Schedule 1

Kraft Foods Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

For the Three Months Ended March 31,

(in millions of dollars, except per share data)  (Unaudited)

As Reported (GAAP) 

2012

2011

% Change
Fav / (Unfav)

Net revenues

$13,093

$12,573

4.1%

Cost of sales

8,426

7,937

(6.2)%

Gross profit

4,667

4,636

0.7%

Gross profit margin

35.6%

36.9%

Selling, general and administrative expenses

2,822

2,933

3.8%

Asset impairment and exit costs

98

-

(100.0)%

Amortization of intangibles

56

57

1.8%

Operating income

1,691

1,646

2.7%

Operating income margin

12.9%

13.1%

Interest and other expense, net

553

446

(24.0)%

Earnings before income taxes

1,138

1,200

(5.2)%

Provision for income taxes

319

398

19.8%

Effective tax rate

28.0%

33.2%

Net earnings

$        819

$        802

2.1%

Noncontrolling interest

6

3

(100.0)%

Net earnings attributable to Kraft Foods

$        813

$        799

1.8%

Per share data:

Basic earnings per share attributable to Kraft Foods

$       0.46

$       0.46

-

Diluted earnings per share attributable to Kraft Foods

$       0.46

$       0.45

2.2%

Average shares outstanding:

Basic

1,773

1,754

(1.1)%

Diluted

1,783

1,760

(1.3)%

Schedule 2

Kraft Foods Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Information

Net Revenues

For the Three Months Ended March 31, 

($ in millions)  (Unaudited)

% Change

Organic Growth Drivers

As Reported (GAAP)

Impact of Divestitures ⁽¹⁾

Impact of Currency

Organic (Non-GAAP)

As Reported (GAAP)

Organic
(Non-GAAP)

Vol/Mix

Price

2012

U.S. Beverages

$      708

$             -

$         -

$   708

(13.8)%

(3.5)%

(6.4)pp

2.9pp

U.S. Cheese

932

-

-

932

6.6%

6.6%

(6.3)

12.9

U.S. Convenient Meals

807

-

-

807

1.9%

1.9%

(1.0)

2.9

U.S. Grocery

852

-

-

852

7.3%

7.3%

4.6

2.7

U.S. Snacks

1,540

-

-

1,540

3.2%

3.2%

(4.1)

7.3

Canada & N.A. Foodservice

1,173

-

8

1,181

0.9%

1.9%

(2.6)

4.5

Kraft Foods North America

$   6,012

$             -

$        8

$6,020

1.3%

3.0%

(2.8)

5.8

Kraft Foods Europe

3,151

-

83

3,234

4.5%

7.2%

4.4

2.8

Kraft Foods Developing Markets

3,930

-

108

4,038

8.5%

11.5%

4.1

7.4

Kraft Foods

$ 13,093

$             -

$    199

$13,292

4.1%

6.5%

1.0pp

5.5pp

2011

U.S. Beverages

$      821

$        (87)

$         -

$    734

U.S. Cheese

874

-

-

874

U.S. Convenient Meals

792

-

-

792

U.S. Grocery

794

-

-

794

U.S. Snacks

1,492

-

-

1,492

Canada & N.A. Foodservice

1,163

(4)

-

1,159

Kraft Foods North America

$   5,936

$        (91)

$         -

$ 5,845

Kraft Foods Europe

3,016

-

-

3,016

Kraft Foods Developing Markets

3,621

-

-

3,621

Kraft Foods

$ 12,573

$        (91)

$         -

$12,482

⁽¹⁾  Impact of divestitures includes for reporting purposes Starbucks CPG business.

Schedule 3

Kraft Foods Inc. and Subsidiaries

Operating Income by Reportable Segments

For the Three Months Ended March 31,

($ in millions)  (Unaudited)

2011 Impacts

2012 Impacts

2011 Operating Income -   As Reported (GAAP)

Integration Program costs ⁽¹⁾

Impact of Divestitures ⁽²⁾

Integration Program costs ⁽¹⁾

Asset Impairment & Exit costs ⁽³⁾

Impact of Currency

Spin-Off Costs ⁽⁴⁾

2012-2014 Restructuring Program costs ⁽⁵⁾

Operations

2012 Operating Income -     As Reported (GAAP)

% Change

Segment Operating Income:

U.S. Beverages

$    161

$       -

$      (13)

$       -

$        -

$      -

$ -

$            (6)

$     (44)

$      98

(39.1)%

U.S. Cheese

134

-

-

-

-

-

-

(19)

52

167

24.6%

U.S. Convenient Meals

105

-

-

-

-

-

-

(6)

(6)

93

(11.4)%

U.S. Grocery

292

-

-

-

-

-

-

(9)

26

309

5.8%

U.S. Snacks

193

7

-

(2)

-

-

-

(27)

33

204

5.7%

Canada & N.A. Foodservice

151

1

(2)

(1)

-

(1)

-

(12)

(12)

124

(17.9)%

        Kraft Foods North America

$ 1,036

$       8

$      (15)

$      (3)

$        -

$    (1)

$ -

$          (79)

$      49

$    995

(4.0)%

        Kraft Foods Europe

308

51

-

(19)

-

(11)

-

-

55

384

24.7%

        Kraft Foods Developing Markets

405

35

-

(21)

(20)

4

-

-

122

525

29.6%

Unrealized G/(L) on Hedging Activities

62

-

-

-

-

-

-

-

(44)

18

HQ Pension

(42)

-

-

-

-

-

-

-

(38)

(80)

General Corporate Expenses

(66)

10

-

-

-

1

(39)

-

(1)

(95)

Amortization of Intangibles

(57)

-

-

-

-

(1)

-

-

2

(56)

Kraft Foods

$ 1,646

$   104

$      (15)

$    (43)

$    (20)

$    (8)

$(39)

$          (79)

$    145

$ 1,691

2.7%

⁽¹⁾  Integration Program costs are defined as the costs associated with combining the Kraft Foods and Cadbury businesses, and are separate from those costs associated with the acquisition.  In Q1 2012, 

$5 million was recorded in Cost of Sales and $38 million was recorded in Selling, General and Administrative expenses.  In Q1 2011, $3 million was recorded in Cost of Sales and $101 million was recorded

in Selling, General and Administrative expenses.

⁽²⁾  Impact of divestitures includes for reporting purposes Starbucks CPG business.

⁽³⁾  Consists of an asset impairment charge related to a trademark in Japan.

⁽⁴⁾  Spin-Off Costs represent non-recurring transaction and transition costs associated with preparing the businesses for independent operations consisting primarily of financial advisory fees, legal fees, accounting fees, 

   tax services and information systems infrastructure duplication.

⁽⁵⁾  Restructuring Program costs represent non-recurring restructuring and related implementation costs reflecting primarily severance, asset disposals and other manufacturing related non-recurring costs.

Schedule 4

Kraft Foods Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Information

Operating Income

For the Three Months Ended March 31,

($ in millions)  (Unaudited)

As Reported (GAAP)

Integration Program costs ⁽¹⁾

Spin-Off Costs ⁽²⁾

2012-2014 Restructuring Program costs ⁽³⁾

Underlying
(Non-GAAP)

2012

Net Revenues

$     13,093

$                   -

$           -

$                   -

$  13,093

Operating Income

$       1,691

$                43

$        39

$                79

$    1,852

Operating Income Margin

12.9%

14.1%

2011

Net Revenues

$     12,573

$                   -

$           -

$                  -

$  12,573

Operating Income

$       1,646

$              104

$           -

$                  -

$    1,750

Operating Income Margin

13.1%

13.9%

⁽¹⁾  Integration Program costs are defined as the costs associated with combining the Kraft Foods and Cadbury 

      businesses, and are separate from those costs associated with the acquisition.

⁽²⁾  Spin-Off Costs represent non-recurring transaction and transition costs associated with preparing the businesses for independent 

   operations consisting primarily of financial advisory fees, legal fees, accounting fees, tax services and information systems infrastructure 

duplication.

⁽³⁾  Restructuring Program costs represent non-recurring restructuring and related implementation costs reflecting primarily severance, 

   asset disposals and other manufacturing related non-recurring costs.

Schedule 5

Kraft Foods Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Information

Diluted EPS

(Unaudited)

Diluted EPS

% Growth

Diluted EPS Attributable to Kraft Foods for the Three

Months Ended March 31, 2011 (GAAP)

$         0.45

Integration Program costs ⁽¹⁾

0.07

Operating EPS for the Three Months Ended March 31, 2011 (Non-GAAP)

0.52

Increases in operations

0.06

Gain on sale of property

0.02

Asset impairment charge

(0.01)

Decreased operating income from the Starbucks CPG business cessation ⁽²⁾

(0.01)

Change in unrealized gains on hedging activities

(0.02)

Favorable foreign currency ⁽³⁾

0.01

Changes in taxes

-

Lower interest and other expense, net ⁽⁴⁾

0.01

Higher shares outstanding

(0.01)

Operating EPS for the Three Months Ended March 31, 2012 (Non-GAAP)

0.57

9.6%

Integration Program costs ⁽¹⁾

(0.02)

Spin-Off Costs ⁽⁵⁾

(0.06)

2012-2014 Restructuring Program costs ⁽⁶⁾

(0.03)

Diluted EPS Attributable to Kraft Foods for the Three

Months Ended March 31, 2012 (GAAP)

$         0.46

2.2%

⁽¹⁾  Integration Program costs are defined as the costs associated with combining the Kraft Foods and Cadbury

   businesses, and are separate from those costs associated with the acquisition.  Integration Program costs were

   $43 million, or $40 million after-tax including certain tax costs associated with the integration of Cadbury,

   for the three months ended March 31, 2012, as compared to $104 million, or $114 million after-tax for the three

   months ended March 31, 2011.

⁽²⁾  Effective March 1, 2011 Starbucks unilaterally took control of the sale and distribution of the packaged coffee

   business in grocery stores and other channels by terminating its agreements with Kraft Foods and in a manner

   that Kraft Foods believes violates the terms of those agreements.

⁽³⁾  Includes the favorable foreign currency impact on Kraft Foods foreign denominated debt and interest expense due

   to the strength of the U.S. dollar.

⁽⁴⁾  Excludes the loss on hedging instruments/other fees related to our planned Spin-Off.

⁽⁵⁾  Spin-Off Costs represent non-recurring transaction and transition costs associated with preparing the businesses 

   for independent operations consisting primarily of financial advisory fees, legal fees, accounting fees, tax services 

   and information systems infrastructure duplication, and financing and related costs to redistribute debt and secure 

   investment grade ratings for both the North American Grocery Business and the Global Snacks Business.    

   Spin-Off Costs for the three months ended March 31, 2012 were $173 million, or $113 million after-tax and include 

   a pre-tax loss of $130 million related to interest rate swaps recognized in interest and other expenses, net as a

   result of a change in the planned timing of certain forecasted debt due to our planned Spin-Off and related debt 

   capitalization plans.

⁽⁶⁾  Restructuring Program costs for the three months ended March 31, 2012 were $79 million, or $49 million after-tax 

   and represent non-recurring restructuring and related implementation costs reflecting primarily severance, 

   asset disposals and other manufacturing related non-recurring costs.

Schedule 6

Kraft Foods Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

($ in millions)  (Unaudited)

March 31,

December 31,

March 31,

2012

2011

2011

ASSETS

Cash and cash equivalents

$   1,852

$    1,974

$   2,088

Receivables, net

7,314

6,361

7,131

Inventories, net

6,286

5,706

6,116

Other current assets

2,241

2,161

2,194

Property, plant and equipment, net

14,084

13,813

14,003

Goodwill

37,940

37,297

38,592

Intangible assets, net

25,602

25,186

26,351

Other assets

1,328

1,339

1,794

      TOTAL ASSETS

$ 96,647

$ 93,837

$ 98,269

LIABILITIES AND EQUITY

Short-term borrowings

$   3,320

$       182

$   1,812

Current portion of long-term debt

1,823

3,654

3,945

Accounts payable

5,545

5,525

5,535

Other current liabilities

8,610

9,084

8,487

Long-term debt

23,198

23,095

24,288

Deferred income taxes

6,901

6,738

8,252

Accrued pension costs

3,540

3,597

1,881

Accrued postretirement health care costs

3,259

3,238

3,052

Other liabilities

3,360

3,396

3,518

      TOTAL LIABILITIES

59,556

58,509

60,770

      TOTAL EQUITY

37,091

35,328

37,499

      TOTAL LIABILITIES AND EQUITY

$ 96,647

$ 93,837

$ 98,269