Kraft 2004 Annual Report Download - page 28

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For the Years Ended
December 31,
2004 2003 2002
(in millions,
except per share data)
Net Earnings:
Earnings from continuing operations ............................. $ 2,669 $ 3,379 $ 3,297
(Loss) earnings from discontinued operations, net of income taxes ......... (4) 97 97
Net earnings ............................................. $ 2,665 $ 3,476 $ 3,394
Weighted average shares for diluted earnings per share .............. 1,714 1,728 1,736
Diluted earnings per share:
Continuing operations ..................................... $ 1.55 $ 1.95 $ 1.90
Discontinued operations .................................... 0.06 0.06
Net earnings ........................................... $ 1.55 $ 2.01 $ 1.96
Operating income was affected by the following items during 2004, 2003 and 2002:
•Asset impairment, exit and implementation costs—As discussed in Note 3 to the consolidated
financial statements, during 2004, the Company recorded $603 million of asset impairment and
exit costs on its consolidated statement of earnings. The Company also recorded $50 million of
pre-tax implementation costs and $47 million of pre-tax impairment charges relating to its equity
investment in a joint venture in Turkey.
The pre-tax asset impairment, exit and implementation costs for the year ended December 31, 2004,
were included in the operating companies income of the following segments:
For the Year Ended December 31, 2004
Total Asset Equity Impairment
Impairment and
Restructuring Asset and Implementation
Costs Impairment Exit Costs Costs Total
(in millions)
U.S. Beverages ................. $ 9 $— $ 9 $ 4 $ 13
U.S. Cheese, Canada & North America
Foodservice .................. 103 8 111 8 119
U.S. Convenient Meals ............ 41 41 4 45
U.S. Grocery ................... 8 8 6 14
U.S. Snacks & Cereals ............ 222 222 18 240
Europe, Middle East & Africa ....... 180 180 56 236
Latin America & Asia Pacific ........ 20 12 32 1 33
Total—Continuing Operations ....... $583 $20 $603 $97 $700
During 2003, the Company recorded a pre-tax charge of $6 million for asset impairment and exit
costs related to the closure of a Nordic snacks plant. During 2002, the Company recorded a pre-tax
charge of $142 million related to employee acceptances under a voluntary retirement program.
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