Kraft 2009 Annual Report Download - page 21

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussions should be read in conjunction with the other sections of this report, including the consolidated financial statements and
related notes contained in Item 8 of this Annual Report on Form 10-K.
Description of the Company
We manufacture and market packaged food products, including snacks, beverages, cheese, convenient meals and various packaged grocery
products, in approximately 160 countries.
Executive Summary
The following executive summary is intended to provide significant highlights of the discussion and analysis that follows.
• Net revenues in 2009 decreased 3.7% to $40.4 billion. Net revenues in 2008 increased 16.9% to $41.9 billion.
• Diluted EPS attributable to Kraft Foods increased 6.8% to $2.03 in 2009 and increased 11.8% to $1.90 in 2008. Diluted EPS
attributable to Kraft Foods from continuing operations increased 67.8% to $2.03 in 2009 and decreased 22.4% to $1.21 in 2008.
• Four priorities will shape our long-term strategy: focusing on growth categories; expanding our footprint in developing markets;
expanding our presence in instant consumption channels; and enhancing margins.
• On February 2, 2010, we had received acceptances to our offer of 71.73% of the outstanding ordinary shares of Cadbury plc. The
combination of Kraft Foods and Cadbury will create a global powerhouse in snacks, confectionery and quick meals with a rich portfolio
of iconic brands. As of February 15, 2010, we had received acceptances of 1,262,356,520 shares representing 91.02% of the
outstanding Cadbury ordinary shares.
• On February 8, 2010, we issued $9.5 billion of senior unsecured notes at a weighted-average effective rate of 5.364% and are
primarily using the net proceeds ($9,379 million) to finance the Cadbury acquisition.
• On January 4, 2010, we entered into an agreement to sell the assets of our North American frozen pizza business to Nestlé USA, Inc.
for total consideration of $3.7 billion. The sale, which is subject to customary conditions, including regulatory clearances, is expected to
close in the first quarter of 2010.
• On November 30, 2009, we entered into a revolving credit agreement for a $4.5 billion three-year senior unsecured revolving credit
facility. The agreement replaced our former revolving credit agreement, which was terminated upon the signing of the new agreement.
• Our $5.0 billion share repurchase authority expired on March 30, 2009. Prior to the expiration, we repurchased 130.9 million
shares for $4.3 billion under the program. We did not repurchase any shares in 2009.
• In 2008, we completed our $3.0 billion, five-year Restructuring Program. We reversed $85 million in Restructuring Program
charges during 2009, and we recorded charges of $989 million during 2008 and $459 million during 2007.
• On August 4, 2008, we completed the split-off of the Post cereals business. Accordingly, the Post cereals business prior period results
were reflected as discontinued operations on the consolidated statement of earnings.
• On November 30, 2007, we acquired the Groupe Danone S.A. global LU biscuit business for € 5.1 billion (approximately $7.6 billion) in
cash.
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Source: KRAFT FOODS INC, 10-K, February 25, 2010 Powered by Morningstar® Document Research℠