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60 PepsiCo, Inc. 2008 Annual Report
Management’s Discussion and Analysis
Operating prot grew 9%, primarily reecting the net revenue
growth, as well as a favorable casualty insurance actuarial adjust-
ment reecting improved safety performance. This growth was
partially offset by higher commodity costs, as well as increased
advertising and marketing expenses. Operating prot beneted
almost 2 percentage points from the impact of lower restructur-
ing and impairment charges in 2007 related to the continued
consolidation of the manufacturing network. Operating prot,
excluding restructuring and impairment charges, grew 7%.
Quaker Foods North America
% Change
2008 2007 2006 2008 2007
Net revenue $1,902 $1,860 $1,769 25
Operating prot $÷«582 $÷«568 $÷«554 2.5 2.5
Impact of restructuring and
impairment charges 31 – –
Operating prot, excluding
restructuring and
impairment charges $÷«613 $÷«568 $÷«554 82.5
2008
Net revenue increased 2% and volume declined 1.5%, partially
reecting the negative impact of the Cedar Rapids ood that
occurred at the end of the second quarter. The volume decrease
reects a low-single-digit decline in Quaker Oatmeal and ready-
to-eat cereals. The net revenue growth reects favorable effective
net pricing, due primarily to price increases, partially offset by
the volume decline. Foreign currency had a nominal impact on
net revenue growth.
In 2008, QFNA’s net revenue grew 2% and volume declined 1.5%,

Operating prot increased 2.5%, reecting the net revenue
growth and lower advertising and marketing costs, partially offset
by increased commodity costs. The negative impact of the ood
was mitigated by related business disruption insurance recover-
ies, which contributed 5 percentage points to operating prot.
The fourth quarter restructuring and impairment charges related
to the Productivity for Growth program reduced operating prot
growth by 5 percentage points. Foreign currency had a nominal
impact on operating prot growth. Operating prot, excluding
restructuring and impairment charges, grew 8%.
2007
Net revenue increased 5% and volume increased 2%. The volume
increase reects mid-single-digit growth in Oatmeal and Life
cereal, as well as low-single-digit growth in Cap’n Crunch cereal.
These increases were partially offset by a double-digit decline in
Rice-A-Roni. The increase in net revenue primarily reects price
increases taken earlier in 2007, as well as the volume growth.
Favorable Canadian exchange rates contributed nearly 1 percent-
age point to net revenue growth.
Operating prot increased 2.5%, primarily reecting the net
revenue growth partially offset by increased raw material costs.
Latin America Foods
% Change
2008 2007 2006 2008 2007
Net revenue $5,895 $4,872 $3,972 21 23
Operating prot $÷«897 $÷«714 $÷«655 26 9
Impact of restructuring and
impairment charges 40 39 –
Operating prot, excluding
restructuring and
impairment charges $÷«937 $÷«753 $÷«655 24 15
2008
Snacks volume grew 3%, primarily reecting the acquisition in
Brazil, which contributed nearly 3 percentage points to the
volume growth. A mid-single-digit decline at Sabritas in Mexico,
largely resulting from weight-outs, was offset by mid-single digit
growth at Gamesa in Mexico and double-digit growth in certain
other markets.

respectively.
Net revenue grew 21%, primarily reecting favorable effective
net pricing. Gamesa experienced double-digit growth due to
favorable pricing actions. Acquisitions contributed 9 percentage
points to the net revenue growth, while foreign currency had a
nominal impact on net revenue growth.
Operating prot grew 26%, driven by the net revenue growth,
partially offset by increased commodity costs. An insurance recov-
ery contributed 3 percentage points to the operating prot growth.
The impact of the fourth quarter restructuring and impairment
charges in 2008 related to the Productivity for Growth program
was offset by the prior year restructuring charges. Acquisitions
contributed 4 percentage points and foreign currency contributed
1 percentage point to the operating prot growth. Operating prot,
excluding restructuring and impairment charges, grew 24%.