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63
Non-GAAP Measures
Certain measures contained in this annual report are financial
measures that are adjusted for items aecting comparability (see
“Items Aecting Comparability” for a detailed list and description
of each of these items), as well as, in certain instances, adjusted
for foreign currency. These measures are not in accordance
with Generally Accepted Accounting Principles (GAAP). Items
adjusted for currency assume foreign currency exchange rates
used for translation based on the rates in eect for the comparable
prior-year period. We believe investors should consider these
non-GAAP measures in evaluating our results as they are more
indicative of our ongoing performance and with how management
evaluates our operational results and trends. These measures are
not, and should not be viewed as, a substitute for U.S. GAAP report-
ing measures. See “Management Operating CashFlow.”
Results of Operations — Consolidated Review
In the discussions of net revenue and operating profit below,
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 dif-
ferent countries. Additionally, 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.
Servings
Since our divisions each use dierent measures of physical unit
volume (i.e., kilos, gallons, pounds and case sales), a common
servings metric is necessary to reflect our consolidated physical
unit volume. Our divisions’ physical volume measures are con-
verted into servings based on U.S. Food and Drug Administration
guidelines for single-serving sizes of our products.
In 2010, total servings increased 7% compared to 2009, as
servings for snacks increased 2% while servings for beverages
increased 9%. In 2009, total servings increased slightly com-
pared to 2008, as servings for snacks increased 1% while servings
for beverages decreased 1%.
Total Net Revenue and Operating Profit
Change
2010 2009 2008 2010 2009
Total net revenue
$57,838 $43,232 $43,251 34% −
Operating prot
FLNA
$ 3,549 $ 3,258 $ 2,959 9% 10%
QFNA 568 628 582 (10)% 8%
LAF 1,004 904 897 11% 1%
PAB 2,776 2,172 2,026 28% 7%
Europe 1,020 932 910 9% 2%
AMEA 742 716 592 4% 21%
Corporate Unallocated
Mark-to-market net (gains/(losses)) 91 274 (346) (67)% n/m
Merger and integration charges (191) (49) – 284% n/m
Restructuring and impairment charges – – (10) – n/m
Venezuela currency devaluation (129) – – n/m –
Asset write-off (145) – – n/m –
Foundation contribution (100) – – n/m –
Other (853) (791) (651) 8% 21%
Total operating prot $ 8,332 $ 8,044 $ 6,959 4% 16%
Total operating prot margin
14.4% 18.6% 16.1% (4.2) 2.5
n/m represents year-over-year changes that are not meaningful.
2010
Total operating profit increased 4% and operating margin
decreased 4.2percentage points. Operating profit performance
was impacted by items aecting comparability (see “Items
Aecting Comparability”) which reduced operating profit by
21percentage points and contributed 2.9percentage points to
the total operating margin decline. Operating profit performance
also reflects the incremental operating results from our acquisi-
tions of PBG and PAS.
2009
Total operating profit increased 16% and operating margin
increased 2.5percentage points. These increases were driven
by the net favorable mark-to-market impact of our commodity
hedges and lower restructuring and impairment charges related
to our Productivity for Growth program, collectively contribut-
ing 17percentage points to operating profit growth, partially
oset by 1percentage point from costs associated with our acqui-
sitions of PBG and PAS. Foreign currency reduced operating
profit growth by 6percentage points, and acquisitions contrib-
uted 2percentage points to the operating profit growth.
Other corporate unallocated expenses increased 21%, primar-
ily reflecting deferred compensation losses, compared to gains in
2008. The deferred compensation losses are oset (as an increase
to interest income) by gains on investments used to economically
hedge these costs.