Kraft 2013 Annual Report Download - page 3

1
Forward-looking Statements
This report contains a number of forward-looking statements. Words such as “anticipate,” “estimate,” “expect,”
“project,” “intend,” “plan,” “continue,” “believe,” “may,” “will,” and variations of such words and similar expressions
are intended to identify our forward-looking statements. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on which they are made. Examples of forward-looking
statements include, but are not limited to, statements, beliefs, and expectations regarding our business, dividends,
new accounting standards and accounting changes, commodity costs, cost savings initiatives, hedging activities,
legal matters, goodwill and other intangible assets, price volatility and cost environment, liquidity, funding sources,
postemployment benefit plans, including expected contributions, obligations, rates of return and costs, capital
expenditures and funding, debt, off-balance sheet arrangements and contractual obligations, general views about
future operating results, risk management program, and other events or developments that we expect or anticipate
will occur in the future.
These forward-looking statements are not guarantees of future performance and are subject to a number of risks
and uncertainties, many of which are beyond our control. We discuss certain factors that affect our business and
operations and that may cause our actual results to differ materially from these forward-looking statements under
“Risk Factors” below in this Annual Report on Form 10-K. These factors include, but are not limited to, increased
competition; our ability to maintain, extend and expand our reputation and brand image; our ability to differentiate
our products from other brands; increasing consolidation of retail customers; changes in relationships with our
significant customers and suppliers; our ability to predict, identify and interpret changes in consumer preferences
and demand; our ability to drive revenue growth in our key product categories, increase our market share, or add
products; volatility in commodity, energy and other input costs; changes in our management team or other key
personnel; our geographic focus in North America; changes in regulations; legal claims or other regulatory
enforcement actions; product recalls or product liability claims; unanticipated business disruptions; our ability to
complete or realize the benefits from potential acquisitions, alliances, divestitures or joint ventures; our
indebtedness and our ability to pay our indebtedness; disruptions in our information technology networks and
systems; our inability to protect our intellectual property rights; weak economic conditions; tax law changes; the tax
treatment of the Spin-Off (as defined below); volatility of market-based impacts to postemployment benefit plans;
pricing actions; and other factors. We disclaim and do not undertake any obligation to update or revise any forward-
looking statement in this report, except as required by applicable law or regulation.
PART I
Item 1. Business.
General
Kraft Foods Group is one of the largest consumer packaged food and beverage companies in North America and
worldwide, with net revenues of $18.2 billion and earnings from continuing operations before income taxes of $4.1
billion in 2013. We manufacture and market food and beverage products, including refrigerated meals, refreshment
beverages, coffee, cheese, and other grocery products, primarily in the United States and Canada, under a host of
iconic brands. Our product categories span breakfast, lunch, and dinner meal occasions, both at home and in
foodservice locations. At December 28, 2013, we had assets of $23.1 billion. We are listed on the NASDAQ Stock
Market and included in the Standard & Poor’s 500 Index.
Our diverse brand portfolio consists of many of the most popular food brands in North America, including two
brands with annual net revenues exceeding $1 billion each—Kraft cheeses, dinners, and dressings and Oscar
Mayer meats—plus over 25 brands with annual net revenues between $100 million and $1 billion each. In the
United States, based on dollar share in 2013, we hold the number one or number two branded market share
position in 16 of our top 17 product categories. We have 12 product categories with the number one branded share
position that contributed in the aggregate approximately 60% of our 2013 U.S. retail net revenues, while our top 17
product categories contributed in the aggregate more than approximately 80% of our 2013 U.S. retail net revenues.
We were initially organized as a Delaware corporation in 1980. In March 2012, we redomesticated to Virginia and
changed our name from “Kraft Foods Global, Inc.” to “Kraft Foods Group, Inc.” On October 1, 2012,
International, Inc. International") spun-off Kraft Foods Group to International’s shareholders
(the “Spin-Off”). We were a wholly owned subsidiary of International prior to the Spin-Off. To effect the
Spin-Off, International distributed all of the shares of Kraft Foods Group common stock owned by