Kraft Foods Inc. Reports 2001 Results.Business Editors NORTHFIELD Northfield, city (1990 pop. 14,684), Rice co., SE Minn., near Minneapolis–St. Paul, on the Cannon River; inc. 1875. It is the trade center for a dairy and farming region. Manufactures include printed circuit boards, toys, feeds and seeds, and cereals. On Sept. , Ill.--(BUSINESS WIRE)--Jan. 29, 2002
Fourth-Quarter 2001 Highlights:
- Pro forma worldwide volume up 0.3%. On a comparable basis,
excluding an extra week of shipments in the fourth quarter of
2000, volume was up 5.3%.
- Pro forma operating companies income up 11.4% to $1.6 billion.
- Pro forma net earnings up 33.7% to $556 million.
- Pro forma diluted earnings per share up 33.3% to $0.32.
- Reported operating companies income up 38.4%. Reported net
earnings increased 32.0% to $548 million and reported diluted
earnings per share were up 10.3% to $0.32.
Full-Year 2001 Highlights:
- Pro forma worldwide volume up 2.5%. On a comparable basis,
excluding an extra week of shipments in 2000, volume was up 3.7%.
- Pro forma operating companies income up 8.9% to $6.1 billion.
- Pro forma net earnings up 19.9% to $2.1 billion.
- Pro forma diluted earnings per share up 19.8% to $1.21.
- Reported operating companies income increased 26.9%. However, due
to the impact of the Nabisco acquisition on interest expense and
goodwill amortization, reported net earnings were down 5.9% to
$1.9 billion and reported diluted earnings per share were down
15.2% to $1.17.
Pro Forma results assume Kraft owned Nabisco for all of 2000, rather
than from the actual acquisition date of December 11, 2000. In
addition, pro forma results assume common shares outstanding of 1.735
billion based on the assumption that shares issued immediately
following the Kraft initial public offering (IPO) were outstanding
during all periods presented and that, effective January 1, 2000, the
net proceeds of the IPO were used to retire indebtedness incurred to
finance the Nabisco acquisition. These results also adjust for certain
items as detailed on the last page of this release, including results
from operations divested since the beginning of 2000.
Reported results include the operating results of Nabisco in 2001, but
not in 2000. Reported results also reflect average shares of common
stock outstanding during 2001 and assume an average of 1.455 billion
shares outstanding during 2000.
Both pro forma and reported results for fiscal year 2001 are based on
a 52-week year while fiscal 2000 results reflect a 53-week year, with
the extra week occurring in the fourth quarter. Where noted, results
excluding the impact of the 53rd week have been provided for more
meaningful comparison.
Unless otherwise stated, all comparisons are for business results in
the fourth quarter or full-year 2001, respectively, versus the fourth
quarter or full-year 2000.
Audio Webcast:
A conference call with members of the investment community will be
Webcast at 5:00 p.m. ET on January 29, 2002. Access is available at
www.kraft.com.
Kraft Foods Inc. Reports 2001 Results
Fourth-Quarter 2001:
Pro Forma Diluted E.P.S. Up 33.3% to $0.32
Pro Forma Net Earnings Up 33.7% to $556 Million
Reported Diluted E.P.S. Up 10.3% to $0.32
Reported Net Earnings Up 32.0% to $548 Million
Full-Year 2001:
Pro Forma Diluted E.P.S. Up 19.8% to $1.21
Pro Forma Net Earnings Up 19.9% to $2.1 Billion
Reported Diluted E.P.S. Down 15.2% to $1.17
Reported Net Earnings Down 5.9% to $1.9 Billion
NORTHFIELD, Ill.--Jan. 29, 2002--Kraft Foods Inc. (NYSE: KFT), a
global leader in branded foods and beverages, announced today that
full-year 2001 pro forma diluted earnings per share rose 19.8% to
$1.21, meeting the high end of the company's previously announced
earnings target. Pro forma net earnings increased 19.9% to $2.1
billion. Fourth-quarter 2001 pro forma diluted earnings per share
increased 33.3% to $0.32 per share with pro forma net earnings up
33.7% to $556 million.
"This was an outstanding year for Kraft," said Betsy D. Holden,
Co-Chief Executive Officer of Kraft Foods. "We delivered superior
results and enhanced shareholder value, while strengthening our
business for the future with the successful integration of Nabisco."
"In the fourth quarter, we achieved a strong increase in earnings
driven by good volume growth across most of our businesses,
significant productivity and synergy savings, and lower interest
expense. Our volume increase was driven by new products and strong
growth in developing markets," said Roger K. Deromedi, Co-Chief
Executive Officer of Kraft Foods.
"The integration of Nabisco continues to progress smoothly and is
ahead of our business plan," Holden said. "We are building new growth
opportunities with joint promotions and cross-branding initiatives. We
exceeded our synergy target and we are on track to deliver our net
cost synergy targets in 2002."
"We look forward to continued strong performance in 2002. For the
full year, we project a 14% to 16% increase in diluted earnings per
share to a range of $2.00 to $2.05," Deromedi said. This projected
rate of growth is from a base of $1.76 for 2001, which includes the
elimination of amortization expense related to indefinite-life
goodwill and intangible assets, and adjusts for the initial public
offering of Kraft Foods Inc. common stock, as if that offering had
occurred on January 1, 2001. The impact of currency, and economic
weakness in certain international markets, as well as other factors
described in the Forward-Looking and Cautionary Statements section of
this release, are risks to this projection. (Please see financial
tables for quarterly reconciliation adjusting for impact of SFAS
141/142 and the Kraft IPO.)
In June 2001, Kraft completed an initial public offering of 16.1%
of its outstanding shares, raising $8.4 billion in net proceeds which
were used to retire debt. Subsequently, Kraft declared two regular
quarterly dividends totaling $0.26 per common share.
Fourth-Quarter 2001 Results
On a reported basis for the fourth quarter of 2001, worldwide
volume increased 29.8%; operating revenues increased 27.3% to $8.8
billion; and operating companies income increased 38.4% to $1.5
billion, primarily reflecting the acquisition of Nabisco. Net earnings
increased 32.0% to $548 million and diluted earnings per share
increased 10.3% to $0.32.
On a pro forma basis, worldwide volume for the fourth quarter
increased 0.3% reflecting one less week of shipments in 2001. On a
comparable basis, excluding the extra week of shipments, volume
increased 5.3%. Volume was driven by continuing new product momentum
and strong growth in developing markets.
Operating revenues decreased 1.2% to $8.8 billion, due to the
extra week of sales in 2000, reduced coffee prices in response to
lower coffee commodity costs, product mix and the adverse effect of
currency. On a comparable basis, excluding the extra week of sales in
2000 and the adverse effect of currency of $19 million, operating
revenues increased 3.8%.
Operating companies income increased 11.4% to $1.6 billion driven
by productivity and synergy savings. Net earnings increased 33.7% and
diluted earnings per share grew 33.3% due to growth in operating
companies income and reduced interest expense.
Full-Year 2001 Results
On a reported basis for full-year 2001, worldwide volume
increased 32.5%; operating revenues increased 27.7% to $33.9 billion;
and operating companies income increased 26.9% to $6.0 billion,
primarily reflecting the acquisition of Nabisco. Net earnings
decreased 5.9% to $1.9 billion and diluted earnings per share
decreased 15.2% to $1.17 as a result of higher interest expense and
goodwill amortization from the Nabisco acquisition. Included in
reported results are charges of $82 million which includes $29 million
related to closing a Kraft cheese facility in the first quarter and
$53 million for Kraft site reconfigurations and other consolidation
programs, of which the latter is part of the previously communicated
$200-$300 million in charges to be recorded as Kraft and Nabisco are
integrated.
On a pro forma basis, full-year volume grew 2.5%, reflecting the
success of new products and strong gains in developing markets. On a
comparable 52-week basis, volume increased 3.7%.
Operating revenues decreased 0.5% as the favorable impact of
volume growth was more than offset by the extra week of sales in 2000,
the adverse effect of currency, lower coffee prices and product mix.
On a comparable basis, excluding the extra week of sales in 2000 and
the adverse effect of currency of $540 million, operating revenues
increased 2.3%.
Operating companies income increased 8.9% to $6.1 billion driven
by volume growth, productivity savings and Nabisco synergies.
Excluding unfavorable currency of $59 million, operating companies
income would have increased 9.9%. Net earnings increased 19.9% and
diluted earnings per share grew 19.8% driven by growth in operating
companies income and lower interest expense.
To allow for a more meaningful comparison of business results,
the following discussion is on a pro forma basis. Pro forma results
assume Kraft owned Nabisco for all of 2000, rather than from the
actual acquisition date of December 11, 2000. In addition, pro forma
results assume common shares outstanding of 1.735 billion based on the
assumption that shares issued immediately following the Kraft initial
public offering (IPO) were outstanding during all periods presented
and that, effective January 1, 2000, the net proceeds of the IPO were
used to retire indebtedness incurred to finance the Nabisco
acquisition. These results also adjust for certain items as detailed
on the last page of this release, including results from operations
divested since the beginning of 2000.
In addition, the results for fiscal year 2001 are based on a
52-week year while fiscal year 2000 results reflect a 53-week year,
with the extra week occurring in the fourth quarter. For a more
meaningful comparison, volume results below exclude the impact of the
extra week in 2000 for Kraft Foods North America and Kraft Foods
International.
KRAFT FOODS NORTH AMERICA
Fourth-Quarter 2001 Results
In the fourth quarter, volume for Kraft Foods North America
(KFNA) increased 5.0% led by growth in the Beverages, Desserts and
Cereals segment, the Biscuits, Snacks and Confectionery segment and
the Cheese, Meals and Enhancers segment.
KFNA operating companies income improved a strong 12.4% due to
productivity and synergy savings.
Following are results by segment for KFNA:
Cheese, Meals and Enhancers volume grew 3.1% driven by strong
gains in Meals, Enhancers and Canada, partially offset by declines in
Cheese and Foodservice due primarily to our exit from lower margin,
non-branded businesses. Operating companies income increased 12.7%
driven by volume growth, productivity savings and reduced marketing
spending in response to higher dairy commodity costs.
Biscuits, Snacks and Confectionery volume increased 2.8% as solid
gains in Biscuits, fueled by continued momentum in our core cookie and
cracker businesses, were partially offset by declines in Confectionery
volume due to reduced holiday programming in our chocolate business.
Operating companies income increased a strong 22.4% due primarily to
volume gains and synergy savings.
Beverages, Desserts and Cereals volume rose a strong 14.2% led by
continued momentum in Beverages fueled by successful new products in
ready-to-drink beverages. Cereals and Coffee volume also grew while
Desserts volume declined due primarily to lower consumption in Jell-O
ready-to-eat desserts and trade inventory reductions in Cool Whip
frozen toppings. Operating companies income increased 6.4% driven
primarily by the increase in volume.
Oscar Mayer and Pizza volume was down 2.0% primarily reflecting
lower consumption and reduced trade inventories in luncheon meats and
Lunchables. Operating companies income increased 1.1% as productivity
and favorable mix more than offset lower volume and higher commodity
costs.
Full-Year 2001 Results
For the full year, volume for Kraft Foods North America increased
3.4%, aided by contributions from new products with gains across all
four business segments.
KFNA operating companies income improved a strong 9.0% driven by
higher volume, productivity and synergy savings.
Following are the results by segment for KFNA:
Cheese, Meals and Enhancers volume was up 0.9%. Operating
companies income increased 5.1% driven by volume growth, productivity
savings and reduced marketing spending in response to higher dairy
commodity costs.
In Cheese, after adjusting for our exit from lower-margin,
non-branded businesses, volume was essentially in-line with prior year
shipments. Within Cheese, increases in Kraft grated cheese and Kraft
natural cheese were offset by declines in Velveeta process cheese
loaves and Philadelphia cream cheese as retailers continue to reduce
trade inventory levels. Meals volume grew, driven by gains in Kraft
macaroni and cheese dinners. Shipments in Enhancers also increased,
driven by strong consumption of Kraft Miracle Whip, Kraft mayonnaise,
and Kraft salad dressings. In Canada, volume was up led by gains in
cheese, salad dressings, coffee and beverages, and by the continued
success of Kraft Delissio frozen pizza. Shipments in U.S. Foodservice
declined due to weakness in the economy and our exit from lower-margin
businesses.
Biscuits, Snacks and Confectionery volume increased 1.6% as solid
gains in Biscuits were partially offset by lower shipments in Snacks.
Operating companies income was up 24.6% due primarily to volume gains,
productivity and synergy savings. Biscuit volume gains were driven by
continued momentum in core cookie and cracker businesses, aided by
successful new products including Chocolate Creme Oreos, Mini Oreos,
Chips Ahoy! Candy-Blasts and Ritz Bits Sandwiches. In Snacks,
shipments of Planters nuts declined due primarily to aggressive
competitive activity in the snack nuts category.
Beverages, Desserts and Cereals recorded strong volume growth of
9.3% led by continued momentum in ready-to-drink beverages. Operating
companies income was up 7.0% driven primarily by the increase in
volume. Double-digit gains in ready-to-drink beverages reflected
continued success of new products, including Capri Sun Big Pouch,
Crystal Light in bottles and Kool-Aid Jammers. In Desserts, volume was
down driven by lower shipments of Jell-O dry packaged desserts and
Cool Whip frozen topping resulting from lower consumption and
reductions in trade inventories. Post cereal volume was lower
reflecting soft category performance and increased competition in the
ready-to-eat cereal category.
Oscar Mayer and Pizza volume increased 2.3% for the year.
Operating companies income increased 5.4%, driven by volume gains,
productivity and favorable mix more than offsetting higher commodity
costs. The processed meats business recorded volume gains in luncheon
meats, hot dogs, bacon and Boca meat alternatives. Lunchables
consumption continued to grow, benefiting from successful new products
including Lunchables Fun Snacks, however volume was lower due to
reductions in trade inventories. In Pizza, volume was higher due to
continued momentum in DiGiorno, aided by the introduction of DiGiorno
stuffed crust pizza, and expanded distribution of the California Pizza
Kitchen product line.
KRAFT FOODS INTERNATIONAL
Fourth-Quarter 2001 Results
In the fourth quarter, volume for Kraft Foods International (KFI)
increased 5.9% driven by strong momentum in the developing markets of
Central and Eastern Europe, Latin America and Asia Pacific, and growth
in the European Union.
Operating companies income increased 9.0% to $425 million, driven
by volume gains, continued productivity savings and Nabisco synergies.
On a constant currency basis, operating companies income increased
8.2%.
Following are results by segment for KFI:
Europe, Middle East and Africa (EMEA) volume grew 3.7% driven by
double-digit gains in Central and Eastern Europe and growth in the
European Union (EU). Beverages, snacks and convenient meals growth was
partially offset by declines in cheese and grocery. Operating
companies income declined 2.0% as higher marketing and administrative
expenses more than offset volume increases.
Latin America and Asia Pacific (LAAP) volume grew 9.4% as
continued momentum in numerous markets was partially offset by a
decline in Argentina due to economic weakness. Beverages, snacks,
cheese and grocery all posted strong volume growth. Operating
companies income grew a strong 47.7% due to higher volume,
productivity and Nabisco synergies.
Full-Year 2001 Results
For the full year, volume for KFI increased 4.7% benefiting from
new products and a strong 11.3% growth in developing markets.
Operating companies income increased 8.5%, driven by volume
growth, continued productivity savings and Nabisco synergies.
Excluding an unfavorable currency impact of $48 million, operating
companies income increased 12.7%.
Following are results by segment for KFI:
Europe, Middle East and Africa (EMEA) volume increased 1.3% as
double-digit gains in Central and Eastern Europe and growth in
numerous EU countries were moderated by lower volumes in Germany and
Italy. Operating companies income increased 0.5% including an
unfavorable currency impact of $19 million. On a constant currency
basis, operating companies income would have increased 2.7%.
EMEA snacks volume increased, driven by favorable confectionery
and salty snacks performance, with strong sales in Central and Eastern
Europe benefiting from the expansion of Milka and Siesta chocolate and
Estrella salty snacks. Germany volume was lower, due to increased
price competition and trade inventory reductions.
Volume growth in EMEA beverages was driven by favorable
performance in both coffee and refreshment beverages. Coffee volume
was up across numerous markets benefiting from the expansion of Jacobs
Ebony and Jacobs Milea and acquisitions in Bulgaria, Romania and
Morocco. Overall coffee volume growth was moderated by trade inventory
reductions, particularly in Germany. However, Germany's coffee volume
was above prior year driven by strong consumption. Refreshment
beverages volume grew in the Middle East, benefiting from new Tang
flavors.
EMEA cheese volume was higher, as strong Philadelphia cream
cheese growth across the region was partially offset by lower cheese
volume in Germany.
EMEA convenient meals and grocery volume was down, as lower
canned meats volume in Italy and a decline in grocery volume in
Germany were moderated by continued success of Dairylea Lunchables and
Kraft salad dressings in the United Kingdom.
The acquisition of Stollwerck AG's Russian and Polish
confectionery businesses was completed on December 31, 2001.
Latin America and Asia Pacific (LAAP) volume increased 9.9%
driven by gains in numerous markets in Latin America and Asia Pacific,
partially offset by a decline in Argentina due to economic weakness.
Operating companies income increased 32.7%, driven by higher volume,
productivity savings and Nabisco synergies.
In snacks, LAAP recorded strong volume growth driven by increases
in Oreo, Chips Ahoy! and Trakinas cookies and Ritz and Club Social
crackers benefiting from successful new product introductions and
geographic expansion.
Double-digit LAAP beverage volume growth was driven by the strong
performance of Maxwell House coffee in Asia Pacific and Tang powdered
soft drinks in both Latin America and Asia Pacific.
Cheese volume in LAAP also grew strongly, driven by gains in
Philadelphia cream cheese and Kraft process cheese. Grocery volume
increased, benefiting from the introduction of new Royal desserts
products.
On January 15, 2002, Kraft announced the acquisition of Lanes
Food Group, a privately-held Australian biscuit company.
Kraft Foods Inc. is the largest branded food and beverage company
headquartered in the United States and the second largest worldwide.
Kraft Foods markets many of the world's leading food brands, including
Kraft cheese, Jacobs and Maxwell House coffees, Nabisco cookies and
crackers, Philadelphia cream cheese, Oscar Mayer meats, Post cereals
and Milka chocolates, in more than 140 countries.
Trademarks and service marks mentioned in this release are the
registered property of, or licenses by, the subsidiaries of Kraft
Foods Inc.
You may learn more by listening to a live audio webcast of the
Kraft conference call with members of the investment community at 5:00
p.m. ET on January 29, 2002. Access is available at www.kraft.com. A
complete copy of the Company's audited 2001 financial statements will
be available through the Company's Web site after it is filed with the
SEC on or about January 30, 2002. If you do not have Internet access
but would like to receive a copy of the audited 2001 financial
statements of Kraft Foods Inc., please call toll-free (800) 295-1255
to request a copy.
Forward-Looking and Cautionary Statements
This press release contains projections of future results and
other forward-looking statements that involve a number of risks and
uncertainties and are made pursuant to the Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995. The following
important factors could cause actual results and outcomes to differ
materially from those contained in such forward-looking statements.
The Company is subject to unfavorable currency movements, intense
competition, changes in consumer preferences and demand for its
products, changing prices for raw materials, fluctuations in levels of
customer inventories and the effects of foreign economies and local
economic and market conditions. For example, in 2002, we anticipate
that the economic downturn in Argentina may have an adverse effect on
LAAP's operating performance. The results of the Company are dependent
upon its continued ability to promote brand equity successfully; to
anticipate and respond to new consumer trends; to develop new products
and markets and to broaden brand portfolios; to compete effectively
with lower-priced products in a consolidating environment at the
retail and manufacturing levels; to improve productivity; to
successfully integrate Nabisco's operations with its own; and other
risks detailed from time to time in the Company's publicly-filed
documents, including the Prospectus related to its initial public
offering of shares. The Company cautions that the foregoing list of
important factors is not complete and does not undertake to update any
forward-looking statement.
KRAFT FOODS INC.
and Subsidiaries
Condensed Statements of Earnings
For the Quarters Ended December 31,
($ in millions, except per share data)
REPORTED
-------------------------------------
2001 2000 % Change
----------- ------------ ------------
Operating revenues $ 8,760 $ 6,883 27.3 %
Cost of sales 4,648 3,722 24.9 %
----------- ------------
Gross profit 4,112 3,161 30.1 %
Marketing, admin-
istration and research
costs 2,554 2,047 24.8 %
Loss on sale of a North
American food factory
and integration costs 16 -
----------- ------------
Operating companies
income 1,542 1,114 38.4 %
Amortization of
goodwill 243 132
General corporate
expenses 48 57
Interest and other debt
expense, net 248 216
----------- ------------
Earnings before income
taxes 1,003 709 41.5 %
Provision for income
taxes 455 294 54.8 %
----------- ------------
Net earnings $ 548 $ 415 32.0 %
=========== ============
Basic earnings per
share (b) $ 0.32 $ 0.29 10.3 %
=========== ============
Diluted earnings per
share (b) $ 0.32 $ 0.29 10.3 %
=========== ============
Weighted average number
of shares
outstanding - Basic 1,735 1,455 19.2 %
- Diluted 1,736 1,455 19.3 %
PRO FORMA (a)
--------------------------------------
2001 2000 % Change
------------ ----------- ------------
Operating revenues $ 8,760 $ 8,862 (1.2) %
Operating companies
income $ 1,558 $ 1,398 11.4 %
Net earnings $ 556 $ 416 33.7 %
============ ============
Basic earnings per
share (b) $ 0.32 $ 0.24 33.3 %
============ ============
Diluted earnings per
share (b) $ 0.32 $ 0.24 33.3 %
============ ============
Weighted average number
of shares
outstanding - Basic 1,735 1,735 - %
- Diluted 1,736 1,735 - %
(a) Results are presented on a pro forma basis as if Nabisco had been
acquired on Jan. 1, 2000 and the initial public offering had been
completed for all the periods presented.
(b) Basic and Diluted earnings per share are computed for each of the
periods presented. Accordingly, the sum of the quarterly earnings
per share amounts may not agree to the year-to-date amounts.
KRAFT FOODS INC.
and Subsidiaries
Volume by Business Segments
For the Quarters Ended December 31,
(pounds in millions)
% Change vs. 2000 (a)
----------------------------
14-Week 13-Week
REPORTED VOLUME 2001 Quarter Quarter
--------------- ------------ -------------- -------------
KF North America:
Cheese, Meals and
Enhancers 1,274 5.2 % 12.3 %
Biscuits, Snacks and
Confectionery 630 100.0+ % 100.0+ %
Beverages, Desserts
and Cereals 772 5.6 % 12.9 %
Oscar Mayer and
Pizza 335 (9.2) % (2.0) %
------------
Total KF North America
reported volume 3,011 29.3 % 38.4 %
------------
KF International:
Europe, Middle East
and Africa 827 (0.7) % 5.7 %
Latin America and
Asia Pacific 558 100.0+ % 100.0+ %
------------
Total KF International
reported volume 1,385 30.9 % 38.2 %
------------
Total Kraft Foods Inc.
reported volume 4,396 29.8 % 38.3 %
------------
Divested Businesses:
Europe, Middle East
and Africa (1)
Latin America and
Asia Pacific (7)
% Change vs. 2000 (a)
-----------------------------
14-Week 13-Week
PRO FORMA VOLUME 2001 Quarter Quarter
------------ ------------- -------------
KF North America:
----------------
Cheese, Meals and
Enhancers 1,274 (3.0) % 3.1 %
Biscuits, Snacks and
Confectionery 630 2.6 % 2.8 %
Beverages, Desserts
and Cereals 772 6.8 % 14.2 %
Oscar Mayer and
Pizza 335 (9.2) % (2.0) %
Total KF North American------------
pro forma volume 3,011 (0.3) % 5.0 %
------------
KF International:
Europe, Middle East
and Africa 826 (2.5) % 3.7 %
Latin America and
Asia Pacific 551 8.3 % 9.4 %
------------
Total KF International
pro forma volume 1,377 1.5 % 5.9 %
------------
Total Kraft Foods Inc.
pro forma volume 4,388 0.3 % 5.3 %
============
(a) Both pro forma and reported results for the fourth quarter
2001 are based on a 13-week period while fourth quarter 2000 results
reflect a 14-week period. For a more meaningful comparison, volume
results above are also compared to prior year excluding the extra week
in 2000.
KRAFT FOODS INC.
and Subsidiaries
Operating Revenues by Business Segments
For the Quarters Ended December 31,
($ in millions)
REPORTED OPERATING
REVENUES 2001 2000 % Change
---------------------------------- ------------ -------------
KF North America:
Cheese, Meals and
Enhancers $ 2,576 $ 2,429 6.1 %
Biscuits, Snacks and
Confectionery 1,607 107 100.0+ %
Beverages, Desserts
and Cereals 1,264 1,251 1.0 %
Oscar Mayer and
Pizza 804 852 (5.6) %
----------- ------------
Total KF North America
reported operating
revenues 6,251 4,639 34.7 %
----------- ------------
KF International:
Europe, Middle East
and Africa 1,862 1,912 (2.6) %
Latin America and
Asia Pacific 647 332 94.9 %
----------- ------------
Total KF International
reported operating
revenues 2,509 2,244 11.8 %
----------- ------------
Total Kraft Foods Inc.
reported operating
revenues 8,760 6,883 27.3 %
----------- ------------
Divested Businesses:
Europe, Middle East
and Africa - (1)
Latin America and
Asia Pacific - (4)
NABISCO ACQUISITION:
Cheese, Meals and
Enhancers - 194
Biscuits, Snacks and
Confectionery - 1,453
Beverages, Desserts
and Cereals - 2
Europe, Middle East
and Africa - 15
Latin America and
Asia Pacific - 320
PRO FORMA OPERATING
REVENUES 2001 2000 % Change
---------------------------------- ------------ -------------
KF North America:
----------------
Cheese, Meals and
Enhancers 2,576 2,623 (1.8) %
Biscuits, Snacks and
Confectionery 1,607 1,560 3.0 %
Beverages, Desserts
and Cereals 1,264 1,253 0.9 %
Oscar Mayer and
Pizza 804 852 (5.6) %
----------- ------------
Total KF North American
pro forma operating
revenues 6,251 6,288 (0.6) %
----------- ------------
KF International:
Europe, Middle East
and Africa 1,862 1,926 (3.3) %
Latin America and
Asia Pacific 647 648 (0.2) %
----------- ------------
Total KF International
pro forma operating
revenues 2,509 2,574 (2.5) %
----------- ------------
Total Kraft Foods Inc.
pro forma operating
revenues $8,760 $ 8,862 (1.2) %
=========== ============
Note: Both pro forma and reported results for the fourth quarter
2001 are based on a 13-week period while fourth quarter 2000 results
reflect a 14-week period.
KRAFT FOODS INC.
and Subsidiaries
Operating Companies Income by Business Segments
For the Quarters Ended December 31,
($ in millions)
REPORTED OPERATING COMPANIES INCOME 2001 2000 % Change
----------------------------------------------------------------------
KF North America:
-----------------
Cheese, Meals and Enhancers $ 512 $ 408 25.5 %
Biscuits, Snacks and Confectionery 277 36 100.0+ %
Beverages, Desserts and Cereals 245 220 11.4 %
Oscar Mayer and Pizza 83 87 (4.6)%
-----------------
Total KF North America reported
operating companies income 1,117 751 48.7 %
-----------------
KF International:
-----------------
Europe, Middle East and Africa 298 304 (2.0)%
Latin America and Asia Pacific 127 59 100.0+ %
-----------------
Total KF International reported
operating companies income 425 363 17.1 %
-----------------
Total Kraft Foods Inc. reported
operating companies income 1,542 1,114 38.4 %
=================
Divested Businesses:
Europe, Middle East and Africa - (1)
Latin America and Asia Pacific - (1)
Loss on Sale of a North American food
factory and Integration Costs:
Cheese, Meals and Enhancers 3 -
Biscuits, Snacks and Confectionery 2 -
Beverages, Desserts and Cereals 6 -
Oscar Mayer and Pizza 5 -
NABISCO ACQUISITION:
--------------------
Cheese, Meals and Enhancers - 49
Biscuits, Snacks and Confectionery - 192
Beverages, Desserts and Cereals - 16
Europe, Middle East and Africa - 1
Latin America and Asia Pacific - 28
PRO FORMA OPERATING COMPANIES INCOME 2001 2000 % Change
----------------------------------------------------------------------
KF North America:
-----------------
Cheese, Meals and Enhancers 515 457 12.7 %
Biscuits, Snacks and Confectionery 279 228 22.4 %
Beverages, Desserts and Cereals 251 236 6.4 %
Oscar Mayer and Pizza 88 87 1.1 %
-----------------
Total KF North America pro forma
operating companies income 1,133 1,008 12.4 %
-----------------
KF International:
-----------------
Europe, Middle East and Africa 298 304 (2.0)%
Latin America and Asia Pacific 127 86 47.7 %
-----------------
Total KF International pro forma
operating companies income 425 390 9.0 %
-----------------
Total Kraft Foods Inc. pro forma
operating companies income $ 1,558 $ 1,398 11.4 %
=================
KRAFT FOODS INC.
and Subsidiaries
Condensed Statements of Earnings
For the Years Ended December 31,
($ in millions, except per share data)
REPORTED
-----------------------------------
2001 2000 % Change
-----------------------------------
Operating revenues $ 33,875 $ 26,532 27.7 %
Cost of sales 17,531 13,917 26.0 %
-----------------------
Gross profit 16,344 12,615 29.6 %
Marketing, administration
and research costs 10,227 7,999 27.9 %
Loss on sale of a North American
food factory and integration costs 82 -
Gain on sale of a French
confectionery business - (139)
-----------------------
Operating companies income 6,035 4,755 26.9 %
Amortization of goodwill 962 535
General corporate expenses 189 208
Interest and
other debt expense, net 1,437 597
-----------------------
Earnings before income taxes 3,447 3,415 0.9 %
Provision for income taxes 1,565 1,414 10.7 %
-----------------------
Net earnings $ 1,882 $ 2,001 (5.9)%
=======================
Basic earnings per share (b) $ 1.17 $ 1.38 (15.2)%
=======================
Diluted earnings per share (b) $ 1.17 $ 1.38 (15.2)%
=======================
Weighted average number of
shares outstanding - Basic 1,610 1,455 10.7 %
- Diluted 1,610 1,455 10.7 %
PRO FORMA (a)
-----------------------------------
2001 2000 % Change
-----------------------------------
Operating revenues $ 33,871 $ 34,033 (0.5)%
Operating companies income $ 6,116 $ 5,616 8.9 %
Net earnings $ 2,092 $ 1,745 19.9 %
=======================
Basic earnings per share (b) $ 1.21 $ 1.01 19.8 %
=======================
Diluted earnings per share (b) $ 1.21 $ 1.01 19.8 %
=======================
Weighted average number of
shares outstanding - Basic 1,735 1,735 - %
- Diluted 1,735 1,735 - %
(a) Results are presented on a pro forma basis as if Nabisco
had been acquired on Jan.1, 2000 and the initial public offering
had been completed for all the periods presented.
(b) Basic and Diluted earnings per share are computed for
each of the periods presented. Accordingly, the sum of the
quarterly earnings per share amounts may not agree to the
year-to-date amounts.
KRAFT FOODS INC.
and Subsidiaries
Volume by Business Segments
For the Years Ended December 31,
(pounds in millions)
% Change vs 2000 (a)
--------------------
53-Week 52-Week
REPORTED VOLUME 2001 Year Year
----------------------------------------------------------------------
KF North America:
Cheese, Meals and Enhancers 5,219 8.3% 10.0%
Biscuits, Snacks and Confectionery 2,350 100.0+% 100.0+%
Beverages, Desserts and Cereals 3,421 9.8% 11.4%
Oscar Mayer and Pizza 1,519 0.8% 2.6%
-----------
Total KF North America
reported volume 12,509 31.7% 33.8%
-----------
KF International:
Europe, Middle East and Africa 2,826 (0.1)% 1.7%
Latin America and Asia Pacific 2,057 100.0+% 100.0+%
-----------
Total KF International
reported volume 4,883 34.4% 36.5%
-----------
Total Kraft Foods Inc.
reported volume 17,392 32.5% 34.6%
-----------
Divested Businesses:
Europe, Middle East and Africa (1)
Latin America and Asia Pacific (17)
% Change vs 2000 (a)
--------------------
53-Week 52-Week
PRO FORMA VOLUME 2001 Year Year
----------------------------------------------------------------------
KF North America:
Cheese, Meals and Enhancers 5,219 (0.6)% 0.9%
Biscuits, Snacks and Confectionery 2,350 1.5% 1.6%
Beverages, Desserts and Cereals 3,421 7.7% 9.3%
Oscar Mayer and Pizza 1,519 0.5% 2.3%
-----------
Total KF North America
pro forma volume 12,509 2.1% 3.4%
-----------
KF International:
Europe, Middle East and Africa 2,825 (0.5)% 1.3%
Latin America and Asia Pacific 2,040 9.6% 9.9%
-----------
Total KF International
pro forma volume 4,865 3.5% 4.7%
-----------
Total Kraft Foods Inc.
pro forma volume 17,374 2.5% 3.7%
===========
(a) Both pro forma and reported results for the fiscal year 2001
are based on a 52-week year while fiscal 2000 results reflect a
53-week year with the extra week occurring in the fourth quarter. For
a more meaningful comparison, volume results above are also compared
to prior year excluding the extra week in 2000.
KRAFT FOODS INC.
and Subsidiaries
Operating Revenues by Business Segments
For the Years Ended December 31,
($ in millions)
REPORTED OPERATING
REVENUES 2001 2000 % Change
----------------------------------- --------------- --------------
KF North America:
Cheese, Meals and
Enhancers $ 10,256 $ 9,405 9.0 %
Biscuits, Snacks and
Confectionery 5,917 329 100.0+ %
Beverages, Desserts
and Cereals 5,370 5,266 2.0 %
Oscar Mayer and
Pizza 3,563 3,461 2.9 %
------------ ---------------
Total KF North American
reported operating
revenues 25,106 18,461 36.0 %
KF International:
Europe, Middle East
and Africa 6,339 6,824 (7.1) %
Latin America and
Asia Pacific 2,430 1,247 94.9 %
------------ ---------------
Total KF International
reported operating
revenues 8,769 8,071 8.6 %
------------ ---------------
Total Kraft Foods Inc.
reported operating
revenues 33,875 26,532 27.7 %
------------ ---------------
Incremental Year 2000
Business:
Cheese, Meals and
Enhancers - 34 `
Biscuits, Snacks and
Confectionery - 3
Beverages, Desserts
and Cereals - 22
Oscar Mayer and
Pizza - 12
Europe, Middle East
and Africa - 14
Latin America and
Asia Pacific - 12
Divested Businesses:
Cheese, Meals and
Enhancers - (10)
Europe, Middle East
and Africa - (131)
Latin America and
Asia Pacific (4) (21)
NABISCO ACQUISITION:
-------------------
Cheese, Meals and
Enhancers - 843
Biscuits, Snacks and
Confectionery - 5,429
Beverages, Desserts
and Cereals - 107
Europe, Middle East
and Africa - 47
Latin America and
Asia Pacific - 1,140
PRO FORMA OPERATING
REVENUES 2001 2000 % Change
------------------------------------- ------------- ---------------
KF North America:
Cheese, Meals and
Enhancers 10,256 10,272 (0.2) %
Biscuits, Snacks and
Confectionery 5,917 5,761 2.7 %
Beverages, Desserts
and Cereals 5,370 5,395 (0.5) %
Oscar Mayer and
Pizza 3,563 3,473 2.6 %
-------------- -------------
Total KF North American
pro forma operating
revenues 25,106 24,901 0.8 %
-------------- -------------
KF International:
Europe, Middle East
and Africa 6,339 6,754 (6.1) %
Latin America and
Asia Pacific 2,426 2,378 2.0 %
-------------- -------------
Total KF International
pro forma operating
revenues 8,765 9,132 (4.0) %
-------------- -------------
Total Kraft Foods Inc.
pro forma operating
revenues $ 33,871 $ 34,033 (0.5) %
============== =============
Note: Both pro forma and reported results for the fiscal year 2001
are based on a 52-week year while fiscal 2000 results reflect a
53-week year with the extra week occurring in the fourth quarter.
KRAFT FOODS INC.
and Subsidiaries
Operating Companies Income by Business Segments
For the Years Ended December 31,
($ in millions)
REPORTED OPERATING
COMPANIES INCOME 2001 2000 % Change
------------------------------------- -------------- -------------
KF North America:
----------------
Cheese, Meals and
Enhancers $ 2,099 $ 1,845 13.8 %
Biscuits, Snacks and
Confectionery 966 100 100.0+ %
Beverages, Desserts
and Cereals 1,192 1,090 9.4 %
Oscar Mayer and
Pizza 539 512 5.3 %
-------------- --------------
Total KF North American
reported operating
companies income 4,796 3,547 35.2 %
-------------- --------------
KF International:
Europe, Middle East
and Africa 861 1,019 (15.5) %
Latin America and
Asia Pacific 378 189 100.0 %
-------------- --------------
Total KF International
reported operating
companies income 1,239 1,208 2.6 %
-------------- --------------
Total Kraft Foods Inc.
reported operating
companies income 6,035 4,755 26.9 %
-------------- --------------
Incremental Year 2000
Business:
Cheese, Meals and
Enhancers - 15
Biscuits, Snacks and
Confectionery - 1
Beverages, Desserts
and Cereals - 7
Oscar Mayer and
Pizza - 4
Europe, Middle East
and Africa - 8
Latin America and
Asia Pacific - 5
Divested Businesses:
Cheese, Meals and
Enhancers - (4)
Europe, Middle East
and Africa - (32)
Latin America and
Asia Pacific (1) (3)
Loss on Sale of a North
American food factory
and Integration
Costs:
Cheese, Meals and
Enhancers 63 -
Biscuits, Snacks and
Confectionery 2 -
Beverage, Desserts
and Cereals 12 -
Oscar Mayer and
Pizza 5 -
Gain on Sale of a
French Confectionery
Business
Europe, Middle East
and Africa - (139)
NABISCO ACQUISITION:
-------------------
Cheese, Meals and
Enhancers - 201
Biscuits, Snacks and
Confectionery - 676
Beverages, Desserts
and Cereals - 28
Europe, Middle East
and Africa - 1
Latin America and
Asia Pacific - 93
PRO FORMA OPERATING
COMPANIES INCOME 2001 2000 % Change
------------------------------------- -------------- -------------
KF North America:
Cheese, Meals and
Enhancers 2,162 2,057 5.1 %
Biscuits, Snacks and
Confectionery 968 777 24.6 %
Beverages, Desserts
and Cereals 1,204 1,125 7.0 %
Oscar Mayer and
Pizza 544 516 5.4 %
-------------- --------------
Total KF North American
pro forma operating
companies income 4,878 4,475 9.0 %
-------------- --------------
KF International:
Europe, Middle East
and Africa 861 857 0.5 %
Latin America and
Asia Pacific 377 284 32.7 %
-------------- --------------
Total KF International
pro forma operating
companies income 1,238 1,141 8.5 %
-------------- --------------
Total Kraft Foods Inc.
pro forma operating
companies income $ 6,116 $ 5,616 8.9 %
============== ==============
KRAFT FOODS INC.
and Subsidiaries
Diluted Earnings per Share
Reconciliation of Reported to Pro forma Results
For the Quarters Ended December 31,
($ and shares in millions, except per share data)
2001 2000 % Change
------------------------
Reported Net Earnings $ 548 $ 415 32.0 %
After-tax effect of incremental year 2000
income, loss on sale of food factory and
integration costs (a) 8 -
Nabisco results (b) - (89)
Lower after-tax interest expense
assuming 1/1/00 IPO date - 90
---------------
Pro forma net earnings $ 556 $ 416 33.7 %
===============
Average shares outstanding 1,736 1,455
Adjustment to reflect shares
outstanding after IPO - 280
---------------
Pro forma shares outstanding 1,736 1,735
===============
Pro forma diluted earnings per share $ 0.32 $ 0.24 33.3 %
===============
For the Years Ended December 31,
($ and shares in millions, except per share data)
2001 2000 % Change
------------------------
Reported Net Earnings $ 1,882 $ 2,001 (5.9)%
After-tax effect of incremental year 2000
income, loss on sale of food factory and
integration costs and divestiture gain (a) 45 (58)
Nabisco results (b) - (561)
Lower after-tax interest expense
assuming 1/1/00 IPO date 165 363
---------------
Pro forma net earnings $ 2,092 $ 1,745 19.9 %
===============
Average shares outstanding 1,610 1,455
Adjustment to reflect shares
outstanding after IPO 125 280
---------------
Pro forma shares outstanding 1,735 1,735
===============
Pro forma diluted earnings per share $ 1.21 $ 1.01 19.8 %
===============
(a) See notes on last page.
(b) Nabisco results include goodwill amortization and interest
expense as if Nabisco had been acquired on January 1, 2000.
KRAFT FOODS INC.
and Subsidiaries
Reconciliation to Pro Forma 2001 Diluted EPS Adjusted for the Impact
of SFAS 141/142 and the Kraft IPO (c)
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
-------------------------------
Reported diluted EPS $ 0.22 $ 0.33 $ 0.29 $ 0.32
Loss on sale of food factory and
integration costs 0.01 - 0.01 -
Interest reduction assuming full-year
IPO 0.06 0.05 - -
Share impact of IPO (0.04) (0.05) - -
-------------------------------
Pro forma diluted EPS 0.25 0.33 0.30 0.32
Cessation of goodwill amortization 0.14 0.14 0.14 0.14
Pro forma diluted EPS Adjusted for -------------------------------
SFAS 141/142 and the Kraft IPO $ 0.39 $ 0.47 $ 0.44 $ 0.46
===============================
Full
Year
-------
Reported diluted EPS $ 1.17
Loss on sale of food factory and
integration costs 0.02
Interest reduction assuming full-year
IPO 0.11
Share impact of IPO (0.09)
-------
Pro forma diluted EPS 1.21
Cessation of goodwill amortization 0.55
Pro forma diluted EPS Adjusted for -------
SFAS 141/142 and the Kraft IPO $ 1.76
=======
(c) Diluted earning per share are computed for each of the periods
presented. Accordingly, the sum of the quarterly earnings per
share amounts may not agree to the year-to-date amounts.
KRAFT FOODS INC.
and Subsidiaries
Condensed Balance Sheets
($ in millions, except ratios)
December 31, December 31,
2001 2000
-------------------------------
Assets
Current assets $ 7,006 $ 7,152
Property, plant and equipment, net 9,109 9,405
Goodwill and other intangible assets,
net 35,957 31,584
Other assets 3,726 3,930
-------------------------------
Total assets $ 55,798 $ 52,071
===============================
Liabilities and Shareholders' Equity
Total current liabilities $ 8,875 $ 7,590
Long-term debt 8,134 2,695
Notes payable to parent and affiliates 5,000 21,407
Deferred income taxes 5,031 1,446
Other long-term liabilities 5,280 4,885
-------------------------------
Total liabilities 32,320 38,023
Total shareholders' equity 23,478 14,048
-------------------------------
Total liabilities and
shareholders' equity $ 55,798 $ 52,071
===============================
Total debt $ 16,007 $ 25,826
Debt/equity ratio 0.68 1.84
KRAFT FOODS INC.
and Subsidiaries
Notes to Condensed Statements of Earnings and Selected Financial Data
($ in millions)
The following pre-tax items had an impact on underlying results in
2001 and 2000:
Fourth Fourth Twelve Twelve
Quarter Quarter Months Months
2001 2000 2001 2000
------ ------ ------ ------
- Loss on sale of a North
American food factory
and integration costs $ 16 $ - $ 82 $ -
- Gain on sale of a French
confectionery business - - - (139)
- Related to incremental
Year 2000 business (a)
Kraft Foods North America - - - 27
Kraft Foods International - - - 13
------ ------ ------ ------
$ 16 $ - $ 82 $ (99)
====== ====== ====== =======
(a) Relates to sales of products that would normally have occurred in
January 2000, but were made in 1999 in order for the Company's
customers to avoid potential problems related to the Century Date
Change. These sales were previously excluded from the underlying
1999 fourth quarter results.
In addition, operating results of businesses sold since the
beginning of 2000 are excluded from underlying operating revenues
and operating companies income (but not from underlying net
earnings or earnings per share). Several international and
domestic food operations were divested since the beginning of
2000. No assumptions were made as to the application of proceeds
from the sales of any operations.
Operating revenues and operating companies income for all periods
presented were restated to reflect the transfer of management
responsibility for Mexico and Puerto Rico from the international
food business to the North American food business.
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