Pepsi 2010 Annual Report Download - page 25

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Performance
Bottom Line
24 PepsiCo, Inc. 2010 Annual Report
5
Continue to expand
division operating
margins.
PepsiCo is committed to delivering
sustainable operating performance. In
order to succeed, we know it’s important
to balance both the short and the long
term. The 2010 acquisition of our
anchor bottlers in North America and
Europe, for example, enables us to drive
growth, ensure a dynamic future for
PepsiCo and create a more integrated
supply chain. As expected, the decision
to acquire these bottlers reduced overall
division operating margins in 2010.
However, we also understood that real-
izing operational synergies would better
position us to increase margins over the
long term. We also invested in some key
growth drivers of our business, includ-
ing expanding our business in China
(one of our priority growth markets) and
increasing advertising and marketing
spending in our North America beverage
and U.S. QuakerFoods businesses.
Through these and other investments,
we expect to increase overall division
operating margins overtime.
6
Increase cash flow in
proportion to net income
growth over three-year
windows.
In the three years ended 2010, operating
cash flow significantly outpaced the
rate of net income. We believe that our
disciplined approach to cash flow man-
agement will enable us to continue to
meet or exceed this goal in thefuture.
7
Deliver total shareholder
returns in the top quartile of
our industry group.
We deliver strong returns to our share-
holders through substantial profit
growth, sound investment decisions
and disciplined cash flow management.
We increased our annual dividend in
2010 for the 38th consecutive year, from
$1.80 to $1.92, or 7percent, and we
returned a total of $8billion to share-
holders in the form of share repurchases
and dividends. From 2001-2005, our
total cash returned to shareholders was
$18 billion. Over the five-year period
from 2006 to 2010, which included the
economic turmoil of recent years, our
Three years
ended 2010:
operating
cash ow >
net income