Kraft 2005 Annual Report Download - page 67

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MERRILL CORPORATION FLANGST// 9-MAR-06 02:24 DISK126:[06CHI5.06CHI1135]DW1135A.;8
mrll.fmt Free: 445D*/540D Foot: 0D/ 0D VJ RSeq: 1 Clr: 0
DISK024:[PAGER.PSTYLES]UNIVERSAL.BST;51
KRAFT FOODS-FSC CERTIFIED-10K/AR Proj: P1102CHI06 Job: 06CHI1135 File: DW1135A.;8
Merrill Corporation/Chicago (312) 786-6300 Page Dim: 8.250X 10.750Copy Dim: 38. X 54.3
Summary results of operations for the sugar confectionery business were as follows:
For the Years Ended
December 31,
2005 2004 2003
(in millions)
Net revenues .............................................. $228 $477 $512
Earnings before income taxes .................................. $ 41 $103 $151
Impairment loss on assets of discontinued operations held for sale ....... (107)
Provision for income taxes ..................................... (16) (54)
Loss on sale of discontinued operations ........................... (297)
(Loss) earnings from discontinued operations, net of income taxes ........ $(272) $ (4) $ 97
The loss on sale of discontinued operations, above, for the year ended December 31, 2005, related
largely to taxes on the transaction.
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 2005, the Company sold its fruit snacks assets, and incurred a pre-tax asset impairment
charge of $93 million in recognition of this sale. Additionally, during 2005, the Company sold its U.K.
desserts assets, its U.S. yogurt assets, a small business in Colombia, a minor trademark in Mexico and a
small equity investment in Turkey. The aggregate proceeds received from these sales were $238 million,
on which the Company recorded pre-tax gains of $108 million. In December 2005, the Company
announced the sale of certain Canadian assets and a small U.S. biscuit brand, incurring pre-tax asset
impairment charges of $176 million in recognition of these sales. These transactions are expected to
close in the first quarter of 2006.
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.
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.
The operating results of the other divestitures, discussed above, in the aggregate, were not material
to the Company’s consolidated financial position, results of operations or cash flows in any of the
periods presented.
66
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