Kraft 2008 Annual Report Download - page 75

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Our postemployment plans are not funded. The changes in the benefit obligations of the plans at December 31, 2007 and 2006 were:
2007 2006
(in millions)
Accumulated benefit obligation at January 1 $ 238 $ 254
Service cost 4 4
Interest cost 6 4
Restructuring program 132 247
Benefits paid (190) (243)
Assumption changes 29 (39)
Actuarial losses 18 11
Other 17 -
Accrued postemployment costs at December 31 $ 254 $ 238
The accumulated benefit obligation was determined using a weighted-average discount rate of 7.0% in 2007 and 6.3% in 2006, an assumed ultimate annual
turnover rate of 0.5% in 2007 and 0.3% in 2006, assumed compensation cost increases of 4.0% in 2007 and 2006, and assumed benefits as defined in the
respective plans. Postemployment costs arising from actions that offer employees benefits in excess of those specified in the respective plans are charged to
expense when incurred.
Note 10. Earnings Per Share:
Basic and diluted EPS from continuing and discontinued operations were calculated using the following:
For the Years Ended December 31,
2007 2006 2005
(in millions, except per share data)
Earnings from continuing operations $ 2,590 $ 3,060 $ 2,904
Loss from discontinued operations - - (272)
Net earnings $ 2,590 $ 3,060 $ 2,632
Weighted average shares for basic EPS 1,575 1,643 1,684
Plus incremental shares from assumed
conversions of stock options,
restricted stock and stock rights 19 12 9
Weighted average shares for diluted EPS 1,594 1,655 1,693
Basic earnings per share:
Continuing Operations $ 1.64 $ 1.86 $ 1.72
Discontinued Operations - - (0.16)
Net Earnings $ 1.64 $ 1.86 $ 1.56
Diluted earnings per share:
Continuing Operations $ 1.62 $ 1.85 $ 1.72
Discontinued Operations - - (0.17)
Net Earnings $ 1.62 $ 1.85 $ 1.55
For the years ended December 31, 2007, 2006 and 2005, we excluded an insignificant number of Kraft stock options from the calculation of weighted average
shares for diluted EPS because they were antidilutive.
Note 11. Acquisitions:
Danone Biscuit:
On November 30, 2007, we acquired the global biscuit business of Groupe Danone S.A. (“Danone Biscuit”) for €5.1 billion (approximately $7.6 billion) in cash
subject to customary purchase price adjustments. On October 12, 2007, we entered into a
73
Source: KRAFT FOODS INC, 10-K, February 25, 2008 Powered by Morningstar® Document Research℠