Kraft 2013 Annual Report Download - page 54

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52
Prior Period Revisions:
Beginning in the third quarter of 2013, we record expense related to certain consumer incentive programs as a
reduction of net revenues. Previously, we included this expense in selling, general and administrative expenses.
We have revised prior periods to reflect this in our current presentation. The impacts of these revisions, which were
not material to any prior period, reduced net revenues and selling, general and administrative expenses by $68
million in 2012 and $79 million in 2011.
During 2013, we determined that we had overstated indefinite-lived tradenames in the purchase accounting of a
2001 acquisition. Therefore, we have revised our financial statements to reduce our Foodservice indefinite-lived
intangible assets by $403 million, reduce our deferred tax liability by $150 million, and increase goodwill by $253
million. This misstatement was not material to any of our prior period financial statements.
In 2012, we misclassified approximately $879 million of United States Foodservice long-lived assets as being
located in Canada. We have corrected and revised the balances reported in our long-lived assets by geographic
area table in Note 15, Segment Reporting, as of December 29, 2012 for this change. This misstatement was not
material to any of our prior period financial statements.
New Accounting Pronouncements:
In July 2013, the Financial Accounting Standards Board issued an accounting standard update which will require us
to present an unrecognized tax benefit as a reduction to a deferred tax asset for a net operating loss carryforward, a
similar tax loss, or a tax credit carryforward in our financial statements, with certain exceptions. The update will be
effective for fiscal years beginning after December 15, 2013. We do not expect the adoption of this guidance to
have a material impact on our financial statements.
Subsequent Events:
We evaluate subsequent events and reflect accounting and disclosure requirements related to material subsequent
events in our financial statements and related notes. We did not identify any material subsequent events impacting
our financial statements in this report.
Note 2. Inventories
Inventories at December 28, 2013 and December 29, 2012 were:
December 28,
2013 December 29,
2012
(in millions)
Raw materials $ 453 $ 535
Work in process 294 326
Finished product 869 1,067
Inventories, net $ 1,616 $ 1,928
Note 3. Property, Plant and Equipment
Property, plant and equipment at December 28, 2013 and December 29, 2012 were:
December 28,
2013 December 29,
2012
(in millions)
Land $ 72 $ 119
Buildings and improvements 1,806 1,996
Machinery and equipment 5,584 5,922
Construction in progress 360 365
7,822 8,402
Accumulated depreciation (3,707) (4,198)
Property, plant and equipment, net $ 4,115 $ 4,204
In 2013, we sold and leased back two of our headquarters facilities for a loss of approximately $36 million. We
received net proceeds of $101 million in connection with the sales.