Snapple 2008 Annual Report Download - page 49

selling activities that support our Beverage Concentrates and Finished Goods segments have not been propor-
tionally allocated between those two segments. We also incur certain centralized functional and corporate costs that
support our entire business, which have not been directly allocated to our respective segments but rather have been
allocated primarily to our Beverage Concentrates segment.
The key financial measures management uses to assess the performance of our segments are net sales and
underlying operating profit (loss) (“UOP”).
The impact of foreign currency is excluded from segments’ net sales and is included as a component of
intersegment eliminations and impact of foreign currency in the reconciliation to reported consolidated net sales.
Significant Acquisitions
On May 2, 2006, we acquired approximately 55% of the outstanding shares of DPSUBG, which combined
with our pre-existing 45% ownership, resulted in our full ownership of DPSUBG. DPSUBG’s results have been
included in the individual line items within our consolidated financial statements beginning on May 2, 2006. Prior
to this date, the existing investment in DPSUBG was accounted for under the equity method and reflected in the line
item captioned equity in earnings of unconsolidated subsidiaries, net of tax in our consolidated statements of
operations. In addition, on June 9, 2006, we acquired the assets of All American Bottling Company, on August 7,
2006, we acquired Seven Up Bottling Company of San Francisco, and on July 11, 2007, we acquired Southeast-
Atlantic Beverage Corporation (“SeaBev”). Each of these acquisitions is included in our consolidated statements of
operations beginning on its date of acquisition. Refer to Note 5 of the Notes to our Audited Consolidated Financial
Statements for further information.
Volume
In evaluating our performance, we consider different volume measures depending on whether we sell beverage
concentrates and syrups or finished beverages.
Beverage Concentrates Sales Volume
In our beverage concentrates and syrup businesses, we measure our sales volume in two ways: (1) “concen-
trates case sales” and (2) “bottler case sales.” The unit of measurement for both concentrates case sales and bottler
case sales equals 288 fluid ounces of finished beverage, or 24 twelve ounce servings.
Concentrates case sales represent units of measurement for concentrates and syrups sold by us to our bottlers
and distributors. A concentrates case is the amount of concentrates needed to make one case of 288 fluid ounces of
finished beverage. It does not include any other component of the finished beverage other than concentrates. Our net
sales in our concentrates businesses are based on concentrates cases sold.
Although our net sales in our concentrates businesses are based on concentrates case sales, we believe that
bottler case sales are also a significant measure of our performance because they measure sales of our finished
beverages into retail channels.
Finished Beverages Sales Volume
In our finished beverages businesses, we measure volume as case sales to customers. A case sale represents a
unit of measurement equal to 288 fluid ounces of finished beverage sold by us. Case sales include both our owned-
brands and certain brands licensed to and/or distributed by us.
Volume in Bottler Case Sales
In addition to sales volume, we also measure volume in bottler case sales (“volume (BCS)”) as sales of finished
beverages, in equivalent 288 ounce cases, sold by us and our bottlers to retailers and independent distributors.
Bottler case sales and concentrates and finished beverage sales volumes are not equal during any given period
due to changes in bottler concentrates inventory levels, which can be affected by seasonality, bottler inventory and
manufacturing practices, and the timing of price increases and new product introductions.
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