Pepsi 2015 Annual Report Download - page 81

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Table of Contents
64
Latin America
% Change
2015 2014 2013 2015 2014
Net revenue $ 8,228 $9,425 $ 9,335 (13) 1
Impact of foreign exchange translation 27 9
Net revenue growth, on a constant currency
basis(a) 14 10
Operating (loss)/profit $ (206) $1,636 $ 1,617 (113) 1
Restructuring and impairment charges 36 28 13
Venezuela impairment charges 1,359 ——
Venezuela remeasurement —(21) (13)
Operating profit excluding above items(a) $ 1,189 $1,643 $ 1,617 (28) 2
Impact of foreign exchange translation 37 13
Operating profit growth excluding above items, on a
constant currency basis(a) 914 (b)
(a) See “Non-GAAP Measures.”
(b) Does not sum due to rounding.
2015
Net revenue decreased 13%, primarily reflecting unfavorable foreign exchange, which negatively impacted
net revenue performance by 27 percentage points, including 11 percentage points from Venezuela. In addition,
the fourth quarter impact of the deconsolidation of our Venezuelan businesses negatively impacted net revenue
performance by 6 percentage points. These impacts were partially offset by effective net pricing, including
14 percentage points of inflation-based pricing from Venezuela, and volume growth.
Snacks volume grew 1%, reflecting a low-single-digit increase in Mexico, partially offset by a high-single-
digit decrease in Brazil.
Beverage volume increased slightly, reflecting a low-single-digit increase in Mexico, partially offset by a
high-single-digit decrease in Brazil and a mid-single-digit decline in Argentina. The beverage volume growth
included a one-half-percentage point positive contribution from certain of our bottler’s brands related to our
joint venture in Chile.
Operating profit decreased 113%, primarily reflecting the Venezuela impairment charges in the above table.
Excluding the items affecting comparability in the above table (see “Items Affecting Comparability”),
operating profit decreased 28%. This decrease reflects certain operating cost increases, including strategic
initiatives, as well as higher commodity costs, which negatively impacted reported operating profit
performance by 39 percentage points, including transaction-related foreign exchange. Additionally, charges
associated with productivity initiatives outside the scope of the 2014 and 2012 Productivity Plans negatively
impacted reported operating profit performance by 2 percentage points. These impacts were partially offset
by the effective net pricing, planned cost reductions across a number of expense categories and the volume
growth. Unfavorable foreign exchange negatively impacted operating profit performance by 37 percentage
points, including a 23-percentage-point impact from Venezuela. The results of our Venezuelan businesses
negatively impacted reported operating profit performance by 94 percentage points, primarily related to the
impairment charges. Additionally, excluding the items affecting comparability, our Venezuelan businesses
negatively impacted operating profit performance by 10 percentage points, which included 4 percentage points
from the fourth quarter impact of the deconsolidation. For additional information on Venezuela, see Note 1
to our consolidated financial statements and “Our Business Risks.”