Pepsi Bottling Group (PBG)

Tax Audit Settlements

In 2009, our tax provision was reduced by the reversal of tax reserves, net of non-controlling interests, of approximately $151 million, or $0.68 per diluted share, from the resolution of tax audits and the expiration of statute of limitations in the U.S. and in our international jurisdictions.

Tax Audit Settlements

During the first quarter of 2009, PBG recorded a net non-cash tax benefit of approximately $39 million, or $0.18 per diluted share, which was reflected in income tax expense. The benefit resulted from the settlement of U.S. audits with the IRS for our 2003-2005 tax years.

During the second quarter of 2009, the statute of limitations closed for our IRS audit in the U.S. for the 2003 and 2004 tax returns. In addition, we reached a settlement with the Canadian tax authorities on an issue related to the 1999-2005 tax years. As a result, we recorded a tax benefit related to these items of $54 million after non-controlling interest, or $0.25 per diluted share.

During the third quarter of 2009, we settled various audits in our international jurisdictions, which resulted in a tax benefit of $40 million after non-controlling interests, or $0.18 per diluted share.

During the fourth quarter of 2009, the statute of limitations closed for our 2005 U.S. tax audit. As a result, we anticipate a tax benefit related to this item of $17 million, or $0.07 per diluted share.

Tax Audit Settlements

During the first quarter of 2009, PBG recorded a net non-cash tax benefit of approximately $39 million, or $0.18 per diluted share, which was reflected in income tax expense. The benefit resulted from the settlement of U.S. audits with the IRS for our 2003-2005 tax years.

During the second quarter of 2009, the statute of limitations for our IRS audit in the U.S. for the 2003 and 2004 tax returns closed. In addition, we reached a settlement with the Canadian tax authorities on an issue related to the 1999-2005 tax years. As a result, we recorded a tax benefit related to these items of $54 million after noncontrolling interest or $0.25 per diluted share.

Tax Audit Settlements

During the first quarter of 2009, PBG recorded a net non-cash tax benefit of approximately $39 million or $0.18 per diluted share which was reflected in income tax expense. The benefit resulted from the settlement of U.S. audits with the IRS for our 2003 - 2005 tax years.

During the second quarter of 2009, the statute of limitations for the IRS audit of our 2004 tax return closed, and we reached a settlement with the Canadian tax authorities related to an issue in dispute for 1999 – 2005. As a result, we expect to record a tax benefit in the range of $55 million to $60 million, or $0.24 to $0.27 per diluted share, which will be reflected in income tax expense.