Pepsi 2008 Annual Report Download - page 62
Download and view the complete annual report
Please find page 62 of the 2008 Pepsi annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.60 PepsiCo, Inc. 2008 Annual Report
Management’s Discussion and Analysis
Operating prot grew 9%, primarily reecting the net revenue
growth, as well as a favorable casualty insurance actuarial adjust-
ment reecting improved safety performance. This growth was
partially offset by higher commodity costs, as well as increased
advertising and marketing expenses. Operating prot beneted
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 prot,
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 prot $÷«582 $÷«568 $÷«554 2.5 2.5
Impact of restructuring and
impairment charges 31 – –
Operating prot, excluding
restructuring and
impairment charges $÷«613 $÷«568 $÷«554 82.5
2008
Net revenue increased 2% and volume declined 1.5%, partially
reecting the negative impact of the Cedar Rapids ood that
occurred at the end of the second quarter. The volume decrease
reects a low-single-digit decline in Quaker Oatmeal and ready-
to-eat cereals. The net revenue growth reects 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 prot increased 2.5%, reecting 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 prot.
The fourth quarter restructuring and impairment charges related
to the Productivity for Growth program reduced operating prot
growth by 5 percentage points. Foreign currency had a nominal
impact on operating prot growth. Operating prot, excluding
restructuring and impairment charges, grew 8%.
2007
Net revenue increased 5% and volume increased 2%. The volume
increase reects 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 reects 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 prot increased 2.5%, primarily reecting 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 prot $÷«897 $÷«714 $÷«655 26 9
Impact of restructuring and
impairment charges 40 39 –
Operating prot, excluding
restructuring and
impairment charges $÷«937 $÷«753 $÷«655 24 15
2008
Snacks volume grew 3%, primarily reecting 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 reecting 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 prot 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 prot 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 prot growth. Operating prot,
excluding restructuring and impairment charges, grew 24%.