Pepsi 2015 Annual Report Download - page 80

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Table of Contents
63
North America Beverages
% Change
2015 2014 2013 2015 2014
Net revenue $ 20,618 $ 20,171 $ 20,083 2 —
Impact of foreign exchange translation 10.5
Net revenue growth, on a constant currency
basis(a) 31(b)
Operating profit $ 2,785 $ 2,421 $ 2,580 15 (6)
Restructuring and impairment charges 33 179 30
Pension-related settlement benefits (67) ——
Operating profit excluding above items(a) $ 2,751 $ 2,600 $ 2,610 6—
Impact of foreign exchange translation 11
Operating profit growth excluding above
items, on a constant currency basis(a) 7—(b)
(a) See “Non-GAAP Measures.”
(b) Does not sum due to rounding.
2015
Net revenue increased 2%, primarily reflecting effective net pricing and volume growth. Unfavorable foreign
exchange reduced net revenue growth by 1 percentage point.
Volume increased 1%, driven by a 6% increase in non-carbonated beverage volume, partially offset by a 2%
decline in CSD volumes. The non-carbonated beverage volume increase primarily reflected a double-digit
increase in our overall water portfolio, a mid-single-digit increase in Gatorade sports drinks, and a high-
single-digit increase in Lipton ready-to-drink teas.
Operating profit increased 15%. Excluding the items affecting comparability in the above table (see “Items
Affecting Comparability”), operating profit increased 6%. This increase primarily reflects the net revenue
growth and planned cost reductions across a number of expense categories, as well as lower commodity
costs, which contributed 8 percentage points to reported operating profit growth. These impacts were partially
offset by certain operating cost increases and higher advertising and marketing expenses, as well as the
lapping of favorable settlements of promotional spending accruals in the prior year, which reduced reported
operating profit growth by 2 percentage points. Unfavorable foreign exchange reduced operating profit growth
by 1 percentage point.
2014
Net revenue was even with the prior year, primarily reflecting effective net pricing, partially offset by
unfavorable foreign exchange, which negatively impacted net revenue performance by 0.5 percentage points.
Volume declined slightly, driven by a 2% decline in CSD volumes, partially offset by a 2% increase in non-
carbonated beverage volume. The non-carbonated beverage volume increase primarily reflected mid-single-
digit increases in Gatorade sports drinks, our overall water portfolio and Lipton ready-to-drink teas, partially
offset by a high-single-digit decline in our juice and juice drinks portfolio.
Operating profit decreased 6%. Excluding the item affecting comparability in the above table (see “Items
Affecting Comparability”), operating profit was even with the prior year. Operating profit performance
reflected certain operating cost increases, mostly offset by the favorable effective net pricing, planned cost
reductions across a number of expense categories, as well as lower commodity costs, which positively
impacted reported operating profit performance by 7 percentage points. Unfavorable foreign exchange
negatively impacted operating profit performance by 1 percentage point.