Pepsi 2005 Annual Report Download - page 72

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Comprehensive income is a measure of
income which includes both net income
and other comprehensive income or loss.
Other comprehensive loss results from
items deferred on the balance sheet in
shareholders’ equity. Other comprehensive
(loss)/income was $(167) million in 2005,
$381 million in 2004, and $405 million
in 2003. The accumulated balances for
each component of other comprehensive
loss were as follows:
2005 2004 2003
Currency translation adjustment $ (971) $(720) $(1,121)
Cash flow hedges, net of tax(a) 27 (19) (12)
Minimum pension liability adjustment(b) (138) (154) (135)
Unrealized gain on securities, net of tax 31 71
Other (2) ––
Accumulated other comprehensive loss $(1,053) $(886) $(1,267)
(a) Includes net commodity gains of $55 million in 2005. Also includes no impact in 2005, $6 million gain in 2004 and $8 million gain in 2003
for our share of our equity investees’ accumulated derivative activity. Deferred gains/(losses) reclassified into earnings were $8 million in
2005, $(10) million in 2004 and no impact in 2003.
(b) Net of taxes of $72 million in 2005, $77 million in 2004 and $67 million in 2003. Also, includes $120 million in 2005, $121 million in 2004
and $110 million in 2003 for our share of our equity investees’ minimum pension liability adjustments.
As of December 31, 2005 and December
25, 2004, there were 3.6 billion shares of
common stock and 3 million shares of
convertible preferred stock authorized. The
preferred stock was issued only for an
employee stock ownership plan (ESOP)
established by Quaker and these shares
are redeemable for common stock by the
ESOP participants. The preferred stock
accrues dividends at an annual rate of
$5.46 per share. At year-end 2005 and
2004, there were 803,953 preferred
shares issued and 354,853 and 424,853
shares outstanding, respectively. Each
share is convertible at the option of the
holder into 4.9625 shares of common
stock. The preferred shares may be called
by us upon written notice at $78 per share
plus accrued and unpaid dividends.
As of December 31, 2005, 0.3 million
outstanding shares of preferred stock with
a fair value of $104 million and 17 million
shares of common stock were held in the
accounts of ESOP participants. As of
December 25, 2004, 0.4 million outstand-
ing shares of preferred stock with a fair
value of $110 million and 18 million
shares of common stock were held in the
accounts of ESOP participants. Quaker
made the final award to its ESOP plan in
June 2001.
Note 12 — Preferred and Common Stock
2005 2004 2003
Income Shares(a) Income Shares(a) Income Shares(a)
Net income $4,078 $4,174 $3,568
Preferred shares:
Dividends (2) (3) (3)
Redemption premium (16) (22) (12)
Net income available for common shareholders $4,060 1,669 $4,149 1,696 $3,553 1,718
Basic net income per common share $2.43 $2.45 $2.07
Net income available for common shareholders $4,060 1,669 $4,149 1,696 $3,553 1,718
Dilutive securities:
Stock options and RSUs –35 –31 –17
ESOP convertible preferred stock 18 2 24 2 15 3
Unvested stock awards –– –– –1
Diluted $4,078 1,706 $4,173 1,729 $3,568 1,739
Diluted net income per common share $2.39 $2.41 $2.05
(a) Weighted-average common shares outstanding.
2005 2004 2003
Shares Amount Shares Amount Shares Amount
Preferred stock 0.8 $41 0.8 $41 0.8 $41
Repurchased preferred stock
Balance, beginning of year 0.4 $ 90 0.3 $63 0.2 $48
Redemptions 0.1 19 0.1 27 0.1 15
Balance, end of year 0.5 $110*0.4 $90 0.3 $63
*Does not sum due to rounding.
Note 13 — Accumulated Other Comprehensive Loss
The computations of basic and diluted net income per common share from continuing operations are as follows: