Kraft 2006 Annual Report Download - page 96
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The Company's postemployment plans are not funded. The changes in the benefit obligations of the plans at December 31, 2006 and 2005, were as follows:
2006
2005
(in millions)
Accumulated benefit obligation at January 1 $ 254 $ 252
Service cost 4 7
Interest cost 4
Restructuring program 247 139
Benefits paid (243) (158)
Assumption changes (39)
Actuarial losses 11 14
Accrued postemployment costs at December 31, 2006 $ 238
Accumulated benefit obligation at December 31, 2005 254
Unrecognized experience gains 46
Accrued postemployment costs at December 31, 2005 $ 300
The accumulated benefit obligation was determined using a discount rate of 6.3% in 2006, an assumed ultimate annual turnover rate of 0.3% in 2006 and
2005, assumed compensation cost increases of 4.0% in 2006 and 2005, and assumed benefits as defined in the respective plans. Postemployment costs arising
from actions that offer employees benefits in excess of those specified in the respective plans are charged to expense when incurred.
Note 16. Additional Information:
The amounts shown below are for continuing operations.
For the Years Ended
December 31,
2006
2005
2004
(in millions)
Research and development expense $ 419 $ 385 $ 388
Advertising expense $ 1,396 $ 1,314 $ 1,258
Interest and other debt expense, net:
Interest income, Altria Group, Inc. and affiliates $ (47) $ (6) $ (2)
Interest expense, external debt 579 657 679
Interest income (22) (15) (11)
$ 510 $ 636 $ 666
Rent expense $ 441 $ 436 $ 448
91
Source: KRAFT FOODS INC, 10-K, March 01, 2007