UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

FORM 10-Q/A
(Amendment No. 1)

(Mark One)

x                              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2006

OR

o                                 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                    to

Commission file number  1-16483

Kraft Foods Inc.

(Exact name of registrant as specified in its charter)

 

 

Registrant’s telephone number, including area code               (847)  646-2000

 

Former name, former address and former fiscal year, if changed since last report

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes   x   No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer  x                          Accelerated filer o                          Non-accelerated filer o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   o   No   x

At July 31, 2006, there were 471,739,795 shares of the registrant’s Class A Common Stock outstanding, and 1,180,000,000 shares of the registrant’s Class B Common Stock outstanding.

EXPLANATORY NOTE

Kraft Foods Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A (this “Form 10-Q/A”) to correct two errors that were included in Part I, Item 1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 (the “Original Form 10-Q”). These errors occurred during the process of preparing the Original Form 10-Q for filing with the Securities and Exchange Commission (the “SEC”) through the SEC’s EDGAR system. The two errors in the Original Form 10-Q that are being corrected in this Form 10-Q/A are:

·           In the Condensed Consolidated Statements of Shareholders’ Equity For the Year Ended December 31, 2005 and the Six Months Ended June 30, 2006 on page 7 of the Original Form 10-Q, the caption “Accumulated Other Comprehensive Earnings/(Losses)” was incorrectly placed above the columns titled “Additional Paid-in Capital” and “Earnings Reinvested in the Business”. The “Accumulated Other Comprehensive Earnings/(Losses)” caption has been corrected in this Form 10-Q/A to only appear above the “Currency Translation Adjustments,” “Other” and “Total” columns.

·           In Note 11. Benefit Plans of the Notes to Condensed Consolidated Financial Statements (Unaudited) on page 25 of the Original Form 10-Q, the table under the heading “Components of Net Periodic Benefit Cost” contained two numbers in the “Other expense” line item that were placed in the incorrect column. The “11” appearing under the U.S. Plans caption for the Six Months Ended June 30, 2006 should have appeared instead under the column for the Six Months Ended June 30, 2005, and the “4” appearing under the U.S. Plans caption for the Six Months Ended June 30, 2005 should have appeared instead under the Non-U.S. Plans caption for the Six Months Ended June 30, 2005.

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Form 10-Q/A amends and restates in its entirety Part I, Item 1. Items included in the Original Form 10-Q that are not included herein are not amended and remain in effect as of the date of the filing of the Original Form 10-Q with the SEC. In addition, no attempt has been made in this Form 10-Q/A to modify or update disclosures that were included in the Original Form 10-Q to reflect developments at the Company subsequent to the date of the filing of the Original Form 10-Q.

2

 

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

Kraft Foods Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions of dollars)

(Unaudited)

 

		June 30,			December 31,
		2006			2005
ASSETS
Cash and cash equivalents		$	402		$	316
Receivables (less allowances of $85 in 2006 and $92 in 2005)		3,549			3,385
Inventories:
Raw materials		1,484			1,363
Finished product		2,066			1,980
		3,550			3,343
Deferred income taxes		625			879
Other current assets		248			230
Total current assets		8,374			8,153
Property, plant and equipment, at cost		17,046			16,598
Less accumulated depreciation		7,284			6,781
		9,762			9,817
Goodwill		24,985			24,648
Other intangible assets, net		10,428			10,516
Prepaid pension assets		3,690			3,617
Other assets		983			877
TOTAL ASSETS		$	58,222		$	57,628

 

See notes to condensed consolidated financial statements.

 

Continued

 

3

 

Kraft Foods Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Continued)

(in millions of dollars)

(Unaudited)

		June 30,			December 31,
		2006			2005
LIABILITIES
Short-term borrowings		$	1,105		$	805
Current portion of long-term debt		2,268			1,268
Due to Altria Group, Inc. and affiliates		485			652
Accounts payable		2,084			2,270
Accrued liabilities:
Marketing		1,451			1,529
Employment costs		637			625
Other		1,270			1,338
Income taxes		398			237
Total current liabilities		9,698			8,724
Long-term debt		7,478			8,475
Deferred income taxes		5,869			6,067
Accrued postretirement health care costs		1,980			1,931
Other liabilities		2,829			2,838
Total liabilities		27,854			28,035
Contingencies (Note 7)
SHAREHOLDERS’ EQUITY
Class A common stock, no par value (555,000,000 shares issued in 2006 and 2005)
Class B common stock, no par value (1,180,000,000 shares issued and outstanding in 2006 and 2005)
Additional paid-in capital		23,525			23,835
Earnings reinvested in the business		10,578			9,453
Accumulated other comprehensive losses (including currency translation of $(856) in 2006 and $(1,290) in 2005)		(1,205		)	(1,663		)
		32,898			31,625
Less cost of repurchased stock (81,646,640 Class A shares in 2006 and 65,119,245 Class A shares in 2005)		(2,530		)	(2,032		)
Total shareholders’ equity		30,368			29,593
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	58,222		$	57,628

 

See notes to condensed consolidated financial statements.

 

4

 

Kraft Foods Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

(in millions of dollars, except per share data)

(Unaudited)

 

		For the Six Months Ended
		June 30,
		2006			2005
Net revenues		$	16,742		$	16,393
Cost of sales		10,626			10,379
Gross profit		6,116			6,014
Marketing, administration and research costs		3,477			3,538
Asset impairment and exit costs		428			179
Losses (gains) on sales of businesses, net		11			(115		)
Amortization of intangibles		5			5
Operating income		2,195			2,407
Interest and other debt expense, net		243			350
Earnings from continuing operations before income taxes and minority interest		1,952			2,057
Provision for income taxes		262			598
Earnings from continuing operations before minority interest		1,690			1,459
Minority interest in earnings from continuing operations, net		2			2
Earnings from continuing operations		1,688			1,457
Loss from discontinued operations, net of income taxes					(272		)
Net earnings		$	1,688		$	1,185
Per share data:
Basic earnings per share:
Continuing operations		$	1.02		$	0.86
Discontinued operations					(0.16		)
Net earnings		$	1.02		$	0.70
Diluted earnings per share:
Continuing operations		$	1.02		$	0.86
Discontinued operations					(0.16		)
Net earnings		$	1.02		$	0.70
Dividends declared		$	0.46		$	0.41

 

See notes to condensed consolidated financial statements.

 

5

 

 Kraft Foods Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

(in millions of dollars, except per share data)

(Unaudited)

 

		For the Three Months Ended
		June 30,
		2006			2005
Net revenues		$	8,619		$	8,334
Cost of sales		5,435			5,275
Gross profit		3,184			3,059
Marketing, administration and research costs		1,770			1,777
Asset impairment and exit costs		226			29
Losses on sales of businesses, net		8			1
Amortization of intangibles		3			2
Operating income		1,177			1,250
Interest and other debt expense, net		147			174
Earnings from continuing operations before income taxes and minority interest		1,030			1,076
Provision for income taxes		347			316
Earnings from continuing operations before minority interest		683			760
Minority interest in earnings from continuing operations, net		1			2
Earnings from continuing operations		682			758
Loss from discontinued operations, net of income taxes					(286		)
Net earnings		$	682		$	472
Per share data:
Basic earnings per share:
Continuing operations		$	0.41		$	0.45
Discontinued operations					(0.17		)
Net earnings		$	0.41		$	0.28
Diluted earnings per share:
Continuing operations		$	0.41		$	0.45
Discontinued operations					(0.17		)
Net earnings		$	0.41		$	0.28
Dividends declared		$	0.23		$	0.205

 

See notes to condensed consolidated financial statements.

 

6

 

Kraft Foods Inc. and Subsidiaries

Condensed Consolidated Statements of Shareholders’ Equity

For the Year Ended December 31, 2005 and

the Six Months Ended June 30, 2006

(in millions of dollars, except per share data)

(Unaudited)

 

											Accumulated Other
		Class									Comprehensive Earnings/(Losses)												Total
		A and B			Additional			Earnings			Currency									Cost of			Share-
		Common			Paid-in			Reinvested in			Translation									Repurchased			holders’
		Stock			Capital			the Business			Adjustments			Other			Total			Stock			Equity
Balances, January 1, 2005		$	—		$	23,762		$	8,304		$	(890	)	$	(315	)	$	(1,205	)	$	(950	)	$	29,911
Comprehensive earnings:
Net earnings								2,632															2,632
Other comprehensive losses, net of income taxes:
Currency translation adjustments											(400		)				(400		)				(400		)
Additional minimum pension liability														(48		)	(48		)				(48		)
Change in fair value of derivatives accounted for as hedges														(10		)	(10		)				(10		)
Total other comprehensive losses																							(458		)
Total comprehensive earnings																							2,174
Exercise of stock options and issuance of other stock awards					52			(12		)										118			158
Cash dividends declared ($0.87 per share)								(1,471		)													(1,471		)
Class A common stock repurchased																				(1,200		)	(1,200		)
Other					21																		21
Balances, December 31, 2005		—			23,835			9,453			(1,290		)	(373		)	(1,663		)	(2,032		)	29,593
Comprehensive earnings:
Net earnings								1,688															1,688
Other comprehensive earnings (losses), net of income taxes:
Currency translation adjustments											434						434						434
Additional minimum pension liability														(21		)	(21		)				(21		)
Change in fair value of derivatives accounted for as hedges														1			1						1
Other														44			44						44
Total other comprehensive earnings																							458
Total comprehensive earnings																							2,146
Exercise of stock options and issuance of other stock awards					(310		)	202												127			19
Cash dividends declared ($0.46 per share)								(765		)													(765		)
Class A common stock repurchased																				(625		)	(625		)
Balances, June 30, 2006		$	—		$	23,525		$	10,578		$	(856	)	$	(349	)	$	(1,205	)	$	(2,530	)	$	30,368

 

Total comprehensive earnings were $1,043 million and $262 million, respectively, for the quarters ended June 30, 2006 and 2005 and $957 million for the first six months of 2005.

 

See notes to condensed consolidated financial statements.

 

7

 

Kraft Foods Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions of dollars)

(Unaudited)

 

		For the Six Months Ended
		June 30,
		2006			2005
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net earnings		$	1,688		$	1,185
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization		433			436
Deferred income tax benefit		(56		)	(222		)
Losses (gains) on sales of businesses, net		11			(115		)
Loss on sale of discontinued operations					32
Asset impairment and exit costs, net of cash paid		325			92
Cash effects of changes, net of the effects from acquired and divested companies:
Receivables, net		(59		)	80
Inventories		(216		)	(296		)
Accounts payable		(93		)	(193		)
Income taxes		103			591
Amounts due to Altria Group, Inc. and affiliates		(202		)	84
Other working capital items		(442		)	(392		)
Change in pension assets and postretirement liabilities, net		14			(101		)
Other		100			111
Net cash provided by operating activities		1,606			1,292
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
Capital expenditures		(450		)	(441		)
Proceeds from sales of businesses		91			1,640
Other		63			16
Net cash (used in) provided by investing activities		(296		)	1,215

 

See notes to condensed consolidated financial statements.

 

Continued

 

8

 

Kraft Foods Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Continued)

(in millions of dollars)

(Unaudited)

 

		For the Six Months Ended
		June 30,
		2006			2005
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
Net issuance (repayment) of short-term borrowings		$	294		$	(945	)
Long-term debt proceeds		32			34
Long-term debt repaid		(35		)	(739		)
Increase in amounts due to Altria Group, Inc. and affiliates		35			187
Repurchase of Class A common stock		(633		)	(375		)
Dividends paid		(769		)	(700		)
Other		(173		)	144
Net cash used in financing activities		(1,249		)	(2,394		)
Effect of exchange rate changes on cash and cash equivalents		25			1
Cash and cash equivalents:
Increase		86			114
Balance at beginning of period		316			282
Balance at end of period		$	402		$	396

 

See notes to condensed consolidated financial statements.

 

9

 

Kraft Foods Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1.  Accounting Policies:

Basis of Presentation

The interim condensed consolidated financial statements of Kraft Foods Inc. (“Kraft”), together with its subsidiaries (collectively referred to as the “Company”), are unaudited.  It is the opinion of the Company’s management that all adjustments necessary for a fair statement of the interim results presented have been reflected therein.  All such adjustments were of a normal recurring nature.  Net revenues and net earnings for any interim period are not necessarily indicative of results that may be expected for the entire year.

These statements should be read in conjunction with the Company’s consolidated financial statements and related notes, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.

In June 2005, the Company sold substantially all of its sugar confectionery business for pre-tax proceeds of approximately $1.4 billion.  The Company has reflected the results of its sugar confectionery business prior to the closing date as discontinued operations on the condensed consolidated statements of earnings.

In October 2005, the Company announced that, effective January 1, 2006, its Canadian business will be realigned to better integrate it into the Company’s North American business by product category.  Beginning in the first quarter of 2006, the operating results of the Canadian business are being reported throughout the North American food segments.  In addition, in the first quarter of 2006, the Company’s international businesses were realigned to reflect the reorganization announced within Europe in November 2005.  The two revised international segments, which are reflected in these condensed consolidated financial statements and notes, are European Union; and Developing Markets, Oceania & North Asia, the latter to reflect the Company’s increased management focus on developing markets.  Accordingly, prior period segment results have been restated.

Stock-Based Compensation Expense

Effective January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123 (Revised 2004), “Share-Based Payment,” (“SFAS No. 123(R)”) using the modified prospective method, which requires measurement of compensation cost for all stock-based awards at fair value on date of grant and recognition of compensation over the service periods for awards expected to vest.  The fair value of restricted stock and rights to receive shares of stock is determined based on the number of shares granted and the market value at date of grant.  The fair value of stock options is determined using a modified Black-Scholes methodology.  The impact of adoption was not material.

The Company previously applied the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” (“APB 25”) and provided the pro forma disclosures required by SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”). No compensation expense for employee stock options was reflected in net earnings in 2005, as all stock options granted under those plans had an exercise price equal to the market value of the common stock on the date of the grant.  Historical condensed consolidated statements of earnings already include the compensation expense for restricted stock and rights to receive shares of stock.  The following table illustrates the effect on net earnings and earnings per share (“EPS”) if the Company had applied the fair value recognition provisions of SFAS No. 123 to measure stock-based compensation expense for stock option awards in 2005:

10

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Kraft Foods Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

		For the Six Months			For the Three Months
		Ended June 30, 2005			Ended June 30, 2005
		(in millions, except per share data)
Net earnings, as reported		$	1,185		$	472
Deduct:
Total stock-based employee compensation expense determined under fair value method for all stock option awards, net of related tax effects		4			2
Pro forma net earnings		$	1,181		$	470
Earnings per share:
Basic – as reported		$	0.70		$	0.28
Basic – pro forma		$	0.70		$	0.28
Diluted – as reported		$	0.70		$	0.28
Diluted – pro forma		$	0.69		$	0.28

 

The adoption of SFAS No. 123(R) in the first quarter of 2006 resulted in a cumulative effect gain of $6 million, which is net of $3 million in taxes, in the condensed consolidated statements of earnings for the six months ended June 30, 2006.  This gain resulted from the impact of estimating future forfeitures on restricted stock and rights to receive shares of stock in the determination of periodic expense for unvested awards, rather than recording forfeitures only when they occur.  The gross cumulative effect was recorded in marketing, administration and research costs in the first quarter of 2006.

Under SFAS No. 123(R), tax shortfalls occur when actual tax deductible compensation expense is less than cumulative stock-based compensation expense recognized in the financial statements.  Tax shortfalls of $10 million were recognized for the six months ended June 30, 2006, and were recorded in additional paid-in capital.

Note 2.  Asset Impairment, Exit and Implementation Costs:

Restructuring Program:

In January 2004, the Company announced a three-year restructuring program with the objectives of leveraging the Company’s global scale, realigning and lowering its cost structure, and optimizing capacity utilization. In January 2006, the Company announced plans to expand its restructuring efforts through 2008.  The entire restructuring program is expected to result in $3.7 billion in pre-tax charges reflecting asset disposals, severance and implementation costs.  As part of this program, the Company anticipates the closure of up to 40 facilities and the elimination of approximately 14,000 positions.  Approximately $2.3 billion of the $3.7 billion in pre-tax charges are expected to require cash payments.  Pre-tax restructuring program charges during 2006 are expected to be approximately $1 billion, including $348 million incurred for the six months ended June 30, 2006.  Total pre-tax restructuring charges incurred since the inception of the program in January 2004 were $1.3 billion.

During the second quarter of 2006, the Company announced a seven-year, $1.7 billion agreement to receive information technology services from Electronic Data Systems (“EDS”).  The agreement, which includes data centers, web hosting, telecommunications and IT workplace services, began on June 1, 2006.  Pursuant to the agreement, approximately 670 employees, who provide certain IT support to the Company, were transitioned to EDS.  As a result, in the second quarter of 2006, the Company incurred pre-tax asset impairment and exit costs of $3 million and implementation costs of $11 million related to the transition.  These costs were included in the pre-tax restructuring program charges discussed above.

 

11

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Kraft Foods Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Restructuring Costs:

During the six months and three months ended June 30, 2006, pre-tax charges under the restructuring program of $318 million and $226 million, respectively, were recorded as asset impairment and exit costs on the condensed consolidated statements of earnings.  During the six months and three months ended June 30, 2005, pre-tax charges under the restructuring program of $86 million and $29 million, respectively, were recorded as asset impairment and exit costs on the condensed consolidated statements of earnings.  The pre-tax charges for the six months ended June 30, 2006 resulted from the announcement of the closing of seven plants, for a total of 26 since January 2004, and the continuation of a number of workforce reduction programs.  Approximately $133 million of the pre-tax charges incurred during the first six months of 2006 will require cash payments.

Pre-tax restructuring liability activity for the six months ended June 30, 2006 was as follows:

					Asset
		Severance			Write-downs			Other			Total
		(in millions)
Liability balance, January 1, 2006		$	114		$	—		$	1		$	115
Charges		123			184			11			318
Cash spent		(97		)				(6		)	(103		)
Charges against assets		(3		)	(184		)	(1		)	(188		)
Currency		3									3
Liability balance, June 30, 2006		$	140		$	—		$	5		$	145

 

Severance costs in the above schedule, which relate to the workforce reduction programs, include the cost of related benefits.  Specific programs announced since 2004, as part of the overall restructuring program, will result in the elimination of approximately 8,600 positions.  At June 30, 2006, approximately 7,200 of these positions have been eliminated.  Asset write-downs relate to the impairment of assets caused by the plant closings and related activity.  Other costs incurred relate primarily to contract termination costs associated with the plant closings and the termination of leasing agreements.

Implementation Costs:

The Company recorded pre-tax implementation costs associated with the restructuring program.  These costs include the discontinuance of certain product lines and incremental costs related to the integration and streamlining of functions and closure of facilities.  Substantially all implementation costs incurred in 2006 will require cash payments.  These costs were recorded on the condensed consolidated statements of earnings as follows:

		For the Six Months Ended						For the Three Months Ended
		June 30,						June 30,
		2006			2005			2006			2005
		(in millions)
Net revenues		$	—		$	1		$	—		$	1
Cost of sales		11			26			5			11
Marketing, administration and research costs		19			18			12			14
Implementation Costs		$	30		$	45		$	17		$	26

 

12

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Kraft Foods Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Asset Impairment Charges:

In July 2006, the Company completed the sale of its pet snacks brand and assets for $580 million and recorded additional taxes of approximately $60 million related to the sale.  This sale and the additional taxes were recorded in the third quarter of 2006.  The Company incurred a pre-tax asset impairment charge of $86 million in the first quarter of 2006 in recognition of this sale.  The charge, which included the write-off of a portion of the associated goodwill, and intangible and fixed assets, was recorded as asset impairment and exit costs on the condensed consolidated statement of earnings.

During the second quarter of 2005, the Company completed the sale of its fruit snacks assets for approximately $30 million.  The Company incurred a pre-tax asset impairment charge of $93 million in the first quarter of 2005 in recognition of the sale.  The charge, which included the write-off of all associated intangible assets, was recorded as asset impairment and exit costs on the condensed consolidated statement of earnings.

During the first quarter of 2006, the Company completed its annual review of goodwill and intangible assets and recorded non-cash pre-tax charges of $24 million related to an intangible asset impairment for biscuits assets in Egypt and hot cereal assets in the United States.  These charges were recorded as asset impairment and exit costs on the condensed consolidated statement of earnings.  During the first quarter of 2005, the Company completed its annual review of goodwill and intangible assets and no charges resulted from this review.

Total:

The pre-tax asset impairment, exit and implementation costs discussed above, for the six months and three months ended June 30, 2006 and 2005, were included in the operating companies income of the following segments:

		For the Six Months Ended June 30, 2006
		Restructuring Costs			Asset Impairment			Total Asset Impairment and Exit Costs			Implementation Costs			Total
		(in millions)
North America Beverages		$	9		$	—		$	9		$	4		$	13
North America Cheese & Foodservice		66						66			1			67
North America Convenient Meals		52						52			4			56
North America Grocery		13						13			4			17
North America Snacks & Cereals		15			99			114			4			118
European Union		99						99			9			108
Developing Markets, Oceania & North Asia		64			11			75			4			79
Total		$	318		$	110		$	428		$	30		$	458

 

13

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Kraft Foods Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

		For the Six Months Ended June 30, 2005
		Restructuring Costs			Asset Impairment			Total Asset Impairment and Exit Costs			Implementation Costs			Total
		(in millions)
North America Beverages		$	4		$	—		$	4		$	3		$	7
North America Cheese & Foodservice		8						8			4			12
North America Convenient Meals		2						2			2			4
North America Grocery		11			93			104						104
North America Snacks & Cereals		4						4			23			27
European Union		47						47			10			57
Developing Markets, Oceania & North Asia		10						10			3			13
Total		$	86		$	93		$	179		$	45		$	224

 

		For the Three Months Ended June 30, 2006
		Restructuring Costs			Asset Impairment			Total Asset Impairment and Exit Costs			Implementation Costs			Total
		(in millions)
North America Beverages		$	7		$	—		$	7		$	3		$	10
North America Cheese & Foodservice		60						60			(3		)	57
North America Convenient Meals		35						35			4			39
North America Grocery		8						8			3			11
North America Snacks & Cereals		10						10			3			13
European Union		81						81			6			87
Developing Markets, Oceania & North Asia		25						25			1			26
Total		$	226		$	—		$	226		$	17		$	243

 

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