INVESTOR RELATIONS

KRAFT’S annual report is easily accessed for viewers via their corporate website under “Investor Center”. The left of the screen has a tab with a variety of different investor-related materials to look at including “Corporate and Financial News”, “Stock Information” and “SEC Fillings and Annual Reports”. When clicking on the Annual Reports options the webpage opens up with a list of old archives or KRAFT’s Annual Reports and a link to visit their “most recent edition” of the Annual Report. In order to view their report, I had to download via a PDF file to my computer. Expecting it be quite fancy looking report, due to the amount of time it took me download, I was very surprised to a plain black and white and, now no offense KRAFT, but BORING LOOKING booklet. Obviously, the report was not intended to impress any marketing/advertising savvy people here- it is simply an economical piece. KRAFT does seem to use the report as a chance to tell their story as a company, it deals solely with financial/investor information in their 233 page report. For example, some of the report consisted of different sections such as “Risk Factors, Item Proprieties, Selected Financial Data, Management Discussion, Quantitative and Qualitative Disclosures” and so on. Being a not very mathematical or investor-related Wall Street person- none of this information I found to be too thrilling, hence I merely took a glance at the packet.

KRAFT’S letter to the shareholder was located in their 2007 annual report. It opened with the feel good line, “Dear Fellow Shareholder, Welcome to the new KRAFT”. There is also a large smiling picture of the CEO and chairman Irene Rosenfeld (photos below) in color filing up the left hand side. The four page letter had a very positive tone, outlining all the various accomplishments that KRAFT made in 2007. In fact, the whole overall tone of the letter was extremely positive, instead of using an apologetic tone for more somber news, the letter organized these sections as “Addressing Challenges”- a very wise choice of words when explaining, oh not the best of news, to their “fellow” shareholders. The CEO is telling the shareholders that their biggest problem was high input costs, however the letter also went on to explain how much that have grown with that issue in 2008 so far; again, keeping that shareholder happy and confident. The letter was very easy to read and perfectly organized- the connotation and the use of graphs/charts were effective. In addition, the big smiling picture of the lovely woman CEO gave legitimacy to letter. The conclusion of the letter left that warm, fuzzy feeling in those shareholders, as the CEO is thanking them for their business and promising them of even more excellent things to come…all is well with KRAFT.

Now, the most recent news release dealing with KRAFT’s corporate earnings has been, by far, the worst thing to read through! (Yes, even worse than that awful annual report) . The release was found under their “Corporate/Financial News Releases” tab in the terrible Investor Relations webpage. I have such poor admiration for this release for various reasons, sit tight and listen: first off, it is at least 18 pages long, the first line of the release is : “Kraft Foods Inc. (NYSE: KFT) today reported 2008 results that reflected solid top-line and bottom-line results in the second year of its three-year turnaround plan” (wait…what?), and the release continued on explaining complicated things such as Net Revenues, Operating Income, Tax Rates and Earnings per Share…Now the quote from the CEO was actually put together very well, and yes, comprehensible for us financial illiterate people out there. She was positive and upbeat, however also addressed real issues by proclaiming that 2008 was a tough year due to the economic crisis, however KRAFT is working extra hard to bounce back and has high expectations for 2009.