Pepsi 2006 Annual Report Download - page 46

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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.
2006 Restructuring and
Impairment Charges
In 2006, we incurred a charge of
$67 million in conjunction with consoli-
dating the manufacturing network at
FLNA by closing two plants in the U.S.,
and rationalizing other assets, to
increase manufacturing productivity
and supply chain efficiencies.
2005 Restructuring Charges
In 2005, we incurred restructuring
charges of $83 million to reduce costs in
our operations, principally through
headcount reductions.
2006 Tax Adjustments
In 2006, we recognized non-cash tax
benefits of $602 million, substantially
all of which related to the IRS’s exami-
nation of our consolidated tax returns
for the years 1998 through 2002.
PepsiCo Share of PBG Tax Settlement
In 2006, the IRS concluded its examina-
tion of PBG’s consolidated income tax
returns for the years 1999 through 2000
(PBG’s Tax Settlement). Consequently, a
non-cash benefit of $21 million was
included in bottling equity income as
part of recording our share of PBG’s
financial results.
AJCA Tax Charge
In 2005, we repatriated approximately
$7.5 billion in earnings previously con-
sidered indefinitely reinvested outside
the U.S. in connection with the AJCA
and recorded income tax expense of
$460 million related to this repatriation.
Our Financial Results
Items Affecting Comparability
The year-over-year comparisons of our financial results are affected by the following items:
2006 2005
Net revenue
53rd week........................................................................................................................................ –$418
Operating profit
2006 restructuring and impairment charges................................................................................. $(67) –
53rd week........................................................................................................................................ –$75
2005 restructuring charges............................................................................................................. –$(83)
Net income
2006 restructuring and impairment charges................................................................................. $(43) –
2006 Tax Adjustments..................................................................................................................... $602 –
PepsiCo share of PBG tax settlement............................................................................................. $18 –
AJCA tax charge .............................................................................................................................. –$(460)
53rd week........................................................................................................................................ –$57
2005 restructuring charges............................................................................................................. –$(55)
Net income per common share — diluted
2006 restructuring and impairment charges................................................................................. $(0.03) –
2006 Tax Adjustments..................................................................................................................... $0.36 –
PepsiCo share of PBG tax settlement............................................................................................. $0.01 –
AJCA tax charge .............................................................................................................................. –$(0.27)
53rd week........................................................................................................................................ –$0.03
2005 restructuring charges............................................................................................................. –$(0.03)
For the items affecting our 2004 results, see Notes 3 and 5, as well as our 2005 Annual Report.
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