Pepsi 2009 Annual Report Download - page 105

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Glossary
Acquisitions: reflect all mergers and acquisitions activity,
including the impact of acquisitions, divestitures and changes in
ownership or control in consolidated subsidiaries. The impact of
acquisitions related to our non-consolidated equity investees is
reflected in our volume and, excluding our anchor bottlers, in our
operating profit.
Anchor bottlers: The Pepsi Bottling Group (PBG), PepsiAmericas
(PAS) and Pepsi Bottling Ventures (PBV).
Bottlers: customers to whom we have granted exclusive
contracts 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 bottlers.
Bottler funding: financial incentives we give to our 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 bottlers, retailers and
independent distributors. This measure is reported on our fiscal
year basis.
Consumers: people who eat and drink our products.
CSD: carbonated soft drinks.
Customers: authorized bottlers and independent 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 bottlers to deliver snacks and beverages directly to retail stores
where our products are merchandised.
Effective net pricing: reflects the year-over-year impact of
discrete pricing actions, sales incentive activities and mix resulting
from selling varying products in different package sizes and in
different countries.
Hedge accounting: treatment for qualifying hedges that allows
fluctuations in a hedging instrument’s fair value to offset corre-
sponding fluctuations 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 effective, 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 offered 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
guidelines 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
affiliates’ financial statements into U.S. dollars for the purpose of
consolidating our financial statements.
93PepsiCo, Inc. 2009 Annual Report
88045_pepsico-09ar_93-96_R3.indd 93 3/6/10 8:26 PM