##### 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
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  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 Street 
Minneapolis, Minnesota
    
    55402(Address of principal executive offices)
    
    (Zip Code)
 
  Yes
    
    þ
    
    No
    
    o
  Yes
    
    o
    
    No
    
    o
  Large accelerated filer
    
    þ
    
    
    
    Accelerated filer
    
    oNon-accelerated filer
    
    o
    
    
    
    Smaller reporting company
    
    o(Do not check if a smaller reporting company)
  Yes
    
    o
    
    No
    
    þ




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##### 



PEPSIAMERICAS, INC.
FORM 10-Q
THIRD QUARTER 2009
 TABLE OF CONTENTS
 PagePART I
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed Consolidated Statements of Income
    
    
    2Condensed Consolidated Balance Sheets
    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Condensed Consolidated Statements of Equity
    
    
    5Condensed Consolidated Statements of Comprehensive Income (Loss)
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    46Item 4.
    
    Controls and Procedures
    
    
    47PART II
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    48Item 1A.
    
    Risk Factors
    
    
    48Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    50Item 5.
    
    Other Information
    
    
    50Item 6.
    
    Exhibits
    
    
    50SIGNATURES
    
    
    
    
    51EXHIBIT INDEX
    
    
    
    
    52EX-31.1EX-31.2EX-32.1EX-32.2




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##### 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 Months2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    1,133.6
    
    
    $
    1,327.5
    
    
    $
    3,453.0
    
    
    $
    3,767.0Cost of goods sold
    
    
    666.1
    
    
    
    785.3
    
    
    
    2,052.6
    
    
    
    2,254.2Gross profit
    
    
    467.5
    
    
    
    542.2
    
    
    
    1,400.4
    
    
    
    1,512.8Selling, delivery and administrative expenses
    
    
    334.6
    
    
    
    388.8
    
    
    
    1,036.2
    
    
    
    1,123.0Intangible assets impairment
    
    
    17.4
    
    
    
    -
    
    
    
    17.4
    
    
    
    -Special charges
    
    
    0.1
    
    
    
    7.1
    
    
    
    8.4
    
    
    
    7.7Operating income
    
    
    115.4
    
    
    
    146.3
    
    
    
    338.4
    
    
    
    382.1Interest expense, net
    
    
    22.4
    
    
    
    27.5
    
    
    
    75.2
    
    
    
    85.6Loss from deconsolidation of business
    
    
    -
    
    
    
    -
    
    
    
    25.8
    
    
    
    -Other expense, net
    
    
    4.9
    
    
    
    1.4
    
    
    
    11.0
    
    
    
    1.6Income from continuing operations before income taxes and
equity in net (earnings) loss of nonconsolidated companies
    
    
    88.1
    
    
    
    117.4
    
    
    
    226.4
    
    
    
    294.9Income taxes
    
    
    30.4
    
    
    
    31.7
    
    
    
    82.9
    
    
    
    87.4Equity in net (earnings) loss of nonconsolidated companies
    
    
    (0.7
    )
    
    
    0.1
    
    
    
    -
    
    
    
    0.7Income from continuing operations
    
    
    58.4
    
    
    
    85.6
    
    
    
    143.5
    
    
    
    206.8Loss from discontinued operations, net of tax
    
    
    -
    
    
    
    9.2
    
    
    
    -
    
    
    
    9.2Net income
    
    
    58.4
    
    
    
    76.4
    
    
    
    143.5
    
    
    
    197.6Less: Net (loss) income attributable to noncontrolling interests
    
    
    (5.1
    )
    
    
    3.3
    
    
    
    (3.1
    )
    
    
    9.0Net income attributable to PepsiAmericas, Inc.
    
    $
    63.5
    
    
    $
    73.1
    
    
    $
    146.6
    
    
    $
    188.6Weighted average common shares:Basic
    
    
    121.3
    
    
    
    124.6
    
    
    
    121.7
    
    
    
    125.7Incremental effect of stock options and awards
    
    
    2.1
    
    
    
    1.7
    
    
    
    2.2
    
    
    
    1.7Diluted
    
    
    123.4
    
    
    
    126.3
    
    
    
    123.9
    
    
    
    127.4Earnings per share attributable to PepsiAmericas, Inc.
common shareholders:BasicIncome from continuing operations
    
    $
    0.52
    
    
    $
    0.66
    
    
    $
    1.20
    
    
    $
    1.57Loss from discontinued operations
    
    
    -
    
    
    
    (0.07
    )
    
    
    -
    
    
    
    (0.07
    )Total
    
    $
    0.52
    
    
    $
    0.59
    
    
    $
    1.20
    
    
    $
    1.50DilutedIncome from continuing operations
    
    $
    0.51
    
    
    $
    0.65
    
    
    $
    1.18
    
    
    $
    1.55Loss from discontinued operations
    
    
    -
    
    
    
    (0.07
    )
    
    
    -
    
    
    
    (0.07
    )Total
    
    $
    0.51
    
    
    $
    0.58
    
    
    $
    1.18
    
    
    $
    1.48Cash dividends declared per share
    
    $
    0.14
    
    
    $
    0.135
    
    
    $
    0.42
    
    
    $
    0.405Amounts attributable to PepsiAmericas, Inc. common shareholders:Income from continuing operations
    
    $
    63.5
    
    
    $
    82.3
    
    
    $
    146.6
    
    
    $
    197.8Loss from discontinued operations
    
    
    -
    
    
    
    (9.2
    )
    
    
    -
    
    
    
    (9.2
    )Net income attributable to PepsiAmericas, Inc.
    
    $
    63.5
    
    
    $
    73.1
    
    
    $
    146.6
    
    
    $
    188.6
  2




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##### Table of Contents



PEPSIAMERICAS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in millions, except per share data)
 End of First
    
    
    End of FiscalNine Months
    
    
    Year2009
    
    
    2008ASSETS:Current assets:Cash and cash equivalents
    
    $
    176.8
    
    
    $
    242.4Receivables, net
    
    
    475.2
    
    
    
    305.5Inventories
    
    
    261.9
    
    
    
    238.5Other current assets
    
    
    129.3
    
    
    
    119.7Total current assets
    
    
    1,043.2
    
    
    
    906.1Property and equipment, net
    
    
    1,275.7
    
    
    
    1,355.7Goodwill
    
    
    2,180.5
    
    
    
    2,244.6Intangible assets, net
    
    
    475.9
    
    
    
    498.6Other assets
    
    
    218.0
    
    
    
    49.1Total assets
    
    $
    5,193.3
    
    
    $
    5,054.1LIABILITIES AND EQUITY:Current liabilities:Short-term debt, including current maturities of long-term debt
    
    $
    278.7
    
    
    $
    525.0Payables and other current liabilities
    
    
    532.1
    
    
    
    523.2Total current liabilities
    
    
    810.8
    
    
    
    1,048.2Long-term debt
    
    
    2,006.3
    
    
    
    1,642.3Deferred income taxes
    
    
    252.6
    
    
    
    237.6Other liabilities
    
    
    249.3
    
    
    
    295.0Total liabilities
    
    
    3,319.0
    
    
    
    3,223.1Equity:PepsiAmericas, Inc. shareholders 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 - 2009 and 2008)
    
    
    1,291.2
    
    
    
    1,296.9Retained income
    
    
    922.7
    
    
    
    828.2Accumulated other comprehensive loss
    
    
    (190.2
    )
    
    
    (200.8
    )Treasury stock, at cost (16.3 million shares and 14.5 million shares, respectively)
    
    
    (348.2
    )
    
    
    (324.3
    )Total PepsiAmericas, Inc. shareholders equity
    
    
    1,675.5
    
    
    
    1,600.0Noncontrolling interests
    
    
    198.8
    
    
    
    231.0Total equity
    
    
    1,874.3
    
    
    
    1,831.0Total liabilities and equity
    
    $
    5,193.3
    
    
    $
    5,054.1
  3




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##### Table of Contents



PEPSIAMERICAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
 First Nine Months2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    143.5
    
    
    $
    197.6Loss from discontinued operations
    
    
    -
    
    
    
    9.2Income from continuing operations
    
    
    143.5
    
    
    
    206.8Adjustments to reconcile to net cash provided
by operating activities of continuing operations:Depreciation and amortization
    
    
    139.5
    
    
    
    155.1Deferred income taxes
    
    
    11.0
    
    
    
    8.5Special charges
    
    
    8.4
    
    
    
    7.7Cash outlays related to special charges
    
    
    (4.4
    )
    
    
    (2.6
    )Pension contributions
    
    
    (11.1
    )
    
    
    -Equity in net loss of nonconsolidated companies
    
    
    -
    
    
    
    0.7Excess tax benefits from share-based payment arrangements
    
    
    (1.1
    )
    
    
    (1.0
    )Marketable securities impairment
    
    
    2.1
    
    
    
    -Intangible assets impairment
    
    
    17.4
    
    
    
    -Loss from deconsolidation of business, net of tax
    
    
    23.0
    
    
    
    -Share-based compensation
    
    
    18.7
    
    
    
    13.7Other
    
    
    (3.2
    )
    
    
    3.1Changes in assets and liabilities:Decrease in securitization receivables
    
    
    (150.0
    )
    
    
    -Increase in remaining receivables
    
    
    (53.7
    )
    
    
    (50.5
    )Increase in inventories
    
    
    (52.3
    )
    
    
    (1.4
    )Increase (decrease) in payables
    
    
    8.9
    
    
    
    (3.2
    )Net change in other assets and liabilities
    
    
    16.8
    
    
    
    (16.7
    )Net cash provided by operating activities of continuing operations
    
    
    113.5
    
    
    
    320.2CASH FLOWS FROM INVESTING ACTIVITIES:Capital investments
    
    
    (174.1
    )
    
    
    (162.9
    )Franchises and companies acquired, net of cash acquired
    
    
    -
    
    
    
    (1.0
    )Distribution rights acquired
    
    
    (12.7
    )
    
    
    -Cash divested from deconsolidation of business
    
    
    (7.1
    )
    
    
    -Proceeds from sales of property and equipment
    
    
    3.9
    
    
    
    6.4Net cash used in investing activities
    
    
    (190.0
    )
    
    
    (157.5
    )CASH FLOWS FROM FINANCING ACTIVITIES:Net borrowings of short-term debt
    
    
    (91.7
    )
    
    
    94.4Proceeds from issuance of long-term debt
    
    
    345.4
    
    
    
    -Repayment of long-term debt
    
    
    (155.0
    )
    
    
    (47.5
    )Contribution from noncontrolling interests
    
    
    6.4
    
    
    
    26.0Excess tax benefits from share-based payment arrangements
    
    
    1.1
    
    
    
    1.0Issuance of common stock
    
    
    4.1
    
    
    
    2.8Treasury stock purchases
    
    
    (45.2
    )
    
    
    (105.2
    )Cash dividends
    
    
    (52.1
    )
    
    
    (51.4
    )Net cash provided by (used in) financing activities
    
    
    13.0
    
    
    
    (79.9
    )Net operating cash flows used in discontinued operations
    
    
    (2.1
    )
    
    
    (7.5
    )Effects of exchange rate changes on cash and cash equivalents
    
    
    -
    
    
    
    0.3Change in cash and cash equivalents
    
    
    (65.6
    )
    
    
    75.6Cash and cash equivalents as of beginning of fiscal year
    
    
    242.4
    
    
    
    189.7Cash and cash equivalents as of end of first nine months
    
    $
    176.8
    
    
    $
    265.3
  4




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##### Table of Contents



PEPSIAMERICAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(unaudited and in millions)
 AccumulatedOtherComprehensive
    
    
    
    
    
    
    TotalShares
    
    
    Common
    
    
    Retained
    
    
    Income
    
    
    Treasury
    
    
    Shareholders
    
    
    Noncontrolling
    
    
    TotalCommon
    
    
    Treasury
    
    
    Stock
    
    
    Income
    
    
    (Loss)
    
    
    Stock
    
    
    Equity
    
    
    Interests
    
    
    EquityAs of Fiscal Year End 2007
    
    
    137.6
    
    
    
    (9.5
    )
    
    $
    1,292.7
    
    
    $
    670.9
    
    
    $
    98.8
    
    
    $
    (204.1
    )
    
    $
    1,858.3
    
    
    $
    273.4
    
    
    $
    2,131.7Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    188.6
    
    
    
    
    
    
    
    
    
    
    
    188.6
    
    
    
    9.0
    
    
    
    197.6Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19.7
    
    
    
    
    
    
    
    19.7
    
    
    
    11.7
    
    
    
    31.4Unrealized losses on securities, net of
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    (0.8
    )Cash flow hedge adjustment, net of
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.8
    
    
    
    
    
    
    
    1.8
    
    
    
    -
    
    
    
    1.8Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    209.3
    
    
    
    20.7
    
    
    
    230.0Measurement date adjustment, net of
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    0.1
    
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.1
    )Treasury stock purchases
    
    
    
    
    
    
    (4.1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105.2
    )
    
    
    (105.2
    )
    
    
    
    
    
    
    (105.2
    )Stock compensation plans
    
    
    
    
    
    
    0.7
    
    
    
    (0.7
    )
    
    
    
    
    
    
    
    
    
    
    14.2
    
    
    
    13.5
    
    
    
    
    
    
    
    13.5Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51.7
    )
    
    
    
    
    
    
    
    
    
    
    (51.7
    )
    
    
    
    
    
    
    (51.7
    )Contributions from noncontrolling
interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26.0
    
    
    
    26.0Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.9
    )
    
    
    (1.9
    )As of End of First Nine Months of 2008
    
    
    137.6
    
    
    
    (12.9
    )
    
    $
    1,292.0
    
    
    $
    807.6
    
    
    $
    119.6
    
    
    $
    (295.1
    )
    
    $
    1,924.1
    
    
    $
    318.2
    
    
    $
    2,242.3As of Fiscal Year End 2008
    
    
    137.6
    
    
    
    (14.5
    )
    
    $
    1,296.9
    
    
    $
    828.2
    
    
    $
    (200.8
    )
    
    $
    (324.3
    )
    
    $
    1,600.0
    
    
    $
    231.0
    
    
    $
    1,831.0Comprehensive income (loss):Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    146.6
    
    
    
    
    
    
    
    
    
    
    
    146.6
    
    
    
    (3.1
    )
    
    
    143.5Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47.3
    )
    
    
    
    
    
    
    (47.3
    )
    
    
    (35.5
    )
    
    
    (82.8
    )Unrealized gains on securities, net of
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    0.3Cash flow hedge adjustment, net of
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31.9
    
    
    
    
    
    
    
    31.9
    
    
    
    
    
    
    
    31.9Recognition from deconsolidation of
business
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25.7
    
    
    
    
    
    
    
    25.7
    
    
    
    -
    
    
    
    25.7Total comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    157.2
    
    
    
    (38.6
    )
    
    
    118.6Treasury stock purchases
    
    
    
    
    
    
    (2.7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45.2
    )
    
    
    (45.2
    )
    
    
    
    
    
    
    (45.2
    )Stock compensation plans
    
    
    
    
    
    
    0.9
    
    
    
    (5.7
    )
    
    
    
    
    
    
    
    
    
    
    21.3
    
    
    
    15.6
    
    
    
    
    
    
    
    15.6Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52.1
    )
    
    
    
    
    
    
    
    
    
    
    (52.1
    )
    
    
    
    
    
    
    (52.1
    )Contributions from noncontrolling
interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.4
    
    
    
    6.4As of End of First Nine Months of 2009
    
    
    137.6
    
    
    
    (16.3
    )
    
    $
    1,291.2
    
    
    $
    922.7
    
    
    $
    (190.2
    )
    
    $
    (348.2
    )
    
    $
    1,675.5
    
    
    $
    198.8
    
    
    $
    1,874.3
  5




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##### Table of Contents



PEPSIAMERICAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited and in millions)
 Third Quarter
    
    
    First Nine Months2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    58.4
    
    
    $
    76.4
    
    
    $
    143.5
    
    
    $
    197.6Foreign currency translation adjustment
    
    
    0.8
    
    
    
    (52.6
    )
    
    
    (82.8
    )
    
    
    31.4Unrealized gains (losses) on securities, net of income taxes
    
    
    0.1
    
    
    
    (0.5
    )
    
    
    0.3
    
    
    
    (0.8
    )Cash flow hedge adjustment, net of income taxes
    
    
    (10.0
    )
    
    
    1.8
    
    
    
    31.9
    
    
    
    1.8Recognition from deconsolidation of business
    
    
    -
    
    
    
    -
    
    
    
    25.7
    
    
    
    -Comprehensive income
    
    
    49.3
    
    
    
    25.1
    
    
    
    118.6
    
    
    
    230.0Less: Comprehensive (loss) income attributable to
noncontrolling interests
    
    
    (14.6
    )
    
    
    3.6
    
    
    
    (38.6
    )
    
    
    20.7Comprehensive income attributable to PepsiAmericas, Inc.
    
    $
    63.9
    
    
    $
    21.5
    
    
    $
    157.2
    
    
    $
    209.3
  6




---



##### Table of Contents



PEPSIAMERICAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 1.
    
    Significant Accounting Policies
 Quarterly Reporting.
 Use of Accounting Estimates.
 Fiscal Year.
  Earnings Per Share.
  Third Quarter
    
    First Nine Months2009
    
    2008
    
    2009
    
    2008Shares under options outstanding
    
    
    -
    
    
    
    152,200
    
    
    
    -
    
    
    
    -Weighted-average exercise price per share
    
    $
    -
    
    
    $
    22.63
    
    
    $
    -
    
    
    $
    -
 7




---



##### Table of Contents



Recently Adopted Accounting Pronouncements.
      Recently Issued Accounting Pronouncements to be Adopted in the Future.
  8




---



##### Table of Contents



2.
    
    Investment and Divestiture
   3.
    
    Special Charges
    Special charge liability, end of fiscal year 2008
    
    $
    2.5Special charges
    
    
    8.4Cash outlays related to special charges
    
    
    (4.4
    )Non-cash charges
    
    
    (4.2
    )Special charge liability, end of first nine months of 2009
    
    $
    2.3
  9




---



##### Table of Contents



4.
    
    Statement of Income Details
  Third Quarter
    
    
    First Nine Months2009
    
    
    2008
    
    
    2009
    
    
    2008Cost of goods sold:Cost of goods sold
    
    $
    667.3
    
    
    $
    785.3
    
    
    $
    2,054.8
    
    
    $
    2,254.3Unrealized gains on derivative instruments
    
    
    (1.2
    )
    
    
    -
    
    
    
    (2.2
    )
    
    
    (0.1
    )Total cost of goods sold
    
    $
    666.1
    
    
    $
    785.3
    
    
    $
    2,052.6
    
    
    $
    2,254.2Selling, delivery and administrative (SD&A)
expenses:SD&A expenses
    
    $
    334.0
    
    
    $
    388.1
    
    
    $
    1,036.5
    
    
    $
    1,122.3Unrealized losses (gains) on derivative instruments
    
    
    0.6
    
    
    
    0.7
    
    
    
    (0.3
    )
    
    
    0.7Total SD&A expenses
    
    $
    334.6
    
    
    $
    388.8
    
    
    $
    1,036.2
    
    
    $
    1,123.0Interest expense, net:Interest expense
    
    $
    23.1
    
    
    $
    29.5
    
    
    $
    79.6
    
    
    $
    89.5Interest income
    
    
    (0.7
    )
    
    
    (2.0
    )
    
    
    (4.4
    )
    
    
    (3.9
    )Interest expense, net
    
    $
    22.4
    
    
    $
    27.5
    
    
    $
    75.2
    
    
    $
    85.6
  5.
    
    Income Taxes
   .
  6.
    
    Goodwill and Intangible Assets
  U.S.
    
    
    CEE
    
    
    Caribbean
    
    
    TotalBalance, fiscal year end 2008
    
    $
    1,824.3
    
    
    $
    404.6
    
    
    $
    15.7
    
    
    $
    2,244.6Foreign currency translation adjustment
    
    
    -
    
    
    
    (48.4
    )
    
    
    (0.1
    )
    
    
    (48.5
    )Deconsolidation of Caribbean business
    
    
    -
    
    
    
    -
    
    
    
    (15.6
    )
    
    
    (15.6
    )Balance, end of the first nine months of
2009
    
    $
    1,824.3
    
    
    $
    356.2
    
    
    $
    -
    
    
    $
    2,180.5
 10




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##### Table of Contents



End of FirstNine Months
    
    
    End of Fiscal2009
    
    
    Year 2008Intangible assets subject to amortization:Gross carrying amount:Customer relationships and lists
    
    $
    51.6
    
    
    $
    57.3Franchise and distribution agreements
    
    
    11.1
    
    
    
    3.3Other
    
    
    2.5
    
    
    
    2.5Total
    
    $
    65.2
    
    
    $
    63.1Accumulated amortization:Customer relationships and lists
    
    $
    (15.3
    )
    
    $
    (11.9
    )Franchise and distribution agreements
    
    
    (1.9
    )
    
    
    (1.2
    )Other
    
    
    (0.8
    )
    
    
    (0.6
    )Total
    
    $
    (18.0
    )
    
    $
    (13.7
    )Intangible assets subject to
amortization, net
    
    $
    47.2
    
    
    $
    49.4Intangible assets not subject to
amortization:Franchise and distribution agreements
    
    $
    372.4
    
    
    $
    362.3Trademarks and tradenames
    
    
    56.3
    
    
    
    86.9Total
    
    $
    428.7
    
    
    $
    449.2Total intangible assets, net
    
    $
    475.9
    
    
    $
    498.6
  Rockstar Muscle Milk Crush
  7.
    
    Sale of Receivables
  11




---



##### Table of Contents



8.
    
    Balance Sheet Details
  End of FirstNine Months 2009
    
    
    End of Fiscal Year 2008Receivables, net:Trade receivables
    
    $
    419.4
    
    
    $
    418.0Securitization receivables
    
    
    
    
    
    
    (150.0
    )Funding and purchasing rebates receivables
    
    
    56.6
    
    
    
    39.7Other receivables
    
    
    13.0
    
    
    
    11.3Allowance for doubtful accounts
    
    
    (13.8
    )
    
    
    (13.5
    )Receivables, net
    
    $
    475.2
    
    
    $
    305.5Inventories:Raw materials and supplies
    
    $
    103.5
    
    
    $
    117.2Finished goods
    
    
    158.4
    
    
    
    121.3Inventories
    
    $
    261.9
    
    
    $
    238.5Other current assets:Prepaid expenses
    
    $
    58.7
    
    
    $
    56.7Prepaid customer incentives
    
    
    22.7
    
    
    
    23.5Other
    
    
    47.9
    
    
    
    39.5Other current assets
    
    $
    129.3
    
    
    $
    119.7Property and equipment, net:Land
    
    $
    72.4
    
    
    $
    84.1Building and improvements
    
    
    543.1
    
    
    
    524.9Machinery and equipment
    
    
    2,226.3
    
    
    
    2,301.1Total property and equipment
    
    
    2,841.8
    
    
    
    2,910.1Accumulated depreciation
    
    
    (1,566.1
    )
    
    
    (1,554.4
    )Property and equipment, net
    
    $
    1,275.7
    
    
    $
    1,355.7Payables and other current liabilities:Trade payables
    
    $
    184.2
    
    
    $
    186.9Income tax and other payables
    
    
    33.0
    
    
    
    16.8Accrued salaries and wages
    
    
    73.7
    
    
    
    71.3Accrued customer incentives
    
    
    78.1
    
    
    
    86.9Accrued interest
    
    
    23.4
    
    
    
    25.3Other current liabilities
    
    
    139.7
    
    
    
    136.0Payables and other current liabilities
    
    $
    532.1
    
    
    $
    523.2
 9.
    
    Debt
  12




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##### Table of Contents



10.
    
    Financial Instruments
     Commodity Prices.
  Foreign Currency Exchange.
 Interest Rates.
 13




---



##### Table of Contents



Asset DerivativesEnd of First Nine Months 2009
    
    
    End of Fiscal Year 2008Derivatives designated as
    
    Balance Sheet
    
    
    Fair
    
    
    Balance Sheet
    
    
    Fairhedging instruments
    
    Location
    
    
    Value
    
    
    Location
    
    
    ValueInterest rate contracts
    
    Other assets
    
    $
    32.5
    
    
    Other assets
    
    $
    -Commodity contracts
    
    Other current assets
    
    
    16.7
    
    
    Other current assets
    
    
    -Foreign exchange contracts
    
    Other current assets
    
    
    0.1
    
    
    Other current assets
    
    
    8.9$
    49.3
    
    
    
    
    
    
    $
    8.9Derivatives not designated
as hedging instrumentsCommodity contracts
    
    Other current assets
    
    
    1.8
    
    
    Other current assets
    
    
    -Total asset derivatives
    
    
    
    
    
    $
    51.1
    
    
    
    
    
    
    $
    8.9
 Liability DerivativesEnd of First Nine Months 2009
    
    
    End of Fiscal Year 2008Derivatives designated as
    
    Balance Sheet
    
    
    Fair
    
    
    Balance Sheet
    
    
    Fairhedging instruments
    
    Location
    
    
    Value
    
    
    Location
    
    
    ValueInterest rate contracts
    
    Other liabilities
    
    $
    -
    
    
    Other liabilities
    
    $
    34.3Commodity contracts
    
    Payables and other
    
    
    
    
    
    Payables and othercurrent liabilities
    
    
    0.9
    
    
    current liabilities
    
    
    4.9$
    0.9
    
    
    
    
    
    
    $
    39.2Derivatives not designatedas hedging instrumentsCommodity contracts
    
    Payables and other
    
    
    
    
    
    Payables and othercurrent liabilities
    
    
    -
    
    
    current liabilities
    
    
    1.7Total liability derivatives
    
    
    
    
    
    $
    0.9
    
    
    
    
    
    
    $
    40.9
 14




---



##### Table of Contents



Amount of Gain (Loss) Recognized inOther Comprehensive Income (Loss)
    
    
    
    
    
    Amount of Gain (Loss) Reclassifiedon Derivatives (a)
    
    
    Location of Gain (Loss)
    
    
    from AOCL into Income (a)Derivatives in Cash Flow
    
    Third Quarter
    
    
    First Nine Months
    
    
    Reclassified from
    
    
    Third Quarter
    
    
    First Nine MonthsHedging Relationships
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    AOCL into Income
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Interest rate contracts
    
    $
    (14.0
    )
    
    $
    -
    
    
    $
    48.5
    
    
    $
    -
    
    
    Interest expense, net
    
    $
    (0.2
    )
    
    $
    (0.1
    )
    
    $
    (0.4
    )
    
    $
    (0.4
    )Foreign exchange
contracts
    
    
    (10.4
    )
    
    
    (2.9
    )
    
    
    (8.1
    )
    
    
    (2.8
    )
    
    Cost of goods sold
    
    
    (7.5
    )
    
    
    (0.3
    )
    
    
    0.7
    
    
    
    (0.3
    )Commodity contracts
    
    
    (6.7
    )
    
    
    0.9
    
    
    
    3.5
    
    
    
    0.9
    
    
    Cost of goods sold
    
    
    (8.3
    )
    
    
    (0.1
    )
    
    
    (9.3
    )
    
    
    (0.2
    )Total
    
    $
    (31.1
    )
    
    $
    (2.0
    )
    
    $
    43.9
    
    
    $
    (1.9
    )
    
    Total
    
    $
    (16.0
    )
    
    $
    (0.5
    )
    
    $
    (9.0
    )
    
    $
    (0.9
    )
  Amount of Gain Recognized in IncomeLocation of Gain
    
    
    on DerivativesDerivatives in Fair Value
    
    Recognized in Income
    
    
    Third Quarter
    
    
    First Nine MonthsHedging Relationships
    
    on Derivatives
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Interest rate contracts
    
    Interest expense, net
    
    $
    2.0
    
    
    $
    0.7
    
    
    $
    2.9
    
    
    $
    2.0
 Amount of Gain (Loss) Recognized inLocation of Gain (Loss)
    
    
    Income on Derivatives (b)Derivatives Not Designated
    
    Recognized in Income
    
    
    Third Quarter
    
    
    First Nine Monthsas Hedging Instruments
    
    on Derivatives
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Commodity contracts
    
    Cost of goods sold
    
    $
    2.7
    
    
    $
    (0.2
    )
    
    $
    (1.8
    )
    
    $
    (0.2
    )Commodity contracts
    
    SD&A expenses
    
    
    (0.6
    )
    
    
    (0.7
    )
    
    
    (1.0
    )
    
    
    (0.7
    )Investment contracts
    
    SD&A expenses
    
    
    1.5
    
    
    
    (2.1
    )
    
    
    2.7
    
    
    
    (2.9
    )Total
    
    $
    3.6
    
    
    $
    (3.0
    )
    
    $
    (0.1
    )
    
    $
    (3.8
    )
  Other Financial Instruments.
  11.
    
    Fair Value Measurements
  15




---



##### Table of Contents



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
  Quoted Pricesin Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantEnd of First
    
    
    Identical
    
    
    Observable
    
    
    UnobservableNine Months
    
    
    Assets
    
    
    Inputs
    
    
    Inputs2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Available-for-sale equity securities
    
    $
    -
    
    
    $
    -
    
    
    $
    -
    
    
    $
    -Deferred compensation plan assets
    
    
    1.5
    
    
    
    1.5
    
    
    
    -
    
    
    
    -Derivative assets
    
    
    51.1
    
    
    
    -
    
    
    
    51.1
    
    
    
    -Total assets
    
    $
    52.6
    
    
    $
    1.5
    
    
    $
    51.1
    
    
    $
    -Deferred compensation plan
liabilities
    
    $
    40.1
    
    
    $
    -
    
    
    $
    40.1
    
    
    $
    -Derivative liabilities
    
    
    0.9
    
    
    
    -
    
    
    
    0.9
    
    
    
    -Total liabilities
    
    $
    41.0
    
    
    $
    -
    
    
    $
    41.0
    
    
    $
    -
 Available-for-sale equity securities.
 Deferred compensation plan assets and liabilities.
 16




---



##### Table of Contents



Derivative assets and liabilities.
  Quoted Pricesin Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantEnd of First
    
    
    Identical
    
    
    Observable
    
    
    UnobservableNine Months
    
    
    Assets
    
    
    Inputs
    
    
    Inputs2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Property and equipment
    
    $
    15.5
    
    
    $
    -
    
    
    $
    -
    
    
    $
    15.5Intangible assets
    
    
    56.3
    
    
    
    -
    
    
    
    -
    
    
    
    56.3Total assets
    
    $
    71.8
    
    
    $
    -
    
    
    $
    -
    
    
    $
    71.8
 Property and equipment.
 Intangible assets.
 12.
    
    Pension and Other Postretirement Benefit Plans
  Third QuarterPension
    
    
    Other PostretirementBenefit Costs
    
    
    Benefit Costs2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost
    
    $
    1.0
    
    
    $
    0.8
    
    
    $
    -
    
    
    $
    -Interest cost
    
    
    2.8
    
    
    
    2.8
    
    
    
    0.3
    
    
    
    0.3Expected return on plan assets
    
    
    (3.8
    )
    
    
    (3.8
    )
    
    
    -
    
    
    
    -Amortization of net loss (gain)
    
    
    1.0
    
    
    
    0.4
    
    
    
    (0.2
    )
    
    
    (0.2
    )Amortization of prior service cost
    
    
    0.1
    
    
    
    0.1
    
    
    
    -
    
    
    
    -Net periodic cost
    
    $
    1.1
    
    
    $
    0.3
    
    
    $
    0.1
    
    
    $
    0.1
 17




---



##### Table of Contents



First Nine MonthsPension
    
    
    Other PostretirementBenefit Costs
    
    
    Benefit Costs2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost
    
    $
    3.0
    
    
    $
    2.4
    
    
    $
    -
    
    
    $
    -Interest cost
    
    
    8.8
    
    
    
    8.4
    
    
    
    0.9
    
    
    
    0.8Expected return on plan assets
    
    
    (11.6
    )
    
    
    (11.4
    )
    
    
    -
    
    
    
    -Amortization of net loss (gain)
    
    
    3.2
    
    
    
    1.4
    
    
    
    (0.6
    )
    
    
    (0.6
    )Amortization of prior service cost
    
    
    0.3
    
    
    
    0.2
    
    
    
    -
    
    
    
    -Net periodic cost
    
    $
    3.7
    
    
    $
    1.0
    
    
    $
    0.3
    
    
    $
    0.2
   13.
    
    Share-Based Compensation
    18




---



##### Table of Contents



14.
    
    Supplemental Statement of Cash Flows Detail
  First  Nine Months2009
    
    
    2008Interest paid
    
    $
    81.1
    
    
    $
    89.1Interest received
    
    
    4.4
    
    
    
    3.8Income taxes paid
    
    
    64.3
    
    
    
    87.2Income tax refunds
    
    
    0.2
    
    
    
    15.0
 15.
    
    Environmental and Other Contingencies
 Current Operations .
   Discontinued Operations  Remediation.
    19




---



##### Table of Contents



People of the
State of California and the City of Willits, California v. Remco Hydraulics, Inc.
  Discontinued Operations  Insurance.
  Discontinued Operations  Product Liability and Toxic Tort Claims.
 Avila
 20




---



##### Table of Contents



Class Action Lawsuits relating to PepsiCo, Inc. (PepsiCo) Proposal.
  Delaware See In
re PepsiAmericas, Inc. Shareholders Litigation
 New York Electrical
Workers Pension Fund, Local 103, I.B.E.W. v. PepsiAmericas, Inc. et al.
 Minnesota See Alan R. Kahn v. Robert C. Pohlad, Herbert M. Baum, Richard G. Cline, Michael J.
Corliss, Pierre S. Du Pont, Archie R. Dykes, Jarobin Gilbert, Jr., James R. Kackley, Matthew M.
McKenna, Deborah E. Powell, PepsiAmericas, Inc. and PepsiCo, Inc Joseph Leone v. PepsiAmericas, Inc.,
Robert C. Pohlad, Herbert M. Baum, Richard G. Cline, Michael J. Corliss, Pierre S. Du Pont, Archie
B. Dykes, Jarobin Gilbert, Jr., James R. Kackley, Matthew M. McKenna, Deborah E. Powell, and
PepsiCo, Inc. Shirley Simon v. PepsiAmericas, Inc., Robert C. Pohlad, Herbert M. Baum, Richard G. Cline, Michael
J. Corliss, Pierre S. Du Pont, Archie B. Dykes, Jarobin Gilbert, Jr., James R. Kackley, Matthew M.
McKenna, Deborah E. Powell, and PepsiCo, Inc Joseph Leone v. PepsiAmericas, Inc., et al.
  21




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##### Table of Contents



16.
    
    Segment Reporting
     Third QuarterNet Sales
    
    
    Operating Income (Loss)2009
    
    
    2008
    
    
    2009
    
    
    2008U.S.
    
    $
    854.6
    
    
    $
    882.7
    
    
    $
    99.5
    
    
    $
    92.6CEE
    
    
    279.0
    
    
    
    382.4
    
    
    
    15.9
    
    
    
    58.9Caribbean
    
    
    -
    
    
    
    62.4
    
    
    
    -
    
    
    
    (5.2
    )Total
    
    $
    1,133.6
    
    
    $
    1,327.5
    
    
    $
    115.4
    
    
    $
    146.3
 First Nine MonthsNet Sales
    
    
    Operating Income (Loss)2009
    
    
    2008
    
    
    2009
    
    
    2008U.S.
    
    $
    2,644.3
    
    
    $
    2,580.7
    
    
    $
    307.2
    
    
    $
    265.1CEE
    
    
    707.8
    
    
    
    1,004.4
    
    
    
    32.6
    
    
    
    123.0Caribbean
    
    
    100.9
    
    
    
    181.9
    
    
    
    (1.4
    )
    
    
    (6.0
    )Total
    
    $
    3,453.0
    
    
    $
    3,767.0
    
    
    $
    338.4
    
    
    $
    382.1
  17.
    
    Related Party Transactions
 Transactions with PepsiCo
  22




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##### Table of Contents



Bottling Agreements and Purchases of Concentrate and Finished Product.
 Bottler Incentives and Other Support Arrangements.
   National Account Sales and Services.
 Sandora Joint Venture.
 Other Transactions.
 23




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##### Table of Contents



Third Quarter
    
    
    First Nine Months2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales:Bottler incentives
    
    $
    5.5
    
    
    $
    9.6
    
    
    $
    24.0
    
    
    $
    27.2National account sales and services
    
    
    58.7
    
    
    
    62.9
    
    
    
    175.7
    
    
    
    175.8Total
    
    $
    64.2
    
    
    $
    72.5
    
    
    $
    199.7
    
    
    $
    203.0Cost of goods sold:Bottler incentives
    
    $
    52.7
    
    
    $
    47.6
    
    
    $
    140.9
    
    
    $
    132.9Purchase of concentrate
    
    
    (225.5
    )
    
    
    (227.9
    )
    
    
    (735.4
    )
    
    
    (690.9
    )Purchases of finished beverage products
    
    
    (59.7
    )
    
    
    (60.3
    )
    
    
    (174.8
    )
    
    
    (187.6
    )Purchases of finished snack food products
    
    
    (6.6
    )
    
    
    (8.2
    )
    
    
    (18.1
    )
    
    
    (21.5
    )Aquafina royalty fee
    
    
    (12.0
    )
    
    
    (13.1
    )
    
    
    (33.9
    )
    
    
    (38.7
    )Procurement services
    
    
    (1.1
    )
    
    
    (1.1
    )
    
    
    (3.1
    )
    
    
    (3.1
    )Total
    
    $
    (252.2
    )
    
    $
    (263.0
    )
    
    $
    (824.4
    )
    
    $
    (808.9
    )SD&A expenses:Bottler incentives
    
    $
    6.3
    
    
    $
    7.0
    
    
    $
    15.9
    
    
    $
    18.9Purchases of advertising materials
    
    
    (0.4
    )
    
    
    (0.6
    )
    
    
    (1.3
    )
    
    
    (2.2
    )Total
    
    $
    5.9
    
    
    $
    6.4
    
    
    $
    14.6
    
    
    $
    16.7
 Transactions with Bottlers in Which PepsiCo Holds an Equity Interest.
 Agreement and Plan of Merger with PepsiCo
   24




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##### Table of Contents



Agreements and Relationships with Dakota Holdings, LLC, Starquest Securities, LLC and Mr.
Pohlad
   Transactions with Pohlad Companies
  25




---



##### 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.
    26




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##### Table of Contents



Environmental Liabilities.
 Income Taxes.
   Casualty Insurance Costs.
  Pension and Postretirement Benefits .
 27




---



##### Table of Contents



RESULTS OF OPERATIONS
 BUSINESS OVERVIEW
   volume Net pricing Cost of goods sold
per unit
 Financial Results
  28




---



##### Table of Contents



Seasonality
  Items Impacting Comparability
 Special Charges
   Loss from Deconsolidation of Business
   Unrealized Losses (Gains) on Derivatives
   PepsiCo Merger Fees
  29




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##### Table of Contents



Marketable Securities Impairment
  Non-operating Assets Impairment
  Intangible Assets Impairment
  RESULTS OF OPERATIONS
2009 THIRD QUARTER COMPARED WITH 2008 THIRD QUARTER
  Volume
  Volume
    
    2009
    
    2008U.S.
    
    
    (8.9%)
    
    
    
    (2.4%)CEE
    
    
    (9.3%)
    
    
    
    38.2%Caribbean
    
    
    (100.0%)
    
    
    
    (15.5%)Worldwide
    
    
    (13.1%)
    
    
    
    7.9%
 2009 compared to 2008Volume Change
    
    U.S.
    
    
    CEE
    
    
    WorldwideConstant territory volume
    
    
    (8.9%)
    
    
    
    (9.3%)
    
    
    
    (9.0%)Deconsolidation of Caribbean
    
    
    --
    
    
    
    --
    
    
    
    (4.1%)Change in volume
    
    
    (8.9%)
    
    
    
    (9.3%)
    
    
    
    (13.1%)
    30




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##### Table of Contents



Net Sales
  Net Sales
    
    2009
    
    
    2008
    
    
    ChangeU.S.
    
    $
    854.6
    
    
    $
    882.7
    
    
    
    (3.2%)CEE
    
    
    279.0
    
    
    
    382.4
    
    
    
    (27.0%)Caribbean
    
    
    -
    
    
    
    62.4
    
    
    
    (100.0%)Worldwide
    
    $
    1,133.6
    
    
    $
    1,327.5
    
    
    
    (14.6%)
 2009 compared to 2008Net Sales Change
    
    U.S.
    
    CEE
    
    WorldwideVolume impact*
    
    
    (7.5%)
    
    
    
    (8.6%)
    
    
    
    (7.9%)Net price per case, excluding impact of foreign
currency
    
    
    5.5%
    
    
    
    6.5%
    
    
    
    5.8%Impact of foreign currency
    
    
    --
    
    
    
    (23.6%)
    
    
    
    (7.1%)Deconsolidation of Caribbean
    
    
    --
    
    
    
    --
    
    
    
    (4.4%)Non-core
    
    
    (1.2%)
    
    
    
    (1.3%)
    
    
    
    (1.0%)Change in net sales
    
    
    (3.2%)
    
    
    
    (27.0%)
    
    
    
    (14.6%)
 
 *
    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 (Decline)**
    
    2009
    
    
    2008U.S.
    
    
    5.5%
    
    
    
    3.6%CEE
    
    
    (19.5%)
    
    
    
    18.4%Worldwide
    
    
    (2.3%)
    
    
    
    5.5%
 
 **
    Includes the impact from deconsolidation and foreign
currency on core net sales.    31




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##### Table of Contents



Cost of Goods Sold
  Cost of Goods Sold
    
    2009
    
    
    2008
    
    
    ChangeU.S.
    
    $
    496.5
    
    
    $
    521.1
    
    
    
    (4.7%)CEE
    
    
    169.6
    
    
    
    217.7
    
    
    
    (22.1%)Caribbean
    
    
    -
    
    
    
    46.5
    
    
    
    (100.0%)Worldwide
    
    $
    666.1
    
    
    $
    785.3
    
    
    
    (15.2%)
 2009 compared to 2008Cost of Goods Sold Change
    
    U.S.
    
    CEE
    
    WorldwideVolume impact*
    
    
    (7.3
    %)
    
    
    (8.4
    %)
    
    
    (7.6
    %)Cost per case, excluding impact of foreign
currency
    
    
    4.4
    %
    
    
    0.7
    %
    
    
    3.3
    %Impact of foreign currency
    
    
    --
    
    
    
    (13.4
    %)
    
    
    (4.0
    %)Unrealized gains on derivatives
    
    
    (0.2
    %)
    
    
    --
    
    
    
    (0.2
    %)Deconsolidation of Caribbean
    
    
    --
    
    
    
    --
    
    
    
    (5.8
    %)Non-core
    
    
    (1.6
    %)
    
    
    (1.0
    %)
    
    
    (0.9
    %)Change in cost of goods sold
    
    
    (4.7
    %)
    
    
    (22.1
    %)
    
    
    (15.2
    %)
 *
    
    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 (Decrease)**
    
    2009
    
    2008U.S.
    
    
    4.4%
    
    
    
    2.8%CEE
    
    
    (13.6%)
    
    
    
    24.5%Worldwide
    
    
    (2.7%)
    
    
    
    5.5%
 **
    
    Includes the impact from deconsolidation and foreign currency on core cost of goods sold.
    32




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##### Table of Contents



Selling, Delivery and Administrative Expenses
  SD&A Expenses
    
    2009
    
    
    2008
    
    
    ChangeU.S.
    
    $
    258.6
    
    
    $
    268.4
    
    
    
    (3.7%)CEE
    
    
    76.0
    
    
    
    105.2
    
    
    
    (27.8%)Caribbean
    
    
    -
    
    
    
    15.2
    
    
    
    (100.0%)Worldwide
    
    $
    334.6
    
    
    $
    388.8
    
    
    
    (13.9%)
 2009 compared to 2008SD&A Expense Change
    
    U.S.
    
    CEE
    
    WorldwideCost impact, excluding items listed below
    
    
    (3.7%)
    
    
    
    (12.8%)
    
    
    
    (6.2%)Impact of foreign currency
    
    
    --
    
    
    
    (15.0%)
    
    
    
    (4.2%)Deconsolidation of Caribbean
    
    
    --
    
    
    
    --
    
    
    
    (3.5%)Change in SD&A expense
    
    
    (3.7%)
    
    
    
    (27.8%)
    
    
    
    (13.9%)
 SD&A Expenses as a Percent of Net Sales
    
    2009
    
    2008U.S.
    
    
    30.3%
    
    
    
    30.4%CEE
    
    
    27.2%
    
    
    
    27.5%Worldwide
    
    
    29.5%
    
    
    
    29.3%
    Operating Income
  Operating Income
    
    2009
    
    
    2008
    
    
    ChangeU.S.
    
    $
    99.5
    
    
    $
    92.6
    
    
    
    7.5%CEE
    
    
    15.9
    
    
    
    58.9
    
    
    
    (73.0%)Caribbean
    
    
    -
    
    
    
    (5.2
    )
    
    
    (100.0%)Worldwide
    
    $
    115.4
    
    
    $
    146.3
    
    
    
    (21.1%)
 33




---



##### Table of Contents



2009 compared to 2008Operating Income Change
    
    U.S.
    
    CEE
    
    WorldwideOperating results, excluding items listed below
    
    
    6.1%
    
    
    
    3.7%
    
    
    
    5.1%Impact of foreign currency
    
    
    --
    
    
    
    (76.7%)
    
    
    
    (29.8%)Unrealized gains on derivatives
    
    
    1.4%
    
    
    
    --
    
    
    
    0.9%Deconsolidation of Caribbean
    
    
    --
    
    
    
    --
    
    
    
    2.7%Change in operating income
    
    
    7.5%
    
    
    
    (73.0%)
    
    
    
    (21.1%)
    Interest Expense, Net and Other Expense, Net
   Income Taxes
  Equity in Net (Earning) Loss of Nonconsolidated Companies
  Net Income
  34




---



##### Table of Contents



Net (Loss) Income Attributable to Noncontrolling Interests
  Net Income Attributable to PepsiAmericas, Inc.
  RESULTS OF OPERATIONS
2009 FIRST NINE MONTHS COMPARED WITH 2008 FIRST NINE MONTHS
  Volume
  Volume
    
    2009
    
    2008U.S.
    
    
    (3.3%)
    
    
    
    (3.1%)CEE
    
    
    (11.4%)
    
    
    
    48.9%Caribbean
    
    
    (43.6%)
    
    
    
    (4.0%)Worldwide
    
    
    (7.9%)
    
    
    
    9.5%
 2009 compared to 2008Volume Change
    
    U.S.
    
    CEE
    
    Caribbean
    
    WorldwideConstant territory volume
    
    
    (3.3
    %)
    
    
    (11.4
    %)
    
    
    (15.9
    %)
    
    
    (6.4
    %)Deconsolidation of Caribbean
    
    
    --
    
    
    
    --
    
    
    
    (27.7
    %)
    
    
    (1.5
    %)Change in volume
    
    
    (3.3
    %)
    
    
    (11.4
    %)
    
    
    (43.6
    %)
    
    
    (7.9
    %)
     35




---



##### Table of Contents



Net Sales
  Net Sales
    
    2009
    
    
    2008
    
    
    ChangeU.S.
    
    $
    2,644.3
    
    
    $
    2,580.7
    
    
    
    2.5%CEE
    
    
    707.8
    
    
    
    1,004.4
    
    
    
    (29.5%)Caribbean
    
    
    100.9
    
    
    
    181.9
    
    
    
    (44.5%)Worldwide
    
    $
    3,453.0
    
    
    $
    3,767.0
    
    
    
    (8.3%)
 2009 compared to 2008Net Sales Change
    
    U.S.
    
    CEE
    
    Caribbean
    
    WorldwideVolume impact*
    
    
    (2.8%)
    
    
    
    (10.6%)
    
    
    
    (13.8%)
    
    
    
    (5.6%)Net price per case, excluding impact of foreign
currency
    
    
    5.4%
    
    
    
    8.0%
    
    
    
    7.0%
    
    
    
    6.6%Impact of foreign currency
    
    
    --
    
    
    
    (25.1%)
    
    
    
    (7.4%)
    
    
    
    (7.1%)Deconsolidation of Caribbean
    
    
    --
    
    
    
    --
    
    
    
    (28.9%)
    
    
    
    (1.5%)Non-core
    
    
    (0.1%)
    
    
    
    (1.8%)
    
    
    
    (1.4%)
    
    
    
    (0.7%)Change in net sales
    
    
    2.5%
    
    
    
    (29.5%)
    
    
    
    (44.5%)
    
    
    
    (8.3%)
 *
    
    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 (Decline)**
    
    2009
    
    2008U.S.
    
    
    5.4%
    
    
    
    3.9%CEE
    
    
    (20.5%)
    
    
    
    17.9%Caribbean
    
    
    (3.4%)
    
    
    
    4.3%Worldwide
    
    
    (1.2%)
    
    
    
    4.6%
 **
    
    Includes the impact from deconsolidation and foreign currency on core net sales.
     36




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##### Table of Contents



Cost of Goods Sold
  Cost of Goods Sold
    
    2009
    
    2008
    
    ChangeU.S.
    
    $
    1,538.8
    
    
    $
    1,517.0
    
    
    
    1.4
    %CEE
    
    
    438.4
    
    
    
    600.2
    
    
    
    (27.0
    %)Caribbean
    
    
    75.4
    
    
    
    137.0
    
    
    
    (45.0
    %)Worldwide
    
    $
    2,052.6
    
    
    $
    2,254.2
    
    
    
    (8.9
    %)
 2009 compared to 2008Cost of Goods Sold Change
    
    U.S.
    
    CEE
    
    Caribbean
    
    WorldwideVolume impact*
    
    
    (2.7%)
    
    
    
    (10.4%)
    
    
    
    (13.9%)
    
    
    
    (5.5%)Cost per case, excluding impact of foreign
currency
    
    
    4.4%
    
    
    
    --
    
    
    
    6.7%
    
    
    
    3.5%Impact of foreign currency
    
    
    --
    
    
    
    (15.7%)
    
    
    
    (7.7%)
    
    
    
    (4.6%)Unrealized gains on derivatives
    
    
    (0.1%)
    
    
    
    --
    
    
    
    --
    
    
    
    (0.1%)Deconsolidation of Caribbean
    
    
    --
    
    
    
    --
    
    
    
    (28.3%)
    
    
    
    (1.9%)Non-core
    
    
    (0.2%)
    
    
    
    (0.9%)
    
    
    
    (1.8%)
    
    
    
    (0.3%)Change in cost of goods sold
    
    
    1.4%
    
    
    
    (27.0%)
    
    
    
    (45.0%)
    
    
    
    (8.9%)
 *
    
    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 (Decrease)**
    
    2009
    
    2008U.S.
    
    
    4.4%
    
    
    
    3.7%CEE
    
    
    (17.4%)
    
    
    
    26.0%Caribbean
    
    
    (3.7%)
    
    
    
    5.5%Worldwide
    
    
    (1.9%)
    
    
    
    5.8%
 **
    
    Includes the impact from deconsolidation and foreign currency on core cost of goods sold.
     37




---



##### Table of Contents



Selling, Delivery and Administrative Expenses
  SD&A Expenses
    
    2009
    
    2008
    
    ChangeU.S.
    
    $
    798.4
    
    
    $
    797.4
    
    
    
    0.1
    %CEE
    
    
    212.4
    
    
    
    280.6
    
    
    
    (24.3
    %)Caribbean
    
    
    25.4
    
    
    
    45.0
    
    
    
    (43.6
    %)Worldwide
    
    $
    1,036.2
    
    
    $
    1,123.0
    
    
    
    (7.7
    %)
 2009 compared to 2008SD&A Expense Change
    
    U.S.
    
    CEE
    
    Caribbean
    
    WorldwideCost impact, excluding items listed below
    
    
    0.2%
    
    
    
    (6.7%)
    
    
    
    (6.7%)
    
    
    
    (1.6%)Impact of foreign currency
    
    
    --
    
    
    
    (17.6%)
    
    
    
    (8.1%)
    
    
    
    (4.7%)Unrealized gains on derivatives
    
    
    (0.1%)
    
    
    
    --
    
    
    
    --
    
    
    
    (0.1%)Deconsolidation of Caribbean
    
    
    --
    
    
    
    --
    
    
    
    (28.8%)
    
    
    
    (1.3%)Change in SD&A expense
    
    
    0.1%
    
    
    
    (24.3%)
    
    
    
    (43.6%)
    
    
    
    (7.7%)
 SD&A Expenses as a Percent of Net Sales
    
    2009
    
    2008U.S.
    
    
    30.2
    %
    
    
    30.9
    %CEE
    
    
    30.0
    %
    
    
    27.9
    %Caribbean
    
    
    25.2
    %
    
    
    24.7
    %Worldwide
    
    
    30.0
    %
    
    
    29.8
    %
     38




---



##### Table of Contents



Operating Income (Loss)
  Operating Income (Loss)
    
    2009
    
    2008
    
    ChangeU.S.
    
    $
    307.2
    
    
    $
    265.1
    
    
    
    15.9%CEE
    
    
    32.6
    
    
    
    123.0
    
    
    
    (73.5%)Caribbean
    
    
    (1.4
    )
    
    
    (6.0
    )
    
    
    76.7%Worldwide
    
    $
    338.4
    
    
    $
    382.1
    
    
    
    (11.4%)
 2009 compared to 2008Operating Income (Loss) Change
    
    U.S.
    
    CEE
    
    Caribbean
    
    WorldwideOperating results, excluding items listed below
    
    
    14.7%
    
    
    
    14.9%
    
    
    
    (150.0%)
    
    
    
    14.5%Impact of foreign currency
    
    
    --
    
    
    
    (88.4%)
    
    
    
    75.0%
    
    
    
    (27.9%)Unrealized gains on derivatives
    
    
    1.2%
    
    
    
    --
    
    
    
    --
    
    
    
    0.8%Deconsolidation of Caribbean
    
    
    --
    
    
    
    --
    
    
    
    151.7%
    
    
    
    1.2%Change in operating income (loss)
    
    
    15.9%
    
    
    
    (73.5%)
    
    
    
    76.7%
    
    
    
    (11.4%)
     Interest Expense, Net and Other Expense, Net
   Income Taxes
  39




---



##### Table of Contents



Equity in Net Loss of Nonconsolidated Companies
  Net Income
  Net (Loss) Income Attributable to Noncontrolling Interests
  Net Income Attributable to PepsiAmericas, Inc.
  LIQUIDITY AND CAPITAL RESOURCES
 Operating Activities .
 Investing Activities. Crush,
Rockstar Muscle Milk.
  Financing Activities.
 40




---



##### Table of Contents



41




---



##### Table of Contents



Discontinued Operations.
  RELATED PARTY TRANSACTIONS
 Transactions with PepsiCo
   Bottling Agreements and Purchases of Concentrate and Finished Product.
 42




---



##### Table of Contents



Bottler Incentives and Other Support Arrangements.
   National Account Sales and Services.
 Sandora Joint Venture.
 Other Transactions.
 43




---



##### Table of Contents



Third Quarter
    
    
    First Nine Months2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales:Bottler incentives
    
    $
    5.5
    
    
    $
    9.6
    
    
    $
    24.0
    
    
    $
    27.2National account sales and services
    
    
    58.7
    
    
    
    62.9
    
    
    
    175.7
    
    
    
    175.8Total
    
    $
    64.2
    
    
    $
    72.5
    
    
    $
    199.7
    
    
    $
    203.0Cost of goods sold:Bottler incentives
    
    $
    52.7
    
    
    $
    47.6
    
    
    $
    140.9
    
    
    $
    132.9Purchase of concentrate
    
    
    (225.5
    )
    
    
    (227.9
    )
    
    
    (735.4
    )
    
    
    (690.9
    )Purchases of finished beverage products
    
    
    (59.7
    )
    
    
    (60.3
    )
    
    
    (174.8
    )
    
    
    (187.6
    )Purchases of finished snack food products
    
    
    (6.6
    )
    
    
    (8.2
    )
    
    
    (18.1
    )
    
    
    (21.5
    )Aquafina royalty fee
    
    
    (12.0
    )
    
    
    (13.1
    )
    
    
    (33.9
    )
    
    
    (38.7
    )Procurement services
    
    
    (1.1
    )
    
    
    (1.1
    )
    
    
    (3.1
    )
    
    
    (3.1
    )Total
    
    $
    (252.2
    )
    
    $
    (263.0
    )
    
    $
    (824.4
    )
    
    $
    (808.9
    )SD&A expenses:Bottler incentives
    
    $
    6.3
    
    
    $
    7.0
    
    
    $
    15.9
    
    
    $
    18.9Purchases of advertising materials
    
    
    (0.4
    )
    
    
    (0.6
    )
    
    
    (1.3
    )
    
    
    (2.2
    )Total
    
    $
    5.9
    
    
    $
    6.4
    
    
    $
    14.6
    
    
    $
    16.7
 Transactions with Bottlers in Which PepsiCo Holds an Equity Interest.
 Agreement and Plan of Merger with PepsiCo
    44




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Agreements and Relationships with Dakota Holdings, LLC, Starquest Securities, LLC and Mr.
Pohlad
   Transactions with Pohlad Companies
  45




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Item 3.          Quantitative and Qualitative Disclosures about Market Risk
  Commodity Prices
   Foreign Currency Exchange Rates
   46




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Interest Rates
   
 Item 4.          Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
  47




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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
Arlich, et al. v. Willits Environmental Remediation Trust, et al. Nickerman v. Remco Hydraulics (Avila/Arlich/Nickerman) Avila/Arlich/Nickerman Whitlock, et al. v. PepsiAmericas, et al.
  
 Item 1A.     Risk Factors
  Our pending merger with PepsiCo may cause disruption in our business and, if the pending
merger does not occur, we will have incurred significant expenses, may need to pay a termination
fee under the merger agreement and our stock price may decline.
    48




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49




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Item 2.         Unregistered Sales of Equity Securities and Use of Proceeds
 (c)
    
    We did not repurchase shares of PepsiAmericas common stock in the third quarter of
2009. Our share repurchase program activity for each of the three months and the quarter
ended October 3, 2009 was as follows:
 Total Number of
    
    
    Maximum Number ofShares Purchased as
    
    
    Shares that May YetTotal Number
    
    
    Average Price
    
    
    Part of Publicly
    
    
    Be Purchased Underof Shares
    
    
    Paid per
    
    
    Announced Plans or
    
    
    the Plans or ProgramsPeriod
    
    Purchased (1)
    
    
    Share
    
    
    Programs (2)
    
    
    (3)July 5, 2009 - August 1, 2009
    
    
    -
    
    
    
    -
    
    
    
    56,201,081
    
    
    
    8,798,919August 2, 2009 - August 29, 2009
    
    
    -
    
    
    $
    -
    
    
    
    56,201,081
    
    
    
    8,798,919August 30, 2009 - October 3, 2009
    
    
    -
    
    
    
    -
    
    
    
    56,201,081
    
    
    
    8,798,919For the Quarter Ended October 3,
2009
    
    
    -
    
    
    $
    -
 
 (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. 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. On July 24, 2008, the Board of Directors authorized the repurchase of 10 million
additional shares.(3)
    
    The repurchase authorization does not have a scheduled expiration date. 
 Item 5.       Other Information
  
 Item 6.       Exhibits
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SIGNATURES
  PEPSIAMERICAS, INC.Dated: November 6, 2009
    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: November 6, 2009
    By:
    /s/ TIMOTHY W. GORMANTimothy W. GormanSenior Vice President and Controller
(As Chief Accounting Officer) 51




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EXHIBIT INDEX
 2.1
    
    Agreement and Plan of Merger dated as of August 3, 2009, among
PepsiCo, Inc., PepsiAmericas, Inc. and Pepsi-Cola Metropolitan
Bottling Company, Inc. (incorporated by reference to the Companys
Current Report on Form 8-K/A (File No. 001-15019) filed on August 5,
2009).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 May 7, 2009 (incorporated by
reference to the Companys Quarterly Report on Form 10-Q (File No.
001-15019) filed on May 8, 2009).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.
 52