Kraft 2012 Annual Report Download - page 58

New Accounting Pronouncements:
In July 2012, the Financial Accounting Standards Board (“FASB”) issued an amendment which permits an entity to make a
qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset, other than
goodwill, is impaired. If an entity concludes, based on an evaluation of all relevant qualitative factors, that it is not more
likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, it will not be required
to perform the quantitative impairment for that asset. The guidance is effective for impairment tests performed for fiscal
years beginning after September 15, 2012, with early adoption permitted. The adoption of this guidance did not have a
material impact on our financial results.
In February 2013, the FASB issued an amendment which requires disclosure of amounts reclassified out of accumulated
other comprehensive income by component. In addition, an entity is required to present either on the face of the statement
of operations or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the
respective line items of net income but only if the amount reclassified is required to be reclassified to net income in its
entirety in the same reporting period. For amounts not reclassified in their entirety to net income, an entity is required to
cross-reference to other disclosures that provide additional detail about those amounts. This guidance is effective
prospectively for annual and interim periods beginning after December 15, 2012. We do not expect the adoption of this
guidance to have a material impact on our financial results.
Subsequent Events:
We evaluated subsequent events and included all accounting and disclosure requirements related to subsequent events in
our consolidated financial statements.
Note 2. Divestitures
Pizza Divestiture:
On March 1, 2010, we completed the sale of the assets of our North American frozen pizza business (“Frozen Pizza”) to
Nestlé USA, Inc. (“Nestlé”) for $3.7 billion. Our Frozen Pizza business was a component of our Refrigerated Meals and
International & Foodservice segments. The sale included the DiGiorno,Tombstone, and Jack’s brands in the U.S., the
Delissio brand in Canada and the California Pizza Kitchen trademark license. It also included two Wisconsin
manufacturing facilities (Medford and Little Chute) and the leases for the pizza depots and delivery trucks. Approximately
3,600 of our employees transferred with the business to Nestlé. Accordingly, the results of our Frozen Pizza business
have been reflected as discontinued operations on the consolidated statement of earnings for 2010.
Summary results of operations for the Frozen Pizza business through March 1, 2010 were as follows:
For the Year Ended
December 31, 2010
(in millions)
Net revenues $ 335
Earnings before income taxes 73
Provision for income taxes (25)
Gain on discontinued operations, net of income taxes 1,596
Earnings and gain from discontinued operations, net of income taxes $ 1,644
Earnings before income taxes as presented exclude associated allocated overheads of $25 million in 2010. The 2010 gain
on discontinued operations from the sale of the Frozen Pizza business included tax expense of $1.2 billion.
The following assets of the Frozen Pizza business were included in the Frozen Pizza divestiture (in millions):
Inventories, net $ 102
Property, plant and equipment, net 317
Goodwill 475
Divested assets of the Frozen Pizza business $ 894
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