Pepsi 2015 Annual Report Download - page 3

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1 Letter to Shareholders
10 Financial Highlights
11 PepsiCo Board of Directors
12 PepsiCo Leadership
13 PepsiCo Form 10-K
143 Reconciliation of GAAP
and Non-GAAP Information
146 Forward-Looking Statements
147 Common Stock and
Shareholder Information
148 Corporate Information
Indra K. Nooyi
PepsiCo Chairman of the Board of Directors
and Chief Executive O cer
There is an old adage that a pessimist
complains about the winds, an optimist
hopes they will improve, and a realist
adjusts the sails.
Dear Fellow
Shareholders,
Over the past several decades, we
have encountered many kinds of
waters. But we have navigated them
all by continually adjusting our sails.
From transforming our portfolio to
rewriting our operating model, we
have sailed with, rather than against,
winds of change.
And those winds were fierce in
2015. Global economic growth,
robust before the 2008 financial crisis,
remained sluggish. Foreign currency
pressures were severe and regulatory
pressures intensified. Instability and
violence shook every corner of the
globe. And a variety of trends, some
new and some longstanding — from
what people consume to how they
pay for it — continued to reshape
ourindustry.
Despite these challenges, we
adjusted our sails and kept PepsiCo
on course, meeting or exceeding all
of our full-year financial targets and
continuing our multiyear track record
of success.
• Organic revenue grew 5% in 2015,
capping a three-year period of consis-
tent mid- single-digit organic revenue
growth — in line with our long-term
objectives.
• Core gross margin improved by
140basis points in 2015, while core
operating margin improved by 30basis
points. Over the past three years, our
core gross margin has increased by
285basis points, with core operating
margin up 100basis points.
• In 2015, core net return on invested
capital (ROIC) improved by 210 basis
points, to 19.6%. We have now main-
tained capital spending below 5%
of sales since 2012 and our core net
ROIC has dramatically improved by
430basis points during that time.
• Core constant currency earnings
pershare (EPS) grew 10% in 2015.
We have now grown core constant
currency earnings per share by at least
9% in each of the past three years.
1. Organic, core and constant currency results, as well as free cash  ow excluding certain items, are non-GAAP  nancial
measures. Please refer to “Reconciliation of GAAP and Non-GAAP Information” beginning on page 143 of this Annual
Report for more information about these results, including a reconciliation to the most directly comparable  nancial
measures in accordance with GAAP.
2015 ANNUAL REPORT  1