What were the main drivers of revenue growth in the nine-month period?

Revenue growth for the nine months ended September 30, 2006, was primarily driven by favorable volume/mix, which contributed $657 million, and higher net pricing, adding $203 million. This growth was partially offset by the impact of divested businesses, which reduced revenues by $324 million.

How did the restructuring program impact the company's financial performance?

The ongoing restructuring program, which includes asset impairment, exit, and implementation costs, had a significant negative impact on operating income. For the nine months ended September 30, 2006, pre-tax charges were $496 million, compared to $173 million in the prior year period. These costs reduced earnings and diluted EPS, but are part of a long-term strategy to optimize cost structure and capacity utilization.

What was the impact of the United Biscuits acquisition and investment redemption?

In the third quarter of 2006, Kraft acquired the Spanish and Portuguese operations of United Biscuits and related trademarks for approximately $1.1 billion. This transaction also involved the redemption of Kraft's investment in United Biscuits, resulting in a pre-tax gain of $251 million ($148 million after-tax). The acquired businesses were not consolidated into earnings for the reporting period due to the timing of the acquisition.

What significant tax-related event occurred in the first quarter of 2006?

In the first quarter of 2006, Altria Group, Inc. reimbursed Kraft $337 million for unrequired federal tax reserves and $46 million in pre-tax interest due to the conclusion of an IRS audit for the years 1996-1999. Additionally, Kraft recognized net state tax reversals of $39 million. This resulted in a total net earnings benefit of $405 million, or $0.24 per diluted share, for the nine-month period.

MDLZ 10-Q Quarterly Report Q3 FY2006 — Revenue, Net Income, EPS

Summary

Mondelez International, Inc. (MDLZ), reporting as Kraft Foods Inc., presented its third-quarter and nine-month results for the period ending September 29, 2006. The company demonstrated growth in net revenues for both the three-month and nine-month periods, largely driven by favorable volume/mix and higher net pricing, despite a decrease in overall volume primarily due to divestitures. Significant restructuring charges continued to impact operating income, with the company expanding its restructuring program through 2008. A notable event during the quarter was a pre-tax gain of $251 million from the redemption of its investment in United Biscuits, which was partially offset by asset impairment and exit costs related to restructuring and business sales. The company also benefited from a significant tax reimbursement from Altria Group, Inc. related to a concluded IRS audit, positively impacting net earnings and diluted EPS. The company raised its full-year EPS guidance, reflecting one-time gains and the ongoing restructuring efforts.

Key Highlights

1Net revenues increased by 2.3% for the nine months ended September 30, 2006, reaching $24.985 billion, compared to the prior year period.
2Operating income saw a slight decrease of 0.1% for the nine months, largely due to significant asset impairment, exit, and implementation costs associated with its ongoing restructuring program.
3A pre-tax gain of $251 million ($148 million after-tax) was recognized in Q3 2006 from the redemption of the company's investment in United Biscuits.
4Net earnings for the nine months increased significantly by 31.0% to $2.436 billion, boosted by a substantial income tax benefit from the resolution of an Altria Group, Inc. IRS audit.
5Diluted Earnings Per Share (EPS) from continuing operations rose to $1.47 for the nine months, up from $1.26 in the prior year.
6The company repurchased approximately $937 million of its Class A common stock in the first nine months of 2006 under new and existing repurchase programs.
7The company acquired the Spanish and Portuguese operations of United Biscuits and Nabisco trademarks in the EU for approximately $1.1 billion during the third quarter of 2006.

Mondelez International, Inc. Quarterly Report for Q3 Ended Sep 30, 2006

Summary

Key Highlights

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