Kraft 2012 Annual Report Download - page 31

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Included within our segment results are sales to Mondele¯ z International, which totaled $114 million in 2012, $100 million in
2011, and $79 million in 2010.
Beverages
For the Years Ended
December 29,
2012
December 31,
2011 $ change % change
(in millions)
Net revenues $ 2,734 $ 3,006 $ (272) (9.0%)
Organic Net Revenues (1) 2,734 2,882 (148) (5.1%)
Segment operating income 260 450 (190) (42.2%)
For the Years Ended
December 31,
2011
December 31,
2010 $ change % change
(in millions)
Net revenues $ 3,006 $ 3,212 $ (206) (6.4%)
Organic Net Revenues (1) 2,882 2,700 182 6.7%
Segment operating income 450 564 (114) (20.2%)
(1) Please see the Non-GAAP Financial Measures section at the end of this item.
2012 compared with 2011:
Net revenues decreased $272 million (9.0%) which includes the impacts of the Starbucks CPG business cessation
(2.7 pp) and of the 53rd week of shipments in 2011 (1.2 pp). Organic Net Revenues decreased $148 million (5.1%), due to
unfavorable volume/mix (5.5 pp, including a detriment of approximately 3.3 pp due to customer trade inventory
reductions), partially offset by higher net pricing (0.4 pp). Unfavorable volume/mix was driven by lower shipments of ready-
to-drink beverages, powdered beverages, and coffee, partially offset by favorable volume/mix from liquid concentrates.
Higher net pricing was due primarily to higher commodity cost-driven pricing.
Segment operating income decreased $190 million (42.2%), due primarily to costs incurred for the Restructuring Program,
unfavorable volume/mix, increased commodity costs, higher advertising and consumer spending, the impact of
divestitures, and the impact of the 53rd week of shipments in 2011. This was partially offset by lower other selling, general
and administrative expenses, higher net pricing, and lower manufacturing costs (driven by net productivity).
2011 compared with 2010:
Net revenues decreased $206 million (6.4%) which includes the impact of the Starbucks CPG business cessation
(14.5 pp), partially offset by the impact of the 53rd week of shipments in 2011 (1.4 pp). Organic Net Revenues increased
$182 million (6.7%) due to higher net pricing (6.2 pp) and favorable volume/mix (0.5 pp). Higher net pricing was due
primarily to commodity cost-driven pricing in coffee. Favorable volume/mix was driven by higher shipments in ready-to-
drink beverages in advance of an announced 2012 list price increase and the introduction of liquid concentrates, partially
offset by lower shipments of coffee.
Segment operating income decreased $114 million (20.2%), due primarily to increased commodity costs and the impact of
the Starbucks CPG business cessation, partially offset by higher net pricing, lower manufacturing costs, favorable volume/
mix, the impact of the 53rd week of shipments in 2011, and lower advertising and consumer spending.
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