Kraft 2008 Annual Report Download - page 63

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Interest and other debt expense:
Interest and other debt (income) / expense for the last three years were:
For the Years Ended December 31,
2007 2006 2005
(in millions)
Interest and other debt expense, net:
Interest income, Altria Group, Inc.
and affiliates $ (74) $ (47) $ (6)
Interest expense, external debt 698 579 657
Interest income (20) (22) (15)
Total interest and other debt expense, net $ 604 $ 510 $ 636
Note 5. Income Taxes:
Earnings from continuing operations before income taxes and provision for income taxes consisted of the following for the years ended December 31, 2007, 2006
and 2005:
2007 2006 2005
(in millions)
Earnings from continuing operations
before income taxes:
United States $ 2,454 $ 2,754 $ 2,774
Outside United States 1,273 1,257 1,339
Total $ 3,727 $ 4,011 $ 4,113
Provision for income taxes:
United States federal:
Current $ 722 $ 613 $ 876
Deferred (306) (150) (210)
416 463 666
State and local 116 95 115
Total United States 532 558 781
Outside United States:
Current 660 411 466
Deferred (55) (18) (38)
Total outside United States 605 393 428
Total provision for income taxes $ 1,137 $ 951 $ 1,209
The loss from discontinued operations for the year ended December 31, 2005, includes additional tax expense of $280 million from the sale of the sugar
confectionery business.
After the implementation of FIN 48 on January 1, 2007, our unrecognized tax benefits were $667 million. If we had recognized all of these benefits, the net
impact on our income tax provision would have been $530 million. Our unrecognized tax benefits were $850 million at December 31, 2007, and if we had
recognized all of these benefits, the net impact on our income tax provision would have been $666 million. We expect that our unrecognized tax benefits will
decrease by an insignificant amount during the next twelve months. Furthermore, we recorded $72 million of unrecognized tax benefits and $30 million of
accrued interest and penalties as part of our preliminary purchase price allocation of Danone Biscuit, which is subject to revision when the purchase price
allocations are finalized during 2008. We include accrued interest and penalties related to uncertain tax positions in our tax provision. We had accrued interest
and penalties of $125 million as of January 1, 2007 and $232 million as of December 31, 2007. Our 2007 provision for income taxes includes $90 million for
interest and penalties, and we paid $13 million during 2007.
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Source: KRAFT FOODS INC, 10-K, February 25, 2008 Powered by Morningstar® Document Research℠