Kraft 2006 Annual Report Download - page 74

For the Year Ended December 31, 2004
Restructuring
Costs
Asset
Impairment
Total Asset
Impairment and
Exit Costs
Equity
Impairment and
Implementation
Costs Total
(in millions)
North America Beverages $ 36 $ — $ 36 $ 5 $ 41
North America Cheese & Foodservice 68 8 76 6 82
North America Convenient Meals 41 41 4 45
North America Grocery 16 16 7 23
North America Snacks & Cereals 222 222 18 240
European Union 180 180 8 188
Developing Markets, Oceania & North
Asia 20 12 32 49 81
Total—Continuing Operations 583 20 603 97 700
Discontinued Operations 124 124 8 132
Total $ 583 $ 144 $ 727 $ 105 $ 832
Note 4. Related Party Transactions:
Altria Group, Inc.'s subsidiary, Altria Corporate Services, Inc., provides the Company with various services, including planning, legal, treasury, auditing,
insurance, human resources, office of the secretary, corporate affairs, information technology, aviation and tax services. Billings for these services, which were
based on the cost to Altria Corporate Services, Inc. to provide such services and a 5% management fee based on wages and benefits, were $178 million,
$237 million and $310 million for the years ended December 31, 2006, 2005 and 2004, respectively. The Company performed at a similar cost various functions
in 2006 and 2005 that previously had been provided by Altria Corporate Services, Inc., resulting in lower service charges in 2006 and 2005. The Company plans
to undertake all remaining services currently provided by Altria Corporate Services, Inc. at a similar cost in 2007. These costs were paid to Altria Corporate
Services, Inc. monthly. Although the cost of these services cannot be quantified on a stand-alone basis, management has assessed that the billings are reasonable
based on the level of support provided by Altria Corporate Services, Inc., and that they reflect all services provided. The cost and nature of the services are
reviewed annually by the Company's Audit Committee, which is comprised of independent directors. The effects of these transactions are included in operating
cash flows in the Company's consolidated statements of cash flows.
During 2006, the Company purchased certain real estate and personal property located in Wilkes Barre, Pennsylvania, from Altria Corporate Services, Inc.,
for an aggregate purchase price of $9.3 million. In addition, the Company assumed all of Altria Corporate Services, Inc.'s rights under a lease for certain real
property located in San Antonio, Texas. The Company also purchased certain personal property located in San Antonio, Texas from Altria Corporate
Services, Inc., for an aggregate purchase price of $6.0 million.
Also, see Note 13.Income Taxes regarding the favorable impact to the Company of the closure of an Internal Revenue Service review of Altria Group, Inc.'s
consolidated federal income tax return recorded during 2006.
During 2005, the Company repatriated certain foreign earnings as part of Altria Group, Inc.'s dividend repatriation plan under provisions of the American
Jobs Creation Act. Increased taxes for this repatriation of $21 million were reimbursed by Altria Group, Inc. The reimbursement was reported in the Company's
financial statements as an increase to additional paid-in capital.
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Source: KRAFT FOODS INC, 10-K, March 01, 2007