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expenses. The impact of the 53rd week in the prior year
reduced operating profit growth by 2 percentage points.
Lower restructuring and impairment charges contributed
1percentage point to operating profit growth.
2011
Net revenue increased 6% and pound volume grew 3%. The
volume growth primarily reflected double-digit growth in
our Sabra joint venture and in variety packs, as well as mid-
single-digit growth in trademark Doritos, Cheetos and Ruffles.
These gains were partially offset by a double-digit decline in
trademark SunChips. Net revenue growth also benefited from
effective net pricing. The 53rd week contributed 2percentage
points to both net revenue and volume growth.
Operating profit grew 7%, primarily reflecting the net rev-
enue growth. Restructuring charges reduced operating profit
growth by 2percentage points and were offset by the 53rd
week, which contributed 2percentage points to operating
profit growth.
Quaker Foods North America
% Change
2012 2011 2010 2012 2011
Net revenue $ 2,636 $ 2,656 $ 2,656 (1) –
53rd week – (42) –
Net revenue excluding above item* $ 2,636 $ 2,614 $ 2,656 1 (2)
Impact of foreign exchange translation – (1)
Net revenue growth excluding above item, on a constant currency basis* 1 (2)**
Operating profit $ 695 $ 797 $ 741 (13) 8
Restructuring and impairment charges 9 18 –
53rd week – (12) –
Operating profit excluding above items* $ 704 $ 803 $ 741 (12) 8
Impact of foreign exchange translation – (0.5)
Operating profit growth excluding above items, on a constant currency basis* (12) 8**
* See “Non-GAAP Measures”
** Does not sum due to rounding
2012
Net revenue and volume declined 1%. The net revenue decline
reflects the lower volume, partially offset by effective net
pricing. The volume decline primarily reflects a double-digit
decline in Chewy granola bars and a low-single-digit decline
in oatmeal, partially offset by the introduction of Soft Baked
Cookies in the second quarter. The volume and net revenue
declines reflect the impact of the 53rd week in 2011, which
contributed nearly 2percentage points to both the net rev-
enue and volume declines.
Operating profit declined 13%, primarily reflecting higher
commodity costs, which negatively impacted operating
profit performance by 9 percentage points, partially offset
by lower general and administrative expenses and effective
net pricing. The net impact of acquisitions and divestitures,
including a partnership investment in 2012 and the gain on
the divestiture of a business in the prior year, reduced operat-
ing profit performance by 5percentage points. Additionally,
the benefit from a change in accounting methodology for
inventory and the sale of a distribution center, both of which
were recorded in the prior year, each contributed 2percent-
age points to the operating profit decline. The net impact of
items affecting comparability in the above table (see “Items
Affecting Comparability”) negatively impacted operating
profit performance by 1percentage point.
2011
Net revenue was flat and volume declined 5%. The impact of
positive net pricing, driven primarily by price increases taken
in the fourth quarter of 2010, was partially offset by negative
mix. The volume decline primarily reflects double-digit volume
declines in ready-to-eat cereals and Chewy granola bars, as
well as a mid-single-digit decline in Aunt Jemima syrup and
mix. Favorable foreign exchange contributed nearly 1percent-
age point to the net revenue performance. The 53rd week
positively contributed almost 2percentage points to both the
net revenue and volume performance.
Operating profit grew 8%, primarily reflecting the favorable
effective net pricing, partially offset by the volume declines.
Gains on the divestiture of a business and the sale of a distribu-
tion center increased operating profit growth by 4percentage
points, and a change in accounting methodology for inven-
tory contributed 2 percentage points to operating profit
growth (see Note1 to our consolidated financial statements).
Management’s Discussion and Analysis
2012 PEPSICO ANNUAL REPORT 61