Kraft 2010 Annual Report Download - page 37

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U.S. Cheese
For the Years Ended
December 31,
2010 2009 $ change % change
(in millions)
Net revenues $ 3,528 $ 3,605 $ (77) (2.1%)
Segment operating income 598 667 (69) (10.3%)
For the Years Ended
December 31,
2009 2008 $ change % change
(in millions)
Net revenues $ 3,605 $ 4,007 $ (402) (10.0%)
Segment operating income 667 563 104 18.5%
2010 compared with 2009:
Net revenues decreased $77 million (2.1%), due to unfavorable volume/mix (4.7 pp) and the impact of divestitures (0.4 pp), partially offset by higher net
pricing (3.0 pp). Unfavorable volume/mix was driven by lower shipments across most cheese categories. Higher net pricing, across all cheese categories, was
due to input cost-driven pricing, partially offset by increased promotional spending.
Segment operating income decreased $69 million (10.3%), due to higher raw material costs (primarily higher dairy costs), unfavorable volume/mix, higher
marketing support costs and a loss on the divestiture of our Bagelfuls operations, partially offset by higher net pricing, lower manufacturing costs, lower other
selling, general and administrative expenses and the impact of divestitures.
2009 compared with 2008:
Net revenues decreased $402 million (10.0%), due to lower net pricing (8.8 pp) and unfavorable volume/mix (1.2 pp). Lower net pricing was due to lower
input cost-driven pricing combined with increases in promotional spending. Net revenues also declined due to lower shipments, primarily in cultured and
natural cheese products.
Segment operating income increased $104 million (18.5%), due primarily to lower raw material costs (primarily lower dairy costs), lower manufacturing
costs, lower costs due to the completion of the Restructuring Program and lower other selling, general and administrative expenses, partially offset by lower
net pricing and higher marketing support costs.
U.S. Convenient Meals
For the Years Ended
December 31,
2010 2009 $ change % change
(in millions; 2009 revised)
Net revenues $ 3,131 $ 3,029 $ 102 3.4%
Segment operating income 268 234 34 14.5%
For the Years Ended
December 31,
2009 2008 $ change % change
(in millions; as revised)
Net revenues $ 3,029 $ 2,947 $ 82 2.8%
Segment operating income 234 125 109 87.2%
2010 compared with 2009:
Net revenues increased $102 million (3.4%), due to favorable volume/mix (3.1 pp) and higher net pricing (0.3 pp). Favorable volume/mix was driven by
higher shipments in hot dogs, Lunchables combination meals and cold cuts. Higher net pricing was driven by input-cost driven pricing, mostly offset by
increased promotional spending.
Segment operating income increased $34 million (14.5%), due to lower other selling, general and administrative expenses, lower manufacturing costs,
favorable volume/mix and higher net pricing, partially offset by higher raw material costs and higher marketing support costs.
34