Pepsi 2015 Annual Report Download - page 5

The grand opening of
the fi rst Quaker plant
in China, marking the
continued expansion
of the brand in a key
growth market.
• Free cash flow excluding certain items was
strong in 2015 at $8.1billion, bringing us to
a total of more than $24billion over the past
three years.
• PepsiCo increased its annualized dividend
for the 43rd consecutive year in 2015 and
returned $9 billion to our shareholders through
share repurchases and dividends. Since 2012,
we have returned more than $24billion to
shareholders in the form of dividends and
share repurchases.
• Our spending on advertising and marketing
as a percentage of sales increased by 40basis
points in 2015, while our research and develop-
ment (R&D) spending was 40% higher than
it was in 2011. Our continued investment in
these two critical areas illustrates our ability
to manage costs and margins in the short-
run while reinvesting in our business to drive
growth over the long term. Importantly, these
investments are fueling organic revenue
growth. 2015 marked the third consecutive
year innovation accounted for at least 8% of
our net revenue.
Such a strong performance reflects our
commitment to advancing the interests of
our shareholders. And even as we have been
fulfilling that commitment, we have also
been pursuing another aspiration: building
the model of a 21st Century corporation
byembracing the idea that delivering strong
performance and acting with a sense of
purpose can go hand in hand. That idea is
apartof what drives us every day.
And we have embedded this approach —
Performance with Purpose — into every aspect
of our business, from the products our con-
sumers enjoy one billion times each day,
to the impact we are having in more than
200 countries and territories around the world,
to how we engage with the hundreds of
thousands of men and women who constitute
the PepsiCo Society. It is an approach with
threepriorities:
Human Sustainability
More and more families are eating healthier,
and we want to be their choice for everyday
nutrition. That is why we are focused on
dialingdown the sodium, added sugar and
saturated fat — and dialing up the nutrition —
in many of our products. We are focused on
doing it in a way that not only meets the strict
guidelines set by the world’s most respected
public health organizations, but also reflects
the evolving ways consumers themselves
define nutrition. And we continue to invest
in industry- leading quality control and food
safety programs to help ensure every product
we sell meets the high standards consumers
rightfully set for our brands.
Environmental Sustainability
In a year that saw the landmark Paris climate
change agreement, our sense of responsi-
bility for our planet was front and center.
Weconsider ourselves members of every
community where our products are made,
marketed, distributed or sold, and we want
tobe good neighbors. From conserving water
to cutting waste, we are finding new ways
to shrink our environmental impact. At the
same time, we are delivering cost savings,
proving that environmental sustainability and
economic success can formavirtuous circle.
Talent Sustainability
PepsiCo has long been viewed as an
“academycompany” that grooms future
corporate leaders, and the results our people
delivered in the face of last year’s stiff head-
winds serve as a powerful reminder that
our company remains home to the best and
brightest in the industry. Competition for
top talent is intensifying, and in 2015, we
continuedto invest in building a diverse and
Comparison of Cumulative Total
Shareholder Return
Return on PepsiCo stock investment
(including dividends) and the S&P 500
A premium Quaker bev-
erage launched in China
that was named “Best
Dairy Drink of 2015”
at the World Beverage
Innovation Awards.
PepsiCo, Inc. S&P 500
$0
$50
$100
$150
$200
$250
2015201420132012
The grand opening of
the fi rst Quaker plant
in China, marking the
continued expansion
of the brand in a key
growth market.
• Free cash flow excluding certain items was
strong in 2015 at $8.1billion, bringing us to
a total of more than $24billion over the past
three years.
• PepsiCo increased its annualized dividend
for the 43rd consecutive year in 2015 and
returned $9 billion to our shareholders through
share repurchases and dividends. Since 2012,
we have returned more than $24billion to
shareholders in the form of dividends and
share repurchases.
• Our spending on advertising and marketing
as a percentage of sales increased by 40basis
points in 2015, while our research and develop-
ment (R&D) spending was 40% higher than
it was in 2011. Our continued investment in
these two critical areas illustrates our ability
to manage costs and margins in the short-
run while reinvesting in our business to drive
growth over the long term. Importantly, these
investments are fueling organic revenue
growth. 2015 marked the third consecutive
year innovation accounted for at least 8% of
our net revenue.
Such a strong performance reflects our
commitment to advancing the interests of
our shareholders. And even as we have been
fulfilling that commitment, we have also
been pursuing another aspiration: building
the model of a 21st-century corporation
byembracing the idea that delivering strong
performance and acting with a sense of
purpose can go hand in hand. That idea is
apartof what drives us every day.
And we have embedded this approach —
Performance with Purpose — into every aspect
of our business, from the products our con-
sumers enjoy one billion times each day,
to the impact we are having in more than
200 countries and territories around the world,
to how we engage with the hundreds of
thousands of men and women who constitute
the PepsiCo Society. It is an approach with
threepriorities:
Human Sustainability
More and more families are eating healthier,
and we want to be their choice for everyday
nutrition. That is why we are focused on
dialingdown the sodium, added sugar and
saturated fat — and dialing up the nutrition —
in many of our products. We are focused on
doing it in a way that not only meets the strict
guidelines set by the world’s most respected
public health organizations, but also reflects
the evolving ways consumers themselves
define nutrition. And we continue to invest
in industry- leading quality control and food
safety programs to help ensure every product
we sell meets the high standards consumers
rightfully set for our brands.
Environmental Sustainability
In a year that saw the landmark Paris climate
change agreement, our sense of responsi-
bility for our planet was front and center. We
consider ourselves members of every commu-
nity where our products are made, marketed,
distributed or sold, and we want to be good
neighbors. From conserving water to cutting
waste, we are finding new ways to shrink our
environmental impact. At the same time, we
are delivering cost savings, proving that envi-
ronmental sustainability and economic success
can form a virtuous circle.
Talent Sustainability
PepsiCo has long been viewed as an
“academycompany” that grooms future
corporate leaders, and the results our people
delivered in the face of last year’s stiff head-
winds serve as a powerful reminder that
our company remains home to the best and
brightest in the industry. Competition for
top talent is intensifying, and in 2015, we
continuedto invest in building a diverse and
Comparison of Cumulative Total
Shareholder Return
Return on PepsiCo stock investment
(including dividends) and the S&P 500
A premium Quaker bev-
erage launched in China
that was named “Best
Dairy Drink of 2015”
at the World Beverage
Innovation Awards.
PepsiCo, Inc. S&P 500
$0
$50
$100
$150
$200
$250
2015201420132012
2015 ANNUAL REPORT 3