Pepsi 2013 Annual Report Download - page 72

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2012
Net interest expense increased $9 million, primarily reflecting higher average debt balances and higher rates
on our debt balances, partially offset by gains in the market value of investments used to economically hedge
a portion of our deferred compensation costs and the impact of the 53rd week in the prior year.
The tax rate decreased 1.6 percentage points compared to 2011, primarily reflecting the tax impact of a
favorable tax court decision combined with the pre-payment of Medicare subsidy liabilities, partially offset
by the tax impact of the transaction with Tingyi and the lapping of prior year tax benefits related to a portion
of our international bottling operations.
Net income attributable to PepsiCo decreased 4% and net income attributable to PepsiCo per common share
decreased 3%. Items affecting comparability (see “Items Affecting Comparability”) positively contributed
4 percentage points to both net income attributable to PepsiCo and net income attributable to PepsiCo per
common share.
Results of Operations — Division Review
The results and discussions below are based on how our Chief Executive Officer monitors the performance
of our divisions. Accordingly, 2013 and 2012 volume growth measures reflect an adjustment to the base year
for divestitures and business changes. See “Items Affecting Comparability” for a discussion of items to
consider when evaluating our results and related information regarding non-GAAP measures.
FLNA QFNA LAF PAB Europe AMEA Total
Net Revenue, 2013 $ 14,126 $ 2,612 $ 8,350 $ 21,068 $ 13,752 $ 6,507 $ 66,415
Net Revenue, 2012 $ 13,574 $ 2,636 $ 7,780 $ 21,408 $ 13,441 $ 6,653 $ 65,492
% Impact of:
Volume(a) 3% 1 % 2% (4)% 0.5% 5 % —%
Effective net pricing(b) 2(1)113374
Foreign exchange translation — — (6) (1) (1) (4) (2)
Acquisitions and divestitures — — — — — (10) (1)
Reported growth(c) 4% (1)% 7% (2)% 2% (2)% 1%
FLNA QFNA LAF PAB Europe AMEA Total
Net Revenue, 2012 $13,574 $ 2,636 $ 7,780 $ 21,408 $13,441 $ 6,653 $65,492
Net Revenue, 2011 $13,322 $ 2,656 $ 7,156 $ 22,418 $13,560 $ 7,392 $66,504
% Impact of:
Volume(a) (1)% (1)% 4% (3)% — % 8 % — %
Effective net pricing(b) 31103424
Foreign exchange translation — — (7) — (7) (3) (2.5)
Acquisitions and divestitures — — 2 (4.5) 2 (17) (3)
Reported growth(c) 2 % (1)% 9% (4.5)% (1)% (10)% (1.5)%
(a) Excludes the impact of acquisitions and divestitures. In certain instances, volume growth varies from the amounts disclosed in the following
divisional discussions due to nonconsolidated joint venture volume, and, for our beverage businesses, temporary timing differences between
BCS and CSE, as well as the mix of beverage volume sold by our Company-owned and franchised-owned bottlers. Our net revenue excludes
nonconsolidated joint venture volume, and, for our beverage businesses, is based on CSE.
(b) Includes the year-over-year impact of discrete pricing actions, sales incentive activities and mix resulting from selling varying products in
different package sizes and in different countries.
(c) Amounts may not sum due to rounding.