Kraft 2004 Annual Report Download - page 62

In addition, the Company expects additional tax expense of approximately $270 million to be
recorded as a loss on sale of discontinued operations in 2005. In accordance with the provisions of
SFAS No. 109, the tax expense will be recorded when the transaction is consummated.
The assets of the sugar confectionery business, which were reflected as assets of discontinued
operations held for sale on the consolidated balance sheet at December 31, 2004, were as follows (in
millions):
Inventories .......................................................... $ 65
Property, plant and equipment, net ......................................... 201
Goodwill ............................................................ 814
Other intangible assets, net .............................................. 485
Impairment loss on assets of discontinued operations held for sale .................. (107)
Assets of discontinued operations held for sale .............................. $1,458
Other:
During 2004, the Company sold a Brazilian snack nuts business and trademarks associated with a
candy business in Norway. The aggregate proceeds received from the sale of these businesses were
$18 million, on which pre-tax losses of $3 million were recorded. In December 2004, the Company
announced the sale of its U.K. desserts business for approximately $135 million, which is expected to
result in an estimated gain of $0.04 per share. The transaction, which is subject to required approvals, is
expected to close in the first quarter of 2005, following completion of necessary employee consultation
requirements. The Company also announced in December 2004, the sale of its yogurt business for
approximately $59 million, which is expected to result in an after-tax loss of approximately $12 million
($5 million in 2004, with the remainder at closing). The transaction, which is also subject to regulatory
approval, is expected to be completed in the first quarter of 2005.
During 2003, the Company sold a European rice business and a branded fresh cheese business in
Italy. The aggregate proceeds received from sales of businesses were $96 million, on which the
Company recorded pre-tax gains of $31 million.
During 2002, the Company sold several small North American food businesses, some of which had
been previously classified as businesses held for sale arising from the acquisition of Nabisco. The net
revenues and operating results of the businesses held for sale, which were not significant, were
excluded from the Company’s consolidated statements of earnings, and no gain or loss was recognized
on these sales. In addition, the Company sold its Latin American yeast and industrial bakery ingredients
business for approximately $110 million and recorded a pre-tax gain of $69 million. The aggregate
proceeds received from sales of businesses were $219 million, on which the Company recorded pre-tax
gains of $80 million.
The operating results of the other businesses sold, discussed above, were not material to the
Company’s consolidated financial position, results of operations or cash flows in any of the periods
presented.
Note 6. Acquisitions:
During 2004, the Company acquired a U.S.-based beverage business for a total cost of $137 million.
During 2003, the Company acquired a biscuits business in Egypt and trademarks associated with a
small U.S.-based natural foods business. The total cost of these and other smaller acquisitions was
$98 million.
During 2002, the Company acquired a snacks business in Turkey and a biscuits business in
Australia. The total cost of these and other smaller acquisitions was $122 million.
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