Mondelez International (MDLZ) 10-Q 3 Nov 09 2009 Q3 Quarterly report Financial data

Statement Of Income

Statement Of Income (USD $)
In Millions, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Net revenues	$9,803	$10,401	$29,361	$31,251
Cost of sales	6,262	7,096	18,890	20,777
Gross profit	3,541	3,305	10,471	10,474
Marketing, administration and research costs	2,116	2,151	6,247	6,544
Asset impairment and exit costs	0	123	(26)	306
Losses on divestitures, net	0	1	17	93
Amortization of intangibles	6	7	15	18
Operating income	1,419	1,023	4,218	3,513
Interest and other expense, net	323	298	915	934
Earnings from continuing operations before income taxes	1,096	725	3,303	2,579
Provision for income taxes	270	205	986	834
Earnings from continuing operations	826	520	2,317	1,745
Earnings and gain from discontinued operations, net of income taxes (Note 2)	0	845	0	968
Net earnings	826	1,365	2,317	2,713
Noncontrolling interest	2	3	6	7
Net earnings attributable to Kraft Foods	$824	$1,362	$2,311	$2,706
Basic earnings per share attributable to Kraft Foods:
Continuing operations	0.56	0.34	1.56	1.15
Discontinued operations	$0	0.57	$0	0.63
Net earnings attributable to Kraft Foods	0.56	0.91	1.56	1.78
Diluted earnings per share attributable to Kraft Foods:
Continuing operations	0.55	0.34	1.56	1.14
Discontinued operations	$0	0.57	$0	0.63
Net earnings attributable to Kraft Foods	0.55	0.91	1.56	1.77
Dividends declared	0.29	0.29	0.87	0.83

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Dec. 31, 2008
ASSETS
Cash and cash equivalents	$2,996	$1,244
Receivables (less allowances of $137 in 2009 and $129 in 2008)	4,720	4,704
Inventories, net	4,073	3,881
Deferred income taxes	654	804
Other current assets	575	828
Total current assets	13,018	11,461
Property, plant and equipment, net	10,409	9,917
Goodwill	28,617	27,581
Intangible assets, net	13,319	12,926
Prepaid pension assets	122	56
Other assets	1,184	1,232
TOTAL ASSETS	66,669	63,173
LIABILITIES
Short-term borrowings	1,359	897
Current portion of long-term debt	1,258	765
Accounts payable	3,264	3,373
Accrued marketing	1,967	1,803
Accrued employment costs	1,020	951
Other current liabilities	3,188	3,255
Total current liabilities	12,056	11,044
Long-term debt	18,108	18,589
Deferred income taxes	4,314	4,064
Accrued pension costs	2,204	2,367
Accrued postretirement health care costs	2,682	2,678
Other liabilities	2,094	2,075
TOTAL LIABILITIES	41,458	40,817
Contingencies (Note 11)	-	-
EQUITY
Common Stock, no par value (1,735,000,000 shares issued in 2009 and 2008)	0	0
Additional paid-in capital	23,570	23,563
Retained earnings	14,394	13,440
Accumulated other comprehensive losses	(4,355)	(5,994)
Treasury stock, at cost	(8,484)	(8,714)
Total Kraft Foods Shareholders' Equity	25,125	22,295
Noncontrolling interest	86	61
TOTAL EQUITY	25,211	22,356
TOTAL LIABILITIES AND EQUITY	$66,669	$63,173

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Millions, except Share data	Sep. 30, 2009	Dec. 31, 2008
Receivables, allowances	$137	$129
Common Stock, no par value	$0	$0
Common Stock, shares issued	1,735,000,000	1,735,000,000

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Earnings / (Losses)	Treasury Stock	Noncontrolling Interest		Total
Beginning Balances at Dec. 31, 2007	$0	$23,445	$12,321	($1,835)	($6,524)	$38		$27,445
Comprehensive earnings / (losses):
Beginning Balances at Dec. 31, 2007	0	23,445	12,321	(1,835)	(6,524)	38		27,445
Comprehensive earnings / (losses):
Net earnings			2,884			9		2,893
Other comprehensive earnings, net of income taxes				(4,159)		(9)		(4,168)
Adoption of new benefit plan guidance			(8)					(8)
Exercise of stock options and issuance of other stock awards		118	(81)		231			268
Cash dividends declared ($0.87 per share in 2009 and $1.12 per share in 2008)			(1,676)					(1,676)
Acquisitions of noncontrolling interest and other activities						23		23
Common Stock repurchased					(777)			(777)
Common Stock tendered					(1,644)			(1,644)
Ending Balances at Dec. 31, 2008	0	23,563	13,440	(5,994)	(8,714)	61		22,356
Comprehensive earnings / (losses):
Beginning Balances at Dec. 31, 2008	0
Comprehensive earnings / (losses):
Net earnings			2,311			6		2,317
Other comprehensive earnings, net of income taxes				1,639		25		1,664
Total comprehensive earnings						31	[1]	3,981	[1]
Exercise of stock options and issuance of other stock awards		8	(71)		230			167
Cash dividends declared ($0.87 per share in 2009 and $1.12 per share in 2008)			(1,286)					(1,286)
Dividends paid on noncontrolling interest and other activities		(1)				(6)		(7)
Ending Balances at Sep. 30, 2009	0	23,570	14,394	(4,355)	(8,484)	86		25,211
Beginning Balances at Jun. 30, 2009	0
Comprehensive earnings / (losses):
Ending Balances at Sep. 30, 2009	$0
[1]Total comprehensive earnings / (losses) were $1,197 million for the quarter ended and $3,981 million for the nine months ended September 30, 2009, as compared to $531 million for the quarter ended and $2,543 million for the nine months ended September 30, 2008. Comprehensive earnings / (losses) attributable to Kraft Foods were $1,192 million for the quarter ended and $3,950 million for the nine months ended September 30, 2009, as compared to $531 million for the quarter ended and $2,536 million for the nine months ended September 30, 2008.

2_Statement Of Shareholders Equ

Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $)
	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008	12 Months Ended Dec. 31, 2008
Cash dividends declared, per share	0.29	0.29	0.87	0.83	1.12

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
CASH PROVIDED BY / (USED IN) OPERATING ACTIVITIES
Net earnings	$2,317	$2,713
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization	659	752
Stock-based compensation expense	123	135
Deferred income tax provision / (benefit)	127	(77)
Losses on divestitures, net	17	93
Gain on discontinued operations (Note 2)	0	(849)
Asset impairment and exit costs, net of cash paid	9	167
Other non-cash expense, net	189	75
Change in assets and liabilities, excluding the effects of acquisitions and divestitures:
Receivables, net	410	373
Inventories, net	(27)	(814)
Accounts payable	(351)	(216)
Other current assets	233	(134)
Other current liabilities	(363)	283
Change in pension and postretirement assets and liabilities, net	(74)	28
Net cash provided by operating activities	3,269	2,529
CASH PROVIDED BY / (USED IN) INVESTING ACTIVITIES
Capital expenditures	(749)	(901)
Acquisitions, net of cash received	0	(99)
Proceeds from divestitures	6	38
Other	43	38
Net cash used in investing activities	(700)	(924)
CASH PROVIDED BY / (USED IN) FINANCING ACTIVITIES
Net issuance / (repayment) of short-term borrowings	461	(5,834)
Long-term debt proceeds	2	6,477
Long-term debt repaid	(215)	(65)
Repurchase of Common Stock	0	(777)
Dividends paid	(1,284)	(1,236)
Other	75	32
Net cash used in financing activities	(961)	(1,403)
Effect of exchange rate changes on cash and cash equivalents	144	(32)
Cash and cash equivalents:
Increase	1,752	170
Balance at beginning of period	1,244	567
Balance at end of period	$2,996	$737

Note 1. Summary of Significant

Note 1. Summary of Significant Accounting Policies:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 1. Summary of Significant Accounting Policies:	Note 1.Summary of Significant Accounting Policies: Basis of Presentation: Our interim condensed consolidated financial statements are unaudited. We prepared the condensed consolidated financial statements following SEC rules for interim reporting. As permitted under those rules, we have condensed or omitted a number of footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America. It is managements opinion that these financial statements include all normal and recurring adjustments necessary for a fair presentation of our financial position and operating results. Net revenues and net earnings for any interim period are not necessarily indicative of future or annual results. You should read these statements in conjunction with our revised consolidated financial statements and related notes for the year ended December31, 2008 in the Form 8-K we filed with the SEC on November3, 2009. Inventories: Effective January1, 2009, we changed our method of valuing our U.S. inventories to the average cost method. In prior years, principally all U.S. inventories were valued using the last-in, first-out (LIFO) method. With this change, we value all of our inventories using the average cost method. We used the LIFO method to determine the cost of 35% of inventories at December31, 2008. We believe that the average cost method of accounting for U.S. inventories is preferable and will improve financial reporting by better matching revenues and expenses to current costs, by better aligning our external reporting with our competitors, and by aligning our external reporting with our tax basis of accounting. We revised prior years financial statements to conform to the change in accounting policy. The following line items within the statements of earnings were affected by the change in accounting policy: FortheThreeMonthsEndedSeptember30,2009 AsComputed under LIFO AsReportedunder AverageCost Favorable / (Unfavorable) (in millions, except per share data) Cost of sales $ 6,253 $ 6,262 $ (9 ) Provision for income taxes 273 270 3 Earnings from continuing operations 832 826 (6 ) Net earnings attributable to Kraft Foods 830 824 (6 ) Basic earnings per share attributable to Kraft Foods: Continuing operations $ 0.56 $ 0.56 $ Discontinued operations Net earnings attributable to Kraft Foods $ 0.56 $ 0.56 $ Diluted earnings per share attributable to Kraft Foods: Continuing operations $ 0.56 $ 0.55 $ (0.01 ) Discontinued operations Net earnings attributable to Kraft Foods $ 0.56 $ 0.55 $ (0.01 ) FortheThreeMonthsEndedSeptember30,2008 AsComputed under LIFO AsReportedunder AverageCo

Note 2. Divestitures:

Note 2. Divestitures:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 2. Divestitures:	Note 2.Divestitures: Post Cereals Split-off: On August4, 2008, we completed the split-off of the Post cereals business into Ralcorp Holdings, Inc., after an exchange with our shareholders. Accordingly, the prior period results of the Post cereals business were reflected as discontinued operations on the condensed consolidated statement of earnings. Summary results of operations for the Post cereals business for the three and nine months ended September30, 2008 were as follows: FortheThree MonthsEnded September30, 2008 FortheNine MonthsEnded September30, 2008 (in millions; as revised) Net revenues $ 90 $ 666 (Loss) / earnings before income taxes (7 ) 189 Benefit / (provision) for income taxes 3 (70 ) Gain on discontinued operations, net of income taxes 849 849 Earnings and gain from discontinued operations, net of income taxes $ 845 $ 968 During the fourth quarter of 2008, we increased our gain on discontinued operations by $77 million to correct for a deferred tax liability related to the split-off of the Post cereals business. As such, our gain from the split-off of the Post cereal business was $926 million. Refer to our revised consolidated financial statements for the year ended December31, 2008 for further details of this transaction. Other Divestitures: In September 2009, we reached an agreement to divest a snack bars operation in the U.S. The transaction is subject to customary closing conditions, including regulatory approvals, and we expect it to close in the fourth quarter of 2009 at a small gain. For the nine months ended September30, 2009, we received $6 million in proceeds and recorded pre-tax losses of $17 million on the divestitures of a juice operation in Brazil and a plant in Spain.

Note 3. Inventories:

Note 3. Inventories:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 3. Inventories:	Note3.Inventories: Inventories at September30, 2009 and December31, 2008 were: September30, 2009 December31, 2008 (in millions; 2008 revised) Raw materials $ 1,587 $ 1,568 Finished product 2,486 2,313 Inventories, net $ 4,073 $ 3,881 Refer to Note 1, Summary of Significant Accounting Policies, for information on the change in our valuation method for U.S. inventories to the average cost method.

Note 4. Goodwill and Intangible

Note 4. Goodwill and Intangible Assets:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 4. Goodwill and Intangible Assets:	Note 4.Goodwill and Intangible Assets: Goodwill by reportable segment was: September30, 2009 December31, 2008 (in millions; 2008 revised) Kraft Foods North America: U.S. Beverages $ 1,290 $ 1,290 U.S. Cheese 3,000 3,000 U.S. Convenient Meals 1,460 1,460 U.S. Grocery 3,046 3,046 U.S. Snacks 6,965 6,965 Canada N.A. Foodservice 2,336 2,306 Kraft Foods Europe (1) 6,626 5,893 Kraft Foods Developing Markets 3,894 3,621 Total goodwill $ 28,617 $ 27,581 (1)This segment was formerly known as European Union. As discussed in Note 14, Segment Reporting, we implemented changes to our operating structure in 2009. As a result of these changes, we aligned the reporting of our Central Europe operations into our Kraft Foods Developing Markets segment and moved $1,534 million of goodwill from Kraft Foods Europe to Kraft Foods Developing Markets as of January1, 2009. We revised prior period segment results in a consistent manner. Intangible assets were: September30, 2009 December31, 2008 (in millions) Non-amortizable intangible assets $ 13,145 $ 12,758 Amortizable intangible assets 273 254 13,418 13,012 Accumulated amortization (99 ) (86 ) Intangible assets, net $ 13,319 $ 12,926 Non-amortizable intangible assets consist substantially of brand names purchased through our acquisitions of Nabisco Holdings Corp., the global LU biscuit business of Groupe Danone S.A. and the Spanish and Portuguese operations of United Biscuits. Amortizable intangible assets consist primarily of trademark licenses, customer-related intangibles and non-compete agreements. The movements in goodwill and intangible assets were: Intangible Goodwill Assets,atCost (in millions) Balance at December31, 2008 $ 27,581 $ 13,012 Changes due to: Foreign currency 1,036 411 Other (5 ) Balance at September30, 2009 $ 28,617 $ 13,418 Amortization expense for intangible assets was $6 million for the three months and $15 million for the nine months ended September30, 2009. We currently estimate amortization expense for each of the next five years to be approximately $21 million or less.

Note 5. Restructuring Costs:

Note 5. Restructuring Costs:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 5. Restructuring Costs:	Note 5.Restructuring Costs: 2004 2008 Restructuring Program: In 2008, we completed our five-year restructuring program (the Restructuring Program). The Restructuring Programs objectives were to leverage our global scale, realign and lower our cost structure, and optimize capacity. As part of the Restructuring Program, we: incurred $3.0 billion in pre-tax charges reflecting asset disposals, severance and implementation costs; announced the closure of 35 facilities and announced the elimination of approximately 18,800 positions; and will use cash to pay for $2.0 billion of the $3.0 billion in charges. In the second quarter of 2009, we sold a plant in Spain that we previously announced we would close under our Restructuring Program. Accordingly, we reversed $35 million in Restructuring Program charges, primarily related to severance, and recorded a $17 million loss on the divestiture of the plant in the second quarter of 2009. The reversal of the Restructuring Program costs, which affected the segment operating income of the Kraft Foods Europe segment, was recorded within asset impairment and exit costs. Since the inception of the Restructuring Program, we have paid cash for $1.6 billion of the $2.0 billion in expected cash payments, including $123 million paid in the first nine months of 2009. At September30, 2009, we had an accrual of $366 million, and we had eliminated approximately 16,500 positions under the Restructuring Program. Restructuring liability activity for the nine months ended September30, 2009 was: Severance Other Total (in millions) Liability balance, January1, 2009 $ 444 $ 45 $ 489 Reversal of charges (32 ) (3 ) (35 ) Cash spent (117 ) (6 ) (123 ) Currency 36 (1 ) 35 Liability balance, September30, 2009 $ 331 $ 35 $ 366 Our 2009 activity was related to the aforementioned reversal of $35 million and cash outflows on prior year Restructuring Program charges. Our prior year severance charges included the cost of benefits received by terminated employees. Other prior year costs related primarily to the renegotiation of supplier contract costs, workforce reductions associated with facility closings and the termination of leasing agreements.

Note 6. Debt:

Note 6. Debt:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 6. Debt:	Note 6.Debt: On September3, 2009, we redeemed our November 2011, 7% $200 million debenture at par value.Upon redemption, we recorded a loss of $14 million within interest and other expense, netwhich represented the write-off of the remaining discount.

Note 7. Accumulated Other Compr

Note 7. Accumulated Other Comprehensive Losses:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 7. Accumulated Other Comprehensive Losses:	Note 7.Accumulated Other Comprehensive Losses: The components of accumulated other comprehensive earnings / (losses) were: Currency Derivatives Translation Pension and Accountedfor Adjustments OtherBenefits as Hedges Total (in millions) Balances at December31, 2008 $ (2,399 ) $ (3,572 ) $ (23 ) $ (5,994 ) Other comprehensive earnings / (losses), net of income taxes: Currency translation adjustments 1,598 (116 ) 1,482 Amortization of experience losses and prior service costs 96 96 Settlement losses 50 50 Net actuarial loss arising during period (12 ) (12 ) Change in fair value of cash flow hedges 23 23 Total other comprehensive earnings 1,639 Balances at September30, 2009 $ (801 ) $ (3,554) $ $ (4,355 )

Note 8. Stock Plans:

Note 8. Stock Plans:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 8. Stock Plans:	Note 8.Stock Plans: At our annual meeting of shareholders held on May20, 2009, our shareholders approved the Kraft Foods Inc. Amended and Restated 2005 Performance Incentive Plan. The amended plan includes, among other provisions, a limit on the number of shares that may be granted under the plan, vesting restrictions and a prohibition on stock option repricing. Under the amended plan, we are authorized to issue a maximum of 168.0million shares of our Common Stock. As of the effective date of the amendment, there were 92.1million shares available to be granted under the plan, of which no more than 27.5million shares may be awarded as restricted or deferred stock. In January 2009, we granted 1.4million shares of stock in connection with our long-term incentive plan. The market value per share was $27.00 on the date of grant. The unvested shares have no voting rights and do not pay dividends. In February 2009, as part of our annual incentive program, we issued 4.1million shares of restricted and deferred stock to eligible U.S. and non-U.S. employees. The market value per restricted or deferred share was $23.64 on the date of grant. Also, as part of our annual incentive program, we granted 16.3million stock options to eligible U.S. and non-U.S. employees at an exercise price of $23.64. We also issued 0.2million off-cycle shares of restricted and deferred stock during the first nine months of 2009. The weighted-average market value per restricted or deferred share was $25.45 on the date of grant. In aggregate, we issued 5.7million restricted and deferred shares during the first nine months of 2009, including those issued as part of our long-term incentive plan. During the first nine months of 2009, 5.4million shares of restricted and deferred stock vested at a market value of $136 million. There were 4.0million stock options exercised during the first nine months of 2009 with a total intrinsic value of $44 million.

Note 9. Benefit Plans:

Note 9. Benefit Plans:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 9. Benefit Plans:	Note 9.Benefit Plans: Pension Plans Components of Net Periodic Pension Cost: Net periodic pension cost consisted of the following for the three and nine months ended September30, 2009 and 2008: U.S. Plans Non-U.S. Plans FortheThreeMonthsEnded September30, FortheThreeMonthsEnded September30, 2009 2008 2009 2008 (in millions) Service cost $ 36 $ 37 $ 15 $ 23 Interest cost 92 93 54 56 Expected return on plan assets (122 ) (131 ) (60 ) (73 ) Amortization: Net loss from experience differences 41 21 6 7 Prior service cost 2 2 1 2 Settlement losses 15 20 1 Net periodic pension cost $ 64 $ 42 $ 16 $ 16 U.S. Plans Non-U.S. Plans For the Nine Months Ended September30, For the Nine Months Ended September30, 2009 2008 2009 2008 (in millions) Service cost $ 114 $ 112 $ 45 $ 70 Interest cost 276 279 156 169 Expected return on plan assets (364 ) (394 ) (175 ) (219 ) Amortization: Net loss from experience differences 120 64 17 22 Prior service cost 5 5 4 6 Settlement losses 81 41 1 Net periodic pension cost $ 232 $ 107 $ 47 $ 49 The following costs are included within settlement losses above. Severance payments from our cost savings initiatives and retired employees who elected lump-sum payments resulted in settlement losses for our U.S. plans of $15 million for the three months and $81 million for the nine months ended September30, 2009, and $20 million for the three months and $41 million for the nine months ended September30, 2008. Our non-U.S. plans also incurred a $1 million curtailment charge in the third quarter of 2008 related to the split-off of the Post cereals business. Employer Contributions: We make contributions to our U.S. and non-U.S. pension plans, primarily to the extent that they are tax deductible and do not generate an excise tax liability. During the first nine months of 2009, we contributed $225 million to our U.S. plans (including a $200 million contribution made on May1, 2009) and $124 million to our non-U.S. plans. Based on current tax law, we plan to make further contributions of approximately $15 million to our U.S. plans and approximately $45 million to our non-U.S. plans during the remainder of 2009. However, our actual contributions may differ due to many factors, including changes in tax and other benefit laws, or significant differences between expected and actual pension asset performance or interest rates. Postretirement Benefit Plans Net postretirement health care co

Note 10. Financial Instruments:

Note 10. Financial Instruments:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 10. Financial Instruments:	Note 10.Financial Instruments: Fair Value of Derivative Instruments: The fair values of derivative instruments recorded in the condensed consolidated balance sheet as of September30, 2009 were: September30, 2009 Asset Derivatives Liability Derivatives (in millions) Derivatives designated as hedging instruments: Foreign exchange contracts $ 7 $ 239 Commodity contracts 12 64 Interest rate contracts 29 $ 48 $ 303 Derivatives not designated as hedging instruments: Foreign exchange contracts $ 1 $ 4 Commodity contracts 83 134 $ 84 $ 138 Total fair value $ 132 $ 441 We include the fair value of our asset derivatives within other current assets and the fair value of our liability derivatives within other current liabilities. The fair values (asset / (liability)) of our derivative instruments at September30, 2009 were determined using: Total FairValue QuotedPricesin ActiveMarkets for Identical Assets (Level 1) Significant OtherObservable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in millions) Foreign exchange contracts $ (235 ) $ $ (235 ) $ Commodity contracts (103 ) (106 ) 3 Interest rate contracts 29 29 Total derivatives $ (309 ) $ (106 ) $ (203 ) $ Cash Flow Hedges: Cash flow hedges affected accumulated other comprehensive earnings / (losses), net of income taxes, as follows: For the Three Months Ended September30, For the Nine Months Ended September30, 2009 2008 2009 2008 (in millions) Accumulated gain / (loss) at beginning of period $ 29 $ 48 $ (23 ) $ 27 Transfer of realized (gains) / losses in fair value to earnings (2 ) (2 ) 87 (4 ) Unrealized loss in fair value (27 ) (30 ) (64 ) (7 ) Accumulated gain at September30 $ $ 16 $ $ 16 The effect of cash flow hedges for the three and nine months ended September30, 2009 was: For the Three Months Ended For the Nine Months Ended September 30, 2009 September 30, 2009 Gain / (Loss) Recognized in OCI (Gain) / Loss Reclassified from AOCI intoEarnings Gain / (Loss) Recognized in OCI (Gain) / Loss Reclassified from AOCI intoEarnings (in millions) Foreign exchange contracts intercompany loans $ 4

Note 11. Commitments and Contin

Note 11. Commitments and Contingencies:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 11. Commitments and Contingencies:	Note 11.Commitments and Contingencies: Legal Proceedings: We are involved, from time to time, in legal proceedings, claims, and governmental inspections or investigations, arising in the ordinary course of our business. While we cannot predict with certainty the results of these matters, we do not expect that the ultimate costs to resolve these matters will have a material effect on our financial results. Third-Party Guarantees: We have third-party guarantees primarily covering the long-term obligations of our vendors. As part of those transactions, we guarantee that third parties will make contractual payments or achieve performance measures. At September30, 2009, the carrying amount of our third-party guarantees on our condensed consolidated balance sheet and the maximum potential payment under these guarantees was $30 million. Substantially all of these guarantees expire at various times through 2018.

Note 12. Income Taxes:

Note 12. Income Taxes:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 12. Income Taxes:	Note12.Income Taxes: As of January1, 2009, our unrecognized tax benefits were $807 million. If we had recognized all of these benefits, the net impact on our income tax provision would have been $612 million. During the nine months ended September30, 2009, we recognized $173 million of previously unrecognized tax benefits due to an agreement we reached with the IRS on specific matters, settlements with various foreign and state tax authorities, and the expiration of the statute of limitations in various jurisdictions. In addition, unrecognized tax benefits increased $110 million during the nine months ended September30, 2009 for additions based on current year tax positions, prior year tax positions and adjustments for currency. As a result, our net unrecognized tax benefits decreased $63 million during the nine months ended September30, 2009. We expect that the amount of unrecognized tax benefits will decrease by$60 million during the next 12 months due to various audit settlements and the expiration of statutes of limitations. We include accrued interest and penalties related to uncertain tax positions in our tax provision. As of January1, 2009, we had $239 million of accrued interest and penalties. The decrease in accrued interest and penalties during the nine months ended September30, 2009 was$53 million. We are regularly examined byvarious federal,state and foreign tax authorities. The U.S. federal statute of limitations remains open for the year 2000 and onward. Years 2000 through 2003are currently under examination by the IRS, and during the third quarter of 2009, we reached an agreement with the IRS on specific matters relating to those tax years. We expect the years under audit by the IRS to close during 2010. We are also currently under examination by taxing authorities in various U.S. state and foreign jurisdictions. U.S. state and foreign jurisdictions have statutes of limitations generally ranging from three to five years. Years still open to examination by foreign tax authorities in major jurisdictions include Germany (1999 onward), Brazil (2002 onward), Canada (2003 onward), Spain (2002 onward) and France (2006 onward).

Note 13. Earnings Per Share:

Note 13. Earnings Per Share:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 13. Earnings Per Share:	Note 13.Earnings Per Share: Basic and diluted EPS were calculated using the following: For the Three Months Ended September30, For the Nine Months Ended September30, 2009 2008 2009 2008 (in millions, except per share data; 2008 revised) Earnings from continuing operations $ 826 $ 520 $ 2,317 $ 1,745 Earnings and gain from discontinued operations, net of income taxes 845 968 Net earnings 826 1,365 2,317 2,713 Noncontrolling interest 2 3 6 7 Net earnings attributable to Kraft Foods $ 824 $ 1,362 $ 2,311 $ 2,706 Weighted-average shares for basic EPS 1,479 1,493 1,477 1,516 Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares 8 10 8 11 Weighted-average shares for diluted EPS 1,487 1,503 1,485 1,527 Basic earnings per share attributable to Kraft Foods: Continuing operations $ 0.56 $ 0.34 $ 1.56 $ 1.15 Discontinued operations 0.57 0.63 Net earnings attributable to Kraft Foods $ 0.56 $ 0.91 $ 1.56 $ 1.78 Diluted earnings per share attributable to Kraft Foods: Continuing operations $ 0.55 $ 0.34 $ 1.56 $ 1.14 Discontinued operations 0.57 0.63 Net earnings attributable to Kraft Foods $ 0.55 $ 0.91 $ 1.56 $ 1.77 We exclude antidilutive Kraft Foods stock options from our calculation of weighted-average shares for diluted EPS. We excluded 23.2million antidilutive options for the three months and 23.3million antidilutive options for the nine months ended September30, 2009, and we excluded 0.3million antidilutive options for the three months and 0.6million antidilutive options for the nine months ended September30, 2008.

Note 14. Segment Reporting:

Note 14. Segment Reporting:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 14. Segment Reporting:	Note 14.Segment Reporting: Effective January 2009, we began implementing changes to our operating structure based on our Organizing For Growth initiative and the Kraft Foods Europe Reorganization. In line with our strategies, we are reorganizing our European operations to function on a pan-European centralized category management and value chain model, and we changed how we work in Europe in two key ways: We transitioned our European Biscuit, Chocolate, Coffee and Cheese categories to fully integrated business units, further strengthening our focus on these core categories. To ensure decisions are made faster and closer to our customers and consumers, each category is fully accountable for its financial results, including marketing, manufacturing and RD. Category leadership, based in Zurich, Switzerland, reports to the Kraft Foods Europe President. These business units now comprise the Kraft Foods Europe segment. We aligned the reporting of our Central Europe operations into our Kraft Foods Developing Markets segment to help build critical scale in these countries. We operate a country-led model in these markets. We manufacture and market packaged food products, including snacks, beverages, cheese, convenient meals and various packaged grocery products. We manage and report operating results through three commercial units: Kraft Foods North America, Kraft Foods Europe and Kraft Foods Developing Markets. We manage the operations of Kraft Foods North America and Kraft Foods Europe by product category, and we manage the operations of Kraft Foods Developing Markets by geographic location. Our reportable segments are U.S. Beverages, U.S. Cheese,U.S. Convenient Meals, U.S. Grocery, U.S. Snacks, Canada North America Foodservice, Kraft Foods Europe (formerly known as European Union) and Kraft Foods Developing Markets. Management uses segment operating income to evaluate segment performance and allocate resources. We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends. Segment operating income excludes unrealized gains and losses on hedging activities (which are a component of cost of sales), certain components of our U.S. pension plan cost (which is a component of cost of sales and marketing, administration and research costs), general corporate expenses (which are a component of marketing, administration and research costs) and amortization of intangibles for all periods presented. In 2009, we began excluding certain components of our U.S. pension plan cost from segment operating income because we centrally manage pension plan funding decisions and the determination of discount rate, expected rate of return on plan assets and other actuarial assumptions. Therefore, we allocate only the service cost component of our U.S. pension plan expense to segment operating income. We exclude the unrealized gains and losses on hedging activities from segment operating income in order to provide better transparency of our segment operating results. Once realized, the gains and losses on hedging activities are recorded within segment operating results. Furthermore, we centrall

Note 15. Subsequent Events:

Note 15. Subsequent Events:
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
Note 15. Subsequent Events:	Note 15.Subsequent Events: On September7, 2009, we disclosed that we approached the Board of Cadbury plc (Cadbury) with a proposal to combine the two companies. The Board of Cadbury has rejected this proposal. We remain interested in working toward a recommended transaction. We proposed an offer for Cadbury (the Possible Offer) of 300 pence in cash and 0.2589 new Kraft Foods shares per Cadbury share. This valued each Cadbury share at 745 pence (based on the closing price of $28.10 for a Kraft Foods share on September4, 2009 and an exchange rate of 1.6346 $/) and valued the entire issued share capital of Cadbury at 10.2 billion (approximately $16.7 billion). The combination would build on Kraft Foods position as a global powerhouse in snacks, confectionery and quick meals with a rich portfolio of iconic brands. The Possible Offer contained several criteria, including our ability to obtain satisfactory financing, that we would maintain an investment-grade credit rating, and the right to change our offer at any time. Pursuant to the U.K. City Code on Takeovers and Mergers, the U.K. Takeover Panel set a deadline of November9, 2009 for us to formally make an offer for Cadbury, or walk away. We evaluated subsequent events through November3, 2009 and included all accounting and disclosure requirements related to subsequent events in our financial statements.

Document Information

Document Information
	9 Months Ended Sep. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 30, 2009
Entity [Text Block]
Trading Symbol	KFT
Entity Registrant Name	KRAFT FOODS INC
Entity Central Index Key	0001103982
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	1,475,836,525