Kraft 2012 Annual Report Download - page 76

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Third-Party Guarantees:
We have third-party guarantees primarily covering certain long-term obligations of our vendors. As part of those
transactions, we guarantee that third parties will make contractual payments or achieve performance measures. At
December 29, 2012, the carrying amount of our third-party guarantees on our consolidated balance sheet and the
maximum potential payment under these guarantees was $22 million. We have off-balance sheet guarantees primarily
covering third-party contractual payments related to leased properties. At December 29, 2012, the maximum potential
payments under these off-balance sheet guarantees was $42 million. Substantially all of these guarantees expire at
various times through 2027.
As of December 29, 2012, Mondele¯z International and three of its indirect wholly owned subsidiaries, including a
subsidiary that became our indirect wholly owned subsidiary as a result of the Spin-Off, are joint and several guarantors of
$1.0 billion of indebtedness issued by Cadbury Schweppes US Finance LLC and maturing on October 1, 2013. Under the
Separation and Distribution Agreement between Mondele¯z International and us, Mondele¯z International has agreed to
indemnify us in the event our subsidiary is called upon to satisfy its obligation under the guarantee. Accordingly, we have
no obligation included on our balance sheets for this guarantee.
Leases:
Rental expenses were $150 million in 2012, $169 million in 2011, and $168 million in 2010. As of December 29, 2012,
minimum rental commitments under non-cancelable operating leases in effect at year-end were (in millions):
2013 $ 115
2014 93
2015 59
2016 47
2017 38
Thereafter 90
Total $ 442
Note 13. Income Taxes
Earnings from continuing operations before income taxes and the provision for income taxes consisted of the following for
the years ended December 29, 2012, December 31, 2011, and December 31, 2010:
2012 2011 2010
(in millions)
Earnings from continuing operations before income taxes:
United States $ 2,156 $ 2,650 $ 2,706
Outside United States 297 226 296
Total $ 2,453 $ 2,876 $ 3,002
Provision for income taxes:
United States federal:
Current $ 209 $ 816 $ 1,000
Deferred 424 43 (88)
633 859 912
State and local:
Current 54 169 115
Deferred 43 9 (7)
97 178 108
Total United States 730 1,037 1,020
Outside United States:
Current 78 77 69
Deferred 3 (13) 23
Total outside United States 81 64 92
Total provision for income taxes $ 811 $ 1,101 $ 1,112
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