Pepsi 2014 Annual Report Download - page 75

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55
2013
Net interest expense increased $6 million, primarily reflecting higher average debt balances and lower interest
income due to lower investment interest rates, partially offset by higher gains on the market value of
investments used to economically hedge a portion of our deferred compensation costs.
The reported tax rate decreased 1.5 percentage points compared to the prior year, due to resolution with the
IRS of audits for taxable years 2003 through 2009, the favorable tax effects of international refranchising,
the reversal of international and state tax reserves resulting from the expiration of statutes of limitations,
favorable resolution of certain tax matters and the lapping of the tax impact of the transaction with Tingyi
in 2012. These decreases were partially offset by the lapping of a 2012 tax benefit related to a favorable tax
court decision, the 2012 pre-payment of Medicare subsidy liabilities and the impact of the 2013 Venezuela
devaluation.
Net income attributable to PepsiCo increased 9% and net income attributable to PepsiCo per common share
increased 10%. Items affecting comparability (see “Items Affecting Comparability”) positively contributed
3 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 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, 2014 $ 14,502 $ 2,568 $ 8,442 $ 21,154 $ 13,290 $ 6,727 $ 66,683
Net Revenue, 2013 $ 14,126 $ 2,612 $ 8,350 $ 21,068 $ 13,752 $ 6,507 $ 66,415
% Impact of:
Volume(a) 2% — % (2)% — % 1 % 6% 1%
Effective net pricing(b) 1 (1) 12 1.5 3 2 3
Foreign exchange translation (1) (1) (8) (1) (8) (3)(3)
Acquisitions and divestitures — — — — — (1.5) —
Reported growth(c) 3% (2)% 1 % — % (3)% 3% —%
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) 11 3 3 7 4
Foreign exchange translation — — (6) (1) (1) (4) (2)
Acquisitions and divestitures — — — — — (10) (1)
Reported growth(c) 4% (1)% 7% (2)% 2% (2)% 1%
(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.