Kraft 2009 Annual Report Download - page 230

At December 31, 2009, applicable U.S. federal income taxes and foreign withholding taxes had not been provided on
approximately $5.7 billion of accumulated earnings of foreign subsidiaries that are expected to be permanently reinvested. It is
impractical for us to determine the amount of unrecognized deferred tax liabilities on these permanently reinvested earnings.
The effective income tax rate on pre-tax earnings differed from the U.S. federal statutory rate for the following reasons for the
years ended December 31, 2009, 2008 and 2007:
2009 2008 2007
U.S. federal statutory rate 35.0% 35.0% 35.0%
Increase / (decrease) resulting from:
State and local income taxes, net of federal tax
benefit excluding IRS audit impacts 1.9% 2.6% 2.8%
Benefit principally related to reversal of federal and
state reserves on IRS audit settlements (2.8%) - -
Reversal of other tax accruals no longer required (0.3%) (1.7%) (1.4%)
Foreign rate differences, net of repatriation impacts (2.1%) (5.2%) (5.2%)
Other (2.3%) (1.7%) (1.0%)
Effective tax rate 29.4% 29.0% 30.2%
2009 2008
(in millions)
Deferred income tax assets:
Accrued postretirement and post employment benefits $ 1,472 $ 1,467
Accrued pension costs 456 703
Other 1,997 2,324
Total deferred income tax assets 3,925 4,494
Valuation allowance (97) (84)
Net deferred income tax assets $ 3,828 $ 4,410
Deferred income tax liabilities:
Trade names $ (4,431) $ (4,431)
Property, plant and equipment (2,029) (1,862)
Other (1,055) (1,239)
Total deferred income tax liabilities (7,515) (7,532)
Net deferred income tax liabilities $ (3,687) $ (3,122)
Source: KRAFT FOODS INC, 10-K, February 25, 2010 Powered by Morningstar® Document Research℠