Pepsi Bottling Group (PBG)

The Pepsi Bottling Group Reports Third Quarter 2009 Results

• Comparable Diluted EPS of $1.06; Reported Diluted EPS of $1.14
• Currency Neutral Operating Income up 10% on Comparable Basis; Reported Down 4%
• Currency Neutral Topline Growth of 2%; Reported Topline Down 5%
• On Track to Exceed $265 Million in Cost and Productivity Savings for 2009
• Company Confirms Full-Year Comparable EPS Guidance at High-End of $2.30 to $2.40 Range; Raises 2009 Operating Free Cash Flow Guidance to about $550 Million

SOMERS, N.Y.--(BUSINESS WIRE)--October 6, 2009--The Pepsi Bottling Group, Inc. (NYSE: PBG) today reported third quarter 2009 net income of $254 million, or diluted earnings per share (EPS) of $1.14. This includes a net after-tax gain of $17 million, or $0.08 per share, resulting from the favorable settlement of tax audits, previously announced restructuring charges, advisory fees relating to the pending PepsiCo transaction, and mark-to-market gains relating to our commodity hedges. This compares to net income of $231 million, or $1.06 per diluted share, that the Company reported in the third quarter of 2008.

“Our third quarter results reflect the continued success of our three strategic platforms for growth. The work we’ve done to strengthen and reposition our brand portfolio, transform our performance through operational excellence and capitalize on geographic growth opportunities drove operating profit and topline growth across all of our reporting segments in the quarter. These factors, combined with easing commodity costs and diminished foreign currency headwinds, are driving sequential improvement in our performance versus the first half of 2009,” said PBG Chairman and Chief Executive Officer Eric Foss.

“We remain confident in our full-year earnings outlook and we’re on track to deliver a very good year despite the challenging macroeconomic environment,” Foss continued.

Financial Highlights

• On a currency neutral basis, worldwide revenue increased two percent in the third quarter. Reported worldwide revenue decreased five percent. The Company’s revenue performance reflects solid currency neutral net revenue per case growth partially offset by soft volume.
• Net revenue per case improved four percent on a currency neutral basis. This included currency neutral growth of three percent in the U.S. and Canada, seven percent in Europe, and six percent in Mexico. On a reported basis, worldwide net revenue per case declined three percent.
• Total worldwide physical case volume declined two percent for the third quarter. Volume in the U.S. and Canada segment was down one percent. In Mexico, volume increased one percent, while European volume declined five percent.

• On a comparable basis, currency neutral worldwide operating income increased 10 percent in the third quarter. This includes a positive impact of four percentage points from acquisitions. Comparable currency neutral operating income increased in each of the Company’s reporting segments, with growth of two percent in the U.S. and Canada and double-digit growth in both Mexico and Europe, which includes the impact of acquisitions.
• Reported worldwide operating income declined four percent for the quarter. The net impact of previously announced restructuring charges, advisory fees related to the pending PepsiCo transaction, and mark-to-market gains reduced reported worldwide operating income by five percentage points. In the U.S. and Canada segment, reported operating income declined seven percent.
• COGS per case increased six percent on a comparable, currency neutral basis for the quarter, consistent with the Company’s expectations. Reported COGS per case declined two percent.
• Comparable worldwide SD&A expenses improved four percent on a currency neutral basis in the third quarter, reflecting the success of the Company’s global productivity initiatives. On a reported basis, PBG’s SD&A expenses declined eight percent, which included a two percentage point increase from advisory fees related to the pending PepsiCo transaction and restructuring charges.

2009 Guidance

For 2009, PBG continues to expect results at the high-end of its full-year comparable diluted EPS guidance of $2.30 to $2.40. This includes a $0.13 per share negative impact from translational foreign currency headwinds. The Company forecasts currency neutral top-line growth in the low-single digits. Currency neutral operating income on a comparable basis is expected to grow in the low to mid-single digits for the year. Operating free cash flow is now expected to be approximately $550 million, an increase of $100 million from the beginning of 2009, including increased pension funding and foreign currency headwinds but excluding advisory fees related to the pending PepsiCo transaction. The Company anticipates capital expenditures of about $550 to $600 million.

PBG will host a conference call at 11:00 a.m. EDT today to discuss its third quarter financial results. The live call and replay can be accessed by visiting the Investor Relations section of the Company's website at http://www.pbg.com.

The Pepsi Bottling Group Reports Second Quarter 2009 Results

• Comparable Diluted EPS of $0.78; Reported Diluted EPS of $0.96
• Strong Comparable Operating Income Performance in U.S. and Canada Driving Results
• On Pace to Achieve $265 Million in Cost and Productivity Savings for 2009
• Company Confirms Earnings at the High End of its 2009 Comparable Diluted EPS Forecast of $2.30 to $2.40

SOMERS, N.Y.--(BUSINESS WIRE)--July 8, 2009--The Pepsi Bottling Group, Inc. (NYSE: PBG) today reported second quarter 2009 net income of $211 million, or diluted earnings per share (EPS) of $0.96. This includes a net after-tax gain of $39 million, or $0.18 per share, as a result of a benefit from the settlement of tax audits, previously announced restructuring charges and advisory fees relating to PepsiCo’s proposal to acquire PBG. This compares to net income of $174 million, or $0.78 per diluted share, that the Company reported in the second quarter of 2008.

“PBG delivered a strong set of results during the second quarter. Our ability to execute an effective global pricing strategy, achieve robust cost and productivity savings, and deliver solid execution at the point of sale has fueled our success through the first half of 2009. We’re also benefiting from improved carbonated soft drink trends in the U.S., as well as encouraging developments in the commodity and foreign currency markets,” said PBG Chairman and Chief Executive Officer Eric Foss. “All of this has driven our performance above expectations for two consecutive quarters despite the challenging macroeconomic environment, and we have a positive outlook for the remainder of this year and beyond.

“As we look towards the future, we continue to focus on our three strategic priorities for growth,” Foss continued. “We’ll strengthen and reposition our brand portfolio, transform our performance through operational excellence, and pursue geographic growth opportunities. We believe that our work in these three areas will unlock significant new growth opportunities and position us well for long-term success.”

Executive Summary

• PBG reported a net revenue per case decline of three percent for the second quarter. Net revenue per case improved five percent on a currency neutral basis, with growth across all reporting segments. This included growth of eight percent in Europe, with strong results in Russia. In Mexico, currency neutral net revenue per case improved six percent. Reported net revenue per case improved two percent in the U.S. and Canada segment, with a currency neutral improvement of three percent, driven by strong pricing actions.

• Total worldwide physical case volume declined four percent for the second quarter. Volume in the U.S. and Canada was down one percent. European volume declined 15 percent. In Mexico, volume declined seven percent. Worldwide volume benefited by one percentage point due to the shift of the Easter holiday from the first quarter of 2008 to the second quarter of 2009.

• Reported worldwide operating income for the second quarter declined 12 percent versus the second quarter of 2008, including a six percentage point reduction from previously announced restructuring charges coupled with advisory fees related to PepsiCo’s proposed acquisition of PBG. On a comparable basis, currency neutral operating income declined one percent given the lapping of strong performance in the prior year. In the U.S. and Canada segment, reported operating income declined one percent and increased a strong five percent on a comparable basis including a two percentage point negative impact from currency. International results were stronger than expected but declined on a year-over-year basis due to overall weak macroeconomic trends and the impact of foreign exchange devaluations.

Financial Highlights

On a reported basis, worldwide revenue decreased seven percent. Worldwide revenue was flat on a currency neutral basis in the second quarter. The Company’s revenue performance reflects solid currency neutral net revenue per case gains offset by softer volume due to macroeconomic pressure.

Reported COGS per case were flat in the second quarter. Currency neutral COGS per case increased eight percent, consistent with the Company’s expectations.

On a reported basis, PBG’s SD&A expenses declined 10 percent in the second quarter. Restructuring charges and advisory fees increased reported SD&A by two percentage points. Reported SD&A in the U.S. and Canada segment declined two percent. Comparable worldwide SD&A expenses improved four percent on a currency neutral basis, reflecting the success of the Company’s global productivity initiatives.

2009 Guidance

For 2009, PBG anticipates results towards the high end of its full-year comparable diluted EPS guidance of $2.30 to $2.40. This includes a $0.13 per share negative impact from translational foreign currency headwinds. The Company forecasts currency neutral top-line growth in the low-single digits. Currency neutral operating income on a comparable basis is expected to grow in the low to mid-single digits for the year. Operating free cash flow is expected to be approximately $525 million, an increase of $75 million from the beginning of 2009, including increased pension funding and foreign currency headwinds. The Company anticipates capital expenditures of about $550 to $600 million.

PBG will host a conference call at 11:00 a.m. EDT today to discuss its second quarter financial results. The live call and replay can be accessed by visiting the Investor Relations section of the Company's website at http://www.pbg.com.

The Pepsi Bottling Group Reports First Quarter 2009 Results

• Worldwide Comparable Operating Profit Growth of 10%; Reported Up 8%
• Comparable Diluted EPS of $0.10; Reported Diluted EPS of $0.27
• On Pace to Achieve Over $250 Million in Cost and Productivity Savings for 2009
• Company Raises Full-Year EPS Guidance by Five Cents to $2.20 – $2.30
• 2009 OFCF Outlook Raised by $50 Million to $500 Million

SOMERS, N.Y.--(BUSINESS WIRE)--April 22, 2009--The Pepsi Bottling Group, Inc. (NYSE: PBG) today reported first quarter 2009 net income of $57 million, or diluted earnings per share (EPS) of $0.27. This includes a net after-tax gain of $36 million, or $0.17 per share, as a result of a benefit from the settlement of tax audits and previously announced restructuring charges. This compares to net income of $28 million, or $0.12 per diluted share, that the Company reported in the first quarter of 2008. This included a net after-tax charge of $1.4 million, or $0.01 per share, from restructuring and asset disposal charges.

“PBG is off to a good start in 2009 despite operating in a challenging macroeconomic environment. Successful execution of our global pricing strategy, as well as our cost and productivity initiatives, allowed us to exceed our profit and earnings objectives for the quarter,” said Eric Foss, PBG Chairman and Chief Executive Officer. “We also possess a healthy balance sheet and ample liquidity, which enabled us to increase our dividend for the sixth consecutive year and make important investments in the future growth of our business.

“The strength of our first quarter performance and the confidence we have in our plans for the remainder of 2009 has led us to raise our full-year earnings and operating free cash flow guidance,” Foss continued. “Our efforts to strengthen our brand portfolio, transform our performance through operational excellence, and capitalize on geographic growth opportunities will position PBG well to achieve greater success going forward.

“Earlier this week, PepsiCo announced its intention to acquire all of the outstanding shares of PBG’s common stock that it doesn’t already own,” Foss added. “Our Board has appointed a special committee of independent directors to evaluate this proposal and will respond in due course.”

Executive Summary

• On a reported basis, worldwide revenue decreased five percent and was flat on a currency neutral basis, reflecting weaker macroeconomic conditions globally. The U.S. and Canada segment reported a one percent revenue decrease for the quarter, with a currency neutral increase of one percent.
• Total worldwide physical case volume declined five percent. Worldwide volume was negatively impacted by two percentage points due to the shift of the Easter holiday from the first quarter of 2008 to the second quarter of 2009. Volume in the U.S. and Canada was down three percent. European volume declined 16 percent. In Mexico, volume declined seven percent.
• PBG reported a net revenue per case decline of one percent. Net revenue per case improved five percent on a currency neutral basis, with growth across all reporting segments. This included double-digit gains in Europe, with strong results in Russia. Reported net revenue per case improved two percent in the U.S. and Canada segment, with a currency neutral improvement of four percent, driven by strong pricing actions.

• Reported worldwide operating income for the first quarter increased eight percent versus the first quarter of 2008, including a two percentage point reduction from previously announced restructuring charges taken in the current and prior years. On a comparable basis, operating profit increased 10 percent. In the U.S. and Canada segment, reported operating profit improved six percent, which includes a one percentage point reduction from the 2008 restructuring charge.
• EPS as compared to prior year was impacted by nine cents per share due to below-the-line transactional foreign exchange and higher interest expense.
• In March, PBG approved a six percent increase in its annual dividend, representing its sixth consecutive annual dividend increase.

Reported COGS per case were flat in the first quarter, as the benefit from foreign currency offset increases in input costs. Currency neutral COGS per case increased five percent.

On both a reported and comparable basis, PBG’s SD&A expenses declined seven percent in the first quarter. Reported SD&A in the U.S. and Canada segment improved three percent. SD&A expenses improved one percent on a currency neutral basis, with the U.S. and Canada segment flat due to the continued success of cost and productivity initiatives.

2009 Guidance

For 2009, PBG is raising its full-year earnings guidance. Comparable diluted EPS are now forecasted to be $2.20 to $2.30. This includes an $0.18 per share negative impact from translational foreign currency headwinds. The Company forecasts currency neutral top-line growth in the low-single digits. Currency neutral operating profit is also expected to grow in the low-single digits for the year. Operating free cash flow is now expected to be approximately $500 million, an increase of $50 million from previous guidance, including increased pension funding and foreign currency headwinds. The Company anticipates capital expenditures of about $550 to $600 million.

PBG will host a conference call at 11:00 a.m. EDT today to discuss its first quarter financial results. The live call and replay can be accessed by visiting the Investor Relations section of the Company's website at http://www.pbg.com.