Pepsi 2015 Annual Report Download - page 72

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Table of Contents
55
In 2013, we recorded a $111 million net charge related to the devaluation of the bolivar for our Venezuelan
businesses. $124 million of this charge was recorded in corporate unallocated expenses, with the balance
(equity income of $13 million) recorded in our Latin America segment. In total, this net charge had an after-
tax impact of $111 million or $0.07 per share.
For additional information on Venezuela, see “Our Business Risks” and Note 1 to our consolidated financial
statements.
Merger and Integration Charges
In 2013, we incurred merger and integration charges of $10 million ($8 million after-tax or $0.01 per share)
related to our acquisition of WBD, all of which were recorded in the ESSA segment.
Tax Benefits
In 2015, we recognized a non-cash tax benefit of $230 million ($0.15 per share) associated with our agreement
with the IRS resolving substantially all open matters related to the audits for taxable years 2010 through
2011, which reduced our reserve for uncertain tax positions for the tax years 2010 and 2011.
In 2013, we recognized a non-cash tax benefit of $209 million ($0.13 per share) associated with our agreement
with the IRS resolving all open matters related to the audits for taxable years 2003 through 2009, which
reduced our reserve for uncertain tax positions for the tax years 2003 through 2012.
See Note 5 to our consolidated financial statements.
Non-GAAP Measures
Certain measures contained in this Form 10-K are financial measures that are adjusted for items affecting
comparability (see “Items Affecting Comparability” for a detailed list and description of each of these items),
as well as, in certain instances, adjusted for foreign exchange. These measures are not in accordance with
U.S. Generally Accepted Accounting Principles (GAAP). Items adjusted for currency assume foreign
currency exchange rates used for translation based on the rates in effect for the comparable prior-year period.
In order to compute our constant currency results, we multiply or divide, as appropriate, our current year
U.S. dollar results by the current year average foreign exchange rates and then multiply or divide, as
appropriate, those amounts by the prior year average foreign exchange rates. We believe investors should
consider these non-GAAP measures in evaluating our results as they are indicative of our ongoing performance
and reflect how management evaluates our operational results and trends. These measures are not, and should
not be viewed as, a substitute for U.S. GAAP reporting measures. See “Organic Revenue Growth,” “Free
Cash Flow” and “Net Return on Invested Capital.”
Results of Operations — Consolidated Review
In the discussions of net revenue and operating profit below, “effective net pricing” reflects 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 and “net pricing” reflects the year-over-year
combined impact of list price changes, weight changes per package, discounts and allowances. Additionally,
“acquisitions and divestitures,” except as otherwise noted, reflect all mergers and acquisitions activity,
including the impact of acquisitions, divestitures and changes in ownership or control in consolidated
subsidiaries and nonconsolidated equity investees. The impact of the structural change related to the
deconsolidation of our Venezuelan businesses is presented separately.