Pepsi 2007 Annual Report Download - page 48

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OUR FINANCIAL RESULTSOUR FINANCIAL RESULTS
Restructuring and Impairment
Charges
In 2007, we incurred a charge of
$102 million in conjunction with restruc-
turing actions primarily to close certain
plants and rationalize other production
lines across FLNA, PBNA and PI.
In 2006, we incurred a charge of
$67 million in conjunction with con-
solidating the manufacturing network at
FLNA by closing two plants in the U.S.,
and rationalizing other assets, to increase
manufacturing productivity and supply
chain effi ciencies.
Tax Benefits
In 2007, we recognized $129 million
of non-cash tax benefi ts related to the
favorable resolution of certain foreign
tax matters.
In 2006, we recognized non-cash tax
benefi ts of $602 million, substantially all
of which related to the Internal Revenue
Service’s (IRS) examination of our con-
solidated tax returns for the years 1998
through 2002.
PepsiCo Share of PBG
Tax Settlement
In 2006, the IRS concluded its examination
of PBG’s consolidated income tax returns
for the years 1999 through 2000 (PBG’s
Tax Settlement). Consequently, a non-cash
benefi t of $21 million was included in
bottling equity income as part of record-
ing our share of PBG’s fi nancial results.
The year-over-year comparisons of our financial results are affected by the following items:
2007 2006
Operating profit
Restructuring and impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(102) $(67)
Net income
Restructuring and impairment charges
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(70) $(43)
Tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $129 $602
PepsiCo share of PBG tax settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – $18
Net income per common share — diluted
Restructuring and impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(0.04) $ (0.03)
Tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.08 $0.36
PepsiCo share of PBG tax settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – $0.01
For the items affecting our 2005 results, see Notes 3 and 5, as well as our 2006 Annual Report.
Items Affecting Comparability
46