Kraft 2004 Annual Report Download - page 32

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Operating Results by Reportable Segment
Kraft North America Commercial
For the Years Ended
December 31,
2004 2003 2002
(in millions)
Volume (in pounds):
U.S. Beverages ..................................... 2,968 2,634 2,444
U.S. Cheese, Canada & North America Foodservice ........... 4,527 4,373 4,273
U.S. Convenient Meals ................................ 2,205 2,171 2,164
U.S. Grocery ....................................... 1,690 1,678 1,688
U.S. Snacks & Cereals ................................ 2,424 2,389 2,476
Volume (in pounds) ................................... 13,814 13,245 13,045
Net revenues:
U.S. Beverages ..................................... $ 2,555 $ 2,433 $ 2,338
U.S. Cheese, Canada & North America Foodservice ........... 7,420 6,716 6,399
U.S. Convenient Meals ................................ 4,250 4,058 3,974
U.S. Grocery ....................................... 2,425 2,388 2,356
U.S. Snacks & Cereals ................................ 5,410 5,342 5,422
Net revenues ........................................ $22,060 $20,937 $20,489
Operating companies income:
U.S. Beverages ..................................... $ 479 $ 630 $ 576
U.S. Cheese, Canada & North America Foodservice ........... 989 1,271 1,255
U.S. Convenient Meals ................................ 771 817 783
U.S. Grocery ....................................... 894 894 881
U.S. Snacks & Cereals ................................ 737 1,046 1,169
Operating companies income ........................... $ 3,870 $ 4,658 $ 4,664
2004 compared with 2003
The following discussion compares Kraft North America Commercial’s operating results for 2004
with 2003.
Volume increased 4.3%, due primarily to an acquisition in the U.S. Beverages segment and
increased shipments in the U.S. Cheese, Canada & North America Foodservice segment.
Net revenues increased $1,123 million (5.4%), due primarily to higher volume/mix ($537 million),
higher net pricing ($312 million, reflecting commodity-driven price increases, partially offset by
increased promotional spending), favorable currency ($164 million) and the impact of acquisitions
($117 million).
Operating companies income decreased $788 million (16.9%), due primarily to the 2004 pre-tax
charges for asset impairment and exit costs ($391 million), unfavorable costs, net of higher pricing
($356 million, including higher commodity costs and increased promotional spending), higher
marketing, administration and research costs ($214 million, including higher benefit costs) and the 2004
implementation costs associated with the restructuring program ($40 million), partially offset by higher
volume/mix ($197 million) and favorable currency ($29 million).
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