Kraft 2012 Annual Report Download - page 34

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Grocery
For the Years Ended
December 29,
2012
December 31,
2011 $ change % change
(in millions)
Net revenues $ 4,551 $ 4,556 $ (5) (0.1%)
Organic Net Revenues (1) 4,548 4,501 47 1.0%
Segment operating income 1,304 1,316 (12) (0.9%)
For the Years Ended
December 31,
2011
December 31,
2010 $ change % change
(in millions)
Net revenues $ 4,556 $ 4,313 $ 243 5.6%
Organic Net Revenues (1) 4,501 4,313 188 4.4%
Segment operating income 1,316 1,246 70 5.6%
(1) Please see the Non-GAAP Financial Measures section at the end of this item.
2012 compared with 2011:
Net revenues decreased $5 million (0.1%) which includes the impact of the 53rd week of shipments in 2011 (1.2 pp).
Organic Net Revenues increased $47 million (1.0%) driven by higher net pricing (4.9 pp) partially offset by unfavorable
volume/mix (3.9 pp, including a detriment of approximately 0.4 pp due to product pruning and 0.4 pp due to customer trade
inventory reductions). Unfavorable volume/mix in the snack nuts, ready-to-eat desserts, pourable and spoonable
dressings, and barbecue sauce categories was driven by lower shipments, partially offset by higher shipments in dinners.
Higher net pricing was driven by higher commodity cost-driven pricing actions in snack nuts, macaroni and cheese
dinners, and pourable and spoonable dressings.
Segment operating income decreased $12 million (0.9%), due primarily to increased commodity costs, unfavorable
volume/mix, costs incurred for the Restructuring Program, and the impact of the 53rd week of shipments in 2011, partially
offset by higher net pricing, lower manufacturing costs (driven by net productivity), lower other selling, general and
administrative expenses, and lower advertising and consumer spending.
2011 compared with 2010:
Net revenues increased $243 million (5.6%) which includes the impact of the 53rd week of shipments in 2011 (1.2 pp).
Organic Net Revenues increased $188 million (4.4%) due to higher net pricing (7.9 pp) , partially offset by unfavorable
volume/mix (3.5 pp). Higher net pricing was reflected across most grocery categories including snack nuts, spoonable
dressings, macaroni and cheese dinners, dry packaged desserts, and ready-to-eat desserts. Unfavorable volume/mix was
driven by lower shipments, primarily spoonable dressings, snack nuts, ready-to-eat desserts, barbecue sauces, dessert
toppings, and dry packaged desserts, partially offset by new products in the dinners category and the introduction of
peanut butter.
Segment operating income increased $70 million (5.6%), driven primarily by higher net pricing, the impact of the 53rd week
of shipments in 2011, lower other selling, general and administrative expenses, and lower advertising and consumer
spending, partially offset by higher commodity costs, unfavorable volume/mix, and higher manufacturing costs.
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