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This excerpt taken from the PBG 8-K filed Sep 16, 2009. Liquidity
and Capital Resources
Our principal sources of cash include cash from our operating
activities and the issuance of debt and bank borrowings. We
believe that these cash inflows will be sufficient for the
foreseeable future to fund capital expenditures, benefit plan
contributions, acquisitions, share repurchases, dividends and
working capital requirements.
The recent and extraordinary disruption in the world credit
markets in 2008 had a significant adverse impact on a number of
financial institutions. At this point in time, the
Company’s liquidity has not been materially impacted by the
current credit environment and management does not expect that
it will be materially impacted in the near-future. Management
will continue to closely monitor the Company’s liquidity
and the credit markets. However, management cannot predict with
any certainty the impact to the Company of any further
disruption in the credit environment.
13
Table of Contents
Acquisitions
and Investments
We completed a joint acquisition with PepsiCo of Russia’s
leading branded juice company JSC Lebedyansky
(“Lebedyansky”) for approximately $1.8 billion.
Lebedyansky was acquired 58.3 percent by PepsiCo and
41.7 percent by PR Beverages, our Russian venture with
PepsiCo. We have recorded an equity investment for PR
Beverages’ share in Lebedyansky. In addition, we have
recorded a noncontrolling interest contribution for
PepsiCo’s proportional contribution to PR Beverages
relating to Lebedyansky.
During 2008, we acquired Pepsi-Cola Batavia Bottling Corp and
Lane Affiliated Companies, Inc. (“Lane”), Pepsi-Cola
franchise bottlers which serve certain New York counties and
portions of Colorado, Arizona and New Mexico. In addition we
acquired Sobol-Aqua JSC (“Sobol”), a company that
manufactures Sobol brands and co-packs various Pepsi products in
Siberia and Eastern Russia. The total cost of acquisitions
during 2008 was approximately $279 million.
Long-Term
Debt Activities
During the fourth quarter, we issued $1.3 billion in senior
notes with a coupon rate of 6.95 percent, maturing in 2014.
A portion of this debt was used to repay our senior notes due in
2009 at their maturity on February 17, 2009. In the
interim, these proceeds were placed in short-term investments.
In addition, we used a portion of the proceeds to finance the
Lane acquisition and repay short-term commercial paper debt, a
portion of which was used to finance our acquisition of
Lebedyansky.
In addition, during the first quarter of 2009 we issued an
additional $750 million in senior notes, with a coupon rate
of 5.125 percent, maturing in 2019. The net proceeds of the
offering, together with a portion of the proceeds from the
offering of our senior notes issued in the fourth quarter of
2008, were used to repay our senior notes due in 2009, at their
scheduled maturity on February 17, 2009. Any excess
proceeds of this offering will be used for general corporate
purposes. The next significant scheduled debt maturity is not
until 2012.
Short-Term
Debt Activities
We have a committed revolving credit facility of
$1.1 billion and an uncommitted credit facility of
$500 million. Both of these credit facilities are
guaranteed by Bottling LLC and are used to support our
$1.2 billion commercial paper program and working capital
requirements. At December 27, 2008, we had no outstanding
commercial paper. At December 29, 2007, we had
$50 million in outstanding commercial paper with a
weighted-average interest rate of 5.3 percent.
In addition to the revolving credit facilities discussed above,
we had available bank credit lines of approximately
$772 million at December 27, 2008, of which the
majority was uncommitted. These lines were primarily used to
support the general operating needs of our international
locations. As of year-end 2008, we had $103 million
outstanding under these lines of credit at a weighted-average
interest rate of 10.0 percent. As of year-end 2007, we had
available short-term bank credit lines of approximately
$748 million, of which $190 million was outstanding at
a weighted-average interest rate of 5.3 percent.
Our peak borrowing timeframe varies with our working capital
requirements and the seasonality of our business. Additionally,
throughout the year, we may have further short-term borrowing
requirements driven by other operational needs of our business.
During 2008, borrowings from our commercial paper program in the
U.S. peaked at $702 million. Borrowings from our line
of credit facilities peaked at $484 million, reflecting
payments for working capital requirements.
Debt
Covenants and Credit Ratings
Certain of our senior notes have redemption features and
non-financial covenants that will, among other things, limit our
ability to create or assume liens, enter into sale and
lease-back transactions, engage in mergers or consolidations and
transfer or lease all or substantially all of our assets.
Additionally, certain of our credit facilities and senior notes
have financial covenants. These requirements are not, and it is
not anticipated they will become, restrictive to our liquidity
or capital resources. We are in compliance with all debt
covenants. For a discussion of our covenants, see Note 9 in
the Notes to Consolidated Financial Statements.
Our credit ratings are periodically reviewed by rating agencies.
Currently our long-term ratings from Moody’s and Standard
and Poor’s are A2 and A, respectively. Changes in our
operating results or financial position could impact the ratings
assigned by the various agencies resulting in higher or lower
borrowing costs.
Pensions
During 2009, we expect to contribute $185 million to fund
our U.S. pension and postretirement plans. For further
information about our pension and postretirement plan funding
see section entitled “Pension and Postretirement Medical
Benefit Plans” in our Critical Accounting Policies.
Dividends
On March 27, 2008, the Company’s Board of Directors
approved an increase in the Company’s quarterly dividend
from $0.14 to $0.17 per share on the outstanding common stock of
the Company. This action resulted in a 21 percent increase
in our quarterly dividend.
14
Table of Contents
These excerpts taken from the PBG 10-K filed Feb 20, 2009. Liquidity
and Capital Resources
Our principal sources of cash include cash from our operating
activities and the issuance of debt and bank borrowings. We
believe that these cash inflows will be sufficient for the
foreseeable future to fund capital expenditures, benefit plan
contributions, acquisitions, share repurchases, dividends and
working capital requirements.
The recent and extraordinary disruption in the world credit
markets in 2008 had a significant adverse impact on a number of
financial institutions. At this point in time, the
Company’s liquidity has not been materially impacted by the
current credit environment and management does not expect that
it will be materially impacted in the near-future. Management
will continue to closely monitor the Company’s liquidity
and the credit markets. However, management cannot predict with
any certainty the impact to the Company of any further
disruption in the credit environment.
26
Table of Contents
Acquisitions
and Investments
We completed a joint acquisition with PepsiCo of Russia’s
leading branded juice company JSC Lebedyansky
(“Lebedyansky”) for approximately $1.8 billion.
Lebedyansky was acquired 58.3 percent by PepsiCo and
41.7 percent by PR Beverages, our Russian venture with
PepsiCo. We have recorded an equity investment for PR
Beverages’ share in Lebedyansky. In addition, we have
recorded minority interest for PepsiCo’s proportional
contribution to PR Beverages relating to Lebedyansky.
During 2008, we acquired Pepsi-Cola Batavia Bottling Corp and
Lane Affiliated Companies, Inc. (“Lane”), Pepsi-Cola
franchise bottlers which serve certain New York counties and
portions of Colorado, Arizona and New Mexico. In addition we
acquired Sobol-Aqua JSC (“Sobol”), a company that
manufactures Sobol brands and co-packs various Pepsi products in
Siberia and Eastern Russia. The total cost of acquisitions
during 2008 was approximately $279 million.
Long-Term
Debt Activities
During the fourth quarter, we issued $1.3 billion in senior
notes with a coupon rate of 6.95 percent, maturing in 2014.
A portion of this debt was used to repay our senior notes due in
2009 at their maturity on February 17, 2009. In the
interim, these proceeds were placed in short-term investments.
In addition, we used a portion of the proceeds to finance the
Lane acquisition and repay short-term commercial paper debt, a
portion of which was used to finance our acquisition of
Lebedyansky.
In addition, during the first quarter of 2009 we issued an
additional $750 million in senior notes, with a coupon rate
of 5.125 percent, maturing in 2019. The net proceeds of the
offering, together with a portion of the proceeds from the
offering of our senior notes issued in the fourth quarter of
2008, were used to repay our senior notes due in 2009, at their
scheduled maturity on February 17, 2009. Any excess
proceeds of this offering will be used for general corporate
purposes. The next significant scheduled debt maturity is not
until 2012.
Short-Term
Debt Activities
We have a committed revolving credit facility of
$1.1 billion and an uncommitted credit facility of
$500 million. Both of these credit facilities are
guaranteed by Bottling LLC and are used to support our
$1.2 billion commercial paper program and working capital
requirements. At December 27, 2008, we had no outstanding
commercial paper. At December 29, 2007, we had
$50 million in outstanding commercial paper with a
weighted-average interest rate of 5.3 percent.
In addition to the revolving credit facilities discussed above,
we had available bank credit lines of approximately
$772 million at December 27, 2008, of which the
majority was uncommitted. These lines were primarily used to
support the general operating needs of our international
locations. As of year-end 2008, we had $103 million
outstanding under these lines of credit at a weighted-average
interest rate of 10.0 percent. As of year-end 2007, we had
available short-term bank credit lines of approximately
$748 million, of which $190 million was outstanding at
a weighted-average interest rate of 5.3 percent.
Our peak borrowing timeframe varies with our working capital
requirements and the seasonality of our business. Additionally,
throughout the year, we may have further short-term borrowing
requirements driven by other operational needs of our business.
During 2008, borrowings from our commercial paper program in the
U.S. peaked at $702 million. Borrowings from our line
of credit facilities peaked at $484 million, reflecting
payments for working capital requirements.
Debt
Covenants and Credit Ratings
Certain of our senior notes have redemption features and
non-financial covenants that will, among other things, limit our
ability to create or assume liens, enter into sale and
lease-back transactions, engage in mergers or consolidations and
transfer or lease all or substantially all of our assets.
Additionally, certain of our credit facilities and senior notes
have financial covenants. These requirements are not, and it is
not anticipated they will become, restrictive to our liquidity
or capital resources. We are in compliance with all debt
covenants. For a discussion of our covenants, see Note 9 in
the Notes to Consolidated Financial Statements.
Our credit ratings are periodically reviewed by rating agencies.
Currently our long-term ratings from Moody’s and Standard
and Poor’s are A2 and A, respectively. Changes in our
operating results or financial position could impact the ratings
assigned by the various agencies resulting in higher or lower
borrowing costs.
Pensions
During 2009, we expect to contribute $185 million to fund
our U.S. pension and postretirement plans. For further
information about our pension and postretirement plan funding
see section entitled “Pension and Postretirement Medical
Benefit Plans” in our Critical Accounting Policies.
Dividends
On March 27, 2008, the Company’s Board of Directors
approved an increase in the Company’s quarterly dividend
from $0.14 to $0.17 per share on the outstanding common stock of
the Company. This action resulted in a 21 percent increase
in our quarterly dividend.
27
Table of Contents
Liquidity and Capital Resources Our principal sources of cash include cash from our operating activities and the issuance of debt and bank borrowings. We believe that these cash inflows will be sufficient for the foreseeable future to fund capital expenditures, benefit plan contributions, acquisitions, share repurchases, dividends and working capital requirements. The recent and extraordinary disruption in the world credit markets in 2008 had a significant adverse impact on a number of financial institutions. At this point in time, the Company’s liquidity has not been materially impacted by the current credit environment and management does not expect that it will be materially impacted in the near-future. Management will continue to closely monitor the Company’s liquidity and the credit markets. However, management cannot predict with any certainty the impact to the Company of any further disruption in the credit environment. 26 Table of ContentsAcquisitions and Investments We completed a joint acquisition with PepsiCo of Russia’s leading branded juice company JSC Lebedyansky (“Lebedyansky”) for approximately $1.8 billion. Lebedyansky was acquired 58.3 percent by PepsiCo and 41.7 percent by PR Beverages, our Russian venture with PepsiCo. We have recorded an equity investment for PR Beverages’ share in Lebedyansky. In addition, we have recorded minority interest for PepsiCo’s proportional contribution to PR Beverages relating to Lebedyansky. During 2008, we acquired Pepsi-Cola Batavia Bottling Corp and Lane Affiliated Companies, Inc. (“Lane”), Pepsi-Cola franchise bottlers which serve certain New York counties and portions of Colorado, Arizona and New Mexico. In addition we acquired Sobol-Aqua JSC (“Sobol”), a company that manufactures Sobol brands and co-packs various Pepsi products in Siberia and Eastern Russia. The total cost of acquisitions during 2008 was approximately $279 million. Long-Term Debt Activities During the fourth quarter, we issued $1.3 billion in senior notes with a coupon rate of 6.95 percent, maturing in 2014. A portion of this debt was used to repay our senior notes due in 2009 at their maturity on February 17, 2009. In the interim, these proceeds were placed in short-term investments. In addition, we used a portion of the proceeds to finance the Lane acquisition and repay short-term commercial paper debt, a portion of which was used to finance our acquisition of Lebedyansky. In addition, during the first quarter of 2009 we issued an additional $750 million in senior notes, with a coupon rate of 5.125 percent, maturing in 2019. The net proceeds of the offering, together with a portion of the proceeds from the offering of our senior notes issued in the fourth quarter of 2008, were used to repay our senior notes due in 2009, at their scheduled maturity on February 17, 2009. Any excess proceeds of this offering will be used for general corporate purposes. The next significant scheduled debt maturity is not until 2012. Short-Term Debt Activities We have a committed revolving credit facility of $1.1 billion and an uncommitted credit facility of $500 million. Both of these credit facilities are guaranteed by Bottling LLC and are used to support our $1.2 billion commercial paper program and working capital requirements. At December 27, 2008, we had no outstanding commercial paper. At December 29, 2007, we had $50 million in outstanding commercial paper with a weighted-average interest rate of 5.3 percent. In addition to the revolving credit facilities discussed above, we had available bank credit lines of approximately $772 million at December 27, 2008, of which the majority was uncommitted. These lines were primarily used to support the general operating needs of our international locations. As of year-end 2008, we had $103 million outstanding under these lines of credit at a weighted-average interest rate of 10.0 percent. As of year-end 2007, we had available short-term bank credit lines of approximately $748 million, of which $190 million was outstanding at a weighted-average interest rate of 5.3 percent. Our peak borrowing timeframe varies with our working capital requirements and the seasonality of our business. Additionally, throughout the year, we may have further short-term borrowing requirements driven by other operational needs of our business. During 2008, borrowings from our commercial paper program in the U.S. peaked at $702 million. Borrowings from our line of credit facilities peaked at $484 million, reflecting payments for working capital requirements. Debt Covenants and Credit Ratings Certain of our senior notes have redemption features and non-financial covenants that will, among other things, limit our ability to create or assume liens, enter into sale and lease-back transactions, engage in mergers or consolidations and transfer or lease all or substantially all of our assets. Additionally, certain of our credit facilities and senior notes have financial covenants. These requirements are not, and it is not anticipated they will become, restrictive to our liquidity or capital resources. We are in compliance with all debt covenants. For a discussion of our covenants, see Note 9 in the Notes to Consolidated Financial Statements. Our credit ratings are periodically reviewed by rating agencies. Currently our long-term ratings from Moody’s and Standard and Poor’s are A2 and A, respectively. Changes in our operating results or financial position could impact the ratings assigned by the various agencies resulting in higher or lower borrowing costs. Pensions During 2009, we expect to contribute $185 million to fund our U.S. pension and postretirement plans. For further information about our pension and postretirement plan funding see section entitled “Pension and Postretirement Medical Benefit Plans” in our Critical Accounting Policies. Dividends On March 27, 2008, the Company’s Board of Directors approved an increase in the Company’s quarterly dividend from $0.14 to $0.17 per share on the outstanding common stock of the Company. This action resulted in a 21 percent increase in our quarterly dividend. 27 Table of Contents
These excerpts taken from the PBG 10-K filed Feb 27, 2008. Liquidity
and Capital Resources
Our principal sources of cash come from our operating activities
and the issuance of debt and bank borrowings. We believe that
these cash inflows will be sufficient to fund capital
expenditures, benefit plan contributions, acquisitions, share
repurchases, dividends and working capital requirements for the
foreseeable future. Our liquidity has not been materially
impacted by the current credit environment.
Long-Term
Debt Activities
We had no significant long-term debt activities during 2007.
On March 30, 2006, Bottling LLC issued $800 million of
5.50% senior notes due 2016 (the “Notes”). The
net proceeds received, after deducting the underwriting discount
and offering expenses, were approximately $793 million. The
net proceeds were used to repay outstanding commercial paper and
the 2.45% senior notes due October of 2006. The Notes are
general unsecured obligations and rank on an equal basis with
all of Bottling LLC’s other existing and future unsecured
indebtedness and are senior to all of Bottling LLC’s future
subordinated indebtedness.
Short-Term
Debt Activities
In October 2007, we amended and restated our existing
$450 million committed revolving credit facility to
increase the credit limit to $1.2 billion and provide for a
new maturity date of October 2012 (“2007 Agreement”).
The existing $550 million committed revolving credit
facility was terminated. Our committed credit facility of
$1.2 billion, which is guaranteed by Bottling LLC, supports
our $1.2 billion commercial paper program. Subject to
certain conditions stated in the 2007 Agreement, funds borrowed
may also be used to issue standby letters of credit up to
$400 million and for general corporate purposes during the
term of the agreement.
At December 29, 2007, we had $50 million in
outstanding commercial paper with a weighted-average interest
rate of 5.3 percent. At December 30, 2006, we had
$115 million in outstanding commercial paper with a
weighted-average interest rate of 5.4 percent.
In addition to the revolving credit facility, we had available
bank credit lines of approximately $748 million at year-end
2007. These lines were primarily used to support the general
operating needs of our international locations. As of year-end
2007, we had $190 million outstanding under these lines of
credit at a weighted-average interest rate of 5.3 percent.
As of year-end 2006, we had available short-term bank credit
lines of approximately $741 million and $242 million
was outstanding under these lines of credit at a
weighted-average interest rate of 5.0 percent.
Our peak borrowing timeframe varies with our working capital
requirements and the seasonality of our business. Additionally,
throughout the year, we may have further short-term borrowing
requirements driven by other operational needs of our business.
During 2007, borrowings from our commercial paper program in the
U.S. peaked at $470 million. Borrowings from our line
of credit facilities peaked at $466 million, reflecting
payments for working capital requirements.
Debt
Covenants and Credit Ratings
Certain of our senior notes have redemption features and
non-financial
covenants that will, among other things, limit our ability to
create or assume liens, enter into sale and lease-back
transactions, engage in mergers or consolidations and transfer
or lease all or substantially all of our assets. Additionally,
certain of our credit facilities and senior notes have financial
covenants. These requirements are not, and it is not anticipated
they will become, restrictive to our liquidity or capital
resources. We are in compliance with all debt covenants. For a
discussion of our covenants, see Note 7 in the Notes to
Consolidated Financial Statements.
Our credit ratings are periodically reviewed by rating agencies.
Currently our long-term ratings from Moody’s and Standard
and Poors’ are A2 and A, respectively. Changes in our
operating results or financial position could impact the ratings
assigned by the various agencies resulting in higher or lower
borrowing costs.
29
Table of Contents
Liquidity and Capital Resources Our principal sources of cash come from our operating activities and the issuance of debt and bank borrowings. We believe that these cash inflows will be sufficient to fund capital expenditures, benefit plan contributions, acquisitions, share repurchases, dividends and working capital requirements for the foreseeable future. Our liquidity has not been materially impacted by the current credit environment. Long-Term Debt Activities We had no significant long-term debt activities during 2007. On March 30, 2006, Bottling LLC issued $800 million of 5.50% senior notes due 2016 (the “Notes”). The net proceeds received, after deducting the underwriting discount and offering expenses, were approximately $793 million. The net proceeds were used to repay outstanding commercial paper and the 2.45% senior notes due October of 2006. The Notes are general unsecured obligations and rank on an equal basis with all of Bottling LLC’s other existing and future unsecured indebtedness and are senior to all of Bottling LLC’s future subordinated indebtedness. Short-Term Debt Activities In October 2007, we amended and restated our existing $450 million committed revolving credit facility to increase the credit limit to $1.2 billion and provide for a new maturity date of October 2012 (“2007 Agreement”). The existing $550 million committed revolving credit facility was terminated. Our committed credit facility of $1.2 billion, which is guaranteed by Bottling LLC, supports our $1.2 billion commercial paper program. Subject to certain conditions stated in the 2007 Agreement, funds borrowed may also be used to issue standby letters of credit up to $400 million and for general corporate purposes during the term of the agreement. At December 29, 2007, we had $50 million in outstanding commercial paper with a weighted-average interest rate of 5.3 percent. At December 30, 2006, we had $115 million in outstanding commercial paper with a weighted-average interest rate of 5.4 percent. In addition to the revolving credit facility, we had available bank credit lines of approximately $748 million at year-end 2007. These lines were primarily used to support the general operating needs of our international locations. As of year-end 2007, we had $190 million outstanding under these lines of credit at a weighted-average interest rate of 5.3 percent. As of year-end 2006, we had available short-term bank credit lines of approximately $741 million and $242 million was outstanding under these lines of credit at a weighted-average interest rate of 5.0 percent. Our peak borrowing timeframe varies with our working capital requirements and the seasonality of our business. Additionally, throughout the year, we may have further short-term borrowing requirements driven by other operational needs of our business. During 2007, borrowings from our commercial paper program in the U.S. peaked at $470 million. Borrowings from our line of credit facilities peaked at $466 million, reflecting payments for working capital requirements. Debt Covenants and Credit Ratings Certain of our senior notes have redemption features and non-financial covenants that will, among other things, limit our ability to create or assume liens, enter into sale and lease-back transactions, engage in mergers or consolidations and transfer or lease all or substantially all of our assets. Additionally, certain of our credit facilities and senior notes have financial covenants. These requirements are not, and it is not anticipated they will become, restrictive to our liquidity or capital resources. We are in compliance with all debt covenants. For a discussion of our covenants, see Note 7 in the Notes to Consolidated Financial Statements. Our credit ratings are periodically reviewed by rating agencies. Currently our long-term ratings from Moody’s and Standard and Poors’ are A2 and A, respectively. Changes in our operating results or financial position could impact the ratings assigned by the various agencies resulting in higher or lower borrowing costs. 29 Table of Contents
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