Pepsi 2010 Annual Report Download - page 110

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Eective net pricing: reflects the year-over-year impact of
discrete pricing actions, sales incentive activities and mix
resulting from selling varying products in dierent package
sizes and in dierentcountries.
Hedge accounting: treatment for qualifying hedges that allows
fluctuations in a hedging instrument’s fair value to oset cor-
responding fluctuations in the hedged item in the same report-
ing period. Hedge accounting is allowed only in cases where
the hedging relationship between the hedging instruments and
hedged items is highly eective, and only prospectively from the
date a hedging relationship is formally documented.
Management operating cash flow: net cash provided by
operating activities less capital spending plus sales of property,
plant and equipment. It is our primary measure used to monitor
cash flowperformance.
Mark-to-market net gain or loss or impact: the change in
market value for commodity contracts, that we purchase to
mitigate the volatility in costs of energy and raw materials that
we consume. The market value is determined based on average
prices on national exchanges and recently reported transactions
in themarketplace.
Marketplace spending: sales incentives oered through various
programs to our customers and consumers (trade spending), as
well as advertising and other marketing activities.
Servings: common metric reflecting our consolidated physical
unit volume. Our divisions’ physical unit measures are converted
into servings based on U.S. Food and Drug Administration guide-
lines for single-serving sizes of our products.
Transaction gains and losses: the impact on our consolidated
financial statements of exchange rate changes arising from
specific transactions.
Translation adjustment: the impact of converting our foreign
aliates’ financial statements into U.S.dollars for the purpose
of consolidating our financial statements.
Acquisitions: 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.
Bottlers: customers to whom we have granted exclusive con-
tracts to sell and manufacture certain beverage products bearing
our trademarks within a specific geographical area.
Bottler Case Sales (BCS): measure of physical beverage volume
shipped to retailers and independent distributors from both
PepsiCo and our independent bottlers.
Bottler funding: financial incentives we give to our indepen-
dent bottlers to assist in the distribution and promotion of our
beverage products.
Concentrate Shipments and Equivalents (CSE): measure of
our physical beverage volume shipments to independent bottlers,
retailers and independent distributors. This measure is reported
on our fiscal year basis.
Constant currency: financial results assuming constant foreign
currency exchange rates used for translation based on the rates
in eect for the comparable prior-year period.
Consumers: people who eat and drink our products.
CSD: carbonated soft drinks.
Customers: authorized independent bottlers, distributors
andretailers.
Derivatives: financial instruments, such as futures, swaps,
Treasury locks, options and forward contracts, that we use to
manage our risk arising from changes in commodity prices,
interest rates, foreign exchange rates and stock prices.
Direct-Store-Delivery (DSD): delivery system used by us and
our independent bottlers to deliver snacks and beverages directly
to retail stores where our products are merchandised.
Glossary
109