Kraft Foods Inc. : Kraft Foods Expected To Deliver Strong 2011 Results

NORTHFIELD, Ill., Jan. 17, 2012/PRNewswire/ -- Kraft Foods Inc. (NYSE: KFT) today reported that strong fourth quarter sales will lead to strong fiscal 2011 results, consistent with the company's previous outlook.

"We finished 2011 with strong business momentum in each of our geographies," said Irene Rosenfeld, ChairmanCEO.  "Our virtuous cycle of investment continues to pay off around the world, despite a difficult operating environment.  We expect our 2011 results will place us solidly among the top-tier of our peer group,we remain on track to launch two industry-leading companies in 2012."

Net revenue for full year 2011 is expected to have grown approximately 10 percent.  Organic Net Revenue is expected to increase approximately 6.5 percent, compared to a previous outlook of at least 6 percent, driven by mid-single-digit organic growth in North AmericaEurope,double-digit organic growth in Developing Markets. 

Diluted earnings per share are expected to be at least $1.95.  Operating EPS, which excludes acquisition-related[2] costs, Integration Program[3] costs,costs related to the spin-off of the North American Grocery business, is expected to be at least $2.28, including a negative $0.01impact from currency in the fourth quarter.  The previous outlook for Operating EPS was at least $2.27excluding any potential impact from currency in the fourth quarter.

The company plans to release its full 2011 financial results, issue its outlook for 2012provide an update on its plan to create two independent companies on Feb. 21, 2012. 

2011 Estimated Net Revenue Growth

As Reported (GAAP)	~10%
Impact of Divestitures(a)	~1 pp
Impact of Acquisitions(b)	~(1) pp
Impact of Accounting Calendar Changes	~(1) pp
Impact of Currency	~(2.5)pp
Organic Net Revenue[1] (Non-GAAP)	~6.5%

(a)	Impact of divestitures includes Starbucks CPG business.
(b)	Impact of acquisitions reflects the incremental January 2011 operating results from our Cadbury acquisition.

2011 Estimated Earnings Per Share

Diluted EPS (GAAP)	At least $1.95
Integration Program Costs	~$0.31
Spin-Off TransactionTransition Costs(c)	~$0.02
Operating EPS[1] (Non-GAAP)	At least $2.28

(c)	Spin-Off transactiontransition costs include transaction feesother costs associated with the proposed creation of two independent companies.

ABOUT KRAFT FOODS

Kraft Foods Inc. (NYSE: KFT) is a global snacks powerhouse with an unrivaled portfolio of brands people love.  Proudly marketing delicious biscuits, confectionery, beverages, cheese, grocery productsconvenient meals in approximately 170 countries, Kraft Foods had 2010 revenue of $49.2 billion.  Twelve of the company's iconic brands - Cadbury, Jacobs, Kraft, LU, Maxwell House, Milka, Nabisco, Oreo, Oscar Mayer, Philadelphia, TangTrident - generate revenue of more than $1 billionannually.  On Aug. 4, 2011, Kraft Foods announced plans to dividecreate two independent public companies:  a high-growth global snacks businessa high-margin North American grocery business.  The transaction is expected to be completed before the end of 2012.  A leader in innovation, marketing, health & wellnesssustainability, Kraft Foods is a member of the Dow Jones Industrial Average, Standard & Poor's 500, Dow Jones Sustainability IndexEthibel Sustainability Index.  Visit .

FORWARD-LOOKING STATEMENTS

This press release contains a number of forward-looking statements.  Words,variations of words such as "continue," "expect," "will,"similar expressions are intended to identify our forward-looking statements, including but not limited to, delivery of strong 2011 results; expected Net Revenues, Organic Net Revenue, Diluted EPSOperating EPS; that 2011 results will place us among top-tier of peers;on-track to launch two industry-leading companies in 2012.  These forward-looking statements are subject to a number of risksuncertainties, many of which are beyond our control, which could cause our actual results to differ materially from those indicated in our forward-looking statements.  Such factors include, but are not limited to, our failure to successfully separate the company, continued volatility ofincreases in input costs, pricing actions, increased competition, weakness in economic conditionstax law changes.  Please also see our risk factors, as they may be amended from time to time, set forth in our filings with the SEC, including our most recently filed Annual Report on Form 10-Ksubsequent reports on Forms 10-Q8-K.  Kraft Foods disclaimsdoes not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation.

NON-GAAP FINANCIAL MEASURES

The company reports its financial results in accordance with accounting principles generally accepted in the United States("GAAP"). 

The company's top-line measure is organic net revenues, which excludes the impacts of acquisitions, divestitures (including the Starbucks CPG business), currencyaccounting calendar changes.  The company uses organic net revenuescorresponding ratios as non-GAAP financial measures.  Management believes this measure better reflects revenues on a going-forward basisprovides improved comparability of results because it excludes the volatility of currency,the one-time impacts of acquisitions, divestituresaccounting calendar changes from net revenues.

The company uses Operating EPS, which is defined as diluted EPS attributable to Kraft Foods from continuing operations excluding costs related to:  the Integration Program; acquisition-related costs, including transaction advisory fees, U.K. stamp taxesthe impact of the Cadbury inventory revaluation; acquisition-related financing fees; transaction feesother costs related to the spin-off of the North American Grocery business;the impact of a deferred tax charge resulting from the recently enacted U.S. health care legislation.  Management believes this measure better reflects earnings per share on a going-forward basisprovides improved comparability of results because it excludes certain impacts related to the Cadbury acquisition, the spin-off of the North American Grocery business,other one-time impacts from earnings per share.

Non-GAAP financial measures should be viewed in addition to,not as an alternative for, the company's results prepared in accordance with GAAP.  In addition, the non-GAAP measures the company is using may differ from non-GAAP measures used by other companies.  Because GAAP financial measures on a forward-looking basis are neither accessible nor deemed to be significantly different from the non-GAAP financial measures, and reconciling information is not available without unreasonable effort, with regard to the non-GAAP financial measures in the company's Outlook, the company has not provided that information.

[1] Please see discussion of Non-GAAP Financial Measures at the end of this press release.

[2] Acquisition-related costs include transaction advisory fees, UK stamp taxes,the impact of the Cadbury inventory revaluation.

[3] Integration Program costs are defined as the costs associated with combining the Kraft FoodsCadbury businesses,are separate from those costs associated with the acquisition.

SOURCE Kraft Foods Inc.

Media, Michael Mitchell, [phone], [e-mail], or Investors, Christopher M. Jakubik, [phone], [e-mail]