 |
|
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Continued)
Discussion and Analysis  Consolidated Operating Results
See pages 19-20 for a discussion of Cautionary Factors That May Affect Future Results. |  | |
|
 |
|
| (in millions) |
|
2003 |
|
|
2002 |
|
2001 |
|
|
|
|
Net Revenues |
|
|
|
|
|
|
|
|
|
|
Domestic tobacco |
|
$17,001 |
|
|
$18,877 |
|
$19,902 |
|
|
|
International tobacco |
|
33,389 |
|
|
28,672 |
|
26,517 |
|
|
|
North American food |
|
21,907 |
|
|
21,485 |
|
20,970 |
|
|
|
International food |
|
9,103 |
|
|
8,238 |
|
8,264 |
|
|
|
Beer |
|
|
|
|
2,641 |
|
4,791 |
|
|
|
Financial services |
|
432 |
|
|
495 |
|
435 |
|
|
|
|
Net revenues |
|
$81,832 |
|
|
$80,408 |
|
$80,879 |
|
|
|
| |
|
|
|
| (in millions) |
|
2003 |
|
|
2002 |
|
2001 |
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
Operating companies income: |
|
|
|
|
|
|
|
|
|
|
Domestic tobacco |
|
$ 3,889 |
|
|
$ 5,011 |
|
$ 5,264 |
|
|
|
International tobacco |
|
6,286 |
|
|
5,666 |
|
5,406 |
|
|
|
North American food |
|
4,920 |
|
|
4,953 |
|
4,796 |
|
|
|
International food |
|
1,282 |
|
|
1,330 |
|
1,239 |
|
|
|
Beer |
|
|
|
|
276 |
|
481 |
|
|
|
Financial services |
|
313 |
|
|
55 |
|
296 |
|
|
|
Amortization of intangibles |
|
(9 |
) |
|
(7 |
) |
(1,014 |
) |
|
|
General corporate expenses |
|
(771 |
) |
|
(683 |
) |
(766 |
) |
|
|
|
Operating income |
|
$15,910 |
|
|
$16,601 |
|
$15,702 |
|
|
|
| | |
The following events occurred during 2003, 2002 and 2001 that affected the comparability of statement of earnings amounts.  Domestic Tobacco Legal Settlement—As discussed in Note 18. Contingencies, during 2003, PM USA and certain other defendants reached an agreement with a class of U.S. tobacco growers and quota-holders to resolve a lawsuit related to tobacco leaf purchases. During 2003, PM USA recorded pre-tax charges of $202 million for its obligations under the agreement.
Domestic Tobacco Headquarters Relocation Charges—During the first quarter of 2003, PM USA announced that it will be moving its corporate headquarters from New York City to Richmond, Virginia, by June 2004. PM USA estimates that the total cost of the relocation will be approximately $120 million, including compensation to those employees who do not relocate. Approximately 270 or 40% of the eligible employees elected to relocate. Pre-tax charges of $69 million were recorded in 2003 for relocation charges. The relocation will require total cash payments of approximately $70 million in 2004 and $20 million in 2005 and beyond. Cash payments of approximately $30 million have been made through December 31, 2003. Gains on Sales of Businesses—During 2003, Kraft Foods International, Inc. (“KFI”) sold a European rice business and a branded fresh cheese business in Italy and recorded aggregate pre-tax gains of $31 million. During 2002, KFI sold a Latin American yeast and industrial bakery ingredients business resulting in a pre-tax gain of $69 million, and Kraft sold several small businesses, resulting in pre-tax gains of $11 million. During 2001, Kraft sold a few small food businesses on which pre-tax gains of $8 million were recorded. | | |
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