##### 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 June 30, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 001-15019
 PEPSIAMERICAS, INC.
  Delaware
    
    13-6167838(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification Number)4000 Dain Rauscher Plaza, 60 South Sixth Street 
Minneapolis, Minnesota
    
    55402(Address of principal executive offices)
    
    (Zip Code)
  (Registrants telephone number, including area code)
  þ o
  þ o o
  o þ




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##### Table of Contents



PEPSIAMERICAS, INC.
FORM 10-Q
SECOND QUARTER 2007
 TABLE OF CONTENTS
 PagePART I FINANCIAL INFORMATIONItem 1.Financial StatementsCondensed Consolidated Statements of Income
    
    2Condensed Consolidated Balance Sheets
    
    3Condensed Consolidated Statements of Cash Flows
    
    4Notes to Condensed Consolidated Financial Statements
    
    5Item 2.Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    15Item 3.Quantitative and Qualitative Disclosures About Market Risk
    
    32Item 4.Controls and Procedures
    
    33PART II OTHER INFORMATIONItem 1.Legal Proceedings
    
    34Item 1A.Risk Factors
    
    34Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
    
    34Item 4.Submission of Matters to a Vote of Security Holders
    
    34Item 5.Other Information
    
    35Item 6.Exhibits
    
    35SIGNATURE
    
    36EXHIBIT INDEX
    
    37Stock Purchase AgreementStock Purchase AgreementPut and Call Option Agreement302 Certification of Chief Executive Officer302 Certification of Chief Financial Officer906 Certification of Chief Executive Officer906 Certification of Chief Financial Officer




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 PEPSIAMERICAS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (unaudited and in millions, except per share data)
 Second Quarter
    
    
    First Half2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    1,198.9
    
    
    $
    1,065.2
    
    
    $
    2,159.1
    
    
    $
    1,913.7Cost of goods sold
    
    
    701.8
    
    
    
    635.7
    
    
    
    1,277.8
    
    
    
    1,136.4Gross profit
    
    
    497.1
    
    
    
    429.5
    
    
    
    881.3
    
    
    
    777.3Selling, delivery and administrative expenses
    
    
    351.5
    
    
    
    305.0
    
    
    
    674.9
    
    
    
    604.9Special charges, net
    
    
    1.4
    
    
    
    
    
    
    
    2.8
    
    
    
    2.2Operating income
    
    
    144.2
    
    
    
    124.5
    
    
    
    203.6
    
    
    
    170.2Interest expense, net
    
    
    26.1
    
    
    
    24.4
    
    
    
    51.8
    
    
    
    47.5Other income (expense), net
    
    
    4.5
    
    
    
    (2.1
    )
    
    
    3.3
    
    
    
    (3.9
    )Income from continuing operations before income
taxes and equity in net earnings of
nonconsolidated companies
    
    
    122.6
    
    
    
    98.0
    
    
    
    155.1
    
    
    
    118.8Income taxes
    
    
    42.5
    
    
    
    37.2
    
    
    
    54.4
    
    
    
    45.1Equity in net earnings of nonconsolidated companies
    
    
    
    
    
    
    4.2
    
    
    
    
    
    
    
    5.4Income from continuing operations
    
    
    80.1
    
    
    
    65.0
    
    
    
    100.7
    
    
    
    79.1Loss from discontinued operations, net of tax
    
    
    2.1
    
    
    
    
    
    
    
    2.1
    
    
    
    Net income
    
    $
    78.0
    
    
    $
    65.0
    
    
    $
    98.6
    
    
    $
    79.1Weighted average common shares:Basic
    
    
    125.7
    
    
    
    127.7
    
    
    
    126.0
    
    
    
    129.0Incremental effect of stock options and awards
    
    
    1.9
    
    
    
    1.9
    
    
    
    1.8
    
    
    
    2.0Diluted
    
    
    127.6
    
    
    
    129.6
    
    
    
    127.8
    
    
    
    131.0Earnings per share:Basic:Income from continuing operations
    
    $
    0.64
    
    
    $
    0.51
    
    
    $
    0.80
    
    
    $
    0.61Loss from discontinued operations
    
    
    (0.02
    )
    
    
    
    
    
    
    (0.02
    )
    
    
    Total
    
    $
    0.62
    
    
    $
    0.51
    
    
    $
    0.78
    
    
    $
    0.61Diluted:Income from continuing operations
    
    $
    0.63
    
    
    $
    0.50
    
    
    $
    0.79
    
    
    $
    0.60Loss from discontinued operations
    
    
    (0.02
    )
    
    
    
    
    
    
    (0.02
    )
    
    
    Total
    
    $
    0.61
    
    
    $
    0.50
    
    
    $
    0.77
    
    
    $
    0.60Cash dividends declared per share
    
    $
    0.13
    
    
    $
    0.125
    
    
    $
    0.26
    
    
    $
    0.25
  2




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PEPSIAMERICAS, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (unaudited and in millions, except per share data)
 End ofSecond
    
    
    End ofQuarter
    
    
    Fiscal Year2007
    
    
    2006ASSETS:Current assets:Cash and cash equivalents
    
    $
    123.5
    
    
    $
    93.1Receivables, net
    
    
    352.5
    
    
    
    267.1Inventories:Raw materials and supplies
    
    
    108.1
    
    
    
    104.2Finished goods
    
    
    156.9
    
    
    
    128.8Total inventories
    
    
    265.0
    
    
    
    233.0Other current assets
    
    
    100.7
    
    
    
    81.9Total current assets
    
    
    841.7
    
    
    
    675.1Property and equipment
    
    
    2,593.6
    
    
    
    2,576.4Accumulated depreciation
    
    
    (1,427.7
    )
    
    
    (1,437.7
    )Net property and equipment
    
    
    1,165.9
    
    
    
    1,138.7Goodwill
    
    
    1,933.7
    
    
    
    2,027.1Intangible assets, net
    
    
    406.0
    
    
    
    299.9Other assets
    
    
    62.9
    
    
    
    66.6Total assets
    
    $
    4,410.2
    
    
    $
    4,207.4LIABILITIES AND SHAREHOLDERS EQUITY:Current liabilities:Short-term debt, including current maturities of long-term debt
    
    $
    247.8
    
    
    $
    212.9Payables
    
    
    255.1
    
    
    
    189.4Other current liabilities
    
    
    317.2
    
    
    
    291.5Total current liabilities
    
    
    820.1
    
    
    
    693.8Long-term debt
    
    
    1,489.2
    
    
    
    1,490.2Deferred income taxes
    
    
    264.2
    
    
    
    243.1Other liabilities
    
    
    182.3
    
    
    
    175.7Total liabilities
    
    
    2,755.8
    
    
    
    2,602.8Shareholders equity:Preferred stock ($0.01 par value, 12.5 million shares authorized; no shares issued)
    
    
    
    
    
    
    Common stock ($0.01 par value, 350 million shares authorized; 137.6 million shares
issued - 2007 and 2006)
    
    
    1,278.8
    
    
    
    1,283.4Retained income
    
    
    591.1
    
    
    
    525.4Accumulated other comprehensive income
    
    
    39.0
    
    
    
    21.7Treasury stock, at cost (11.9 million shares and 10.6 million shares, respectively)
    
    
    (254.5
    )
    
    
    (225.9
    )Total shareholders equity
    
    
    1,654.4
    
    
    
    1,604.6Total liabilities and shareholders equity
    
    $
    4,410.2
    
    
    $
    4,207.4
  3




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PEPSIAMERICAS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited and in millions)
 First Half2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    98.6
    
    
    $
    79.1Loss from discontinued operations
    
    
    2.1
    
    
    
    Income from continuing operations
    
    
    100.7
    
    
    
    79.1Adjustments to reconcile to net cash provided by operating activities of continuing
operations:Depreciation and amortization
    
    
    97.9
    
    
    
    99.1Deferred income taxes
    
    
    0.9
    
    
    
    (8.9
    )Special charges, net
    
    
    2.8
    
    
    
    2.2Cash outlays related to special charges
    
    
    (11.2
    )
    
    
    (1.7
    )Pension contributions
    
    
    
    
    
    
    (10.0
    )Equity in net earnings of nonconsolidated companies
    
    
    
    
    
    
    (5.4
    )Excess tax benefits from shared-based payment arrangements
    
    
    (3.0
    )
    
    
    (5.6
    )Gain on sale of non-core property
    
    
    (10.2
    )
    
    
    Marketable securities impairment
    
    
    4.0
    
    
    
    Other
    
    
    10.7
    
    
    
    15.2Changes in assets and liabilities, exclusive of acquisitions:Increase in receivables
    
    
    (85.5
    )
    
    
    (105.8
    )Increase in inventories
    
    
    (31.9
    )
    
    
    (32.7
    )Increase in payables
    
    
    52.8
    
    
    
    38.3Net change in other assets and liabilities
    
    
    30.0
    
    
    
    21.2Net cash provided by operating activities of continuing operations
    
    
    158.0
    
    
    
    85.0CASH FLOWS FROM INVESTING ACTIVITIES:Capital investments
    
    
    (109.4
    )
    
    
    (89.2
    )Franchises and companies acquired, net of cash acquired
    
    
    
    
    
    
    (6.6
    )Proceeds from sales of property
    
    
    23.5
    
    
    
    3.3Net cash used in investing activities
    
    
    (85.9
    )
    
    
    (92.5
    )CASH FLOWS FROM FINANCING ACTIVITIES:Net borrowings of short-term debt
    
    
    46.4
    
    
    
    69.8Proceeds from issuance of long-term debt
    
    
    
    
    
    
    247.4Repayment of long-term debt
    
    
    (11.6
    )
    
    
    (134.7
    )Treasury stock purchases
    
    
    (59.4
    )
    
    
    (150.7
    )Excess tax benefits from share-based payment arrangements
    
    
    3.0
    
    
    
    5.6Issuance of common stock
    
    
    17.6
    
    
    
    19.5Cash dividends
    
    
    (32.2
    )
    
    
    (27.9
    )Net cash (used in) provided by financing activities
    
    
    (36.2
    )
    
    
    29.0Net cash used in activities of discontinued operations
    
    
    (4.3
    )
    
    
    (3.6
    )Effects of exchange rate changes on cash and cash equivalents
    
    
    (1.2
    )
    
    
    (0.9
    )Change in cash and cash equivalents
    
    
    30.4
    
    
    
    17.0Cash and cash equivalents at beginning of fiscal year
    
    
    93.1
    
    
    
    116.0Cash and cash equivalents at end of second quarter
    
    $
    123.5
    
    
    $
    133.0
  4




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PEPSIAMERICAS, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited)
 1. Significant Accounting Policies
 Quarterly reporting.
 Fiscal year. st
 rd
  Use of accounting estimates.
 Earnings per share.
  Second Quarter
    
    First Half2007
    
    2006
    
    2007
    
    2006Shares under nonvested restricted stock awards
    
    
    
    
    
    
    929,256
    
    
    
    953,111
    
    
    
    929,256Weighted-average grant date fair value per
share
    
    $
    
    
    
    $
    24.31
    
    
    $
    22.11
    
    
    $
    24.31
 Reclassifications.
 Recently Issued Accounting Pronouncements.
 5




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2. Special Charges
    2007 ChargesBeginning of fiscal year 2007
    
    $
    11.1Special charges, net
    
    
    2.8Payment of special charges
    
    
    (11.2
    )End of the first half of 2007
    
    $
    2.7
  3. Interest Expense, Net
  Second Quarter
    
    
    First Half2007
    
    
    2006
    
    
    2007
    
    
    2006Interest expense
    
    $
    26.8
    
    
    $
    25.8
    
    
    $
    53.0
    
    
    $
    49.6Interest income
    
    
    (0.7
    )
    
    
    (1.4
    )
    
    
    (1.2
    )
    
    
    (2.1
    )Interest expense, net
    
    $
    26.1
    
    
    $
    24.4
    
    
    $
    51.8
    
    
    $
    47.5
 6




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4. Income Taxes
     Jurisdiction
    
    Subject to ExaminationFederal
    
    
    2005-2006Illinois
    
    
    1999-2006Indiana
    
    
    2003-2006Iowa
    
    
    2003-2006Romania
    
    
    2002-2006Poland
    
    
    2001-2006Czech Republic
    
    
    2003-2006
  5. Comprehensive Income
  Second Quarter
    
    
    First Half2007
    
    
    2006
    
    
    2007
    
    
    2006Net income
    
    $
    78.0
    
    
    $
    65.0
    
    
    $
    98.6
    
    
    $
    79.1Foreign currency translation adjustment
    
    
    14.7
    
    
    
    5.0
    
    
    
    16.9
    
    
    
    8.1Net unrealized investment and hedging
gains (losses)
    
    
    0.4
    
    
    
    0.1
    
    
    
    0.4
    
    
    
    (3.3
    )Comprehensive income
    
    $
    93.1
    
    
    $
    70.1
    
    
    $
    115.9
    
    
    $
    83.9
  7




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6. Goodwill and Intangible Assets
  CentralU.S.
    
    
    Europe
    
    
    Caribbean
    
    
    TotalBalance at beginning of fiscal year 2007
    
    $
    1,825.2
    
    
    $
    185.7
    
    
    $
    16.2
    
    
    $
    2,027.1Purchase accounting adjustments
    
    
    (0.4
    )
    
    
    (104.3
    )
    
    
    
    
    
    
    (104.7
    )Foreign currency translation adjustment
    
    
    
    
    
    
    11.3
    
    
    
    
    
    
    
    11.3Balance at end of first half of 2007
    
    $
    1,824.8
    
    
    $
    92.7
    
    
    $
    16.2
    
    
    $
    1,933.7
  End of First
    
    
    End of FiscalHalf 2007
    
    
    Year 2006Intangible assets subject to amortizationGross carrying amountFranchise and distribution agreements
    
    $
    3.3
    
    
    $
    3.3Customer relationships and lists
    
    
    24.0
    
    
    
    8.0Other
    
    
    2.9
    
    
    
    2.9Total
    
    $
    30.2
    
    
    $
    14.2Accumulated amortizationFranchise and distribution agreements
    
    $
    (1.0
    )
    
    $
    (0.9
    )Customer relationships and lists
    
    
    (3.5
    )
    
    
    (1.3
    )Other
    
    
    (0.7
    )
    
    
    (0.6
    )Total
    
    $
    (5.2
    )
    
    $
    (2.8
    )Intangible assets subject to amortization, net
    
    $
    25.0
    
    
    $
    11.4Intangible assets not subject to amortization:Franchise and distribution agreements
    
    $
    381.0
    
    
    $
    288.5Total intangible assets, net
    
    $
    406.0
    
    
    $
    299.9
    8




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7. Acquisitions
    8. Debt
  9. Financial Instruments
  Cash Flow Hedges.
  First Half2007
    
    
    2006Unrealized losses on derivatives at beginning of fiscal year
    
    $
    (3.3
    )
    
    $
    (2.4
    )Deferral of net derivative (losses) gains in accumulated other
comprehensive income
    
    
    (0.2
    )
    
    
    0.1Reclassification of net derivative gains (losses)
to earnings
    
    
    0.6
    
    
    
    (0.3
    )Unrealized losses on derivatives at end of first half
    
    $
    (2.9
    )
    
    $
    (2.6
    )
 Fair Value Hedges.
 9




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Derivatives not Designated as Hedges.
  End of First
    
    End of FiscalHalf of 2007
    
    Year 2006Unrealized gains:Commodities
    
    $
    3.6
    
    
    $
    Interest rate instruments
    
    
    6.8
    
    
    
    8.2Unrealized losses:Commodities
    
    $
    (0.1
    )
    
    $
    (0.6
    )Interest rate instruments
    
    
    (6.3
    )
    
    
    (6.8
    )
 10. Pension and Other Postretirement Benefit Plans
  Second Quarter
    
    
    First Half2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    0.8
    
    
    $
    0.9
    
    
    $
    1.6
    
    
    $
    1.9Interest cost
    
    
    2.7
    
    
    
    2.5
    
    
    
    5.3
    
    
    
    5.1Expected return on plan assets
    
    
    (3.7
    )
    
    
    (3.5
    )
    
    
    (7.4
    )
    
    
    (6.9
    )Amortization of prior service cost
    
    
    
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1Amortization of net loss
    
    
    0.7
    
    
    
    1.0
    
    
    
    1.4
    
    
    
    1.9Net periodic pension cost
    
    $
    0.5
    
    
    $
    1.0
    
    
    $
    1.0
    
    
    $
    2.1
  11. Share-Based Compensation
   10




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12. Supplemental Cash Flow Information
  First Half2007
    
    2006Interest paid
    
    $
    53.1
    
    
    $
    51.0Interest received
    
    
    1.1
    
    
    
    2.1Income taxes paid, net of refunds
    
    
    40.5
    
    
    
    12.0
 13. Environmental and Other Commitments and Contingencies
 Current Operations .
   Discontinued Operations  Remediation.
    11




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Discontinued OperationsInsurance.
   Cooper Industries,
LLC v. PepsiAmericas, Inc., et al.,
 12




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Discontinued OperationsProduct Liability and Toxic Tort Claims.
 14. Segment Reporting
   Second QuarterNet Sales
    
    
    Operating Income2007
    
    
    2006
    
    
    2007
    
    
    2006U.S.
    
    $
    929.9
    
    
    $
    892.1
    
    
    $
    113.8
    
    
    $
    115.9Central Europe
    
    
    207.0
    
    
    
    111.9
    
    
    
    29.6
    
    
    
    7.7Caribbean
    
    
    62.0
    
    
    
    61.2
    
    
    
    0.8
    
    
    
    0.9Total
    
    $
    1,198.9
    
    
    $
    1,065.2
    
    
    $
    144.2
    
    
    $
    124.5
 First HalfNet Sales
    
    
    Operating Income (Loss)2007
    
    
    2006
    
    
    2007
    
    
    2006U.S.
    
    $
    1,694.8
    
    
    $
    1,620.5
    
    
    $
    174.2
    
    
    $
    173.6Central Europe
    
    
    350.0
    
    
    
    180.3
    
    
    
    30.6
    
    
    
    (3.3
    )Caribbean
    
    
    114.3
    
    
    
    112.9
    
    
    
    (1.2
    )
    
    
    (0.1
    )Total
    
    $
    2,159.1
    
    
    $
    1,913.7
    
    
    $
    203.6
    
    
    $
    170.2
 15. Related Party Transactions
  13




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16. Subsequent Event
   14




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 FORWARD-LOOKING STATEMENTS
   CRITICAL ACCOUNTING POLICIES
  Recoverability of Goodwill and Intangible Assets with Indefinite Lives.
    Environmental Liabilities.
 15




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Income Taxes.
  Casualty Insurance Costs.
  16




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RESULTS OF OPERATIONS
 BUSINESS OVERVIEW
  volume Constant territory Net pricing Cost of goods sold per unit
 Seasonality
  Items Impacting Comparability
 Acquisition
   Special Charges
  17




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Marketable Securities Impairment
  Gain on Sale of Non-Core Property
  Financial Results
 . .
   2007 Outlook
   18




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RESULTS OF OPERATIONS
2007 SECOND QUARTER COMPARED WITH 2006 SECOND QUARTER
  Volume
  As reported
    
    2007
    
    2006U.S.
    
    
    (3.3
    %)
    
    
    3.6
    %Central Europe
    
    
    56.3
    %
    
    
    11.4
    %Caribbean
    
    
    (4.1
    %)
    
    
    (4.4
    %)Worldwide
    
    
    6.2
    %
    
    
    4.3
    %
 Constant territory
    
    2007
    
    2006U.S.
    
    
    (3.3
    %)
    
    
    3.6
    %Central Europe
    
    
    10.7
    %
    
    
    11.4
    %Caribbean
    
    
    (4.1
    %)
    
    
    (4.4
    %)Worldwide
    
    
    (1.1
    %)
    
    
    4.3
    %
     19




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Net Sales
  Net Sales
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    929.9
    
    
    $
    892.1
    
    
    
    4.2
    %Central Europe
    
    
    207.0
    
    
    
    111.9
    
    
    
    85.0
    %Caribbean
    
    
    62.0
    
    
    
    61.2
    
    
    
    1.3
    %Worldwide
    
    $
    1,198.9
    
    
    $
    1,065.2
    
    
    
    12.6
    %Net Pricing Growth (Decline)as reported
    
    2007
    
    2006U.S.
    
    
    7.3
    %
    
    
    (0.5
    %)Central Europe
    
    
    19.5
    %
    
    
    4.7
    %Caribbean
    
    
    5.1
    %
    
    
    6.6
    %Worldwide
    
    
    6.0
    %
    
    
    0.1
    %Net Pricing Growth(Decline)constant territory
    
    2007
    
    2006U.S.
    
    
    7.3
    %
    
    
    (0.5
    %)Central Europe
    
    
    16.5
    %
    
    
    4.7
    %Caribbean
    
    
    5.1
    %
    
    
    6.6
    %Worldwide
    
    
    7.4
    %
    
    
    0.1
    %
     20




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##### Table of Contents



Cost of Goods Sold
  Cost of Goods Sold
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    541.1
    
    
    $
    524.1
    
    
    
    3.2
    %Central Europe
    
    
    114.9
    
    
    
    66.1
    
    
    
    73.8
    %Caribbean
    
    
    45.8
    
    
    
    45.5
    
    
    
    0.7
    %Worldwide
    
    $
    701.8
    
    
    $
    635.7
    
    
    
    10.4
    %Cost of Goods Sold per UnitIncreaseas reported
    
    2007
    
    2006U.S.
    
    
    5.4
    %
    
    
    3.7
    %Central Europe
    
    
    10.3
    %
    
    
    4.2
    %Caribbean
    
    
    4.2
    %
    
    
    6.6
    %Worldwide
    
    
    3.1
    %
    
    
    3.4
    %Cost of Goods Sold per UnitIncrease constant territory
    
    2007
    
    2006U.S.
    
    
    5.4
    %
    
    
    3.7
    %Central Europe
    
    
    10.2
    %
    
    
    4.2
    %Caribbean
    
    
    4.2
    %
    
    
    6.6
    %Worldwide
    
    
    5.1
    %
    
    
    3.4
    %
     21




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##### Table of Contents



Selling, Delivery and Administrative Expenses
  SD&A Expenses
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    273.6
    
    
    $
    252.1
    
    
    
    8.5
    %Central Europe
    
    
    62.5
    
    
    
    38.1
    
    
    
    64.0
    %Caribbean
    
    
    15.4
    
    
    
    14.8
    
    
    
    4.1
    %Worldwide
    
    $
    351.5
    
    
    $
    305.0
    
    
    
    15.2
    %SD&A as Percent of Net Sales
    
    2007
    
    2006U.S.
    
    
    29.4
    %
    
    
    28.3
    %Central Europe
    
    
    30.2
    %
    
    
    34.0
    %Caribbean
    
    
    24.8
    %
    
    
    24.2
    %Worldwide
    
    
    29.3
    %
    
    
    28.6
    %
     Special Charges
  Operating Income
  2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    113.8
    
    
    $
    115.9
    
    
    
    (1.8
    %)Central Europe
    
    
    29.6
    
    
    
    7.7
    
    
    
    284.4
    %Caribbean
    
    
    0.8
    
    
    
    0.9
    
    
    
    (11.1
    %)Worldwide
    
    $
    144.2
    
    
    $
    124.5
    
    
    
    15.8
    %
  22




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Interest Expense and Other Expenses
   Income Taxes
  Equity in Net Earnings of Nonconsolidated Companies
  Loss on Discontinued Operations
  Net Income
  23




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##### Table of Contents



RESULTS OF OPERATIONS
2007 FIRST HALF COMPARED WITH 2006 FIRST HALF
  Volume
  As reported
    
    2007
    
    2006U.S.
    
    
    (1.6
    %)
    
    
    1.1
    %Central Europe
    
    
    65.7
    %
    
    
    7.6
    %Caribbean
    
    
    (5.2
    %)
    
    
    (0.5
    %)Worldwide
    
    
    8.1
    %
    
    
    1.9
    %
 Constant territory
    
    2007
    
    2006U.S.
    
    
    (1.6
    %)
    
    
    1.1
    %Central Europe
    
    
    12.0
    %
    
    
    7.6
    %Caribbean
    
    
    (5.2
    %)
    
    
    (0.5
    %)Worldwide
    
    
    0.2
    %
    
    
    1.9
    %
     24




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##### Table of Contents



Net Sales
  Net Sales
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    1,694.8
    
    
    $
    1,620.5
    
    
    
    4.6
    %Central Europe
    
    
    350.0
    
    
    
    180.3
    
    
    
    94.1
    %Caribbean
    
    
    114.3
    
    
    
    112.9
    
    
    
    1.2
    %Worldwide
    
    $
    2,159.1
    
    
    $
    1,913.7
    
    
    
    12.8
    %Net Pricing Growthas reported
    
    2007
    
    2006U.S.
    
    
    5.7
    %
    
    
    1.3
    %Central Europe
    
    
    19.2
    %
    
    
    0.9
    %Caribbean
    
    
    5.8
    %
    
    
    6.0
    %Worldwide
    
    
    4.5
    %
    
    
    1.2
    %Net Pricing Growthconstantterritory
    
    2007
    
    2006U.S.
    
    
    5.7
    %
    
    
    1.3
    %Central Europe
    
    
    17.0
    %
    
    
    0.9
    %Caribbean
    
    
    5.8
    %
    
    
    6.0
    %Worldwide
    
    
    6.2
    %
    
    
    1.2
    %
     25




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Cost of Goods Sold
  Cost of Goods Sold
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    989.5
    
    
    $
    941.9
    
    
    
    5.1
    %Central Europe
    
    
    202.9
    
    
    
    110.3
    
    
    
    84.0
    %Caribbean
    
    
    85.4
    
    
    
    84.2
    
    
    
    1.4
    %Worldwide
    
    $
    1,277.8
    
    
    $
    1,136.4
    
    
    
    12.4
    %Cost of Goods Sold per UnitIncrease
    
    2007
    
    2006U.S.
    
    
    5.8
    %
    
    
    4.5
    %Central Europe
    
    
    11.3
    %
    
    
    0.3
    %Caribbean
    
    
    5.6
    %
    
    
    6.1
    %Worldwide
    
    
    3.6
    %
    
    
    3.9
    %Cost of Goods Sold per UnitIncrease constant territory
    
    2007
    
    2006U.S.
    
    
    5.8
    %
    
    
    4.5
    %Central Europe
    
    
    11.8
    %
    
    
    0.3
    %Caribbean
    
    
    5.6
    %
    
    
    6.1
    %Worldwide
    
    
    5.7
    %
    
    
    4.6
    %
     26




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##### Table of Contents



Selling, Delivery and Administrative Expenses
  SD&A Expenses
    
    2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    528.5
    
    
    $
    505.0
    
    
    
    4.7
    %Central Europe
    
    
    116.3
    
    
    
    71.1
    
    
    
    63.6
    %Caribbean
    
    
    30.1
    
    
    
    28.8
    
    
    
    4.5
    %Worldwide
    
    $
    674.9
    
    
    $
    604.9
    
    
    
    11.6
    %SD&A as Percent of Net Sales
    
    2007
    
    2006U.S.
    
    
    31.2
    %
    
    
    31.2
    %Central Europe
    
    
    33.2
    %
    
    
    39.4
    %Caribbean
    
    
    26.3
    %
    
    
    25.5
    %Worldwide
    
    
    31.3
    %
    
    
    31.6
    %
     Special Charges
  27




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##### Table of Contents



Operating Income (Loss)
  2007
    
    
    2006
    
    
    ChangeU.S.
    
    $
    174.2
    
    
    $
    173.6
    
    
    
    0.3
    %Central Europe
    
    
    30.6
    
    
    
    (3.3
    )
    
    
    *Caribbean
    
    
    (1.2
    )
    
    
    (0.1
    )
    
    
    *Worldwide
    
    $
    203.6
    
    
    $
    170.2
    
    
    
    19.6
    %
 
 *
    
    Percentage change not meaningful     Interest Expense and Other Expenses
   Income Taxes
  Equity in Net Earnings of Nonconsolidated Companies
  Loss on Discontinued Operations
  28




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##### Table of Contents



Net Income
  LIQUIDITY AND CAPITAL RESOURCES
 Operating Activities.
 Investing Activities.
   Financing Activities.
     29




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##### Table of Contents



Discontinued operations.
  RELATED PARTY TRANSACTIONS
     30




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##### Table of Contents



31




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Commodity Prices
  Interest Rates
  Currency Exchange Rates
   32




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
  33




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (c)
    
    Our share repurchase program activity for each of the three months and the quarter
ended June 30, 2007 was as follows:
 Total
    
    
    
    
    
    
    Total Number of
    
    
    Maximum NumberNumber of
    
    
    Average
    
    
    Shares Purchased
    
    
    of Shares that MayShares
    
    
    Price
    
    
    as Part of Publicly
    
    
    Yet Be PurchasedPurchased
    
    
    Paid per
    
    
    Announced Plans
    
    
    Under the Plans orPeriod
    
    (1)
    
    
    Share (2)
    
    
    or Programs
    
    
    Programs (3)April 1 - April 28, 2007
    
    
    457,300
    
    
    $
    23.31
    
    
    
    32,540,380
    
    
    
    7,459,620April 29 - May 26, 2007
    
    
    300,120
    
    
    
    24.48
    
    
    
    32,840,500
    
    
    
    7,159,500May 27  June 30, 2007
    
    
    
    
    
    
    
    
    
    
    32,840,500
    
    
    
    7,159,500For the Quarter Ended June 30, 2007
    
    
    757,420
    
    
    $
    23.77
 
 (1)
    
    Represents shares purchased in open-market transactions pursuant to our
publicly announced repurchase program.(2)
    
    Includes commissions of $0.02 per share.(3)
    
    On July 21, 2005, we announced that our Board of Directors authorized the
repurchase of 20 million additional shares under a previously authorized repurchase
program. This repurchase authorization does not have a scheduled expiration date. 
 Item 4. Submission of Matters to a Vote of Security Holders
 (a)
    
    We held our Annual Meeting of Shareholders on April 26, 2007.(b)
    
    Election of DirectorsThe following persons, who together constitute all of the members of our Board of
Directors, were elected at the Annual Meeting of Shareholders to serve as directors for
the ensuing year:
 Herbert M. Baum
    
    Jarobin Gilbert, Jr.Richard G. Cline
    
    James R. KackleyMichael J. Corliss
    
    Matthew M. McKennaPierre S. du Pont
    
    Robert C. PohladArchie R. Dykes
    
    Deborah E. Powell
 34




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##### Table of Contents



(c) Matters Voted Upon
   Votes For
    
    Votes Against
    
    AbstentionHerbert M. Baum
    
    
    116,046,946
    
    
    
    1,090,056
    
    
    
    99,392Richard G. Cline
    
    
    116,140,887
    
    
    
    1,015,604
    
    
    
    79,903Michael J. Corliss
    
    
    116,996,538
    
    
    
    143,780
    
    
    
    96,076Pierre S. du Pont
    
    
    116,128,356
    
    
    
    1,011,543
    
    
    
    96,495Archie R. Dykes
    
    
    116,095,987
    
    
    
    1,042,396
    
    
    
    98,011Jarobin Gilbert, Jr.
    
    
    116,956,529
    
    
    
    1,187,383
    
    
    
    92,482James R. Kackley
    
    
    116,994,905
    
    
    
    142,984
    
    
    
    98,505Matthew M. McKenna
    
    
    116,211,060
    
    
    
    927,982
    
    
    
    97,352Robert C. Pohlad
    
    
    116,113,460
    
    
    
    1,025,961
    
    
    
    96,973Deborah E. Powell
    
    
    118,981,541
    
    
    
    159,575
    
    
    
    95,278
   Votes for
    
    
    116,670,762Votes against
    
    
    489,100Votes abstaining
    
    
    76,532Broker non-votes
    
    
    
 (d)
    
    Not applicable.
 
 Item 5. Other Information
 (a)
    
    Item 8.01. Other Events. On July 26, 2007, our Board of Directors declared a dividend
of $0.13 per share on PepsiAmericas common stock. The dividend is payable October 1, 2007
to shareholders of record on September 14, 2007. Our Board of Directors reviews the
dividend policy on a quarterly basis.
 
 Item 6. Exhibits
  35




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##### Table of Contents



SIGNATURE
  PEPSIAMERICAS, INC.Date: August 3, 2007
    By:
    /s/ ALEXANDER H. WAREAlexander H. WareExecutive Vice President and Chief Financial Officer
(As Principal Financial Officer, Chief
Accounting Officer and Duly Authorized Officer
of PepsiAmericas, Inc.) 36




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##### Table of Contents



EXHIBIT INDEX
 3.1
    
    Restated Certificate of Incorporation (incorporated by reference
to the Companys Registration Statement on Form S-8 (File No.
333-64292) filed on June 29, 2001).3.2
    
    By-Laws, as amended and restated on December 14, 2006
(incorporated by reference to the Companys Current Report on Form
8-K (File No. 000-15019) filed on December 18, 2006).10.1
    
    Stock Purchase Agreement by and among PepsiAmericas, Inc.,
PepsiCo, Inc., Igor Yevgenovych Bezzub, and Raimondas Tumenas
dated as of June 7, 2007.10.2
    
    Stock Purchase Agreement by and among PepsiAmericas, Inc.,
PepsiCo, Sergiy Oleksandrovych Sypko, Olena Mykhailivna Sypko,
Oleksiy Sergiyovich Sypko and Andriy Serviyovich Sypko dated as of
June 7, 2007.10.3
    
    Put and Call Option Agreement by and among PepsiAmericas, Inc.,
PepsiCo, Inc., Marina Bezzub and Agne Tumenaite dated as of June
7, 2007.31.1
    
    Chief Executive Officer Certification pursuant to Exchange Act
Rule 13a-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Chief Financial Officer Certification pursuant to Exchange Act
Rule 13a-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Chief Executive Officer Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Chief Financial Officer Certification pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 37