Pepsi 2010 Annual Report Download - page 11

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9
Watch an introductory video with PepsiCo’s Chairman at
www.PepsiCo.com/annual10.
Indra K. Nooyi
Chairman and Chief Executive Ofcer
is good
for all.
Dear Fellow
Shareholders,
2010 was a good year for PepsiCo. I
am delighted with the success we have
achieved, and I am sure you aretoo.
Amid the continuing challenge of the
most dicult global macroeconomic
environment in decades, we deliv-
ered strong operating performance
that puts us in the top tier in our
industry while we generated signifi-
cant operating cash flow.
• Net revenue grew 33percent on a
constant currency basis.1
• Core division operating profit
rose 23percent on a constant
currency basis.1
• Core EPS grew 12 percent on a
constant currency basis.2
• Management operating cash flow,
excluding certain items, reached
$6.9billion, up 23percent.1
• $8 billion was returned to our
shareholders through share repur-
chases and dividends.
• We raised the annual dividend by
7percent.
We can confidently say that PepsiCo
continues to operate from a position
of balance and strength. We are the
second-largest food and beverage
business in the world, and the larg-
est food and beverage business in
NorthAmerica.
We are increasingly global. More
than 45percent of our revenue comes
from outside the United States, with
approximately 30percent coming
from emerging and developing mar-
kets, where we have tremendous
growth opportunities. Globally,
PepsiCo operates more than 100,000
routes, serves approximately 10mil-
lion outlets almost every week and
generates more than $300million in
retail sales everyday.
We are performing today to deliver
top-tier financial performance, while
investing to ensure that our perfor-
mance levels can be sustained in the
long term. For example, in 2010 we
stepped up our investments in brand
building, R&D, emerging markets
infrastructure and ourpeople.
PepsiCo has 19 brands that gen-
erate more than $1billion of retail
sales each — up from just 11 in 2000.
Brands are our lifeblood — we
invest to sustain and improve brand
equity in existing global brands
while judiciously focusing on our
local and regional brands. In 2010,
all of our $1billion brands grew
revenues, thanks in part to our
brand-buildingactivities.
Dierentiated products help us drive
sales and pricing. In 2010, we again
increased our R&D investments
in sweetener technologies, next-
generation processing and packaging
and nutrition products. For example,
SoBe Lifewater Zero Calorie, a
2010 Snapshot
%PY
Net Revenue1 +33%
Division Op. Prot1 +23%
EPS2 +12%
Mgmt OCF1 +23%
Annual Dividend + 7%
1 Core results and core results on a constant currency basis are non-GAAP measures that exclude certain items.
See page 108 for a reconciliation to the most directly comparable nancial measure in accordance with GAAP.
2 Core results and core results on a constant currency basis are non-GAAP measures that exclude certain
items. See page 64 for a reconciliation to the most directly comparable nancial measure in accordance with GAAP.