Why is Kraft Foods filing this 8-K to update its 2008 financial information?

Kraft Foods is filing this 8-K to reflect revised financial information and disclosures resulting from its "Organizing For Growth" initiative and a reorganization of its European operations, effective January 1, 2009. These changes impact segment reporting and accounting policies.

What are the key changes in the European operational structure?

Kraft Foods has transitioned its European Biscuit, Chocolate, Coffee, and Cheese categories into fully integrated, accountable business units. Additionally, Central Europe operations have been realigned into the Kraft Foods Developing Markets segment.

How does the change in inventory valuation method affect the company's financial reporting?

The company has changed its U.S. inventory valuation from LIFO to the average cost method. This change aims to better match revenues and expenses to current costs, align external reporting with competitors, and harmonize external reporting with the tax basis of accounting. This is a change in accounting policy.

What impact do the new accounting standards adopted have on the financial statements?

The adoption of new guidance on noncontrolling interests and share-based payments did not have a material impact on Kraft Foods' financial statements. The guidance on noncontrolling interests changed its classification within equity and how related transactions are treated, while the share-based payment guidance affects EPS calculations for certain awards.

MDLZ 8-K SEC Disclosure

Summary

This Form 8-K filing by Kraft Foods Inc. (prior to its spin-off and rebranding into Mondelez International) on November 3, 2009, provides updated financial information for the year ended December 31, 2008, reflecting significant changes from its "Organizing For Growth" initiative and a European reorganization. Key changes include a shift in segment reporting for European operations and revisions to accounting policies for inventory valuation, excise tax classification, and cost assignment for headquarters' functional costs. These adjustments aim to enhance operational focus, align reporting with competitors and tax practices, and provide clearer financial insights. Investors should note that these revisions are primarily retrospective, updating the company's previous 10-K filing. The document emphasizes that other information in the original 10-K has not been updated for subsequent events, directing stakeholders to consult subsequent 10-Q filings for more current information. The filing also includes forward-looking statements regarding potential future business developments, including risks and uncertainties associated with a possible combination with Cadbury.

Key Highlights

1Kraft Foods Inc. is updating its 2008 financial information due to a strategic reorganization under the "Organizing For Growth" initiative.
2European operations are being restructured into integrated business units by category (Biscuits, Chocolate, Coffee, Cheese) and Central Europe operations are realigned into the Developing Markets segment.
3The company changed its U.S. inventory valuation method from LIFO to average cost to better match revenues with current costs and align with competitors.
4Excise taxes will now be presented net of revenues and cost of sales for better clarity, a change that did not materially impact revenues or costs.
5A new methodology for assigning headquarters' functional costs across the operating structure was implemented, reclassifying certain costs but not impacting net earnings.
6Two new accounting standards were adopted effective January 1, 2009: one concerning noncontrolling interests and another impacting the calculation of Earnings Per Share (EPS) for share-based payments with dividend rights.
7The filing provides revised sections of the 2008 Form 10-K, including Selected Financial Data, Management's Discussion and Analysis, and Financial Statements.

Mondelez International, Inc. 8-K Report, Corporate Update (Nov 3, 2009)

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Key Highlights

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