Pepsi 2011 Annual Report Download - page 87

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Interest Expense Incurred in Connection with
Debt Repurchase
In the year ended December25, 2010, we paid $672million in a
cash tender oer to repurchase $500million (aggregate principal
amount) of our 7.90% senior unsecured notes maturing in 2018. As
a result of this debt repurchase, we recorded a $178million charge
to interest expense, primarily representing the premium paid in the
tender oer.
Tax Adjustments
In the year ended December30, 2006, we recorded non- cash tax
benets of $602million, substantially all of which related to the
Internal Revenue Service’s (IRS’s) examination of our consolidated
income tax returns for the years 1998 through 2002. In 2006, PBG
also recorded non- cash tax benets in connection with the IRS’s
examination of certain of their consolidated income tax returns.
Werecorded our share of $18million of these tax benets in bottling
equity income.
Management Operating Cash Flow
Additionally, management operating cash ow is the primary
measure management uses to monitor cash ow performance.
Thisis not a measure dened by GAAP. Since net capital spending is
essential to our product innovation initiatives and maintaining our
operational capabilities, we believe that it is a recurring and neces-
sary use of cash. As such, we believe investors should also consider
net capital spending when evaluating our cash from operating
activities. Additionally, we consider certain other items (included in
the Net Cash Provided by Operating Activities Reconciliation table)
in evaluating management operating cash ow which we believe
investors should consider in evaluating our management operating
cash ow results.
Net Revenue Reconciliation
Year Ended
12/31/11 12/25/10 Grow th
Reported Net Revenue $ 66,504 $ 57,838 15%
53rd Week (623) –
Core Net Revenue $ 65,881 $ 57,838 14%
Division Operating Profit Reconciliation
Year Ended
12/31/11 12/25/10 Grow th
Core Division Operating Prot $ 11,329 $ 10,626 7%
53rd Week 127 –
Merger and Integration Charges (235) (578)
Restructuring Charges (309) –
Venezuela Currency Devaluation – 9
Inventory Fair Value Adjustments (46) (398)
Division Operating Prot 10,866 9,659
Impact of Corporate Unallocated (1,233) (1,327)
Total Reported Operating Prot $ 9,633 $ 8,332 16%
Total Operating Profit Reconciliation
Year Ended
12/31/11 12/25/10 Grow th
Reported Operating Prot $ 9,633 $ 8,332 16%
53rd Week (109) –
Mark- to-Market Net Losses/(Gains) 102 (91)
Merger and Integration Charges 313 769
Restructuring Charges 383 –
Venezuela Currency Devaluation – 120
Asset Write- O – 145
Foundation Contribution – 100
Inventory Fair Value Adjustments 46 398
Core Operating Prot $ 10,368 $ 9,773 6%
Operating Margin Reconciliation
Year Ended 12/31/11
Net
Revenue
Operating
Prot Margin
Reported Operating Margin $ 66,504 $ 9,633 14%
53rd Week (623) (109)
Mark- to-Market Net Losses – 102
Merger and Integration Charges – 313
Restructuring Charges – 383
Inventory Fair Value Adjustments – 46
Core Operating Margin $ 65,881 $ 10,368 16%
Diluted EPS Reconciliation (5-Year CAGR)
Year Ended
12/30/06 12/31/11 CAGR
Reported Diluted EPS $ 3.34 $ 4.03 4%
53rd Week − (0.04)
Mark- to-Market Net Losses 0.01 0.04
Merger and Integration Charges − 0.17
Restructuring and Impairment Charges 0.03 0.18
Inventory Fair Value Adjustments − 0.02
Tax Benets (0.37) −
Core Diluted EPS $ 3.01 $ 4.40 8%
Net Revenue Reconciliation (5-Year CAGR)
Year Ended
12/30/06 12/31/11 CAGR
Reported Net Revenue $ 35,137 $ 66,504 14%
53rd Week − (623)
Core Net Revenue $ 35,137 $ 65,881 13%
Operating Profit Reconciliation (5-Year CAGR)
Year Ended
12/30/06 12/31/11 CAGR
Reported Operating Prot $ 6,502 $ 9,633 8%
53rd Week − (109)
Mark- to-Market Net Losses 18 102
Merger and Integration Charges − 313
Restructuring and Impairment Charges 67 383
Inventory Fair Value Adjustments − 46
Core Operating Prot $ 6,587 $ 10,368 9%
PepsiCo, Inc.  Annual Report
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