Kraft Foods Inc. (KFT, Financial) filed Quarterly Report for the period ended 2011-03-31.
Kraft Foods Inc. has a market cap of $58.38 billion; its shares were traded at around $33.39 with a P/E ratio of 16.6 and P/S ratio of 1.2. The dividend yield of Kraft Foods Inc. stocks is 3.4%. Kraft Foods Inc. had an annual average earning growth of 2.3% over the past 5 years.
As part of our Cadbury acquisition, we expensed and incurred transaction related fees of $203 million in the first quarter of 2010. We recorded these expenses within selling, general and administrative expenses. We also incurred acquisition financing fees of $96 million in the first quarter of 2010. We recorded these expenses within interest and other expense, net.
Cadbury contributed net revenues of $1,693 million and net earnings of $60 million from February 2, 2010 through March 31, 2010. The following unaudited pro forma summary presents Kraft Foods consolidated information as if Cadbury had been acquired on January 1, 2010. These amounts were calculated after conversion to accounting principles generally accepted in the United States of America (U.S. GAAP), applying our accounting policies, and adjusting Cadburys results to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment, and intangible assets had been applied from January 1, 2010, together with the consequential tax effects. These adjustments also reflect the additional interest expense incurred on the debt to finance the purchase.
Integration Program costs include the costs associated with combining our operations with Cadburys and are separate from the costs related to the acquisition. We incurred charges under the Integration Program of $104 million for the three months ended March 31, 2011 and $43 million for the three months ended March 31, 2010. We recorded these charges in operations, as a part of selling, general and administrative expenses primarily within our Kraft Foods Europe and Kraft Foods Developing Markets segments, as well as general corporate expenses. Since the inception of the Integration Program, we have incurred $761 million of the $1.5 billion in expected charges. At March 31, 2011, we had an accrual of $406 million related to the Integration Program.
Our effective tax rate was 33.2% for the first quarter of 2011 and 57.2% for the first quarter of 2010. The effective tax rate was impacted by discrete items in both years. The 2011 first quarter effective tax rate was favorably impacted by net discrete items totaling $5 million, arising principally from net favorable state and foreign audit settlements and the expiration of the statute of limitations in various foreign jurisdictions. The 2010 first quarter effective tax rate was unfavorably impacted by $72 million of net tax costs, primarily due to a $137 million write-off of deferred tax assets as a result of the U.S. health care legislation enacted in March 2010, partially offset by favorable one-time tax impacts of highly inflationary accounting adjustments related to our Venezuelan subsidiaries and favorable foreign audit settlements.
The increase in net revenues was primarily driven by the Cadbury acquisition, which added $697 million in net revenues. Favorable foreign currency increased net revenues by $121 million, due primarily to the strength of the Brazilian real, Canadian dollar, Australian dollar and British pound versus the U.S. dollar, partially offset by the strength of the U.S. dollar against the euro and the impact of the highly inflationary Venezuelan economy. These gains were partially offset by the impact of divestitures (including Starbucks CPG business). Additionally, increased organic net revenues were driven by higher net pricing and favorable volume/mix. Higher net pricing was reflected across all reportable business segments as we increased pricing to offset higher input costs. Favorable volume/mix was driven by higher base business shipments across all reportable business segments, except U.S. Grocery and U.S. Convenient Meals.
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Kraft Foods Inc. has a market cap of $58.38 billion; its shares were traded at around $33.39 with a P/E ratio of 16.6 and P/S ratio of 1.2. The dividend yield of Kraft Foods Inc. stocks is 3.4%. Kraft Foods Inc. had an annual average earning growth of 2.3% over the past 5 years.
Highlight of Business Operations:
On February 2, 2010 we acquired 71.73% of Cadbury Limited (Cadbury) and as of June 1, 2010 we owned 100% of all outstanding Cadbury Shares. The Cadbury acquisition was valued at $18,547 million, or $17,503 million net of cash and cash equivalents.As part of our Cadbury acquisition, we expensed and incurred transaction related fees of $203 million in the first quarter of 2010. We recorded these expenses within selling, general and administrative expenses. We also incurred acquisition financing fees of $96 million in the first quarter of 2010. We recorded these expenses within interest and other expense, net.
Cadbury contributed net revenues of $1,693 million and net earnings of $60 million from February 2, 2010 through March 31, 2010. The following unaudited pro forma summary presents Kraft Foods consolidated information as if Cadbury had been acquired on January 1, 2010. These amounts were calculated after conversion to accounting principles generally accepted in the United States of America (U.S. GAAP), applying our accounting policies, and adjusting Cadburys results to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment, and intangible assets had been applied from January 1, 2010, together with the consequential tax effects. These adjustments also reflect the additional interest expense incurred on the debt to finance the purchase.
Integration Program costs include the costs associated with combining our operations with Cadburys and are separate from the costs related to the acquisition. We incurred charges under the Integration Program of $104 million for the three months ended March 31, 2011 and $43 million for the three months ended March 31, 2010. We recorded these charges in operations, as a part of selling, general and administrative expenses primarily within our Kraft Foods Europe and Kraft Foods Developing Markets segments, as well as general corporate expenses. Since the inception of the Integration Program, we have incurred $761 million of the $1.5 billion in expected charges. At March 31, 2011, we had an accrual of $406 million related to the Integration Program.
Our effective tax rate was 33.2% for the first quarter of 2011 and 57.2% for the first quarter of 2010. The effective tax rate was impacted by discrete items in both years. The 2011 first quarter effective tax rate was favorably impacted by net discrete items totaling $5 million, arising principally from net favorable state and foreign audit settlements and the expiration of the statute of limitations in various foreign jurisdictions. The 2010 first quarter effective tax rate was unfavorably impacted by $72 million of net tax costs, primarily due to a $137 million write-off of deferred tax assets as a result of the U.S. health care legislation enacted in March 2010, partially offset by favorable one-time tax impacts of highly inflationary accounting adjustments related to our Venezuelan subsidiaries and favorable foreign audit settlements.
The increase in net revenues was primarily driven by the Cadbury acquisition, which added $697 million in net revenues. Favorable foreign currency increased net revenues by $121 million, due primarily to the strength of the Brazilian real, Canadian dollar, Australian dollar and British pound versus the U.S. dollar, partially offset by the strength of the U.S. dollar against the euro and the impact of the highly inflationary Venezuelan economy. These gains were partially offset by the impact of divestitures (including Starbucks CPG business). Additionally, increased organic net revenues were driven by higher net pricing and favorable volume/mix. Higher net pricing was reflected across all reportable business segments as we increased pricing to offset higher input costs. Favorable volume/mix was driven by higher base business shipments across all reportable business segments, except U.S. Grocery and U.S. Convenient Meals.
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