Analysis of 10K vs Annual Report

Writing Assignment #3: Analysis of 10K vs. Annual Report
The company chosen for this report is Northfield (IL)-based Kraft Foods Inc., the largest food and beverage company in the U.S. and second in the world only to Nestle of Switzerland. The company operates 223 manufacturing and processing facilities globally and is present in no less than 170 countries. The product portfolio consists of 11 key brands: Oreo, Nabisco and LU biscuits. Milka and Cadbury chocolates. Trident gum. Jacobs and Maxwell House coffees. Philadelphia cream cheeses. Kraft cheeses, dinners and dressings, and Oscar Mayer meats. In early 2010, the company completed its acquisition of Cadbury plc.
The SEC Filing
The 10-K Kraft filed with the SEC differs not at all from all such reports for addressing just one readership, the regulators at this lead Federal agency concerned with industrial regulation. The clear purpose of the 10-K filing is compliance. Hence, the SEC report is an exercise in form-filling and adhering with painstaking care to government reporting rules.
As a seasoned equities issuer, Kraft ensured that the report to the SEC complied with every requirement for quarterly and annual filings. Hence, the 10-K Report is strictly by the book and consists of these sections: defining the scope of its business, the risks faced by the company that investors should be aware of when making buy or hold decisions (also detailed further in Quantitative and Qualitative Disclosures about Market Risk later in the report), admitting to any business issues raised by its own responsible executives and staff, an inventory of properties, suits and other legal proceedings it is confronted with and that might draw down stockholder equity, matters that have been submitted to stockholder vote, disclosure of the market for Kraft Common Stock A, the requisite reports of Income Statement and Balance Sheet for the reporting period, Management’s Discussion and Analysis of Financial Condition and Results of Operations, comparisons with performance in three prior years, Consolidated Statements of (enhanced or eroded) Shareholders’ Equity for prior years, Notes to Consolidated Financial Statements to explain discretionary accounting practices or vague items, the auditor’s opinion or Report of Independent Registered Public Accounting Firm on Financial Statement Schedule, the response of management to the auditor’s report, sections on internal control that comply with the Sarbanes-Oxley Act, mandatory disclosures on executive compensation and other matters of corporate governance, including transactions with directors and related interests. For the benefit of more sophisticated institutional investors and financial intermediaries that might have reason to loan money to Kraft Foods and subsidiaries, the 10-K also lays out: Consolidated Statements of Cash Flows for a four-year period.
The 2010 Annual Report
In its Annual Report, on the other hand, the company takes the opportunity not only to report on financial results but also to polish its corporate image with stockholders and the mass media (Kraft Foods 10-39). Consequently, the Annual Report is profusely illustrated with numerous product shots and depictions of happy workers and consumers. This is commonplace by now when communicating with editors and the investing public: to make reading easy and the experience pleasant in the style of newsmagazines and richly-illustrated Web sites.
Even more unique, however, is the editorial slant Kraft Foods takes. The 2010 Annual Report is very emphatic on good corporate citizenship. Kraft Foods chairman/CEO I.B. Rosenfeld makes much of corporate social responsibility not just in the obvious area of marketing safe, nutritious food but also practicing fair trade, the new buzzword that refers to paying farmers and dairy cooperatives more equitable prices for their produce. Uniquely, the Annual Report also spotlights an ongoing shift towards recyclable packaging.
Works Cited
Kraft Foods. Creating a More Delicious World. Northfield, IL: Kraft Foods Inc., 2011,