Mondelez International (MDLZ) 10-K 25 Feb 10 2009 FY Annual report Financial data

Statement Of Income

Statement Of Income (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Net revenues	$40,386	$41,932	$35,858
Cost of sales	25,786	28,088	23,656
Gross profit	14,600	13,844	12,202
Marketing, administration and research costs	9,108	8,862	7,587
Asset impairment and exit costs	(64)	1,024	440
(Gains) / losses on divestitures, net	6	92	(14)
Amortization of intangibles	26	23	13
Operating income	5,524	3,843	4,176
Interest and other expense, net	1,237	1,240	604
Earnings from continuing operations before income taxes	4,287	2,603	3,572
Provision for income taxes	1,259	755	1,080
Earnings from continuing operations	3,028	1,848	2,492
Earnings and gain from discontinued operations, net of income taxes (Note 2)	0	1,045	232
Net earnings	3,028	2,893	2,724
Noncontrolling interest	7	9	3
Net earnings attributable to Kraft Foods	$3,021	$2,884	$2,721
Basic earnings per share attributable to Kraft Foods:
Continuing operations	2.04	1.22	1.56
Discontinued operations	$0	0.7	0.15
Net earnings attributable to Kraft Foods	2.04	1.92	1.71
Diluted earnings per share attributable to Kraft Foods:
Continuing operations	2.03	1.21	1.56
Discontinued operations	$0	0.69	0.14
Net earnings attributable to Kraft Foods	2.03	1.9	1.7
Dividends declared	1.16	1.12	1.04

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
ASSETS
Cash and cash equivalents	$2,101	$1,244
Receivables (net of allowances of $121 in 2009 and $129 in 2008)	5,197	4,704
Inventories, net	3,775	3,881
Deferred income taxes	730	804
Other current assets	651	828
Total current assets	12,454	11,461
Property, plant and equipment, net	10,693	9,917
Goodwill	28,764	27,581
Intangible assets, net	13,429	12,926
Prepaid pension assets	115	56
Other assets	1,259	1,232
TOTAL ASSETS	66,714	63,173
LIABILITIES
Short-term borrowings	453	897
Current portion of long-term debt	513	765
Accounts payable	3,766	3,373
Accrued marketing	2,181	1,803
Accrued employment costs	1,175	951
Other current liabilities	3,403	3,255
Total current liabilities	11,491	11,044
Long-term debt	18,024	18,589
Deferred income taxes	4,508	4,064
Accrued pension costs	1,765	2,367
Accrued postretirement health care costs	2,816	2,678
Other liabilities	2,138	2,075
TOTAL LIABILITIES	40,742	40,817
EQUITY
Common Stock, no par value (1,735,000,000 shares issued in 2009 and 2008)	0	0
Additional paid-in capital	23,611	23,563
Retained earnings	14,636	13,440
Accumulated other comprehensive losses	(3,955)	(5,994)
Treasury stock, at cost	(8,416)	(8,714)
Total Kraft Foods Shareholders' Equity	25,876	22,295
Noncontrolling interest	96	61
TOTAL EQUITY	25,972	22,356
TOTAL LIABILITIES AND EQUITY	$66,714	$63,173

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Millions, except Share data	Dec. 31, 2009	Dec. 31, 2008
Receivables, allowances	$121	$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, 2006	$0	$23,626	$11,109	($3,069)	($3,130)	$26	$28,562
Comprehensive earnings / (losses):
Net earnings			2,721			3	2,724
Other comprehensive earnings / (losses), net of income taxes				1,234		2	1,236
Total comprehensive earnings /(losses)						5	3,960
Adoption of new income tax guidance			213				213
Exercise of stock options and issuance of other stock awards		33	(79)		293		247
Net settlement of employee stock awards with Altria Group, Inc. (Note 10)		(179)					(179)
Cash dividends declared ($1.16 per share in 2009, $1.12 per share in 2008 and $1.04 per share in 2007)			(1,643)				(1,643)
Acquisition of noncontrolling interest and other activities						7	7
Common Stock repurchased					(3,687)		(3,687)
Other		(35)					(35)
Ending 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 / (losses), 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 ($1.16 per share in 2009, $1.12 per share in 2008 and $1.04 per share in 2007)			(1,676)				(1,676)
Acquisition of noncontrolling interest and other activities						23	23
Common Stock repurchased					(777)		(777)
Common Stock tendered (Note 2)					(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):
Net earnings			3,021			7	3,028
Other comprehensive earnings / (losses), net of income taxes				2,039		34	2,073
Total comprehensive earnings /(losses)						41	5,101
Exercise of stock options and issuance of other stock awards		49	(110)		298		237
Cash dividends declared ($1.16 per share in 2009, $1.12 per share in 2008 and $1.04 per share in 2007)			(1,715)				(1,715)
Dividends paid on noncontrolling interest and other activities		(1)				(6)	(7)
Ending Balances at Dec. 31, 2009	$0	$23,611	$14,636	($3,955)	($8,416)	$96	$25,972

2_Statement Of Shareholders Equ

Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $)
	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash dividends declared, per share	1.16	1.12	1.04

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
CASH PROVIDED BY / (USED IN) OPERATING ACTIVITIES
Net earnings	$3,028	$2,893	$2,724
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization	931	986	886
Stock-based compensation expense	164	178	136
Deferred income tax provision / (benefit)	38	(208)	(389)
(Gains) / losses on divestitures, net	6	92	(14)
Gain on discontinued operations (Note 2)	0	(926)	0
Asset impairment and exit costs, net of cash paid	17	731	209
Other non-cash expense, net	269	87	115
Change in assets and liabilities, excluding the effects of acquisitions and divestitures:
Receivables, net	(17)	(39)	(268)
Inventories, net	299	(151)	(404)
Accounts payable	126	29	241
Amounts due to Altria Group, Inc. and affiliates	0	0	(93)
Other current assets	351	(535)	161
Other current liabilities	111	985	186
Change in pension and postretirement assets and liabilities, net	(239)	19	81
Net cash provided by operating activities	5,084	4,141	3,571
CASH PROVIDED BY / (USED IN) INVESTING ACTIVITIES
Capital expenditures	(1,330)	(1,367)	(1,241)
Acquisitions, net of cash received	0	(99)	(7,437)
Proceeds from divestitures, net of disbursements	41	97	216
Other	50	49	46
Net cash used in investing activities	(1,239)	(1,320)	(8,416)
CASH PROVIDED BY / (USED IN) FINANCING ACTIVITIES
Net (repayment) / issuance of short-term borrowings	(446)	(5,912)	5,649
Long-term debt proceeds	3	7,018	6,495
Long-term debt repaid	(968)	(795)	(1,472)
Decrease in amounts due to Altria Group, Inc. and affiliates	0	0	(149)
Repurchase of Common Stock	0	(777)	(3,708)
Dividends paid	(1,712)	(1,663)	(1,638)
Other	(10)	72	(56)
Net cash (used in) / provided by financing activities	(3,133)	(2,057)	5,121
Effect of exchange rate changes on cash and cash equivalents	145	(87)	52
Cash and cash equivalents:
Increase	857	677	328
Balance at beginning of period	1,244	567	239
Balance at end of period	2,101	1,244	567
Cash paid:
Interest	1,262	968	628
Income taxes	$1,025	$964	$1,366

Summary of Significant Accounti

Summary of Significant Accounting Policies:
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Significant Accounting Policies:	Note1.Summary of Significant Accounting Policies: Nature of Operations and Basis of Presentation: Kraft FoodsInc. was incorporated in 2000 in the Commonwealth of Virginia. Kraft Foods Inc., through its subsidiaries (collectively Kraft Foods, we, us and our), sells packaged food and beverage products to consumers in approximately 160 countries. Prior to June13, 2001, Kraft Foods was a wholly owned subsidiary of Altria Group,Inc. (Altria). On June13, 2001, we completed an initial public offering of 280,000,000 shares of our ClassA common stock (Common Stock). In the first quarter of 2007, Altria spun off its remaining interest (89.0%)in Kraft Foods on a pro rata basis to Altria stockholders in a tax-free transaction. Effective as of the close of business on March30, 2007, all Kraft Foods shares owned by Altria were distributed to Altrias stockholders, and our separation from Altria was completed. Principles of Consolidation: The consolidated financial statements include Kraft Foods, as well as our wholly owned and majority owned subsidiaries. Our domestic operating subsidiaries report year-end results as of the last Saturday of the year, and our international operating subsidiaries generally report year-end results two weeks prior to the last Saturday of the year. We account for investments in which we exercise significant influence (20%-50% ownership interest) under the equity method of accounting. We use the cost method of accounting for investments in which we have an ownership interest of less than 20% and in which we do not exercise significant influence. Noncontrolling interest in subsidiaries consists of the equity interest of noncontrolling investors in consolidated subsidiaries of Kraft Foods. All intercompany transactions are eliminated. Use of Estimates: We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), which require us to make estimates and assumptions that affect a number of amounts in our financial statements. Significant accounting policy elections, estimates and assumptions include, among others, pension and benefit plan assumptions, lives and valuation assumptions of goodwill and intangible assets, marketing programs and income taxes. We base our estimates on historical experience and other assumptions that we believe are reasonable. If actual amounts differ from estimates, we include the revisions in our consolidated results of operations in the period the actual amounts become known. Historically, the aggregate differences, if any, between our estimates and actual amounts in any year have not had a significant impact on our consolidated financial statements. Foreign Currencies: We translate the results of operations of our foreign subsidiaries using average exchange rates during each period, whereas balance sheet accounts are translated using exchange rates at the end of each period. We record currency translation adjustments as a component of equity. Transaction gains and losses are recorded in earnings and were not significant for any of the periods presented. Highly Inflationary Accounting: In the fourth qua

Acquisitions and Divestitures:

Acquisitions and Divestitures:
	12 Months Ended Dec. 31, 2009 USD / shares
Acquisitions and Divestitures:	Note2.Acquisitions and Divestitures: Cadbury Acquisition: On January19, 2010, we announced the terms of our final offer for each outstanding ordinary share of Cadbury plc (Cadbury), including each ordinary share represented by an American Depositary Share (Cadbury ADS), and the Cadbury board of directors recommended that Cadbury shareholders accept the terms of the final offer. Under the terms of the offer, we agreed to pay Cadbury shareholders 500 pence in cash and 0.1874 shares of Kraft Foods Common Stock per Cadbury ordinary share validly tendered and 2,000 pence in cash and 0.7496 shares of Kraft Foods Common Stock per Cadbury ADS validly tendered. This valued each Cadbury ordinary share at 840 pence and each Cadbury ADS at 33.60 (based on the closing price of $29.58 for a share of Kraft Foods Common Stock on January15, 2010 and an exchange rate of $1.63 per 1.00) and valued the entire issued share capital of Cadbury at 11.9 billion (approximately $19.4 billion) on January15, 2010, the last trading day before the publication of our final offer. The combination of Kraft Foods and Cadbury will create a global powerhouse in snacks, confectionery and quick meals with a rich portfolio of iconic brands. On February2, 2010, all of the conditions to the offer were satisfied or validly waived, the initial offer period expired and a subsequent offer period immediately began. At that point, we had received acceptances of 71.73% ofthe outstanding Cadburyordinary shares, including those represented by Cadbury ADSs. The subsequent offer period remains open until further notice and at least 14 days of notice will be given if Kraft Foods decides to close the offer. As of February15, 2010, we had received acceptances of 1,262,356,520 shares representing 91.02% of the outstanding Cadbury ordinary shares, including those represented by Cadbury ADSs. As we have received acceptances of over 90% of Cadbury shares, we are n the process of acquiring the remaining Cadbury ordinary shares that are not tendered in the offer, including those represented by Cadbury ADSs, through a compulsory acquisition procedure under the United Kingdom Companies Act of 2006, as amended. Additionally, as a condition of the EU Commissions approval of the Cadbury acquisition, we are required to divest confectionary operations in Poland and Romania. As part of our acquisition of Cadbury, we expensed approximately $40 million in transaction related fees in 2009 as we incurred them, and we also incurred $40 million in financing fees in 2009 related to the acquisition. The accounting for our Cadbury acquisition was incomplete at the time we issued our financial statements. Accordingly, it is impracticable for us to make certain business combination disclosures. At the time of filing, it was impracticable for us to: A)Complete a reconciliation of Cadburys IFRS financial statements to U.S. GAAP. Accordingly, we were unable to present the acquisition date fair value of assets acquired and liabilities assumed, or assets and liabilities arising from contingencies. B)Calculate the amount of goodwill and intangibles acquired and the total amount of goodwill that is expected to be deduc

Inventories:

Inventories:
	12 Months Ended Dec. 31, 2009 USD / shares
Inventories:	Note3.Inventories: Inventories at December31, 2009 and 2008 were: 2009 2008 (in millions) Raw materials $ 1,410 $ 1,568 Finished product 2,365 2,313 Inventories, net $ 3,775 $ 3,881

Property, Plant and Equipment:

Property, Plant and Equipment:
	12 Months Ended Dec. 31, 2009 USD / shares
Property, Plant and Equipment:	Note4.Property, Plant and Equipment: Property, plant and equipment at December31, 2009 and 2008 were: 2009 2008 (in millions) Land and land improvements $ 492 $ 462 Buildings and building equipment 4,231 3,913 Machinery and equipment 13,872 12,590 Construction in progress 828 850 19,423 17,815 Accumulated depreciation (8,730 ) (7,898 ) Property, plant and equipment, net $ 10,693 $ 9,917 Refer to Note 5, Goodwill and Intangible Assets, for asset impairment charges taken against property, plant and equipment.

Goodwill and Intangible Assets:

Goodwill and Intangible Assets:
	12 Months Ended Dec. 31, 2009 USD / shares
Goodwill and Intangible Assets:	Note5.Goodwill and Intangible Assets: At December31, 2009 and 2008, goodwill by reportable segment was: 2009 2008 (in millions) 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 6,948 6,965 Canada N.A. Foodservice 2,340 2,306 Kraft Foods Europe (1) 6,756 5,893 Kraft Foods Developing Markets 3,924 3,621 Total goodwill $ 28,764 $ 27,581 (1)This segment was formerly known as European Union. As discussed in Note 16, 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. 2009 2008 (in millions) Non-amortizable intangible assets $ 13,262 $ 12,758 Amortizable intangible assets 278 254 13,540 13,012 Accumulated amortization (111 ) (86 ) Intangible assets, net $ 13,429 $ 12,926 Non-amortizable intangible assets consist principally of brand names purchased through our acquisitions of Nabisco Holdings Corp., LU Biscuit 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: 2009 2008 Goodwill Intangible Assets,atcost Goodwill Intangible Assets,atcost (in millions) Balance at January1 $ 27,581 $ 13,012 $ 31,193 $ 12,262 Changes due to: Foreign currency 1,200 544 (1,062 ) (516 ) Acquisitions - - (1,187 ) 1,356 Divestitures (17 ) - (1,272 ) (37 ) Asset impairments - (12 ) (35 ) (53 ) Other - (4 ) (56 ) - Balance at December31 $ 28,764 $ 13,540 $ 27,581 $ 13,012 Changes to goodwill and intangible assets during 2009 were: Divestitures - We reduced goodwill by $17 million due to the divestiture of our Balance bar operations in the U.S. Asset impairments - During our 2009 review of goodwill and non-amortizable intangible assets, we recorded a $12 million charge for the impairment of intangible assets in the Netherlands. Changes to goodwill and intangible assets during 2008 were: Acquisitions - We decreased

Restructuring Costs:

Restructuring Costs:
	12 Months Ended Dec. 31, 2009 USD / shares
Restructuring Costs:	Note6.Restructuring Costs: Cost Savings Initiatives We incurred costs associated with our Cost Savings Initiatives of $318 million in 2009. These charges were recorded in operations, primarily within the segment operating income of Kraft Foods Europe with the remainder spread across all other segments. The Kraft Foods Europe charges were largely a result of the reorganization of our European operations discussed below. Cost Savings Initiatives include exit, disposal and implementation costs. Even though implementation costs were directly attributable to exit and disposal costs, they did not qualify for special accounting treatment as exit or disposal activities. In 2009, our Cost Savings Initiatives primarily included severance charges for benefits received by terminated employees, associated benefit plan costs and other related activities. 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 18,600 positions; and will use cash to pay for $2.0 billion of the $3.0 billion in charges. In 2009, we reversed $85 million of previously accrued Restructuring Program charges. Those reversals related to the following: 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 2009. The reversal occurred in our Kraft Foods Europe segment. We also reversed $50 million in Restructuring Program charges, primarily due to planned position eliminations that did not occur. These were primarily the result of redeployment and natural attrition. The majority of these reversals occurred in our Kraft Foods Europe segment, with the remainder spread across all other segments. We incurred charges under the Restructuring Program of $989 million in 2008 and $459million in 2007. Since the inception of the Restructuring Program, we have paid cash of $1.7 billion of the $2.0 billion in expected cash payments, including $176 million paid in 2009. At December31, 2009, we had an accrual of $270 million, and we had eliminated approximately 17,300 positions under the Restructuring Program. In 2008, we implemented a new operating structure built on three core elements: business units, shared services that leverage the scale of our global portfolio, and a streamlined corporate staff. Within the new structure, business units now have full PL accountability and are staffed accordingly. This also ensures that we are putting our resources closer to where we make decisions that affect our consumers and customers. Our corporate and shared service functions streamlined their or

Debt and Borrowing Arrangements

Debt and Borrowing Arrangements:
	12 Months Ended Dec. 31, 2009 USD / shares
Debt and Borrowing Arrangements:	Note7.Debt and Borrowing Arrangements: Short-Term Borrowings: At December31, 2009 and 2008, our short-term borrowings and related average interest rates consisted of: 2009 2008 Amount Outstanding Average Year-EndRate Amount Outstanding Average Year-EndRate (in millions) (in millions) Commercial paper $ 262 0.5% $ 606 2.6% Bank loans 191 10.5% 291 13.0% Total short-term borrowings $ 453 $ 897 The fair values of our short-term borrowings at December31, 2009 and 2008, based upon current market interest rates, approximate the amounts disclosed above. Borrowing Arrangements: On November30, 2009, we entered into a revolving credit agreement for a $4.5 billion three-year senior unsecured revolving credit facility. The agreement replaced our former revolving credit agreement, which was terminated upon the signing of the new agreement. We intend to use the revolving credit facility for general corporate purposes, including for working capital purposes, and to support our commercial paper issuances. No amounts have been drawn on the facility. The revolving credit agreement requires us to maintain a minimum total shareholders equity, excluding accumulated other comprehensive earnings / (losses), of at least $23.0billion. Upon the completion of our acquisition of Cadbury, this covenant will increase by 75% of any increase in our total shareholders equity as a direct result of a) our issuance of certain types of equity securities to finance the acquisition; or b) our refinancing certain indebtedness. At December31, 2009, our total shareholders equity, excluding accumulated other comprehensive earnings / (losses), was $29.8 billion. We expect to continue to meet this covenant. The revolving credit agreement also contains customary representations, covenants and events of default. However, the revolving credit facility has no other financial covenants, credit rating triggers or provisions that could require us to post collateral as security. In addition to the above, some of our international subsidiaries maintain primarily uncommitted credit lines to meet short-term working capital needs. Collectively, these credit lines amounted to $1.5billion at December31, 2009. Borrowings on these lines amounted to $191 million at December31, 2009 and $291million at December31, 2008. On November9, 2009, we entered into an agreement for a 5.5billion (approximately $8.9 billion) 364-day senior unsecured bridge facility (the Cadbury Bridge Facility). On January18, 2010, we amended the agreement to increase the Cadbury Bridge Facility to an aggregate of 7.1billion. On February11, 2010, after the issuance of $9.5 billion of senior unsecured notes, we amended the agreement again to decrease the Cadbury Bridge Facility to an aggregate of 1.3billion. We expect to use borrowings under the Cadbury Bridge Facility and proceeds from other financing sources to finance the Cadbury acquisition and to refinance certain indebtedness of Cadbury and its subsidiaries. With certain res

Capital Stock:

Capital Stock:
	12 Months Ended Dec. 31, 2009 USD / shares
Capital Stock:	Note8.Capital Stock: Our articles of incorporation authorize 3.0billion shares of ClassA common stock, 2.0billion shares of ClassB common stock and 500million shares of preferred stock. Shares of ClassA common stock issued, repurchased and outstanding were: Shares Issued Shares Repurchased Shares Outstanding Balance at January1, 2007 555,000,000 (99,027,355 ) 455,972,645 Repurchase of shares - (111,516,043 ) (111,516,043 ) Exercise of stock options and issuance of other stock awards - 9,321,018 9,321,018 Conversion of Class B common shares to ClassA common shares 1,180,000,000 - 1,180,000,000 Balance at December31, 2007 1,735,000,000 (201,222,380 ) 1,533,777,620 Repurchase of shares - (25,272,255 ) (25,272,255 ) Shares tendered (Note 2) - (46,119,899 ) (46,119,899 ) Exercise of stock options and issuance of other stock awards - 6,915,974 6,915,974 Balance at December31, 2008 1,735,000,000 (265,698,560 ) 1,469,301,440 Exercise of stock options and issuance of other stock awards - 8,583,463 8,583,463 Balance at December31, 2009 1,735,000,000 (257,115,097 ) 1,477,884,903 Effective on the date of our spin-off, Altria converted all of its ClassB shares of Kraft Foods common stock into ClassA shares of Kraft Foods common stock. Following our spin-off, we only have ClassA common stock outstanding. There were no Class B common shares or preferred shares issued and outstanding at December31, 2009, 2008 and 2007. On August4, 2008, we completed the split-off of the Post cereals business. In this transaction, approximately 46.1million shares of Kraft Foods Common Stock were tendered for $1,644 million. At December31, 2009, 146,863,809 shares of Common Stock were reserved for stock options and other stock awards. In 2010, we expect to issue approximately 260million additional shares of our Common Stock as part of the Cadbury acquisition. Our Board of Directors authorized the following Common Stock repurchase programs. Our $5.0 billion share repurchase authority expired on March30, 2009. We did not repurchase any shares in 2009. Share Repurchase Program Authorized by the Board of Directors $5.0 billion $2.0 billion Authorized / completed period for repurchase April2007- March2009 March2006- March 2007 Aggregate cost of shares repurchased in 2008 (millions of shares) $777 million (25.3shares) Aggregate cost of shares repurchased in 2007 (millions of shares) $3.5 billion (105.6shares) $140 million (4.5 shares) Aggregate cost of shares repurchased life-to-date under program (millions of shares) $4.3 billion (130.9shares) $1.1 billion (34.7shares) In total, we repurchased 25.3million shares for $777 million in 2008 and 110.1mill

Sheet1

( Losses):
	12 Months Ended Dec. 31, 2009 USD / shares
Accumulated Other Comprehensive Earnings / (Losses):	Note 9.Accumulated Other Comprehensive Earnings / (Losses): The components of accumulated other comprehensive earnings / (losses) were: Currency Translation Adjustments Pensionand OtherBenefits Derivatives Accountedfor as Hedges Total (in millions) Balances at January1, 2007 $ (723 ) $ (2,342 ) $ (4 ) $ (3,069 ) Other comprehensive earnings / (losses), net of income taxes: Currency translation adjustments 672 (78 ) - 594 Amortization of experience losses and prior service costs - 154 - 154 Settlement losses - 45 - 45 Net actuarial gain arising during period - 410 - 410 Change in fair value of cash flow hedges - - 31 31 Total other comprehensive earnings 1,234 Balances at December31, 2007 $ (51 ) $ (1,811 ) $ 27 $ (1,835 ) Other comprehensive earnings / (losses), net of income taxes: Currency translation adjustments (2,348 ) 114 - (2,234 ) Amortization of experience losses and prior service costs - 98 - 98 Settlement losses - 48 - 48 Net actuarial loss arising during period - (2,021 ) - (2,021 ) Change in fair value of cash flow hedges - - (50 ) (50 ) Total other comprehensive losses (4,159 ) Balances at December31, 2008 $ (2,399 ) $ (3,572 ) $ (23 ) $ (5,994 ) Other comprehensive earnings / (losses), net of income taxes: Currency translation adjustments 1,893 (116 ) - 1,777 Amortization of experience losses and prior service costs - 126 - 126 Settlement losses - 76 - 76 Net actuarial loss arising during period - (64 ) - (64 ) Change in fair value of cash flow hedges - - 124 124 Total other comprehensive earnings 2,039 Balances at December31, 2009 $ (506 ) $ (3,550 ) $ 101 $ (3,955 )

Stock Plans:

Stock Plans:
	12 Months Ended Dec. 31, 2009 USD / shares
Stock Plans:	Note10.Stock Plans: At our 2009 annual meeting, our shareholders approved the Kraft Foods Inc. Amended and Restated 2005 Performance Incentive Plan (the "2005 Plan"). The2005 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 2005 Plan, we may grant to eligible employees awards of stock options, stock appreciation rights, restricted stock, restricted and deferred stock units, and other awards based on our Common Stock, as well as performance-based annual and long-term incentive awards. We are authorized to issue a maximum of 168.0million shares of our Common Stock under the 2005 Plan. As of the effective date of the amendment, there were 92.1million shares available to be granted under the 2005 Plan, of which no more than 27.5million shares may be awarded as restricted or deferred stock. In addition, under the Kraft Foods 2006 Stock Compensation Plan for Non-Employee Directors (the 2006 Directors Plan), we may grant up to 500,000 shares of Common Stock to members of the Board of Directors who are not our full-time employees. At December31, 2009, there were 93,740,465 shares available to be granted under the 2005 Plan and 372,097 shares available to be granted under the 2006 Directors Plan. Restricted or deferred shares available for grant under the 2005 Plan at December31, 2009, were 27,984,072. In 2008, we changed our annual and long-term incentive compensation programs to further align them with shareholder returns. Under the annual equity program, we now grant equity in the form of both restricted or deferred stock and stock options. The restricted or deferred stock continues to vest 100% after three years, and the stock options vest in three annual installments beginning on the first anniversary of the grant date. Additionally, we changed our long-term incentive plan from a cash-based program to a share-based program. These shares vest based on varying performance, market and service conditions. All stock awards are issued to employees from treasury stock. We have no specific policy to repurchase Common Stock to mitigate the dilutive impact of options; however, we have historically made adequate discretionary purchases, based on cash availability, market trends and other factors, to satisfy stock option exercise activity. Stock Options: Stock options are granted at an exercise price equal to the market value of the underlying stock on the grant date, generally become exercisable in three annual installments beginning on the first anniversary of the grant date and have a maximum term of ten years. Prior to 2008, we had not granted stock options through a broad-based program since 2002. We account for our employee stock options under the fair value method of accounting using a modified Black-Scholes methodology to measure stock option expense at the date of grant. The fair value of the stock options at the date of grant is amortized to expense over the vesting period. We recorded compensation expense related to stock options of $31 million in 2009 and $18 million in 2008. The deferred tax benefit

Benefit Plans:

Benefit Plans:
	12 Months Ended Dec. 31, 2009 USD / shares
Benefit Plans:	Note11.Benefit Plans: Pension Plans Obligations and Funded Status: The projected benefit obligations, plan assets and funded status of our pension plans at December31, 2009 and 2008 were: U.S. Plans Non-U.S. Plans 2009 2008 2009 2008 (in millions) Benefit obligation at January1 $ 6,133 $ 5,952 $ 3,211 $ 4,275 Service cost 152 149 67 107 Interest cost 369 371 215 257 Benefits paid (310 ) (314 ) (225 ) (269 ) Settlements paid (187 ) (331 ) (14 ) (16 ) Curtailment gain (168 ) - - - Actuarial (gains) / losses 203 306 619 (542 ) Currency - - 510 (710 ) Other 3 - 18 109 Benefit obligation at December31 6,195 6,133 4,401 3,211 Fair value of plan assets at January1 4,386 7,006 2,618 4,041 Actual return on plan assets 1,180 (2,028 ) 400 (761 ) Contributions 427 53 209 180 Benefits paid (310 ) (314 ) (225 ) (269 ) Settlements paid (187 ) (331 ) (14 ) (16 ) Currency - - 414 (615 ) Other - - (5 ) 58 Fair value of plan assets at December31 5,496 4,386 3,397 2,618 Net pension liability recognized at December31 $ (699 ) $ (1,747 ) $ (1,004 ) $ (593 ) Our projected benefit obligation decreased $168 million in 2009 due to the freeze of certain of our U.S. pension plans. The accumulated benefit obligation, which represents benefits earned to the measurement date, was $5,673 million at December31, 2009 and $5,464million at December31, 2008 for the U.S. pension plans. The accumulated benefit obligation for the non-U.S. pension plans was $4,115 million at December31, 2009 and $3,024million at December31, 2008. The combined U.S. and non-U.S. pension plans resulted in a net pension liability of $1,703million at December31, 2009 and $2,340million at December31, 2008. We recognized these amounts in our consolidated balance sheets at December31, 2009 and 2008 as follows: 2009 2008 (in millions) Prepaid pension assets $ 115 $ 56 Other accrued liabilities (53 ) (29 ) Accrued pension costs (1,765 ) (2,367 ) $ (1,703 ) $ (2,340 ) Certain of our U.S. and non-U.S. plans are under funded and have accumulated benefit obligations in excess of plan assets. For these plans, the projected benefit obligations, accumulated benefit obligations and the fair value of pl

Financial Instruments:

Financial Instruments:
	12 Months Ended Dec. 31, 2009 USD / shares
Financial Instruments:	Note12.Financial Instruments: Fair Value of Derivative Instruments: The fair values of derivative instruments recorded in the consolidated balance sheet as of December31, 2009 were: December31, 2009 Asset Derivatives Liability Derivatives (in millions) Derivatives designated as hedging instruments: Foreign exchange contracts $ 8 $ 158 Commodity contracts 25 14 Interest rate contracts 153 - $ 186 $ 172 Derivatives not designated as hedging instruments: Foreign exchange contracts $ 2 $ - Commodity contracts 71 62 $ 73 $ 62 Total fair value $ 259 $ 234 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 December31, 2009 were determined using: Total FairValue QuotedPricesin Active Markets for Identical Assets (Level 1) Significant OtherObservable Inputs (Level2) Significant Unobservable Inputs (Level3) (in millions) Foreign exchange contracts $ (148 ) $ - $ (148 ) $ - Commodity contracts 20 11 8 1 Interest rate contracts 153 - 153 - Total derivatives $ 25 $ 11 $ 13 $ 1 Cash Flow Hedges: Cash flow hedges affected accumulated other comprehensive earnings / (losses), net of income taxes, as follows: 2009 2008 2007 (in millions) Accumulated gain / (loss) at beginning of period $ (23 ) $ 27 $ (4 ) Transfer of realized (gains) / losses in fair value to earnings 111 26 (10 ) Unrealized gain / (loss) in fair value 13 (76 ) 41 Accumulated gain / (loss) at December31 $ 101 $ (23 ) $ 27 The effect of cash flow hedges for the year ended December31, 2009 was: Gain/(Loss) RecognizedinOCI (Gain)/Loss Reclassified from AOCI intoEarnings (in millions) Foreign exchange contracts - intercompany loans $ (12 ) $ - Foreign exchange contracts - forecasted transactions (40 ) (27 ) Commodity contracts (27 ) 138 Interest rate contracts 92 - Total $ 13 $ 111

Commitments and Contingencies:

Commitments and Contingencies:
	12 Months Ended Dec. 31, 2009 USD / shares
Commitments and Contingencies:	Note13. 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. In 2009, we recorded an additional $50 million of charges for legal matters related to certain of our European operations. See Part I Item3. Legal Proceedings for a description of these matters. In 2008, we recorded charges of $72 million for legal matters related to certain of our U.S. and European operations, including U.S. coffee operations. 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 December31, 2009, the carrying amount of our third-party guarantees on our consolidated balance sheet and the maximum potential payment under these guarantees was $29 million. Substantially all of these guarantees expire at various times through 2018. Leases: Rental expenses were $505 million in 2009, $505 million in 2008 and $433million in 2007. As of December31, 2009, minimum rental commitments under non-cancelable operating leases in effect at year-end were (in millions): 2010 $ 306 2011 243 2012 185 2013 103 2014 76 Thereafter 212

Income Taxes:

Income Taxes:
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes:	Note14. Income Taxes: Earnings from continuing operations before income taxes and the provision for income taxes consisted of the following for the years ended December31, 2009, 2008 and 2007: 2009 2008 2007 (inmillions) Earnings from continuing operations before income taxes: United States $ 2,323 $ 1,341 $ 2,325 Outside United States 1,964 1,262 1,247 Total $ 4,287 $ 2,603 $ 3,572 Provision for income taxes: United States federal: Current $ 425 $ 392 $ 649 Deferred 108 (13 ) (270 ) 533 379 379 State and local: Current 95 62 175 Deferred (39 ) (21 ) (69 ) 56 41 106 Total United States 589 420 485 Outside United States: Current 701 507 649 Deferred (31 ) (172 ) (54 ) Total outside United States 670 335 595 Total provision for income taxes $ 1,259 $ 755 $ 1,080 Additionally, the 2008 earnings and gain from discontinued operations from the split-off of the Post cereals business included a net tax benefit of $104 million. 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. Our unrecognized tax benefits were $829 million at December31, 2009, and if we had recognized all of these benefits, the net impact on our income tax provision would have been $661 million. We do not expect a significant change in our unrecognized tax benefits during the next 12 months. As this disclosure was made as of December31, 2009, it does not reflect the impacts of our recent acquisition and divestiture activity. We include accrued interest and penalties related to uncertain tax positions in our tax provision. We had accrued interest and penalties of $239 million as of January1, 2009 and $210 million as of December31, 2009. Our 2009 provision for income taxes included a $26 million net benefit for interest and penalties as reversals exceeded expense accruals during the year, due to agreements reached with the IRS on specific matters, settlements with various foreign and state tax authorities and the expiration of the statutes of limitations in various jurisdictions. We also paid interest and penalties of $10 million during 2009. The changes in our unrecognized tax benefits for the years ended December31, 2009, 2008 and 2007 were (in millions): 2009 2008 2007

Earnings Per Share:

Earnings Per Share:
	12 Months Ended Dec. 31, 2009 USD / shares
Earnings Per Share:	Note15. Earnings Per Share: Basic and diluted EPS from continuing and discontinued operations were calculated using the following: FortheYearsEndedDecember31, 2009 2008 2007 (inmillions,exceptpersharedata) Earnings from continuing operations $ 3,028 $ 1,848 $ 2,492 Earnings and gain from discontinued operations, net of income taxes - 1,045 232 Net earnings 3,028 2,893 2,724 Noncontrolling interest 7 9 3 Net earnings attributable to Kraft Foods $ 3,021 $ 2,884 $ 2,721 Weighted-average shares for basic EPS 1,478 1,505 1,591 Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares 8 10 9 Weighted-average shares for diluted EPS 1,486 1,515 1,600 Basic earnings per share attributable to Kraft Foods: Continuing operations $ 2.04 $ 1.22 $ 1.56 Discontinued operations - 0.70 0.15 Net earnings attributable to Kraft Foods $ 2.04 $ 1.92 $ 1.71 Diluted earnings per share attributable to Kraft Foods: Continuing operations $ 2.03 $ 1.21 $ 1.56 Discontinued operations - 0.69 0.14 Net earnings attributable to Kraft Foods $ 2.03 $ 1.90 $ 1.70 We exclude antidilutive Kraft Foods stock options from our calculation of weighted-average shares for diluted EPS. We excluded 23.0million antidilutive options for the year ended December31, 2009 and 11.3million antidilutive options for the year ended December31, 2008. We excluded an insignificant number of antidilutive options for the year ended December31, 2007.

Segment Reporting:

Segment Reporting:
	12 Months Ended Dec. 31, 2009 USD / shares
Segment Reporting:	Note16. Segment Reporting: Kraft Foods manufactures and markets packaged food products, including snacks, beverages, cheese, convenient meals and various packaged grocery products. We manage and report operating results through three geographic 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 location. Our reportable segments are U.S. Beverages, U.S. Cheese,U.S. Convenient Meals, U.S. Grocery, U.S. Snacks, Canada N.A. Foodservice, Kraft Foods Europe (formerly known as European Union) and Kraft Foods Developing Markets. 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. 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 centrally manage

Quarterly Financial Data

Quarterly Financial Data (Unaudited):
	12 Months Ended Dec. 31, 2009 USD / shares
Quarterly Financial Data (Unaudited):	Note17.Quarterly Financial Data (Unaudited): 2009 Quarters First Second Third Fourth (in millions, except per share data) Net revenues $ 9,396 $ 10,162 $ 9,803 $ 11,025 Gross profit $ 3,265 $ 3,665 $ 3,541 $ 4,129 Earnings from continuing operations $ 662 $ 829 $ 826 $ 711 Earnings and gain from discontinued operations, net of income taxes - - - - Net earnings 662 829 826 711 Noncontrolling interest 2 2 2 1 Net earnings attributable to Kraft Foods $ 660 $ 827 $ 824 $ 710 Weighted-average shares for diluted EPS 1,483 1,484 1,487 1,487 Per share data: Basic EPS attributable to Kraft Foods: Continuing operations $ 0.45 $ 0.56 $ 0.56 $ 0.48 Discontinued operations - - - - Net earnings attributable to Kraft Foods $ 0.45 $ 0.56 $ 0.56 $ 0.48 Diluted EPS attributable to Kraft Foods: Continuing operations $ 0.45 $ 0.56 $ 0.55 $ 0.48 Discontinued operations - - - - Net earnings attributable to Kraft Foods $ 0.45 $ 0.56 $ 0.55 $ 0.48 Dividends declared $ 0.29 $ 0.29 $ 0.29 $ 0.29 Market price - high $ 29.84 $ 27.24 $ 29.11 $ 27.84 - low $ 20.81 $ 21.94 $ 25.41 $ 25.72 During 2009, we recorded the following pre-tax charges / (gains) in earnings from continuing operations: 2009 Quarters First Second Third Fourth (in millions) Asset impairment and exit costs $ - $ (26 ) $ - $ (38 ) (Gains) / losses on divestitures, net - 17 - (11 ) $ - $ (9 ) $ - $ (49 ) 2008 Quarters First Second Third Fourth (in millions, except per share data) Net revenues $ 10,046 $ 10,804 $ 10,401 $ 10,681 Gross profit $ 3,301 $ 3,868 $ 3,305 $ 3,370 Earnings from continuing operations $ 547 $ 678 $ 520 $ 103 Earnings and gain from discontinued operations, net of income taxes 54 69 845 77 Net earnings 601 747 1,365 180 Noncontrolling interest 2 2 3 2 Net earnings attributable to Kraft Foods $ 599 $ 745 $ 1,362 $

Subsequent Events:

Subsequent Events:
	12 Months Ended Dec. 31, 2009 USD / shares
Subsequent Events:	Note 18.Subsequent Events: We evaluated subsequent events through February16, 2010 and included all accounting and disclosure requirements related to subsequent events in our financial statements.

Valuation and Qualifying Accoun

Valuation and Qualifying Accounts
	12 Months Ended Dec. 31, 2009 USD / shares
Valuation and Qualifying Accounts	Kraft Foods Inc. and Subsidiaries Valuation and Qualifying Accounts for the years ended December31, 2009, 2008 and 2007 (in millions) Col. A Col. B Col. C Col. D Col. E Balanceat Beginning ofPeriod Additions Deductions Balanceat Endof Period Description Chargedto Costs and Expenses Chargedto Other Accounts (a) (b) 2009: Allowance for discounts $ 28 $ 35 $ 4 $ 59 $ 8 Allowance for doubtful accounts 128 32 13 35 138 Allowance for deferred taxes 84 19 13 19 97 $ 240 $ 86 $ 30 $ 113 $ 243 2008: Allowance for discounts $ 5 $ 73 $ 17 $ 67 $ 28 Allowance for doubtful accounts 118 47 (22 ) 15 128 Allowance for deferred taxes 105 11 (16 ) 16 84 $ 228 $ 131 $ (21 ) $ 98 $ 240 2007: Allowance for discounts $ 7 $ 24 $ - $ 26 $ 5 Allowance for doubtful accounts 103 26 18 29 118 Allowance for deferred taxes 100 52 10 57 105 $ 210 $ 102 $ 28 $ 112 $ 228 Notes: (a) Primarily related to divestitures, acquisitions and currency translation. (b) Represents charges for which allowances were created.

Document Information

Document Information
	12 Months Ended Dec. 31, 2009 USD / shares
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Jan. 29, 2010	Jun. 30, 2009
Trading Symbol	KFT
Entity Registrant Name	KRAFT FOODS INC
Entity Central Index Key	0001103982
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,479,371,197
Entity Public Float			$37,000,000,000