Kraft 2005 Annual Report Download - page 32

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MERRILL CORPORATION ABLIJDE// 7-MAR-06 14:42 DISK126:[06CHI5.06CHI1135]DK1135A.;21
mrll.fmt Free: 1325DM/0D Foot: 0D/ 0D VJ RSeq: 2 Clr: 0
DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;51
KRAFT FOODS-FSC CERTIFIED-10K/AR Proj: P1102CHI06 Job: 06CHI1135 File: DK1135A.;21
Merrill Corporation/Chicago (312) 786-6300 Page Dim: 8.250X 10.750Copy Dim: 38. X 54.3
Operating income was affected by the following items during 2005, 2004 and 2003:
•Asset impairment, exit and implementation costs—As discussed in Note 3 to the consolidated
financial statements, during 2005 and 2004, the Company recorded $479 million and
$603 million, respectively, of asset impairment and exit costs on its consolidated statement of
earnings. Additionally, during 2005 and 2004, the Company recorded pre-tax implementation
costs of $87 million and $50 million, respectively. During 2004, the Company also recorded
$47 million of pre-tax impairment charges related to its equity investment in a joint venture in
Turkey.
The pre-tax asset impairment, exit and implementation costs for the years ended December 31,
2005 and 2004, were included in the operating companies income of the following segments:
For the Year Ended December 31, 2005
Total Asset
Impairment
Restructuring Asset and Implementation
Costs Impairment Exit Costs Costs Total
(in millions)
U.S. Beverages ................. $ 9 $ — $ 9 $ 2 $ 11
U.S. Cheese, Canada & North America
Foodservice .................. 33 113 146 20 166
U.S. Convenient Meals ............ 12 12 7 19
U.S. Grocery ................... 6 93 99 2 101
U.S. Snacks & Cereals ............ 6 63 69 24 93
Europe, Middle East & Africa ....... 127 127 26 153
Latin America & Asia Pacific ........ 17 17 6 23
Total—Continuing Operations ....... $210 $269 $479 $ 87 $566
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
31
6 C Cs: 50674