receivables, net
    
    
    380.2
    
    
    
    330.6Inventories:Raw materials and supplies
    
    
    132.6
    
    
    
    144.5Finished goods
    
    
    160.5
    
    
    
    143.2Total inventories
    
    
    293.1
    
    
    
    287.7Other current assets
    
    
    136.9
    
    
    
    114.1Total current assets
    
    
    1,075.5
    
    
    
    922.1Property and equipment
    
    
    2,993.9
    
    
    
    2,850.5Accumulated depreciation
    
    
    (1,583.6
    )
    
    
    (1,520.9
    )Net property and equipment
    
    
    1,410.3
    
    
    
    1,329.6Goodwill
    
    
    2,388.1
    
    
    
    2,432.7Intangible assets, net
    
    
    566.2
    
    
    
    545.6Other assets
    
    
    70.8
    
    
    
    78.0Total assets
    
    $
    5,510.9
    
    
    $
    5,308.0LIABILITIES AND SHAREHOLDERS EQUITY:Current liabilities:Short-term debt, including current maturities of long-term debt
    
    $
    541.9
    
    
    $
    337.6Payables
    
    
    225.6
    
    
    
    224.0Other current liabilities
    
    
    333.3
    
    
    
    341.0Total current liabilities
    
    
    1,100.8
    
    
    
    902.6Long-term debt
    
    
    1,650.0
    
    
    
    1,803.5Deferred income taxes
    
    
    312.3
    
    
    
    282.5Minority interest
    
    
    306.5
    
    
    
    273.4Other liabilities
    
    
    205.5
    
    
    
    187.7Total liabilities
    
    
    3,575.1
    
    
    
    3,449.7Shareholders 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 - 2008 and 2007)
    
    
    1,292.0
    
    
    
    1,292.7Retained income
    
    
    807.5
    
    
    
    670.9Accumulated other comprehensive income
    
    
    131.4
    
    
    
    98.8Treasury stock, at cost (12.9 million shares and 9.5 million shares, respectively)
    
    
    (295.1
    )
    
    
    (204.1
    )Total shareholders equity
    
    
    1,935.8
    
    
    
    1,858.3Total liabilities and shareholders equity
    
    $
    5,510.9
    
    
    $
    5,308.0
  3




---



##### Table of Contents



PEPSIAMERICAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
 First Nine Months2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    188.6
    
    
    $
    170.1Loss from discontinued operations
    
    
    9.2
    
    
    
    2.1Income from continuing operations
    
    
    197.8
    
    
    
    172.2Adjustments to reconcile to net cash provided
by operating activities of continuing operations:Depreciation and amortization
    
    
    155.1
    
    
    
    145.5Deferred income taxes
    
    
    8.5
    
    
    
    (0.9
    )Special charges
    
    
    7.7
    
    
    
    4.1Cash outlays related to special charges
    
    
    (2.6
    )
    
    
    (12.5
    )Pension contribution
    
    
    
    
    
    
    (0.7
    )Equity in net loss of nonconsolidated companies
    
    
    0.7
    
    
    
    Excess tax benefits from share-based payment arrangements
    
    
    (1.0
    )
    
    
    (9.2
    )Gain on sale of non-core property
    
    
    
    
    
    
    (10.2
    )Marketable securities impairment
    
    
    
    
    
    
    4.0Minority interest
    
    
    9.0
    
    
    
    0.3Other
    
    
    16.8
    
    
    
    21.4Changes in assets and liabilities:Increase in receivables
    
    
    (50.5
    )
    
    
    (19.9
    )Increase in inventories
    
    
    (1.4
    )
    
    
    (11.9
    )(Decrease) increase in payables
    
    
    (3.2
    )
    
    
    10.9Net change in other assets and liabilities
    
    
    (16.7
    )
    
    
    35.4Net cash provided by operating activities of continuing operations
    
    
    320.2
    
    
    
    328.5CASH FLOWS FROM INVESTING ACTIVITIES:Capital investments
    
    
    (162.9
    )
    
    
    (143.3
    )Franchises and companies acquired
    
    
    (1.0
    )
    
    
    (543.9
    )Proceeds from sales of property
    
    
    6.4
    
    
    
    27.8Purchase of equity investment
    
    
    
    
    
    
    (2.3
    )Net cash used in investing activities
    
    
    (157.5
    )
    
    
    (661.7
    )CASH FLOWS FROM FINANCING ACTIVITIES:Net borrowings of short-term debt
    
    
    94.4
    
    
    
    (2.0
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    298.2Repayment of long-term debt
    
    
    (47.5
    )
    
    
    (38.9
    )Treasury stock purchases
    
    
    (105.2
    )
    
    
    (59.4
    )Excess tax benefits from share-based payment arrangements
    
    
    1.0
    
    
    
    9.2Contribution from joint venture minority shareholder
    
    
    26.0
    
    
    
    216.8Issuance of common stock
    
    
    2.8
    
    
    
    48.2Cash dividends
    
    
    (51.4
    )
    
    
    (48.6
    )Net cash (used in) provided by financing activities
    
    
    (79.9
    )
    
    
    423.5Net operating cash flows used in discontinued operations
    
    
    (7.5
    )
    
    
    (7.5
    )Effects of exchange rate changes on cash and cash equivalents
    
    
    0.3
    
    
    
    (3.3
    )Change in cash and cash equivalents
    
    
    75.6
    
    
    
    79.5Cash and cash equivalents at beginning of fiscal year
    
    
    189.7
    
    
    
    93.1Cash and cash equivalents at end of third quarter
    
    $
    265.3
    
    
    $
    172.6
  4




---



##### Table of Contents



PEPSIAMERICAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 1. Significant Accounting Policies
 Quarterly Reporting.
 Use of Accounting Estimates.
 Fiscal Year. st st
  Earnings Per Share.
  Third Quarter
    
    First Nine Months2008
    
    2007
    
    2008
    
    2007Shares under options outstanding
    
    
    152,200
    
    
    
    
    
    
    
    
    
    
    
    Weighted-average exercise price per share
    
    $
    22.63
    
    
    $
    
    
    
    $
    
    
    
    $
    
 Reclassifications.
 Recently Adopted Accounting Pronouncements.
 5




---



##### Table of Contents



Recently Issued Accounting Pronouncements to be Adopted in the Future.
   2. Special Charges
  6




---



##### Table of Contents



2008 ChargesBalance as of the end of fiscal year 2007
    
    $
    1.1Special charges
    
    
    7.7Application of special charges
    
    
    (2.6
    )Application of non-cash charges
    
    
    (5.9
    )Balance as of the end of the first nine months of 2008
    
    $
    0.3
  3. Interest Expense, Net
  Third Quarter
    
    
    First Nine Months2008
    
    
    2007
    
    
    2008
    
    
    2007Interest expense
    
    $
    29.5
    
    
    $
    28.0
    
    
    $
    89.5
    
    
    $
    81.0Interest income
    
    
    (2.0
    )
    
    
    (0.7
    )
    
    
    (3.9
    )
    
    
    (1.9
    )Interest expense, net
    
    $
    27.5
    
    
    $
    27.3
    
    
    $
    85.6
    
    
    $
    79.1
 4. Income Taxes
    7




---



##### Table of Contents



Subject toJurisdiction
    
    ExaminationFederal (U.S.)
    
    2005-2007Illinois
    
    1999-2007Indiana
    
    2004-2007Iowa
    
    2004-2007Romania
    
    2003-2007Poland
    
    2002-2007Czech Republic
    
    2004-2007Ukraine
    
    2005-2007
 5. Comprehensive Income
  Third Quarter
    
    
    First Nine Months2008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    73.1
    
    
    $
    71.5
    
    
    $
    188.6
    
    
    $
    170.1Foreign currency translation adjustment
    
    
    (52.5
    )
    
    
    19.3
    
    
    
    31.5
    
    
    
    36.2Unrealized (losses) gains on investments
    
    
    (0.5
    )
    
    
    0.5
    
    
    
    (0.8
    )
    
    
    0.5Unrealized gains on derivatives
    
    
    1.8
    
    
    
    0.1
    
    
    
    1.8
    
    
    
    0.5Amortization of unrecognized pension and
postretirement benefit cost
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    Comprehensive income
    
    $
    21.9
    
    
    $
    91.4
    
    
    $
    221.2
    
    
    $
    207.3
  6. Acquisitions
  8




---



##### Table of Contents



Goodwill
    
    $
    430.6Trademark and tradenames
    
    
    116.0Customer relationships and lists
    
    
    48.2Net assets assumed, net of cash acquired
    
    
    142.5Deferred tax liabilities
    
    
    (56.9
    )Total
    
    $
    680.4
 7. Goodwill and Intangible Assets
  U.S.
    
    
    CEE
    
    
    Caribbean
    
    
    TotalBalance as of the end of fiscal year 2007
    
    $
    1,824.1
    
    
    $
    592.8
    
    
    $
    15.8
    
    
    $
    2,432.7Purchase accounting adjustments
    
    
    
    
    
    
    (63.1
    )
    
    
    
    
    
    
    (63.1
    )Foreign currency translation adjustment
    
    
    
    
    
    
    18.6
    
    
    
    (0.1
    )
    
    
    18.5Balance as of the end of the first nine
months of 2008
    
    $
    1,824.1
    
    
    $
    548.3
    
    
    $
    15.7
    
    
    $
    2,388.1
  End of FirstNine Months
    
    
    End of Fiscal2008
    
    
    Year 2007Intangible assets subject to amortization:Gross carrying amountTrademarks and tradenames
    
    $
    
    
    
    $
    109.0Customer relationships and lists
    
    
    74.5
    
    
    
    56.2Franchise and distribution agreements
    
    
    3.3
    
    
    
    3.3Other
    
    
    2.9
    
    
    
    2.9Total
    
    $
    80.7
    
    
    $
    171.4Accumulated amortizationTrademarks and tradenames
    
    $
    
    
    
    $
    (1.2
    )Customer relationships and lists
    
    
    (12.8
    )
    
    
    (6.3
    )Franchise and distribution agreements
    
    
    (1.2
    )
    
    
    (1.1
    )Other
    
    
    (1.0
    )
    
    
    (0.8
    )Total
    
    $
    (15.0
    )
    
    $
    (9.4
    )Intangible assets subject to amortization, net
    
    $
    65.7
    
    
    $
    162.0Intangible assets not subject to amortization:Franchise and distribution agreements
    
    
    379.6
    
    
    
    383.6Trademarks and tradenames
    
    
    120.9
    
    
    
    Total intangible assets, net
    
    $
    566.2
    
    
    $
    545.6
  9




---



##### Table of Contents



8. Receivables
  End of FirstNine Months
    
    
    End of Fiscal2008
    
    
    Year 2007Trade receivables, net of securitization
    
    $
    309.8
    
    
    $
    290.6Funding and rebates, net
    
    
    73.5
    
    
    
    42.3Other receivables
    
    
    10.5
    
    
    
    12.4Allowance for doubtful accounts
    
    
    (13.6
    )
    
    
    (14.7
    )Receivables, net of allowance
    
    $
    380.2
    
    
    $
    330.6
 9. Payables
  End of FirstNine Months
    
    
    End of Fiscal2008
    
    
    Year 2007Trade payables
    
    $
    180.0
    
    
    $
    189.4Dividends payable
    
    
    16.8
    
    
    
    16.6Income tax and other payables
    
    
    28.8
    
    
    
    18.0Payables
    
    $
    225.6
    
    
    $
    224.0
 10. Financial Instruments
  Cash Flow Hedges.
  10




---



##### Table of Contents



First Nine Months2008
    
    
    2007Balance as of the beginning of fiscal year
    
    $
    (2.7
    )
    
    $
    (3.3
    )Deferral of net derivative gains (losses) in
accumulated other comprehensive income
    
    
    1.3
    
    
    
    (0.2
    )Reclassification of net derivative losses to income
    
    
    0.5
    
    
    
    0.7Balance as of the end of the first nine months
    
    $
    (0.9
    )
    
    $
    (2.8
    )
 Fair Value Hedges.
 11. Fair Value Measurements
   Level 1
 Level 2
 
    
    Quoted prices for similar assets or liabilities in active markets;
    
    Quoted prices for identical or similar assets or liabilities in non-active markets
(examples include corporate and municipal bonds which trade infrequently);
    
    Inputs other than quoted prices that are observable for substantially the full term of
the asset or liability (examples include interest rate and currency swaps); and
    
    Inputs that are derived principally from or corroborated by observable market data for
substantially the full term of the asset or liability (examples include certain
securities and derivatives).
 Level 3
 11




---



##### Table of Contents



Quoted Pricesin Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantEnd of First
    
    
    Identical
    
    
    Observable
    
    
    UnobservableNine Months
    
    
    Assets
    
    
    Inputs
    
    
    Inputs2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Available-for-sale equity securities
    
    $
    0.5
    
    
    $
    0.5
    
    
    $
    
    
    
    $
    Deferred compensation plan assets
    
    
    4.4
    
    
    
    4.4
    
    
    
    
    
    
    
    Hedge assets
    
    
    3.1
    
    
    
    
    
    
    
    3.1
    
    
    
    Total assets
    
    $
    8.0
    
    
    $
    4.9
    
    
    $
    3.1
    
    
    $
    Deferred compensation plan liabilities
    
    $
    37.9
    
    
    $
    
    
    
    $
    37.9
    
    
    $
    Hedge liabilities
    
    
    1.3
    
    
    
    
    
    
    
    1.3
    
    
    
    Total liabilities
    
    $
    39.2
    
    
    $
    
    
    
    $
    39.2
    
    
    $
    
 Available-For-Sale Equity Securities.
 Deferred Compensation Plan Assets and Liabilities.
 Derivative Assets and Liabilities.
 12. Pension and Other Postretirement Benefit Plans
  Third QuarterPension
    
    
    Other PostretirementBenefit Costs
    
    
    Benefit Costs2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    0.8
    
    
    $
    0.8
    
    
    $
    
    
    
    $
    Interest cost
    
    
    2.8
    
    
    
    2.6
    
    
    
    0.3
    
    
    
    0.3Expected return on plan assets
    
    
    (3.8
    )
    
    
    (3.7
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    Amortization of net loss (gain)
    
    
    0.4
    
    
    
    0.7
    
    
    
    (0.2
    )
    
    
    (0.2
    )Net periodic pension cost
    
    $
    0.3
    
    
    $
    0.5
    
    
    $
    0.1
    
    
    $
    0.1
 12




---



##### Table of Contents



First Nine MonthsPension
    
    
    Other PostretirementBenefit Costs
    
    
    Benefit Costs2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    2.4
    
    
    $
    2.4
    
    
    $
    
    
    
    $
    Interest cost
    
    
    8.4
    
    
    
    7.9
    
    
    
    0.8
    
    
    
    0.9Expected return on plan assets
    
    
    (11.4
    )
    
    
    (11.1
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    0.2
    
    
    
    0.2
    
    
    
    
    
    
    
    Amortization of net loss (gain)
    
    
    1.4
    
    
    
    2.1
    
    
    
    (0.6
    )
    
    
    (0.4
    )Net periodic pension cost
    
    $
    1.0
    
    
    $
    1.5
    
    
    $
    0.2
    
    
    $
    0.5
  13. Share-Based Compensation
   14. Supplemental Cash Flow Information
  First Nine Months2008
    
    2007Interest paid
    
    $
    89.1
    
    
    $
    73.5Interest received
    
    
    3.8
    
    
    
    1.9Income taxes paid, net of refunds
    
    
    44.0
    
    
    
    91.4
 15. Environmental and Other Commitments and Contingencies
 Current Operations .
  13




---



##### Table of Contents



Discontinued Operations  Remediation.
    People of the State of California
and the City of Willits, CA v. Remco Hydraulics, Inc.
  14




---



##### Table of Contents



Discontinued OperationsInsurance.
  Cooper Industries,
LLC v. PepsiAmericas, Inc., et al.,
  Discontinued OperationsProduct Liability and Toxic Tort Claims.
  15




---



##### Table of Contents



16. Segment Reporting
    Third QuarterNet Sales
    
    
    Operating Income (Loss)2008
    
    
    2007
    
    
    2008
    
    
    2007U.S.
    
    $
    882.7
    
    
    $
    877.9
    
    
    $
    89.1
    
    
    $
    90.8CEE
    
    
    382.4
    
    
    
    238.2
    
    
    
    62.4
    
    
    
    46.3Caribbean
    
    
    62.4
    
    
    
    67.0
    
    
    
    (5.2
    )
    
    
    2.9Total
    
    $
    1,327.5
    
    
    $
    1,183.1
    
    
    $
    146.3
    
    
    $
    140.0
 First Nine MonthsNet Sales
    
    
    Operating Income (Loss)2008
    
    
    2007
    
    
    2008
    
    
    2007U.S.
    
    $
    2,580.7
    
    
    $
    2,572.7
    
    
    $
    259.1
    
    
    $
    265.0CEE
    
    
    1,004.4
    
    
    
    588.2
    
    
    
    129.0
    
    
    
    76.9Caribbean
    
    
    181.9
    
    
    
    181.3
    
    
    
    (6.0
    )
    
    
    1.7Total
    
    $
    3,767.0
    
    
    $
    3,342.2
    
    
    $
    382.1
    
    
    $
    343.6
 17. Related Party Transactions
    16




---



##### Table of Contents



17




---



##### Table of Contents



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.
     18




---



##### Table of Contents



Environmental Liabilities.
 Income Taxes.
   Casualty Insurance Costs.
  Pension and Postretirement Benefits .
 19




---



##### Table of Contents



20




---



##### Table of Contents



RESULTS OF OPERATIONS
 BUSINESS OVERVIEW
  volume. Constant territory Net pricing Cost of goods sold per unit
 Financial Results
    21




---



##### Table of Contents



Seasonality
  Items Impacting Comparability
 Acquisitions
   Special Charges
   22




---



##### Table of Contents



RESULTS OF OPERATIONS
2008 THIRD QUARTER COMPARED WITH 2007 THIRD QUARTER
  Volume
  2008
    
    2007U.S.
    
    
    (2.4
    %)
    
    
    (1.6
    %)CEE
    
    
    38.2
    %
    
    
    25.2
    %Caribbean
    
    
    (15.5
    %)
    
    
    (4.5
    %)Worldwide
    
    
    7.9
    %
    
    
    4.3
    %
 2008 compared to 2007Volume Change
    
    U.S.
    
    CEE
    
    Caribbean
    
    WorldwideConstant territory volume
    
    
    (2.4
    %)
    
    
    1.2
    %
    
    
    (15.5
    %)
    
    
    (2.2
    %)Acquisitions
    
    
    
    
    
    
    37.0
    %
    
    
    
    
    
    
    10.1
    %Change in volume
    
    
    (2.4
    %)
    
    
    38.2
    %
    
    
    (15.5
    %)
    
    
    7.9
    %
     Net Sales
  Net Sales
    
    2008
    
    
    2007
    
    
    ChangeU.S.
    
    $
    882.7
    
    
    $
    877.9
    
    
    
    0.5
    %CEE
    
    
    382.4
    
    
    
    238.2
    
    
    
    60.5
    %Caribbean
    
    
    62.4
    
    
    
    67.0
    
    
    
    (6.9
    %)Worldwide
    
    $
    1,327.5
    
    
    $
    1,183.1
    
    
    
    12.2
    %
 23




---



##### Table of Contents



2008 compared to 2007Net Sales Change
    
    U.S.
    
    CEE
    
    Caribbean
    
    WorldwideVolume impact*
    
    
    (2.0
    %)
    
    
    1.1
    %
    
    
    (13.3
    %)
    
    
    (1.8
    %)Net price per case, excluding impact of currency
translation
    
    
    3.2
    %
    
    
    7.2
    %
    
    
    11.9
    %
    
    
    4.6
    %Currency translation
    
    
    
    
    
    
    16.0
    %
    
    
    (3.3
    %)
    
    
    3.0
    %Acquisitions
    
    
    
    
    
    
    38.2
    %
    
    
    
    
    
    
    7.7
    %Non-core
    
    
    (0.7
    %)
    
    
    (2.0
    %)
    
    
    (2.2
    %)
    
    
    (1.3
    %)Change in net sales
    
    
    0.5
    %
    
    
    60.5
    %
    
    
    (6.9
    %)
    
    
    12.2
    %
 
 *
    
    The amounts in this table represent the dollar impact on net sales due to changes in volume
and are not intended to equal the absolute change in volume. Net Pricing Growth**
    
    2008
    
    2007U.S.
    
    
    3.2
    %
    
    
    5.2
    %CEE
    
    
    18.4
    %
    
    
    22.1
    %Caribbean
    
    
    7.9
    %
    
    
    6.9
    %Worldwide
    
    
    5.2
    %
    
    
    6.5
    %
 
 **
    
    Includes the impact from acquisitions and currency translation on core net sales.     Cost of Goods Sold
  Cost of Goods Sold
    
    2008
    
    
    2007
    
    
    ChangeU.S.
    
    $
    521.1
    
    
    $
    521.1
    
    
    
    CEE
    
    
    217.7
    
    
    
    128.8
    
    
    
    69.0
    %Caribbean
    
    
    46.5
    
    
    
    49.3
    
    
    
    (5.7
    %)Worldwide
    
    $
    785.3
    
    
    $
    699.2
    
    
    
    12.3
    %
 24




---



##### Table of Contents



2008 compared to 2007Cost of Goods Sold Change
    
    U.S.
    
    CEE
    
    Caribbean
    
    WorldwideVolume impact*
    
    
    (1.9
    %)
    
    
    1.0
    %
    
    
    (13.3
    %)
    
    
    (1.3
    %)Cost per case, excluding impact of currency
translation
    
    
    2.3
    %
    
    
    6.0
    %
    
    
    13.2
    %
    
    
    3.7
    %Currency translation
    
    
    
    
    
    
    10.9
    %
    
    
    (3.4
    %)
    
    
    1.7
    %Acquisitions
    
    
    
    
    
    
    51.4
    %
    
    
    
    
    
    
    9.5
    %Non-core
    
    
    (0.4
    %)
    
    
    (0.3
    %)
    
    
    (2.2
    %)
    
    
    (1.3
    %)Change in cost of goods sold
    
    
    
    
    
    
    69.0
    %
    
    
    (5.7
    %)
    
    
    12.3
    %
 
 *
    
    The amounts in this table represent the dollar impact on cost of goods sold due to changes
in volume
and are not intended to equal the absolute change in volume. Cost of Goods Sold per Unit Increase**
    
    2008
    
    2007U.S.
    
    
    2.3
    %
    
    
    6.7
    %CEE
    
    
    24.5
    %
    
    
    12.9
    %Caribbean
    
    
    9.2
    %
    
    
    5.8
    %Worldwide
    
    
    5.1
    %
    
    
    5.8
    %
 
 **
    
    Includes the impact from acquisitions and currency translation on core cost of goods sold.     Selling, Delivery and Administrative Expenses
  SD&A Expenses
    
    2008
    
    
    2007
    
    
    ChangeU.S.
    
    $
    271.9
    
    
    $
    264.7
    
    
    
    2.7
    %CEE
    
    
    101.7
    
    
    
    63.1
    
    
    
    61.2
    %Caribbean
    
    
    15.2
    
    
    
    14.8
    
    
    
    2.7
    %Worldwide
    
    $
    388.8
    
    
    $
    342.6
    
    
    
    13.5
    %
 25




---



##### Table of Contents



2008 compared to 2007SD&A Expense Change
    
    U.S.
    
    CEE
    
    Caribbean
    
    WorldwideCost impact, excluding impact of currency translation
    
    
    2.7
    %
    
    
    16.5
    %
    
    
    6.1
    %
    
    
    5.4
    %Currency translation
    
    
    
    
    
    
    20.8
    %
    
    
    (3.4
    %)
    
    
    3.7
    %Acquisitions
    
    
    
    
    
    
    23.9
    %
    
    
    
    
    
    
    4.4
    %Change in SD&A expense
    
    
    2.7
    %
    
    
    61.2
    %
    
    
    2.7
    %
    
    
    13.5
    %
 SD&A Expenses as a Percent of Net Sales
    
    2008
    
    2007U.S.
    
    
    30.8
    %
    
    
    30.2
    %CEE
    
    
    26.6
    %
    
    
    26.5
    %Caribbean
    
    
    24.4
    %
    
    
    22.1
    %Worldwide
    
    
    29.3
    %
    
    
    29.0
    %
     Special Charges
   26




---



##### Table of Contents



Operating Income
  2008
    
    
    2007
    
    
    ChangeU.S.
    
    $
    89.1
    
    
    $
    90.8
    
    
    
    (1.9
    %)CEE
    
    
    62.4
    
    
    
    46.3
    
    
    
    34.8
    %Caribbean
    
    
    (5.2
    )
    
    
    2.9
    
    
    
    *Worldwide
    
    $
    146.3
    
    
    $
    140.0
    
    
    
    4.5
    %
 
 *
    
    Calculation of percentage is not meaningful.     Interest Expense and Other (Expense) Income
   Income Taxes
  Minority Interest
  Equity in Net Loss of Nonconsolidated Companies
  27




---



##### Table of Contents



Loss on Discontinued Operations
  Net Income
   28




---



##### Table of Contents



RESULTS OF OPERATIONS
2008 FIRST NINE MONTHS COMPARED WITH 2007 FIRST NINE MONTHS
  Volume
  2008
    
    2007U.S.
    
    
    (3.1
    %)
    
    
    (1.6
    %)CEE
    
    
    48.9
    %
    
    
    46.9
    %Caribbean
    
    
    (4.0
    %)
    
    
    (4.9
    %)Worldwide
    
    
    9.5
    %
    
    
    6.7
    %
 Volume Change
    
    2008 compared to 2007U.S.
    
    
    CEE
    
    
    Caribbean
    
    
    WorldwideConstant territory volume
    
    
    (3.1
    %)
    
    
    3.4
    %
    
    
    (4.0
    %)
    
    
    (1.5
    %)Acquisitions
    
    
    
    
    
    
    45.5
    %
    
    
    
    
    
    
    11.0
    %Change in volume
    
    
    (3.1
    %)
    
    
    48.9
    %
    
    
    (4.0
    %)
    
    
    9.5
    %
     Net Sales
  Net Sales
    
    2008
    
    
    2007
    
    
    ChangeU.S.
    
    $
    2,580.7
    
    
    $
    2,572.7
    
    
    
    0.3
    %CEE
    
    
    1,004.4
    
    
    
    588.2
    
    
    
    70.8
    %Caribbean
    
    
    181.9
    
    
    
    181.3
    
    
    
    0.3
    %Worldwide
    
    $
    3,767.0
    
    
    $
    3,342.2
    
    
    
    12.7
    %
 29




---



##### Table of Contents



2008 compared to 2007Net Sales Change
    
    U.S.
    
    
    CEE
    
    
    Caribbean
    
    
    WorldwideVolume impact*
    
    
    (2.6
    %)
    
    
    3.1
    %
    
    
    (3.6
    %)
    
    
    (1.3
    %)Net price per case, excluding impact of currency
translation
    
    
    3.4
    %
    
    
    5.3
    %
    
    
    6.9
    %
    
    
    3.6
    %Currency translation
    
    
    
    
    
    
    17.8
    %
    
    
    (2.5
    %)
    
    
    3.0
    %Acquisitions
    
    
    
    
    
    
    46.7
    %
    
    
    
    
    
    
    8.2
    %Non-core
    
    
    (0.5
    %)
    
    
    (2.1
    %)
    
    
    (0.5
    %)
    
    
    (0.8
    %)Change in net sales
    
    
    0.3
    %
    
    
    70.8
    %
    
    
    0.3
    %
    
    
    12.7
    %
 
 *
    
    The amounts in this table represent the dollar impact on net sales due to changes in volume
and are not intended to equal the absolute change in volume. Net Pricing Growth**
    
    2008
    
    2007U.S.
    
    
    3.4
    %
    
    
    5.5
    %CEE
    
    
    17.9
    %
    
    
    20.1
    %Caribbean
    
    
    4.3
    %
    
    
    6.2
    %Worldwide
    
    
    4.1
    %
    
    
    5.2
    %
 
 **
    
    Includes the impact from acquisitions and currency translation on core net sales.     Cost of Goods Sold
  Cost of Goods Sold
    
    2008
    
    
    2007
    
    
    ChangeU.S.
    
    $
    1,517.0
    
    
    $
    1,510.6
    
    
    
    0.4
    %CEE
    
    
    600.2
    
    
    
    331.7
    
    
    
    80.9
    %Caribbean
    
    
    137.0
    
    
    
    134.7
    
    
    
    1.7
    %Worldwide
    
    $
    2,254.2
    
    
    $
    1,977.0
    
    
    
    14.0
    %
 30




---



##### Table of Contents



2008 compared to 2007Cost of Goods Sold Change
    
    U.S.
    
    
    CEE
    
    
    Caribbean
    
    
    WorldwideVolume impact*
    
    
    (2.5
    %)
    
    
    4.4
    %
    
    
    (2.0
    %)
    
    
    (1.4
    %)Cost per case, excluding
impact of currency
translation
    
    
    3.2
    %
    
    
    6.3
    %
    
    
    8.0
    %
    
    
    3.7
    %Currency translation
    
    
    
    
    
    
    13.2
    %
    
    
    (2.4
    %)
    
    
    2.0
    %Acquisitions
    
    
    
    
    
    
    60.8
    %
    
    
    
    
    
    
    10.2
    %Non-core
    
    
    (0.3
    %)
    
    
    (3.8
    %)
    
    
    (1.9
    %)
    
    
    (0.5
    %)Change in cost of goods sold
    
    
    0.4
    %
    
    
    80.9
    %
    
    
    1.7
    %
    
    
    14.0
    %
 
 *
    
    The amounts in this table represent the dollar impact on cost of goods sold due to changes
in volume and are not intended to equal the absolute change in volume. Cost of Goods Sold per Unit Increase**
    
    2008
    
    2007U.S.
    
    
    3.2
    %
    
    
    6.1
    %CEE
    
    
    26.0
    %
    
    
    12.1
    %Caribbean
    
    
    5.5
    %
    
    
    5.7
    %Worldwide
    
    
    5.5
    %
    
    
    4.3
    %
 
 **
    
    Includes the impact from acquisitions and currency translation on core cost of goods sold.     Selling, Delivery and Administrative Expenses
  SD&A Expenses
    
    2008
    
    
    2007
    
    
    ChangeU.S.
    
    $
    803.4
    
    
    $
    793.2
    
    
    
    1.3
    %CEE
    
    
    274.6
    
    
    
    179.4
    
    
    
    53.1
    %Caribbean
    
    
    45.0
    
    
    
    44.9
    
    
    
    0.2
    %Worldwide
    
    $
    1,123.0
    
    
    $
    1,017.5
    
    
    
    10.4
    %
 31




---



##### Table of Contents



SD&A Expense Change
    
    2008 compared to 2007U.S.
    
    
    CEE
    
    
    Caribbean
    
    
    WorldwideCost impact, excluding impact of currency translation
    
    
    1.3
    %
    
    
    9.7
    %
    
    
    2.4
    %
    
    
    2.9
    %Currency translation
    
    
    
    
    
    
    19.9
    %
    
    
    (2.2
    %)
    
    
    3.4
    %Acquisitions
    
    
    
    
    
    
    23.5
    %
    
    
    
    
    
    
    4.1
    %Change in SD&A expense
    
    
    1.3
    %
    
    
    53.1
    %
    
    
    0.2
    %
    
    
    10.4
    %
 SD&A Expenses as a Percent of Net Sales
    
    2008
    
    2007U.S.
    
    
    31.1
    %
    
    
    30.8
    %CEE
    
    
    27.3
    %
    
    
    30.5
    %Caribbean
    
    
    24.7
    %
    
    
    24.8
    %Worldwide
    
    
    29.8
    %
    
    
    30.4
    %
     Special Charges
   32




---



##### Table of Contents



Operating Income
  2008
    
    
    2007
    
    
    ChangeU.S.
    
    $
    259.1
    
    
    $
    265.0
    
    
    
    (2.2
    %)CEE
    
    
    129.0
    
    
    
    76.9
    
    
    
    67.8
    %Caribbean
    
    
    (6.0
    )
    
    
    1.7
    
    
    
    *Worldwide
    
    $
    382.1
    
    
    $
    343.6
    
    
    
    11.2
    %
 
 *
    
    Calculation of percentage is not meaningful.     Interest Expense and Other (Expense) Income
   Income Taxes
  Minority Interest
  33




---



##### Table of Contents



Equity in Net Loss of Nonconsolidated Companies
  Loss on Discontinued Operations
  Net Income
  34




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
 Operating Activities .
 Investing Activities .
  Financing Activities.
      35




---



##### Table of Contents



Discontinued operations.
   RELATED PARTY TRANSACTIONS
     36




---



##### Table of Contents



37




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
  Commodity Prices
  Interest Rates
  Currency Exchange Rates
   38




---



##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
  39




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Donna M. Avila, et al. v. Willits
Environmental Remediation Trust, Remco Hydraulics, Inc., M-C Industries, Inc., Pneumo Abex
Corporation and Whitman Corporation, Pamela Jo
Alrich, et al. v. Willits Environmental Remediation Trust, et al. Nickerman v. Remco Hydraulics
 
 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 27, 2008 was as follows:
 Total Number of
    
    
    Maximum Number ofShares Purchased as
    
    
    Shares that May YetTotal Number of
    
    
    Part of Publicly
    
    
    Be Purchased UnderShares Purchased
    
    
    Announced Plans or
    
    
    the Plans orPeriod
    
    (1)
    
    
    Programs (2)
    
    
    Programs (3)June 29, 2008 - July 26, 2008
    
    
    
    
    
    
    36,930,500
    
    
    
    13,069,500July 27, 2008 - August 23, 2008
    
    
    
    
    
    
    36,930,500
    
    
    
    13,069,500August 24, 2008 - September 27, 2008
    
    
    
    
    
    
    36,930,500
    
    
    
    13,069,500For the Quarter Ended September 27,
2008
    
    
    
 
 (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. On July 24, 2008,
we announced that our Board of Directors authorized the repurchase of 10 million
additional shares under our previously authorized repurchase program. 40




---



##### Table of Contents



Item 5. Other Information
 (a)
    
    Item 8.01. Other Events. On October 2, 2008, our Board of Directors
declared a dividend of $0.135 per share on PepsiAmericas common stock. The dividend
is payable January 2, 2009 to shareholders of record on December 15, 2008. Our Board
of Directors reviews the dividend policy on a quarterly basis.
 
 Item 6. Exhibits
  41




---



##### Table of Contents



SIGNATURES
  PEPSIAMERICAS, INC.Dated: October 31, 2008
    By:
    /s/ ALEXANDER H. WAREAlexander H. WareExecutive Vice President and Chief Financial
Officer (As Principal Financial Officer and
Duly Authorized Officer of PepsiAmericas,
Inc.)Dated: October 31, 2008
    By:
    /s/ TIMOTHY W. GORMANTimothy W. GormanSenior Vice President and Controller
(As Chief Accounting Officer) 42




---



##### 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).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.
 43