Kraft 2012 Annual Report Download - page 33

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Refrigerated Meals
For the Years Ended
December 29,
2012
December 31,
2011 $ change % change
(in millions)
Net revenues $ 3,296 $ 3,328 $ (32) (1.0%)
Organic Net Revenues (1) 3,296 3,285 11 0.3%
Segment operating income 379 319 60 18.8%
For the Years Ended
December 31,
2011
December 31,
2010 $ change % change
(in millions)
Net revenues $ 3,328 $ 3,131 $ 197 6.3%
Organic Net Revenues (1) 3,285 3,131 154 4.9%
Segment operating income 319 268 51 19.0%
(1) Please see the Non-GAAP Financial Measures section at the end of this item.
2012 compared with 2011:
Net revenues decreased $32 million (1.0%) which includes the impact of the 53rd week of shipments in 2011 (1.3 pp).
Organic Net Revenues increased $11 million (0.3%) due to higher net pricing (1.6 pp), partially offset by unfavorable
volume/mix (1.3 pp, including a detriment of approximately 0.7 pp due to product pruning). Unfavorable volume/mix was
driven primarily by pruning of certain meat products and lower shipments in hot dogs, partially offset by favorable mix in
cold cuts. Higher net pricing was due to commodity cost-driven pricing primarily related to lunch combinations and hot
dogs.
Segment operating income increased $60 million (18.8%), driven primarily by higher net pricing, lower other selling,
general and administrative expenses, and lower manufacturing costs (driven by net productivity), partially offset by costs
incurred for the Restructuring Program, increased commodity costs, higher advertising and consumer spending, the
impact of the 53rd week of shipments in 2011, and unfavorable volume/mix.
2011 compared with 2010:
Net revenues increased $197 million (6.3%) which includes the impact of the 53rd week of shipments in 2011 (1.4pp).
Organic Net Revenues increased $154 million (4.9%) due to higher net pricing (6.7 pp), partially offset by unfavorable
volume/mix (1.8 pp). Higher net pricing was driven by bacon, cold cuts, hot dogs, and lunch combinations. Unfavorable
volume/mix was due primarily to lower shipments in bacon and hot dogs, partially offset by higher shipments in cold cuts
and lunch combinations.
Segment operating income increased $51 million (19.0%), due primarily to higher net pricing, lower other selling, general
and administrative expenses, lower manufacturing costs, and the impact of the 53rd week of shipments in 2011, partially
offset by higher commodity costs, the impact of divestitures (lower income from a transition services agreement related to
the Frozen Pizza business), unfavorable volume/mix, and higher advertising and consumer spending.
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