Kraft 2001 Annual Report Download - page 56

Kraft Foods Inc.
50
Reportable segment data were as follows:
(in millions)
For the Years Ended December 31, 2001 2000 1999
Operating revenues:
Cheese, Meals and Enhancers $10,256 $ 9,405 $ 9,360
Biscuits, Snacks and Confectionery 5,917 329 265
Beverages, Desserts and Cereals 5,370 5,266 5,074
Oscar Mayer and Pizza 3,563 3,461 3,198
Total Kraft Foods North America 25,106 18,461 17,897
Europe, Middle East and Africa 6,339 6,824 7,676
Latin America and Asia Pacific 2,430 1,247 1,224
Total Kraft Foods International 8,769 8,071 8,900
Total operating revenues $33,875 $26,532 $26,797
Operating companies income:
Cheese, Meals and Enhancers $ 2,099 $ 1,845 $ 1,658
Biscuits, Snacks and Confectionery 966 100 73
Beverages, Desserts and Cereals 1,192 1,090 1,009
Oscar Mayer and Pizza 539 512 450
Total Kraft Foods North America 4,796 3,547 3,190
Europe, Middle East and Africa 861 1,019 895
Latin America and Asia Pacific 378 189 168
Total Kraft Foods International 1,239 1,208 1,063
Total operating companies income 6,035 4,755 4,253
Amortization of goodwill and
other intangibles (962) (535) (539)
General corporate expenses (189) (208) (135)
Total operating income 4,884 4,012 3,579
Interest and other debt expense, net (1,437) (597) (539)
Earnings before income taxes $ 3,447 $ 3,415 $ 3,040
As previously noted, the Company’s international operations are
managed by geographic location. Operating revenues by consumer
sector for Kraft Foods International were as follows:
Consumer Sector
(in millions)
For the Years Ended December 31, 2001 2000 1999
Snacks $3,263 $2,723 $2,999
Beverages 3,097 3,201 3,551
Cheese 1,267 1,259 1,316
Grocery 866 584 664
Convenient Meals 276 304 370
To t a l $8,769 $8,071 $8,900
During 2001, the Company recorded pre-tax charges of $53 million
for site reconfigurations and other consolidation programs in the
United States. In addition, the Company recorded a pre-tax charge
of $29 million to close a North American food factory. These
pre-tax charges, which aggregate $82 million, were included in
marketing, administration and research costs in the consolidated
statement of earnings for the following segments: Cheese, Meals
and Enhancers, $63 million; Biscuits, Snacks and Confectionery,
$2 million; Beverages, Desserts and Cereals, $12 million; and Oscar
Mayer and Pizza, $5 million.
During 1999, the Company’s North American food business
announced that it was offering voluntary retirement incentive or
separation programs to certain eligible hourly and salaried
employees in the United States. Employees electing to terminate
employment under the terms of these programs were entitled to
enhanced retirement or severance benefits. Approximately 1,100
hourly and salaried employees accepted the benefits offered by
these programs and elected to retire or terminate. As a result, the
Company recorded a pre-tax charge of $157 million during 1999.
This charge was included in marketing, administration and research
costs in the consolidated statement of earnings for the following
segments: Cheese, Meals and Enhancers, $71 million; Oscar
Mayer and Pizza, $38 million; Biscuits, Snacks and Confectionery,
$2 million; and Beverages, Desserts and Cereals, $46 million.
Payments of pension and postretirement benefits are made in
accordance with the terms of the applicable benefit plans.
Severance benefits, which were paid over a period of time,
commenced upon dates of termination which ranged from April
1999 to March 2000. The program and related payments were
completed during 2000. Salary and related benefit costs of
employees prior to their retirement or termination date were
expensed as incurred.
See Notes 4 and 5 regarding divestitures and acquisitions. The
acquisition of Nabisco primarily affected the reported results of the
Biscuits, Snacks and Confectionery and the Latin America and Asia
Pacific segments.
(in millions)
For the Years Ended December 31, 2001 2000 1999
Depreciation expense:
Cheese, Meals and Enhancers $ 163 $150 $135
Biscuits, Snacks and Confectionery 152
Beverages, Desserts and Cereals 113 109 102
Oscar Mayer and Pizza 55 51 49
Total Kraft Foods North America 483 310 286
Europe, Middle East and Africa 158 163 175
Latin America and Asia Pacific 39 26 30
Total Kraft Foods International 197 189 205
Total depreciation expense $ 680 $499 $491
Capital expenditures:
Cheese, Meals and Enhancers $ 257 $247 $246
Biscuits, Snacks and Confectionery 171
Beverages, Desserts and Cereals 202 193 204
Oscar Mayer and Pizza 131 148 125
Total Kraft Foods North America 761 588 575
Europe, Middle East and Africa 231 239 255
Latin America and Asia Pacific 109 79 30
Total Kraft Foods International 340 318 285
Total capital expenditures $1,101 $906 $860