Pepsi 2005 Annual Report Download - page 42

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40
53rd week
In 2005, we had an additional week of
results (53rd week). Our fiscal year ends
on the last Saturday of each December,
resulting in an additional week of results
every five or six years.
2005 Restructuring Charges
In the fourth quarter of 2005, we incurred
restructuring charges of $83 million to
reduce costs in our operations, principally
through headcount reductions.
2004 Restructuring and Impairment Charges
In the fourth quarter of 2004, we incurred
restructuring and impairment charges of
$150 million in conjunction with the
consolidation of FLNA’s manufacturing
network in connection with its ongoing
productivity program. Savings from this
productivity program have been used to
offset increased marketplace spending.
AJCA Tax Charge
As approved by our Board of Directors in
July 2005, in the fourth quarter of 2005
we repatriated approximately $7.5 billion
in earnings previously considered indefinitely
reinvested outside the U.S. in connection
with the AJCA. In 2005, we recorded
income tax expense of $460 million
associated with this repatriation.
Net Tax Benefits — Continuing Operations
In the fourth quarter of 2004, we recog-
nized $45 million of tax benefits related to
the completion of the U.S. Internal
Revenue Service (IRS) audit for pre-merger
Quaker open tax years. In the third quarter
of 2004, we recognized $221 million of
tax benefits related to a reduction in for-
eign tax accruals following the resolution
of certain open tax issues with foreign tax
authorities, and a refund claim related to
prior U.S. tax settlements.
Tax Benefit from Discontinued Operations
In the fourth quarter of 2004, we reached
agreement with the IRS for an open issue
related to our discontinued restaurant
operations which resulted in a tax benefit
of $38 million.
Our Financial Results
Items Affecting Comparability
The year-over-year comparisons of our financial results are affected by the following items:
2005 2004
Net revenue
53rd week ........................................................................................................................................................................... $418 –
Operating profit
53rd week ........................................................................................................................................................................... $75 –
2005 restructuring charges................................................................................................................................................ $(83) –
2004 restructuring and impairment charges...................................................................................................................... –$(150)
Net income
AJCA tax charge.................................................................................................................................................................. $(460) –
53rd week........................................................................................................................................................................... $57 –
2005 restructuring charges................................................................................................................................................ $(55) –
2004 restructuring and impairment charges ..................................................................................................................... –$(96)
Net tax benefits — continuing operations......................................................................................................................... –$266
Tax benefit from discontinued operations .......................................................................................................................... –$38
Net income per common share — diluted
AJCA tax charge................................................................................................................................................................. $(0.27) –
53rd week.......................................................................................................................................................................... $0.03 –
2005 restructuring charges............................................................................................................................................... $(0.03) –
2004 restructuring and impairment charges .................................................................................................................... –$(0.06)
Net tax benefits — continuing operations ........................................................................................................................ –$0.15
Tax benefit from discontinued operations.......................................................................................................................... –$0.02
For the items and accounting changes affecting our 2003 results, see Note 1 and our 2003 Annual Report.