Kraft 2009 Annual Report Download - page 98

Note 14. Income Taxes:
Earnings from continuing operations before income taxes and the provision for income taxes consisted of the following for the years ended
December 31, 2009, 2008 and 2007:
2009 2008 2007
(in millions)
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 January 1, 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 December 31, 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 December 31, 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 January 1, 2009 and $210 million as of December 31, 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.
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Source: KRAFT FOODS INC, 10-K, February 25, 2010 Powered by Morningstar® Document Research℠