Pepsi 2011 Annual Report Download - page 89

Acquisitions and divestitures: reect all mergers and acquisitions
activity, including the impact of acquisitions, divestitures and
changes in ownership or control in consolidated subsidiaries and
nonconsolidated equity investees.
Bottler Case Sales (BCS): measure of physical beverage volume
shipped to retailers and independent distributors from both
PepsiCo and our independent bottlers.
Bottler funding: nancial incentives we give to our independent
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 scal year basis.
Constant currency: nancial results assuming constant foreign
currency exchange rates used for translation based on the rates in
eect for the comparable prior- year period. In order to compute our
constant currency results, we multiply or divide, as appropriate, our
current year U.S. dollar results by the current year average foreign
exchange rates and then multiply or divide, as appropriate, those
amounts by the prior year average foreign exchange rates.
Consumers: people who eat and drink our products.
CSD: carbonated soft drinks.
Customers: authorized independent bottlers, distributors
and retailers.
Derivatives: nancial 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.
Effective net pricing: reects 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 uctuations in a hedging instrument’s fair value to oset
corresponding uctuations in the hedged item in the same
reporting 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.
Independent bottlers: customers to whom we have granted exclu-
sive contracts to sell and manufacture certain beverage products
bearing our trademarks within a specic geographical area.
Management operating cash flow: net cash provided by oper-
ating activities less capital spending plus sales of property, plant
and equipment. It is our primary measure used to monitor cash
ow 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 reecting our consolidated physical unit
volume. Our divisions’ physical unit measures are converted into
servings based on U.S. Food and Drug Administration guidelines for
single- serving sizes of our products.
Transaction gains and losses: the impact on our consolidated
nancial statements of exchange rate changes arising from
specic transactions.
Translation adjustment: the impact of converting our foreign
aliates’ nancial statements into U.S. dollars for the purpose of
consolidating our nancial statements.
Glossary
PepsiCo, Inc.  Annual Report
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