PepsiAmericas Plans to Strategically Realign its U.S. Business

12/12/06 PepsiAmericas, Inc. plans to strategically realign its U.S. business to further strengthen its customer focused go-to- market strategy, as previously announced. Beginning Jan. 1, 2007, the company's domestic business will establish dedicated channel sales teams with a more centralized operating framework designed to streamline decision making and standardize key processes. In addition, the company's field sales and delivery network will consolidate from 14 divisions to seven.

"Our new organization better aligns our selling and delivery efforts with our customers, improving top-line growth opportunities and increasing system efficiencies," said Robert C. Pohlad, Chairman and Chief Executive Officer of PepsiAmericas. "The new domestic infrastructure provides greater capability, increased consistency, and more effective selling to compete successfully in today's dynamic marketplace. Continued investments to build our capabilities in revenue management, category management and supply chain in this new operating framework will make us a more effective partner."

As a result of this reorganization, the company expects to incur pre-tax charges in the range of $18 million related primarily to severance and other employee related costs. Approximately $12 million is expected to be recorded in the fourth quarter of 2006, with the remainder of the charges recorded throughout 2007 as they relate mainly to relocation costs. The cash expenditures are expected to be approximately $16 million, and will be paid primarily in 2007. Realignment savings will be reinvested in the business against longer term capability and infrastructure initiatives.