Kraft 2005 Annual Report Download - page 90

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MERRILL CORPORATION SPAPPON// 8-MAR-06 11:26 DISK126:[06CHI5.06CHI1135]EE1135A.;14
mrll.fmt Free: 1790DM/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: EE1135A.;14
Merrill Corporation/Chicago (312) 786-6300 Page Dim: 8.250X 10.750Copy Dim: 38. X 54.3
As discussed in Note 13. Income Taxes, Kraft has recognized income tax benefits in the
consolidated statements of earnings during 2005 and 2004 as a result of various tax events, including
the benefits earned under the provisions of the American Jobs Creation Act.
Note 20. Subsequent Event:
In January 2006, the Company announced plans to continue its restructuring efforts beyond those
originally contemplated (see Note 3. Asset Impairment, Exit and Implementation Costs). Additional
pre-tax charges are anticipated to be $2.5 billion from 2006 to 2009, of which approximately $1.6 billion
are expected to require cash payments. These charges will result in the anticipated closure of up to 20
additional facilities and the elimination of approximately 8,000 additional positions. Initiatives under the
expanded program include additional organizational streamlining and facility closures. The entire
restructuring program is expected to ultimately result in $3.7 billion in pre-tax charges, the closure of up
to 40 facilities and the elimination of approximately 14,000 positions. Approximately $2.3 billion of the
$3.7 billion in pre-tax charges are expected to require cash payments.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.
None.
Item 9A. Controls and Procedures.
The Company carried out an evaluation, with the participation of the Company’s management,
including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the
Company’s disclosure controls and procedures (pursuant to Rule 13a-15(e) under the Securities
Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s
disclosure controls and procedures are effective. Our management evaluated, with the participation of
the Company’s Chief Executive Officer and Chief Financial Officer, any change in the Company’s internal
control over financial reporting and determined that there has been no change in the Company’s internal
control over financial reporting during the quarter ended December 31, 2005 that has materially affected,
or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
See also ‘‘Report of Management on Internal Control over Financial Reporting’’ in Item 8.
Item 9B. Other Information.
None.
89
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