Pepsi 2011 Annual Report Download - page 49

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Asia, Middle East & Africa
% Change
2011 2010 2009 2011 2010
Net revenue $ 7,392 $ 6,291 $ 5,277 17 19
Impact of foreign currency translation (2) (3)
Net revenue growth, on a constant currency basis* 16** 16
Operating prot $ 887 $ 708 $ 700 25 1
Restructuring and impairment charges 9 – 12
Operating prot excluding above item* $ 896 $ 708 $ 712 27 (1)
Impact of foreign currency translation (2.5) (3)
Operating prot growth excluding above item, on a constant currency basis* 24** (4)
* See “Non- GAAP Measures”
** Does not sum due to rounding
2011
Snacks volume grew 15%, reecting broad- based increases driven
by double- digit growth in India, China and the Middle East.
Beverage volume grew 5%, driven by double- digit growth in
India and mid- single-digit growth in China and the Middle East.
Acquisitions had a nominal impact on the beverage volume
growth rate.
Net revenue grew 17%, reecting the volume growth and
favorable eective net pricing. Foreign currency contributed 2per-
centage points to net revenue growth. Acquisitions had a nominal
impact on net revenue growth.
Operating prot grew 25%, driven primarily by the net revenue
growth, partially oset by higher commodity costs. Acquisitions and
divestitures increased operating prot growth by 16percentage
points, primarily as a result of a one- time gain associated with the
sale of our investment in our franchise bottler in Thailand. Favorable
foreign currency contributed 2.5percentage points to the operating
prot growth.
2010
Snacks volume grew 16%, reecting broad- based increases driven
by double- digit growth in India, the Middle East and China, partially
oset by a low- single-digit decline in Australia. Acquisitions contrib-
uted nearly 3percentage points to the snacks volume growth.
Beverage volume grew 7%, driven by double- digit growth in India
and China, partially oset by a low- single-digit decline in the Middle
East. Acquisitions had a nominal impact on the beverage volume
growth rate.
Net revenue grew 19%, reecting the volume growth and
favorable eective net pricing. Foreign currency contributed
3percentage points to the net revenue growth. The net impact of
acquisitions and divestitures contributed 1percentage point to the
net revenue growth.
Operating prot grew 1%, driven primarily by the net revenue
growth, partially oset by higher commodity costs and increased
investments in strategic markets. The net impact of acquisitions
and divestitures reduced operating prot growth by 10percentage
points, primarily as a result of a one- time gain in the prior year asso-
ciated with the contribution of our snacks business in Japan to form
a joint venture with Calbee Foods Company. Favorable foreign cur-
rency contributed over 3percentage points to the operating prot
growth and the absence of restructuring and impairment charges in
the current year contributed 2percentage points.
Our Liquidity and Capital Resources
We believe that our cash generating capability and nancial condi-
tion, together with our revolving credit facilities and other available
methods of debt nancing (including long- term debt nancing
which, depending upon market conditions, we may use to replace
a portion of our commercial paper borrowings), will be adequate to
meet our operating, investing and nancing needs. However, there
can be no assurance that volatility in the global capital and credit
markets will not impair our ability to access these markets on terms
commercially acceptable to us or at all. See Note 9 for a description
of our credit facilities. See also “Unfavorable economic conditions
may have an adverse impact on our business results or nancial con-
dition.” in “Our Business Risks.”
In addition, currency restrictions enacted by the government in
Venezuela have impacted our ability to pay dividends outside of the
country from our snack and beverage operations in Venezuela. As
of December31, 2011, our operations in Venezuela comprised 8% of
our cash and cash equivalents balance.
Furthermore, our cash provided from operating activities is some-
what impacted by seasonality. Working capital needs are impacted
by weekly sales, which are generally highest in the third quarter due
to seasonal and holiday- related sales patterns, and generally lowest
in the rst quarter. On a continuing basis, we consider various trans-
actions to increase shareholder value and enhance our business
results, including acquisitions, divestitures, joint ventures and share
repurchases. These transactions may result in future cash proceeds
or payments.
Management’s Discussion and Analysis
PepsiCo, Inc.  Annual Report
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