Kraft Realigns Reporting Divisions

NEW YORK - Jan 10/05 - SNS -- Kraft Foods Inc. has realigned the financial reporting structure for its North American businesses following its agreement to sell its sugar confectionery brands.

The new segment reporting structure separates the former U.S. Beverages & Grocery segment into a U.S. Beverages segment and a U.S. Grocery segment to provide more focus on each business. Additionally, the cereals business has been moved from the former U.S. Beverages & Grocery segment to the new U.S. Snacks & Cereals segment to benefit more fully from synergies among grain-based products like cereals, cookies and crackers.

The sugar confectionery brands Kraft recently agreed to sell will be reported as a "discontinued business," which excludes the results of this business from its volume, revenue and operating companies income (OCI) measures, while maintaining its impact on earnings per share until the sale is completed.

These brands previously had been part of the U.S. Snacks segment; the U.S. Cheese, Canada & North America Foodservice segment; and the company's two international segments.

Under the new structure, there are five North American reportable segments:

* U.S. Beverages, including coffee and refreshment beverages

* U.S. Cheese, Canada & North America Foodservice

* U.S. Convenient Meals, including pizza, meats and meals

* U.S. Grocery, including desserts and enhancers

* U.S. Snacks & Cereals, including biscuits, salted snacks and cereals

Kraft will continue to report its International results within the same two geographic segments: Europe, Middle East & Africa; and Latin America & Asia Pacific.