Document and Entity Information (USD $) In Billions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Jan. 31, 2011	Jun. 30, 2010
Document and Entity Information
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2010
Trading Symbol	KFT
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	FY
Entity Registrant Name	KRAFT FOODS INC
Entity Central Index Key	0001103982
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,748,927,248
Entity Public Float			$ 49

Consolidated Statements of Earnings (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Consolidated Statements of Earnings
Net revenues	$ 49,207	$ 38,754	$ 40,492
Cost of sales	31,305	24,819	27,164
Gross profit	17,902	13,935	13,328
Selling, general and administrative expenses	12,001	8,784	8,613
Asset impairment and exit costs	18	(64)	1,024
Losses on divestitures, net	6	6	92
Amortization of intangibles	211	26	23
Operating income	5,666	5,183	3,576
Interest and other expense, net	2,024	1,237	1,240
Earnings from continuing operations before income taxes	3,642	3,946	2,336
Provision for income taxes	1,147	1,136	658
Earnings from continuing operations	2,495	2,810	1,678
Earnings and gain from discontinued operations, net of income taxes	1,644	218	1,215
Net earnings	4,139	3,028	2,893
Noncontrolling interest	25	7	9
Net earnings attributable to Kraft Foods	$ 4,114	$ 3,021	$ 2,884
Basic earnings per share attributable to Kraft Foods:
Continuing operations	$ 1.44	$ 1.9	$ 1.11
Discontinued operations	$ 0.96	$ 0.14	$ 0.81
Net earnings attributable to Kraft Foods	$ 2.4	$ 2.04	$ 1.92
Diluted earnings per share attributable to Kraft Foods:
Continuing operations	$ 1.44	$ 1.89	$ 1.1
Discontinued operations	$ 0.95	$ 0.14	$ 0.8
Net earnings attributable to Kraft Foods	$ 2.39	$ 2.03	$ 1.9
Dividends declared	$ 1.16	$ 1.16	$ 1.12

Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
ASSETS
Cash and cash equivalents	$ 2,481	$ 2,101
Receivables (net of allowances of $246 in 2010 and $121 in 2009)	6,539	5,197
Inventories, net	5,310	3,775
Deferred income taxes	898	730
Other current assets	993	651
Total current assets	16,221	12,454
Property, plant and equipment, net	13,792	10,693
Goodwill	37,856	28,764
Intangible assets, net	25,963	13,429
Prepaid pension assets	86	115
Other assets	1,371	1,259
TOTAL ASSETS	95,289	66,714
LIABILITIES
Short-term borrowings	750	453
Current portion of long-term debt	1,115	513
Accounts payable	5,409	3,766
Accrued marketing	2,515	2,181
Accrued employment costs	1,292	1,175
Other current liabilities	4,579	3,403
Total current liabilities	15,660	11,491
Long-term debt	26,859	18,024
Deferred income taxes	7,984	4,508
Accrued pension costs	2,382	1,765
Accrued postretirement health care costs	3,046	2,816
Other liabilities	3,416	2,138
TOTAL LIABILITIES	59,347	40,742
Contingencies (Note 13)
EQUITY
Common Stock, no par value (1,996,537,778 shares issued in 2010 and 1,735,000,000 shares issued in 2009)
Additional paid-in capital	31,231	23,611
Retained earnings	16,619	14,636
Accumulated other comprehensive losses	(3,890)	(3,955)
Treasury stock, at cost	(8,126)	(8,416)
Total Kraft Foods Shareholders' Equity	35,834	25,876
Noncontrolling interest	108	96
TOTAL EQUITY	35,942	25,972
TOTAL LIABILITIES AND EQUITY	$ 95,289	$ 66,714

Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Consolidated Balance Sheets
Receivables, allowances	$ 246	$ 121
Common Stock, par value	$ 0	$ 0
Common Stock, shares issued	1,996,537,778	1,735,000,000

Consolidated Statements of Equity (USD $) In Millions, unless otherwise specified	Total	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Earnings / (Losses) [Member]	Treasury Stock	Noncontrolling Interest
Balances at Dec. 31, 2007	$ 27,445	$ 23,445	$ 12,321	$ (1,835)	$ (6,524)	$ 38
Comprehensive earnings / (losses):
Net earnings	2,893		2,884			9
Other comprehensive earnings / (losses), net of income taxes	(4,168)			(4,159)		(9)
Total comprehensive earnings / (losses)	(1,275)
Adoption of new benefit plan guidance	(8)		(8)
Exercise of stock options and issuance of other stock awards	268	118	(81)		231
Cash dividends declared	(1,676)		(1,676)
Acquisitions of noncontrolling interest	23					23
Common stock repurchased	(777)				(777)
Common Stock tendered	(1,644)				(1,644)
Balances at Dec. 31, 2008	22,356	23,563	13,440	(5,994)	(8,714)	61
Comprehensive earnings / (losses):
Net earnings	3,028		3,021			7
Other comprehensive earnings / (losses), net of income taxes	2,073			2,039		34
Total comprehensive earnings / (losses)	5,101					41
Exercise of stock options and issuance of other stock awards	237	49	(110)		298
Cash dividends declared	(1,715)		(1,715)
Dividends paid on noncontrolling interest and other activities	(7)	(1)				(6)
Balances at Dec. 31, 2009	25,972	23,611	14,636	(3,955)	(8,416)	96
Comprehensive earnings / (losses):
Net earnings	4,139		4,114			25
Other comprehensive earnings / (losses), net of income taxes	46			65		(19)
Total comprehensive earnings / (losses)	4,185					6
Exercise of stock options and issuance of other stock awards	337	153	(106)		290
Cash dividends declared	(2,025)		(2,025)
Net impact of noncontrolling interests from Cadbury acquisition	71	38				33
Purchase from noncontrolling interest, dividends paid and other activities	(55)	(28)				(27)
Issuance of Common Stock	7,457	7,457
Balances at Dec. 31, 2010	$ 35,942	$ 31,231	$ 16,619	$ (3,890)	$ (8,126)	$ 108

Consolidated Statements of Cash Flows In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2008 USD ($)
CASH PROVIDED BY / (USED IN) OPERATING ACTIVITIES
Net earnings	$ 4,139	$ 3,028	$ 2,893
Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization	1,440	931	986
Stock-based compensation expense	174	164	178
Deferred income tax provision / (benefit)	251	38	(208)
Losses on divestitures, net	6	6	92
Gains on discontinued operations	(1,596)		(926)
Asset impairment and exit costs, net of cash paid	55	17	731
Other non-cash expense, net	329	269	87
Change in assets and liabilities, excluding the effects of acquisitions and divestitures:
Receivables, net	(165)	(17)	(39)
Inventories, net	(359)	299	(151)
Accounts payable	83	126	29
Other current assets	42	351	(535)
Other current liabilities	(776)	111	985
Change in pension and postretirement assets and liabilities, net	125	(239)	19
Net cash provided by operating activities	3,748	5,084	4,141
CASH PROVIDED BY / (USED IN) INVESTING ACTIVITIES
Capital expenditures	(1,661)	(1,330)	(1,367)
Acquisitions, net of cash received	(9,848)		(99)
Proceeds from divestitures, net of disbursements	4,039	41	97
Other	8	50	49
Net cash used in investing activities	(7,462)	(1,239)	(1,320)
CASH PROVIDED BY / (USED IN) FINANCING ACTIVITIES
Net repayments of short-term borrowings	(864)	(446)	(5,912)
Long-term debt proceeds	9,433	3	7,018
Long-term debt repaid	(2,134)	(968)	(795)
Repurchase of Common Stock			(777)
Dividends paid	(2,175)	(1,712)	(1,663)
Other	(72)	(10)	72
Net cash provided by / (used in) financing activities	4,188	(3,133)	(2,057)
Effect of exchange rate changes on cash and cash equivalents	(94)	145	(87)
Cash and cash equivalents:
Increase	380	857	677
Balance at beginning of period	2,101	1,244	567
Balance at end of period	2,481	2,101	1,244
Cash paid:
Interest	1,593	1,308	968
Income taxes	$ 2,232	$ 1,025	$ 964

Summary of Significant Accounting Policies	12 Months Ended
Summary of Significant Accounting Policies	Dec. 31, 2010
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 1. Summary of Significant Accounting Policies: Nature of Operations and Basis of Presentation: Kraft Foods Inc. was incorporated in 2000 in the Commonwealth of Virginia. Kraft Foods Inc., through its subsidiaries (collectively "Kraft Foods," "we," "us" and "our"), sells packaged food and beverage products to consumers in approximately 170 countries. Principles of Consolidation: The consolidated financial statements include Kraft Foods, as well as our wholly owned and majority owned subsidiaries. Our domestic operating subsidiaries report results as of the last Saturday of the year, and our international operating subsidiaries generally report results two weeks prior to the last Saturday of the year. The results of operations of the newly acquired Cadbury Limited (formerly, Cadbury plc) ("Cadbury") are reported on the last day of the calendar month. In 2010, we changed the consolidation date for certain European biscuits operations, which are included within our Kraft Foods Europe segment, and certain operations in Asia Pacific and Latin America, which are included within our Kraft Foods Developing Markets segment. Previously, these operations primarily reported period-end results one month or two weeks prior to the end of the period. Now our Kraft Foods Europe segment primarily reports period-end results two weeks prior to the last Saturday of the period, and certain of our operations in Asia Pacific and Latin America report results through the last day of the period. We believe the change is preferable and will improve financial reporting by better matching the close dates of the operating subsidiaries within our Kraft Foods Europe segment and those operations with Asia Pacific and Latin America with our consolidated reporting. This change resulted in a favorable impact to net revenues of approximately $200 million and an insignificant impact on operating income and net income in 2010. As the impacts to prior period results were not material to our financial results, we have not revised the prior period results for this change. Our domestic operating subsidiaries will continue to report period-end results as of the Saturday closest to the end of each period, and our international operating subsidiaries will continue to report period-end results two weeks prior to the Saturday closest to the end of each period. We account for investments in which we exercise significant influence (20%-50% ownership interest) under the equity method of accounting. We use the cost method of accounting for investments in which we have an ownership interest of less than 20% and in which we do not exercise significant influence. Noncontrolling interest in subsidiaries consists of the equity interest of noncontrolling investors in consolidated subsidiaries of Kraft Foods. All intercompany transactions are eliminated. Use of Estimates: We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), which require us to make estimates and assumptions that affect a number of amounts in our financial statements. Significant accounting policy elections, estimates and assumptions include, among others, pension and benefit plan assumptions, lives and valuation assumptions of goodwill and intangible assets, marketing programs and income taxes. We base our estimates on historical experience and other assumptions that we believe are reasonable. If actual amounts differ from estimates, we include the revisions in our consolidated results of operations in the period the actual amounts become known. Historically, the aggregate differences, if any, between our estimates and actual amounts in any year have not had a significant impact on our consolidated financial statements. Foreign Currencies: We translate the results of operations of our foreign subsidiaries using average exchange rates during each period, whereas balance sheet accounts are translated using exchange rates at the end of each period. We record currency translation adjustments as a component of equity. Transaction gains and losses are recorded in earnings and were not significant for any of the periods presented. Highly Inflationary Accounting: In the fourth quarter of 2009, the Venezuelan economy was classified as highly inflationary under U.S. GAAP. Effective January 1, 2010, we began accounting for our Venezuelan subsidiaries under highly inflationary accounting rules, which principally means all transactions are recorded in U.S. dollars. On January 8, 2010, the Venezuelan government devalued its currency and established a preferential exchange rate for imports of food, medicine and other essential items. Accordingly, we were required to revalue our net assets in Venezuela. In July 2010, the Venezuelan government eliminated the secondary (or parallel) market exchange rate and replaced it with the government-regulated Transaction System for Foreign Currency Denominate Securities ("SITME") rate. Accordingly, we were required to revalue those of our net assets in Venezuela that we maintained at the parallel rate. Then on December 30, 2010, the Venezuelan government eliminated the preferential exchange rate. Although the elimination of the preferential exchange rate did not immediately cause us to revalue our net assets in Venezuela, it will have further impacts to our operating results in future periods. Venezuela now has two exchange rates: the official rate and the SITME rate. We used both the official rate and the SITME rate to translate our Venezuelan operations into U.S. dollars, based on the nature of the operations of each individual subsidiary. During 2010, we recorded approximately $115 million of unfavorable foreign currency impacts relating to highly inflationary accounting in Venezuela. This included a one-time impact to translate cash of $34 million that we previously carried at the secondary rate. Upon the change to highly inflationary accounting in January, we were required to translate those U.S. dollars on hand using the official rate. Cash and Cash Equivalents: Cash equivalents include demand deposits with banks and all highly liquid investments with original maturities of three months or less. Inventories: Inventories are stated at the lower of cost or market. We value all our inventories using the average cost method. We also record inventory allowances for overstocked and obsolete inventories due to ingredient and packaging changes. Long-Lived Assets: Property, plant and equipment are stated at historical cost and depreciated by the straight-line method over the estimated useful lives of the assets. Machinery and equipment are depreciated over periods ranging from 3 to 20 years and buildings and building improvements over periods up to 40 years. We review long-lived assets, including amortizable intangible assets, for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. We perform undiscounted operating cash flow analyses to determine if an impairment exists. When testing for impairment of assets held for use, we group assets and liabilities at the lowest level for which cash flows are separately identifiable. If an impairment is determined to exist, the loss is calculated based on estimated fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. Software Costs: We capitalize certain computer software and software development costs incurred in connection with developing or obtaining computer software for internal use. Capitalized software costs are included in property, plant and equipment and amortized on a straight-line basis over the estimated useful lives of the software, which do not exceed seven years. Goodwill and Intangible Assets: We test goodwill and non-amortizable intangible assets at least annually for impairment. We have recognized goodwill in our reporting units, which are generally one level below our operating segments. We use a two step process to test goodwill at the reporting unit level. The first step involves a comparison of the estimated fair value of each reporting unit with its carrying value. Fair value is estimated using discounted cash flows of the reporting unit based on planned growth rates, and estimates of discount rates and residual values. If the carrying value exceeds the fair value, we must proceed with the second step of the process. The second step measures the difference between the carrying value and implied fair value of goodwill. To test non-amortizable intangible assets for impairment, we compare the fair value of the intangible asset with its carrying value. Fair value of non-amortizable intangible assets is determined using our planned growth rates, and estimates of discount rates and royalty rates. If the carrying value exceeds fair value, the intangible asset is considered impaired and is reduced to fair value. Definite-lived intangible assets are amortized over their estimated useful lives. We perform our annual impairment review of goodwill and non-amortizable intangible assets as of October 1 each year. The basis of our valuation methodology for estimating the fair value of our 21 reporting units is a 20-year projection of discounted cash flows that is based on our annual strategic planning process. Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding our future plans, industry and economic conditions. For reporting units within our Kraft Foods North America and Kraft Foods Europe geographic units, we used a market-participant, weighted-average cost of capital of 7.5% to discount the projected cash flows of those operations. For reporting units within our Kraft Foods Developing Markets geographic unit, we used a risk-rated discount rate of 10.5%. Insurance and Self-Insurance: We use a combination of insurance and self-insurance for a number of risks, including workers' compensation, general liability, automobile liability, product liability and our obligation for employee healthcare benefits. Liabilities associated with the risks are estimated by considering historical claims experience and other actuarial assumptions. Revenue Recognition: We recognize revenues when title and risk of loss pass to customers, which generally occurs upon shipment or delivery of goods. Revenues are recorded net of consumer incentives and trade promotions and include all shipping and handling charges billed to customers. Kraft Foods' shipping and handling costs are classified as part of cost of sales. A provision for product returns and allowances for bad debts are also recorded as reductions to revenues within the same period that the revenue is recognized. Selling, general and administrative expenses: Marketing - We promote our products with advertising, consumer incentives and trade promotions. These programs include, but are not limited to, discounts, coupons, rebates, in-store display incentives and volume-based incentives. We expense advertising costs either in the period the advertising first takes place or as incurred. Consumer incentive and trade promotion activities are recorded as a reduction to revenues based on amounts estimated as being due to customers and consumers at the end of a period. We base these estimates principally on historical utilization and redemption rates. For interim reporting purposes, advertising and consumer incentive expenses are charged to operations as a percentage of volume, based on estimated volume and related expense for the full year. We do not defer costs on our year-end consolidated balance sheet and all marketing costs are recorded as an expense in the year incurred. Advertising expense was $2,269 million in 2010, $1,581 million in 2009, and $1,598 million in 2008. Research - We expense costs as incurred for product research and development. Research and development expense was $583 million in 2010, $466 million in 2009, and $487 million in 2008. Environmental Costs: We are subject to laws and regulations relating to the protection of the environment. We accrue for environmental remediation obligations on an undiscounted basis when amounts are probable and can be reasonably estimated. The accruals are adjusted as new information develops or circumstances change. Recoveries of environmental remediation costs from third parties are recorded as assets when recovery of those costs is deemed probable. At December 31, 2010, our subsidiaries were involved in 74 active actions in the U.S. under Superfund legislation (and other similar actions and legislation) related to current operations and certain former or divested operations for which we retain liability. Outside the U.S., we are subject to applicable multi-national, national and local environmental laws and regulations in the countries in which we do business. Outside the U.S., we have specific programs across our business units designed to meet applicable environmental compliance requirements. As of December 31, 2010, we had accrued an insignificant amount for environmental remediation. Based on information currently available, we believe that the ultimate resolution of existing environmental remediation actions and our compliance in general with environmental laws and regulations will not have a material effect on our financial results. However, we cannot quantify with certainty the potential impact of future compliance efforts and environmental remediation actions. Employee Benefit Plans: We provide a range of benefits to our employees and retired employees. These include pension benefits, postretirement health care benefits and postemployment benefits, consisting primarily of severance. We provide pension coverage for certain employees of our non-U.S. subsidiaries through separate plans. Local statutory requirements govern many of these plans. For salaried and non-union hourly employees hired in the U.S. after January 1, 2009, we discontinued benefits under our U.S. pension plans, and we replaced them with an enhanced company contribution to our employee savings plan. Additionally, we will be freezing the U.S. pension plans for current salaried and non-union hourly employees effective December 31, 2019. Pension accruals for all salaried and non-union employees who are currently earning pension benefits will end on December 31, 2019, and continuing pay and service will be used to calculate the pension benefits through December 31, 2019. Our projected benefit obligation decreased $168 million in 2009, and we incurred a $5 million curtailment charge in 2009 related to the freeze. Our U.S., Canadian, and United Kingdom subsidiaries provide health care and other benefits to most retired employees. Local government plans generally cover health care benefits for retirees outside the U.S., Canada, and United Kingdom. Our postemployment benefit plans cover most salaried and certain hourly employees. The cost of these plans is charged to expense over the working life of the covered employees. In September 2006, new guidance was issued surrounding employers' accounting for defined benefit pension and other postretirement plans. The new guidance required us to measure plan assets and benefit obligations as of the balance sheet date beginning in 2008. We previously measured our non-U.S. pension plans (other than certain Canadian and French pension plans) at September 30 of each year. On December 31, 2008, we recorded an after-tax decrease of $8 million to retained earnings using the 15-month approach to proportionally allocate the transition adjustment required upon adoption of the measurement provision of the new guidance. Financial Instruments: As we operate globally, we use certain financial instruments to manage our foreign currency exchange rate, commodity price and interest rate risks. We monitor and manage these exposures as part of our overall risk management program. Our risk management program focuses on the unpredictability of financial markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on our operating results. We maintain foreign currency, commodity price and interest rate risk management strategies that seek to reduce significant, unanticipated earnings fluctuations that may arise from volatility in foreign currency exchange rates, commodity prices and interest rates, principally through the use of derivative instruments. Financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at inception and throughout the hedged period. We formally document the nature of and relationships between the hedging instruments and hedged items, as well as our risk management objectives, strategies for undertaking the various hedge transactions and method of assessing hedge effectiveness. Additionally, for hedges of forecasted transactions, the significant characteristics and expected terms of the forecasted transaction must be specifically identified, and it must be probable that each forecasted transaction will occur. If we deem it probable that the forecasted transaction will not occur, we recognize the gain or loss in earnings currently. By using derivatives to hedge exposures to changes in exchange rates, commodity prices and interest rates, we have exposure on these derivatives to credit and market risk. We are exposed to credit risk that the counterparty might fail to fulfill its performance obligations under the terms of the derivative contract. We minimize our credit risk by entering into transactions with high quality counterparties with investment grade credit ratings, limiting the amount of exposure we have with each counterparty and monitoring the financial condition of our counterparties. We also maintain a policy of requiring that all significant, non-exchange traded derivative contracts with a duration greater than one year be governed by an International Swaps and Derivatives Association master agreement. Market risk is the risk that the value of the financial instrument might be adversely affected by a change in foreign currency exchange rates, commodity prices or interest rates. We manage market risk by incorporating monitoring parameters within our risk management strategy that limit the types of derivative instruments and derivative strategies we use, and the degree of market risk that may be undertaken by the use of derivative instruments. We record derivative financial instruments at fair value in our consolidated balance sheets as either current assets or current liabilities. Cash flows from hedging instruments are classified in the same manner as the affected hedged item in the consolidated statement of cash flows. Commodity cash flow hedges - We are exposed to price risk related to forecasted purchases of certain commodities that we primarily use as raw materials. Accordingly, we use commodity forward contracts as cash flow hedges, primarily for meat, coffee, dairy, sugar, cocoa and wheat. Commodity forward contracts generally qualify for the normal purchase exception under guidance for derivative instruments and hedging activities, and therefore are not subject to its provisions. We use commodity futures and options to hedge the price of certain input costs, including dairy, coffee, cocoa, wheat, corn products, soybean oils, meat products, sugar, natural gas and heating oil. Some of these derivative instruments are highly effective and qualify for hedge accounting treatment. We also sell commodity futures to unprice future purchase commitments, and we occasionally use related futures to cross-hedge a commodity exposure. We are not a party to leveraged derivatives and, by policy, do not use financial instruments for speculative purposes. For those derivative instruments that are highly effective and qualify for hedge accounting treatment, we defer the effective portion of unrealized gains and losses on commodity futures and option contracts as a component of accumulated other comprehensive earnings / (losses). We recognize the deferred portion as a component of cost of sales when the related inventory is sold. Ineffectiveness is directly recorded as a component of cost of sales. For the derivative instruments that we consider economic hedges but do not designate for hedge accounting treatment, we recognize gains and losses directly as a component of cost of sales. Foreign currency cash flow hedges - We use various financial instruments to mitigate our exposure to changes in exchange rates from third-party and intercompany actual and forecasted transactions. These instruments include forward foreign exchange contracts, foreign currency swaps and foreign currency options. Based on the size and location of our businesses, we use these instruments to hedge our exposure to certain currencies, including the euro, Swiss franc, pound sterling and Canadian dollar. For those derivative instruments that are highly effective and qualify for hedge accounting treatment, we defer the effective portion of unrealized gains and losses associated with forward, swap and option contracts as a component of accumulated other comprehensive earnings / (losses) until the underlying hedged transactions are reported in earnings. We recognize the deferred portion as a component of cost of sales when the related inventory is sold or as interest and other expense, net for our hedges of intercompany loans, when the payments are made. For those derivative instruments that we consider economic hedges but do not designate for hedge accounting treatment, we recognize gains and losses directly as a component of cost of sales or interest and other expense, net, depending on the nature of the underlying transaction. Interest rate cash flow and fair value hedges - We manage interest rate volatility by modifying the repricing or maturity characteristics of certain liabilities so that the net interest margin is not, on a material basis, adversely affected by movements in interest rates. As a result of interest rate fluctuations, hedged fixed-rate liabilities appreciate or depreciate in market value. We expect the effect of this unrealized appreciation or depreciation to be substantially offset by our gains or losses on the derivative instruments that are linked to these hedged liabilities. We use derivative instruments, including interest rate swaps that have indices related to the pricing of specific liabilities as part of our interest rate risk management strategy. As a matter of policy, we do not use highly leveraged derivative instruments for interest rate risk management. We use interest rate swaps to economically convert a portion of our nonprepayable fixed-rate debt into variable-rate debt. Under the interest rate swap contracts, we agree with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts, which is calculated based on an agreed-upon notional amount. We also use interest rate swaps to hedge the variability of interest payment cash flows on a portion of our future debt obligations. Substantially all of these derivative instruments are highly effective and qualify for hedge accounting treatment. For those derivative instruments that are highly effective and qualify for hedge accounting treatment, we either record the impacts in current period earnings or defer the effective portion of unrealized gains and losses as a component of accumulated other comprehensive earnings / (losses), depending on whether the hedging relationship satisfies the criteria for a fair value or cash flow hedge. For fair value hedges, we record both (i) the gains or losses on interest rate swaps and (ii) the corresponding changes in fair value of the hedged long-term debt directly as a component of interest and other expense, net. For cash flow hedges, we recognize the deferred portion as a component of interest and other expense, net when we incur the interest expense. The ineffective portion is directly recorded as a component of interest and other expense, net. For the derivative instruments that we consider economic hedges but do not designate for hedge accounting treatment, we recognize gains and losses directly as a component of interest and other expense, net. Hedges of net investments in foreign operations - We have numerous investments in our foreign subsidiaries. The net assets of these subsidiaries are exposed to volatility in foreign currency exchange rates. We use foreign-currency-denominated debt to hedge our net investment in foreign operations against adverse movements in exchange rates. We designated our euro and pound sterling denominated borrowings as a net investment hedge of a portion of our overall European operations. The gains and losses on our net investment in these designated European operations are economically offset by losses and gains on our euro and pound sterling denominated borrowings. The change in the debt's fair value is recorded in the currency translation adjustment component of accumulated other comprehensive earnings / (losses). Guarantees: Authoritative guidance related to guarantor's accounting and disclosure requirements for guarantees requires us to disclose certain guarantees and to recognize a liability for the fair value of the obligation of qualifying guarantee activities. See Note 13, Commitments and Contingencies for a further discussion of guarantees. Income Taxes: We recognize tax benefits in our financial statements when our uncertain tax positions are more likely than not to be sustained upon audit. The amount we recognize is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We recognize deferred tax assets for deductible temporary differences, operating loss carryforwards and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. New Accounting Pronouncements: In June 2009, new guidance was issued on the consolidation of variable interest entities. We adopted the guidance effective January 1, 2010. This guidance increases the likelihood of an enterprise being classified as a variable interest entity. The adoption of this guidance did not have a material impact on our financial results.

Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2010

Acquisitions and Divestitures

Acquisitions and Divestitures

Note 2. Acquisitions and Divestitures:

Cadbury Acquisition:

On January 19, 2010, we announced the terms of our final offer for each outstanding ordinary share of Cadbury, including each ordinary share represented by an American Depositary Share ("Cadbury ADS"), and the Cadbury Board of Directors recommended that Cadbury shareholders accept the terms of the final offer. On February 2, 2010, all of the conditions to the offer were satisfied or validly waived, the initial offer period expired and a subsequent offer period immediately began. At that point, we had received acceptances of 71.73% of the outstanding Cadbury ordinary shares, including those represented by Cadbury ADSs ("Cadbury Shares"). As of June 1, 2010, we owned 100% of all outstanding Cadbury Shares. We believe the combination of Kraft Foods and Cadbury will create a global snacks powerhouse and an unrivaled portfolio of brands people love.

Under the terms of our final offer and the subsequent offer, we agreed to pay Cadbury shareholders 500 pence in cash and 0.1874 shares of Kraft Foods Common Stock per Cadbury ordinary share validly tendered and 2,000 pence in cash and 0.7496 shares of Kraft Foods Common Stock per Cadbury ADS validly tendered. This valued Cadbury at $18.5 billion, or approximately £11.6 billion (based on the average price of $28.36 for a share of Kraft Foods Common Stock on February 2, 2010 and an exchange rate of $1.595 per £1.00).

On February 2, 2010, we acquired 71.73% of Cadbury Shares for $13.1 billion and the value attributed to noncontrolling interests was $5.4 billion. From February 2, 2010 through June 1, 2010, we acquired the remaining 28.27% of Cadbury Shares for $5.4 billion. We had a $38 million gain on noncontrolling interest acquired and recorded it within additional paid in capital.

As part of our Cadbury acquisition, we incurred and expensed transaction related fees of $218 million in 2010 and $40 million in 2009. We recorded these expenses within selling, general and administrative expenses. We also incurred acquisition financing fees of $96 million in 2010. We recorded these expenses within interest and other expense, net.

Cadbury contributed net revenues of $9,143 million and net earnings of $530 million from February 2, 2010 through December 31, 2010. The following unaudited pro forma summary presents Kraft Foods' consolidated information as if Cadbury had been acquired on January 1, 2009. These amounts were calculated after conversion to U.S. GAAP, applying our accounting policies, and adjusting Cadbury's results to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment, and intangible assets had been applied from January 1, 2009, together with the consequential tax effects. These adjustments also reflect the additional interest expense incurred on the debt to finance the purchase, and the divestitures of certain Cadbury confectionery operations in Poland and Romania, as required by the EU Commission as a condition of our Cadbury acquisition.


	Pro forma for the Years Ended December 31,
	2010		2009
	(in millions)

Net revenues	$	49,770	$	47,852
Net earnings attributable to Kraft Foods		3,938		2,586

Our February 2, 2010 Cadbury acquisition was valued at $18,547 million, or $17,503 million net of cash and cash equivalents. As part of that acquisition, we acquired the following assets and assumed the following liabilities (in millions):


Receivables ⁽¹⁾	$	1,333
Inventories		1,298
Other current assets		660
Property, plant and equipment		3,293
Goodwill ⁽²⁾		9,530
Intangible assets ⁽³⁾		12,905
Other assets		593
Short-term borrowings		(1,206	)
Accounts payable		(1,605	)
Other current liabilities ⁽⁴⁾		(1,866	)
Long-term debt		(2,437	)
Deferred income taxes		(3,218	)
Accrued pension costs		(817	)
Other liabilities		(927	)
Noncontrolling interest		(33	)

(1)

The gross amount due under the receivables we acquired is $1,474 million, of which $141 million is expected to be uncollectable.

(2)

Goodwill will not be deductible for statutory tax purposes and is attributable to Cadbury's workforce and the significant synergies we expect from the acquisition.

(3)

We acquired $10.3 billion of indefinitely lived intangible assets, primarily trademarks, and $2.6 billion of amortizable intangible assets, primarily customer relationships and technology. Customer relationships will be amortized over approximately 13 years and technology will be amortized over approximately 12 years.

(4)

Within other current liabilities, a reserve for exposures related to taxes of approximately $70 million was established within our Developing Markets segment. The cumulative exposure was approximately $150 million at December 31, 2010.

The above amounts represent the allocation of purchase price which was completed during the fourth quarter of 2010.

Pizza Divestiture:

On March 1, 2010, we completed the sale of the assets of our North American frozen pizza business ("Frozen Pizza") to Nestlé USA, Inc. ("Nestlé") for $3.7 billion. Our Frozen Pizza business was a component of our U.S. Convenient Meals and Canada & North America Foodservice segments. The sale included the DiGiorno, Tombstone and Jack's brands in the U.S., the Delissio brand in Canada and the California Pizza Kitchen trademark license. It also included two Wisconsin manufacturing facilities (Medford and Little Chute) and the leases for the pizza depots and delivery trucks. Approximately 3,600 of our employees transferred with the business to Nestlé. Accordingly, the results of our Frozen Pizza business have been reflected as discontinued operations on the consolidated statement of earnings, and prior period results have been revised in a consistent manner.

Pursuant to the Frozen Pizza business Transition Services Agreement, we agreed to provide certain sales, co-manufacturing, distribution, information technology, accounting and finance services to Nestlé for up to two years.

Summary results of operations for the Frozen Pizza business through March 1, 2010 were as follows:

		00000000			00000000			00000000
	For the Years Ended December 31,
	2010			2009			2008
	(in millions)

Net revenues	$	335		$	1,632		$	1,440

Earnings before income taxes		73			341			267
Provision for income taxes		(25	)		(123	)		(97	)
Gain on discontinued operations, net of income taxes		1,596			-			-

Earnings and gain from discontinued operations, net of income taxes	$	1,644		$	218		$	170

Earnings before income taxes as presented exclude associated allocated overheads of $25 million in 2010, $108 million in 2009 and $112 million in 2008.

The 2010 gain on discontinued operations from the sale of the Frozen Pizza business included tax expense of $1.2 billion.

The following assets of the Frozen Pizza business were included in the Frozen Pizza divestiture (in millions):

		00000000
Inventories, net	$	102
Property, plant and equipment, net		317
Goodwill		475

Distributed assets of the Frozen Pizza business	$	894

Post Cereals Split-off:

On August 4, 2008, we completed the split-off of the Post cereals business into Ralcorp Holdings, Inc. ("Ralcorp"), after an exchange with our shareholders. Accordingly, the Post cereals business prior period results were reflected as discontinued operations on the consolidated statement of earnings. The exchange was expected to be tax-free to participating shareholders for U.S. federal income tax purposes.

In this split-off transaction, approximately 46 million shares of Kraft Foods Common Stock were tendered for $1,644 million. Our shareholders had the option to exchange some or all of their shares of Kraft Foods Common Stock and receive shares of common stock of Cable Holdco, Inc. ("Cable Holdco"). Cable Holdco was our wholly owned subsidiary that owned certain assets and liabilities of the Post cereals business. In exchange for the contribution of the Post cereals business, Cable Holdco issued approximately $665 million in debt securities, issued shares of its common stock and assumed a $300 million credit facility. Upon closing, we used the cash equivalent net proceeds, approximately $960 million, to repay debt.

The Post cereals business included such brands as Honey Bunches of Oats, Pebbles, Shredded Wheat, Selects, Grape-Nuts and Honeycomb. Under Kraft Foods, the brands in this transaction were distributed primarily in North America. In addition to the Post brands, the transaction included four manufacturing facilities, certain manufacturing equipment and approximately 1,230 employees who joined Ralcorp as part of the transaction.

Pursuant to the Post cereals business Transition Services Agreement, we provided certain sales, co-manufacturing, distribution, information technology, and accounting and finance services to Ralcorp through 2009.

Summary results of operations for the Post cereals business through August 4, 2008, were as follows:


	For the Year Ended December 31, 2008
	(in millions)

Net revenues	$	666

Earnings before income taxes		189
Provision for income taxes		(70	)
Gain on discontinued operations, net of income taxes		926

Earnings and gain from discontinued operations, net of income taxes	$	1,045

Other Divestitures:

The EU Commission required, as a condition of our Cadbury acquisition, that we divest certain Cadbury confectionery operations in Poland and Romania. In 2010, we completed the sale of the assets of the confectionery operations in Poland and Romania. The total proceeds from the divestitures were $342 million and the impacts of these divestitures were primarily reflected as adjustments to the purchase price allocations.

In 2009, we received $41 million in net proceeds and recorded pre-tax losses of $6 million on the divestitures of our Balance bar operations in the U.S., a juice operation in Brazil and a plant in Spain. We recorded after-tax gains of $58 million on these divestitures, primarily due to the differing book and tax bases of our Balance bar operations.

In 2008, we received $153 million in net proceeds, and recorded pre-tax losses of $92 million on divestitures, primarily related to a Nordic and Baltic snacks operation and four operations in Spain. We recorded after-tax losses of $64 million on these divestitures.

Included in the 2008 divestitures were the following, which were a condition of the EU Commission's approval of our Groupe Danone S.A. global LU biscuit business ("LU Biscuit") acquisition:

•

We divested a biscuit operation in Spain. From this divestiture, we received $86 million in net proceeds and recorded pre-tax losses of $74 million.

•

We divested another biscuit operation in Spain and a trademark in Hungary that we had previously acquired as part of the LU Biscuit acquisition. As such, the impacts of these divestitures were reflected as adjustments to the purchase price allocations.

These gains and losses on divestitures do not reflect the related asset impairment charges discussed in Note 5, Goodwill and Intangible Assets.

The aggregate operating results of the divestitures discussed above, other than the divestiture of the Frozen Pizza and Post cereals businesses, were not material to our financial statements in any of the periods presented. Refer to Note 16, Segment Reporting, for details of the gains and losses on divestitures by segment.

Inventories

12 Months Ended

Dec. 31, 2010

Inventories

Inventories

Note 3. Inventories:

Inventories at December 31, 2010 and 2009 were:

		00000000		00000000
	2010		2009
	(in millions)

Raw materials	$	1,743	$	1,410
Finished product		3,567		2,365

Inventories, net	$	5,310	$	3,775

Property, Plant and Equipment

12 Months Ended

Dec. 31, 2010

Property, Plant and Equipment

Property, Plant and Equipment

Note 4. Property, Plant and Equipment:

Property, plant and equipment at December 31, 2010 and 2009 were:

		00000000			00000000
	2010			2009
	(in millions)

Land and land improvements	$	795		$	492
Buildings and building equipment		4,934			4,231
Machinery and equipment		16,147			13,872
Construction in progress		1,154			828

		23,030			19,423
Accumulated depreciation		(9,238	)		(8,730	)

Property, plant and equipment, net	$	13,792		$	10,693

Refer to Note 5, Goodwill and Intangible Assets, for asset impairment charges taken against property, plant and equipment.

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2010

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Note 5. Goodwill and Intangible Assets:

At December 31, 2010 and 2009, goodwill by reportable segment was:

		00000000			00000000
	2010			2009
	(in millions)
Kraft Foods North America:
U.S. Beverages	$	1,290		$	1,290
U.S. Cheese		3,000			3,000
U.S. Convenient Meals		985			1,460
U.S. Grocery		3,046			3,046
U.S. Snacks		9,125			6,948
Canada & N.A. Foodservice		3,430			2,340
Kraft Foods Europe		9,023			6,756
Kraft Foods Developing Markets		7,957			3,924

Total goodwill	$	37,856		$	28,764

Intangible assets at December 31, 2010 and 2009 were:
	2010			2009
	(in millions)

Non-amortizable intangible assets	$	23,351		$	13,262
Amortizable intangible assets		2,928			278

		26,279			13,540
Accumulated amortization		(316	)		(111	)

Intangible assets, net	$	25,963		$	13,429

Non-amortizable intangible assets consist principally of brand names purchased through our acquisitions of Nabisco Holdings Corp., LU Biscuit and the Spanish and Portuguese operations of United Biscuits and Cadbury. Amortizable intangible assets consist primarily of trademark licenses, customer-related intangibles, process technology, license agreements and non-compete agreements. At December 31, 2010, the weighted-average life of our amortizable intangible assets was 13.2 years.

The movements in goodwill and intangible assets were:

		Assets,natncost			Assets,natncost			Assets,natncost			Assets,natncost
	2010						2009
	Goodwill			Intangible Assets, at cost			Goodwill			Intangible Assets, at cost
	(in millions)

Balance at January 1	$	28,764		$	13,540		$	27,581		$	13,012
Changes due to:
Foreign currency		37			48			1,200			544
Acquisitions		9,530			12,907			-			-
Divestitures		(475	)		(168	)		(17	)		-
Asset impairments		-			(43	)		-			(12	)
Other		-			(5	)		-			(4	)

Balance at December 31	$	37,856		$	26,279		$	28,764		$	13,540

Changes to goodwill and intangible assets during 2010 were:

•

Acquisitions - We increased goodwill by $9,530 million and intangible assets by $12,907 million related to allocations of purchase price for our Cadbury acquisition. We recorded $2,177 million of the acquired goodwill in our U.S. Snacks segment, $937 million in our Canada & N.A. Foodservice segment, $2,671 million in our Kraft Foods Europe segment and $3,745 million in our Kraft Foods Developing Markets segment.

•

Divestitures - We reduced goodwill by $475 million due to our Frozen Pizza business divestiture.

•

Asset impairments - During our 2010 review of goodwill and non-amortizable intangible assets, we recorded a $43 million charge for the impairment of intangible assets. We recorded the aggregate asset impairment charges within asset impairment and exit costs.

Changes to goodwill and intangible assets during 2009 were:

•

Divestitures - We reduced goodwill by $17 million due to the divestiture of our Balance bar operations in the U.S.

•

Asset impairments - During our 2009 review of goodwill and non-amortizable intangible assets, we recorded a $12 million charge for the impairment of intangible assets in the Netherlands.

Amortization expense for intangible assets was $211 million in 2010, $26 million in 2009, and $23 million in 2008. We currently estimate amortization expense for each of the next five years to be approximately $220 million.

Annual Impairment Review & Asset Impairment Charges:

As a result of our 2010 annual review of goodwill and non-amortizable intangible assets, we recorded a $13 million charge for the impairment of intangible assets in the Netherlands and a $30 million charge for the impairment of intangible assets in China. During the fourth quarter of 2010, we also recorded an asset impairment of $12 million on a biscuit plant and related property, plant and equipment in France. We recorded the aggregate asset impairment charges within asset impairment and exit costs. During our 2010 impairment review, we also noted that the following five reporting units were the most sensitive to near-term changes in our discounted cash flow assumptions:

		Assets,natncost		Assets,natncost	Assets,natncost	Assets,natncost
	Percentage of Excess Fair Value over Carrying Value		October 1, 2010 Carrying Value of Goodwill
			(in millions)

U.S. Confections		17%	$	2,177
U.S. Grain Snacks		10%		5,778
U.S. Salty Snacks		12%		1,170
Central and Eastern Europe, Middle East and Africa		8%		3,390
Asia Pacific		18%		2,517

Each of our reporting units passed the first step of our 2010 annual impairment review with an estimated fair value greater than 105% of its carrying value. Looking past 2010, there are uncertainties within the five identified reporting units that could potentially require further analysis in the future in order for us to determine if a goodwill impairment exists within any of the individual reporting units. Significant uncertainties are:

•

Across Kraft Foods North America, and specifically within our U.S. Grain Snacks reporting unit, we experienced significant input cost inflation over the past year. In 2010 the contribution from pricing trailed input cost inflation. Consequently, in 2011 we have announced price increases on selective portions of the portfolio, while also implementing sizing changes on other portions of the portfolio. If input costs continue to rise, as we expect, additional price increases will be required. We expect to take needed pricing actions in the midst of persistent consumer weakness; however, if we are unable to, it would decrease profitability and adversely affect the estimated fair value of our U.S. Grain Snacks reporting unit.

•

Our U.S. Salty Snacks business grew in 2010, after experiencing two years of volume declines. Revenues and operating income grew more substantially as we increased pricing and implemented cost saving measures. Further volume, revenue or operating income declines would adversely affect the estimated fair value of U.S. Salty Snacks reporting unit. However, as noted, we also experienced significant input cost inflation over the past year within our U.S. Salty Snacks business. If input costs continue to rise, as we expect, additional price increases will be required. We expect to take needed pricing actions in the midst of persistent consumer weakness; however, if we are unable to, it would decrease profitability and adversely affect the estimated fair value of our U.S. Salty Snacks reporting unit.

•

Our U.S. Confections, Asia Pacific and Central and Eastern Europe, Middle East and Africa businesses compose a significant portion of our 2010 Cadbury acquisition. As our Cadbury acquisition was only eight months prior to our annual review of goodwill on October 1, 2010, we did not expect a significant amount of excess estimated fair value over book value to be realized in such a short period. We expect to integrate our combined businesses in these reporting units over the next two years; however, if we are unable to, it would adversely affect the estimated fair values of these reporting units.

During the fourth quarter of 2009, we completed the annual review of goodwill and non-amortizable intangible assets and recorded a $12 million charge for the impairment of intangible assets in the Netherlands. In addition, during 2009, we recorded a $9 million asset impairment charge to write off an investment in Norway. We recorded the aggregate charges within asset impairment and exit costs.

During the fourth quarter of 2008, we completed the annual review of goodwill and non-amortizable intangible assets and recorded a $44 million charge for the impairment of intangible assets in the Netherlands, France and Puerto Rico. During our 2008 impairment review, we determined that our Europe Biscuits reporting unit was the most sensitive to near-term changes in our discounted cash flow assumptions, as it contains a significant portion of the goodwill recorded upon our 2007 acquisition of LU Biscuit. In addition, in December 2008, we reached a preliminary agreement to divest a juice operation in Brazil and reached an agreement to sell a cheese plant in Australia. In anticipation of divesting the juice operation in Brazil, we recorded an asset impairment charge of $13 million in the fourth quarter of 2008. The charge primarily included the write-off of associated intangible assets of $8 million and property, plant and equipment of $4 million. In anticipation of selling the cheese plant in Australia, we recorded an asset impairment charge of $28 million to property, plant and equipment in the fourth quarter of 2008. Additionally, in 2008, we divested a Nordic and Baltic snacks operation and incurred an asset impairment charge of $55 million in connection with the divestiture. This charge primarily included the write-off of associated goodwill of $34 million and property, plant and equipment of $16 million. We recorded the aggregate charges within asset impairment and exit costs.

- Definition

Discloses the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain or loss on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. This element may be used as a single block of text to include the entire intangible asset disclosure including data and tables.

+ References+ Details

Restructuring Costs

12 Months Ended

Dec. 31, 2010

Restructuring Costs

Restructuring Costs

Note 6. Restructuring Costs:

Within our restructuring programs and initiatives, we include certain costs along with exit and disposal costs that are directly attributable to those activities yet they do not qualify for treatment as exit or disposal costs under U.S. GAAP. These costs, which we commonly refer to as other project costs or implementation costs, generally include the integration and reorganization of operations and facilities, the discontinuance of certain product lines and the incremental expenses related to the closure of facilities. Management believes the disclosure and inclusion of these charges provides readers of our financial statements greater transparency to the total costs of our programs and initiatives.

Integration Program

Our combination with Cadbury has the potential for meaningful synergies and costs savings. We expect to recognize at least $750 million of cost savings by the end of the third year following completion of the acquisition. Additionally, we expect to create revenue synergies from investments in distribution, marketing and product development. In order to achieve these cost savings and synergies, we expect to incur total integration charges of approximately $1.5 billion in the first three years following the acquisition to combine and integrate the two businesses (the "Integration Program").

Integration Program costs include the costs associated with combining our operations with Cadbury's and are separate from the costs related to the acquisition. We incurred charges under the Integration Program of $657 million in 2010. We recorded these charges primarily in operations as a part of selling, general and administrative expenses within our Kraft Foods Europe and Kraft Foods Developing Markets segments, as well as general corporate expenses.

During the second quarter of 2010, we evaluated Cadbury's Vision into Action ("VIA") restructuring program and began managing it within our overall Integration Program. Cadbury initiated the VIA restructuring program in 2007 and planned to run it through 2011. Accordingly, we acquired an accrual of $228 million relating to charges taken in previous periods. In evaluating the program as part of our corporate strategies and our integration plans, we included the remaining charges within our overall Integration Program. As we move forward on a combined company basis, we do not intend to manage these programs separately.

Liability activity for Integration Program in 2010 was (in millions):

		00000000
Liability assumed upon acquisition	$	228
Charges		657
Cash spent		(463	)
Asset impairments		(13	)
Currency / other		(3	)

Liability balance, December 31, 2010	$	406

Cost Savings Initiatives

Cost savings initiatives generally include exit, disposal and other project costs. We incurred costs associated with our Cost Savings Initiatives of $170 million in 2010 and $318 million in 2009 and none in 2008.

•

In 2010, we primarily recorded these changes within the segment operating income of Kraft Foods Europe and Canada & N.A. Foodservice. The majority of these charges incurred were for other project costs associated with the Kraft Foods Europe Reorganization.

•

The 2009 charges primarily included severance charges for benefits received by terminated employees, associated benefit plan costs and other related activities. These were recorded in operations, primarily within the segment operating income of Kraft Foods Europe, with the remainder spread across all other segments.

Even though other project costs were directly attributable to exit and disposal costs, they did not qualify for special accounting treatment as exit or disposal activities. Management believes the disclosure of other project costs provides readers of our financial statements greater transparency to the total costs of our Cost Savings Initiatives.

2004-2008 Restructuring Program

In 2008, we completed our five-year restructuring program (the "Restructuring Program"). The Restructuring Program's objectives were to leverage our global scale, realign and lower our cost structure, and optimize capacity. As part of the Restructuring Program, we:

•

incurred $2.9 billion in pre-tax charges reflecting asset disposals, severance and implementation costs;

•

announced the closure of 35 facilities and announced the elimination of approximately 18,200 positions; and

•

will use cash to pay for $1.9 billion of the $2.9 billion in charges.

In 2010, we reversed $37 million of previously accrued Restructuring Program charges, primarily related to severance. In 2009, we reversed $85 million of previously accrued Restructuring Program charges. The reversal in 2009 related to the following:

•

We sold a plant in Spain that we previously announced we would close under our Restructuring Program. Accordingly, we reversed $35 million in Restructuring Program charges, primarily related to severance, and recorded a $17 million loss on the divestiture of the plant in 2009. The reversal occurred in our Kraft Foods Europe segment.

•

We also reversed $50 million of previously accrued Restructuring Program charges in 2009, primarily due to planned position eliminations that did not occur. These were primarily the result of redeployment and natural attrition. The majority of these reversals occurred in our Kraft Foods Europe segment, with the remainder spread across all other segments.

We incurred charges from continuing operations under the Restructuring Program of $989 million in 2008. Since the inception of the Restructuring Program, we have paid cash of $1.8 billion of the $1.9 billion in expected cash payments, including $94 million paid in 2010. At December 31, 2010, we had an accrual of $125 million related to the Restructuring Program.

Restructuring Costs:

Under the Restructuring Program, we recorded asset impairment and exit costs of $884 million during 2008. We recorded implementation costs from of $105 million in 2008. Restructuring liability activity for the years ended December 31, 2010 and 2009 was (in millions):

		00000000
Liability balance, January 1, 2009		489
Reversal of charges		(85	)
Cash spent		(176	)
Currency		42

Liability balance, December 31, 2009		270
Reversal of charges		(37	)
Cash spent		(94	)
Currency		(14	)

Liability balance, December 31, 2010	$	125

Our 2010 activity was related to cash outflows on prior year Restructuring Program charges and reversals relating to severance benefits and other charges. Our prior year charges to the liability included severance benefits received by terminated employees, other costs related primarily to the renegotiation of supplier contract costs, workforce reductions associated with facility closings and the termination of leasing agreements. We anticipate utilizing the majority of the remaining accrual during 2011.

Implementation Costs:

Implementation costs were directly attributable to exit and disposal costs; however, they did not qualify for special accounting treatment as exit or disposal activities. These costs primarily included the discontinuance of certain product lines, incremental expenses related to the closure of facilities and the reorganization of our European operations discussed above. Management believes the disclosure of implementation charges provides readers of our financial statements greater transparency to the total costs of our Restructuring Program.

Implementation costs associated with the Restructuring Program were:


	2008
	(in millions)

Cost of sales	$	38
Selling, general and administrative costs		67

Total implementation costs	$	105

Total Restructuring Program Costs:

We included the asset impairment, exit and implementation costs discussed above, for the year ended December 31, 2008 in segment operating income as follows:


	For the Year Ended December 31, 2008
	Restructuring Costs		Implementation Costs		Total
	(in millions)

Kraft Foods North America:
U.S. Beverages	$	59	$	8	$	67
U.S. Cheese		31		7		38
U.S. Convenient Meals		31		7		38
U.S. Grocery		36		5		41
U.S. Snacks		72		9		81
Canada & N.A. Foodservice		100		10		110
Kraft Foods Europe		418		56		474
Kraft Foods Developing Markets		137		3		140

Total	$	884	$	105	$	989

Debt and Borrowing Arrangements

12 Months Ended

Dec. 31, 2010

Debt and Borrowing Arrangements

Debt and Borrowing Arrangements

Note 7. Debt and Borrowing Arrangements:

Short-Term Borrowings:

At December 31, 2010 and 2009, our short-term borrowings and related weighted-average interest rates consisted of:


	2010				2009
	Amount Outstanding		Weighted-Average Year-End Rate		Amount Outstanding		Weighted-Average Year-End Rate
	(in millions)				(in millions)

Commercial paper	$	483		0.5%	$	262		0.5%
Bank loans		267		6.3%		191		10.5%

Total short-term borrowings	$	750			$	453

The fair values of our short-term borrowings at December 31, 2010 and 2009, based upon current market interest rates, approximate the amounts disclosed above.

Borrowing Arrangements:

We maintain a revolving credit facility that we have historically used for general corporate purposes, including for working capital purposes, and to support our commercial paper issuances. Our $4.5 billion three-year senior unsecured revolving credit facility expires in November 2012. No amounts have been drawn on the facility.

The revolving credit facility agreement requires us to maintain a minimum total shareholders' equity, excluding accumulated other comprehensive earnings / (losses), of at least $28.6 billion. This threshold was increased by $5.6 billion to $28.6 billion due to the equity we issued as part of our Cadbury acquisition. At December 31, 2010, our total shareholders' equity, excluding accumulated other comprehensive earnings / (losses), was $39.7 billion. We expect to continue to meet this covenant. The revolving credit agreement also contains customary representations, covenants and events of default. However, the revolving credit facility has no other financial covenants, credit rating triggers or provisions that could require us to post collateral as security.

In addition to the above, some of our international subsidiaries maintain primarily uncommitted credit lines to meet short-term working capital needs. Collectively, these credit lines amounted to $2.4 billion at December 31, 2010. Borrowings on these lines amounted to $267 million at December 31, 2010 and $191 million at December 31, 2009.

Cadbury maintained a three-year, £450 million senior unsecured revolving credit facility that we terminated in 2010.

As part of our Cadbury acquisition, on November 9, 2009, we entered into an agreement for a 364-day senior unsecured bridge facility (the "Cadbury Bridge Facility"). During the first quarter of 2010, we borrowed £807 million under the Cadbury Bridge Facility, and later repaid it ($1,205 million at the time of repayment) with proceeds from the divestiture of our Frozen Pizza business. Upon repayment, the Cadbury Bridge Facility was terminated.

Long-Term Debt:

On February 8, 2010, we issued $9.5 billion of senior unsecured notes at a weighted-average effective rate of 5.364% and used the net proceeds ($9,379 million) to finance the Cadbury acquisition and for general corporate purposes. The general terms of the $9.5 billion notes are:

•

$3.75 billion total principal notes due February 10, 2020 at a fixed, annual interest rate of 5.375%. Interest is payable semiannually beginning August 10, 2010.

•

$3.00 billion total principal notes due February 9, 2040 at a fixed, annual interest rate of 6.500%. Interest is payable semiannually beginning August 9, 2010.

•

$1.75 billion total principal notes due February 9, 2016 at a fixed, annual interest rate of 4.125%. Interest is payable semiannually beginning August 9, 2010.

•

$1.00 billion total principal notes due May 8, 2013 at a fixed, annual interest rate of 2.625%. Interest is payable semiannually beginning November 8, 2010.

In addition, these notes include covenants that restrict our ability to incur debt secured by liens above a certain threshold. We also must offer to purchase these notes at a price equal to 101% of the aggregate principal amount, plus accrued and unpaid interest to the date of repurchase, if both of the following occur:

(i)

a "change of control" triggering event, and

(ii)

a downgrade of these notes below an investment grade rating by each of Moody's Investors Service, Inc., Standard & Poor's Ratings Services and Fitch, Inc. within a specified period.

We expect to continue to comply with our long-term debt covenants.

The fair value of the long-term debt we acquired as part of our Cadbury acquisition was $2,437 million at February 2, 2010. The acquired debt has the following terms (including U.S. dollar par amounts):

•

£77 million (approximately $123 million) total principal notes due December 20, 2010 at a fixed, annual interest rate of 4.875%.

•

C$150 million (approximately $140 million) Canadian bank loan agreement expiring August 30, 2012 at a variable interest rate. The interest rate at December 31, 2010 was 1.573%.

•

$1.00 billion total principal notes due October 1, 2013 at a fixed, annual interest rate of 5.125%.

•

£300 million (approximately $478 million) total principal notes due December 11, 2014 at a fixed, annual interest rate of 5.375%.

•

£350 million (approximately $558 million) total principal notes due July 18, 2018 at a fixed, annual interest rate of 7.250%.

At December 31, 2010 and 2009, our long-term debt consisted of (interest rates were as of December 31, 2010):

	0000000000		0000000000			0000000000
		December 31, 2010			December 31, 2009
		(in millions)

Notes, 2.63% to 7.55% (average effective rate 5.86%), due through 2040		$	22,872		$	14,395
Euro notes, 5.75% to 6.25% (average effective rate 5.98%), due through 2015			3,808			4,072
Sterling notes, 5.38% to 7.25% (average effective rate 4.94%), due through 2018			1,091			-
Other foreign currency obligations			158			5
Capital leases and other			45			65

Total			27,974			18,537
Less current portion of long-term debt			(1,115	)		(513	)

Long-term debt		$	26,859		$	18,024

As of December 31, 2010, aggregate maturities of long-term debt were (in millions):

	17,062		17,062	17,062	17,062

2011		$	1,115
2012			3,738
2013			3,557
2014			972
2015			1,541
Thereafter			17,062

On December 29, 2010 we repurchased $900 million principal amount of our 5.625% notes due 2011 and $600 million principal amount of our 6.25% notes due 2012, which were validly tendered pursuant to the cash tender offers we initiated in November 2010. We paid $1,596 million aggregate consideration, including accrued and unpaid interest, for the accepted notes in December 2010.

On December 20, 2010, we repaid £77 million (approximately $119 million) of our long-term debt and on August 11, 2010, we repaid $500 million of our long-term debt. We funded these repayments with cash from operations and short-term borrowings.

On September 3, 2009, we redeemed our November 2011, 7% $200 million debenture at par value. Upon redemption, we recorded a loss of $14 million within interest and other expense, net which represented the write-off of the remaining discount. On November 12, 2009, we repaid $750 million in notes. This repayment was primarily financed from commercial paper issuances.

Fair Value:

The aggregate fair value of our total debt, based on quoted prices in active markets for identical liabilities, was $31,459 million at December 31, 2010 as compared with the carrying value of $28,724 million. The aggregate fair value of our total debt, based on quoted prices in active markets for identical liabilities, at December 31, 2009, was $20,222 million as compared with the carrying value of $18,990 million.

Interest and Other Expense:

Interest and other expense was:

		(innmillions)			(innmillions)			(innmillions)
	For the Years Ended December 31,
	2010			2009			2008
				(in millions)
Interest and other expense, net:
Interest expense, debt	$	1,790		$	1,260		$	1,272
Acquisition-related financing fees	$	251		$	-		$	-
Other income, net		(17	)		(23	)		(32	)

Total interest and other expense, net	$	2,024		$	1,237		$	1,240

Acquisition-related financing fees include hedging and foreign currency impacts associated with the Cadbury acquisition and other fees associated with the Cadbury Bridge Facility.

Capital Stock

12 Months Ended

Dec. 31, 2010

Capital Stock

Capital Stock

Note 8. Capital Stock:

Our articles of incorporation authorize 5.0 billion shares of Class A common stock and 500 million shares of preferred stock. In 2010, we combined our Class B common stock authorization with our Class A common stock authorization. Accordingly, we only have a single class of Class A common stock authorized. Shares of Class A common stock issued, repurchased and outstanding were:



	Shares Issued		Shares Repurchased			Shares Outstanding

Balance at January 1, 2008		1,735,000,000		(201,222,380	)		1,533,777,620

Repurchase of shares		-		(25,272,255	)		(25,272,255	)
Shares tendered		-		(46,119,899	)		(46,119,899	)
Exercise of stock options and issuance of other stock awards		-		6,915,974			6,915,974

Balance at December 31, 2008		1,735,000,000		(265,698,560	)		1,469,301,440
Exercise of stock options and issuance of other stock awards		-		8,583,463			8,583,463

Balance at December 31, 2009		1,735,000,000		(257,115,097	)		1,477,884,903
Shares issued		261,537,778		-			261,537,778
Exercise of stock options and issuance of other stock awards		-		8,643,868			8,643,868

Balance at December 31, 2010		1,996,537,778		(248,471,229	)		1,748,066,549

There were no Class B common shares or preferred shares issued and outstanding at December 31, 2010, 2009 and 2008. At December 31, 2010, 136,402,967 shares of Common Stock were reserved for stock options and other stock awards.

In 2010, we issued 262 million additional shares of our Common Stock as part of the Cadbury acquisition. The issued stock had a total fair value of $7,457 million based on the average of the high and low market prices on the dates of issuance.

On August 4, 2008, we completed the split-off of the Post cereals business. In this transaction, approximately 46 million shares of Kraft Foods Common Stock were tendered for $1,644 million.

On March 30, 2007, our Board of Directors had authorized a $5.0 billion share repurchase program that expired on March 30, 2009. We did not repurchase any shares in 2010 or 2009.


		Share Repurchase Program Authorized by the Board of Directors						$5.0 billion

		Authorized / completed period for repurchase						April 2007 - March 2009

		Aggregate cost of shares repurchased in 2008 (millions of shares)						$777 million (25.3 shares)

		Aggregate cost of shares repurchased life-to-date under program (millions of shares)						$4.3 billion (130.9 shares)

In total, we repurchased 25.3 million shares for $777 million in 2008 under this program. We made these repurchases of our Common Stock in open market transactions.

- Definition

Disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References+ Details

Accumulated Other Comprehensive Earnings / (Losses)

12 Months Ended

Dec. 31, 2010

Accumulated Other Comprehensive Earnings / (Losses)

Accumulated Other Comprehensive Earnings / (Losses)

Note 9. Accumulated Other Comprehensive Earnings / (Losses):

The components of accumulated other comprehensive earnings / (losses) were:

		OthermBenefits			OthermBenefits			OthermBenefits			OthermBenefits
	Currency Translation Adjustments			Pension and Other Benefits			Derivatives Accounted for as Hedges			Total
	(in millions)

Balances at January 1, 2008	$	(51)		$	(1,811)		$	27		$	(1,835)
Other comprehensive earnings / (losses), net of income taxes:
Currency translation adjustments		(2,348	)		114			-			(2,234	)
Amortization of experience losses and prior service costs		-			98			-			98
Settlement losses		-			48			-			48
Net actuarial loss arising during period		-			(2,021	)		-			(2,021	)
Change in fair value of cash flow hedges		-			-			(50	)		(50	)

Total other comprehensive losses											(4,159	)

Balances at December 31, 2008	$	(2,399	)	$	(3,572	)	$	(23	)	$	(5,994	)
Other comprehensive earnings / (losses), net of income taxes:
Currency translation adjustments		1,893			(116	)		-			1,777
Amortization of experience losses and prior service costs		-			126			-			126
Settlement losses		-			76			-			76
Net actuarial loss arising during period		-			(64	)		-			(64	)
Change in fair value of cash flow hedges		-			-			124			124

Total other comprehensive earnings											2,039

Balances at December 31, 2009	$	(506	)	$	(3,550	)	$	101		$	(3,955	)
Other comprehensive earnings / (losses), net of income taxes:		-			-			-			-
Currency translation adjustments		195			(13	)		-			182
Amortization of experience losses and prior service costs		-			186			-			186
Settlement losses		-			96			-			96
Net actuarial loss arising during period		-			(377	)		-			(377	)
Change in fair value of cash flow hedges		-			-			(22	)		(22	)

Total other comprehensive earnings											65

Balances at December 31, 2010	$	(311	)	$	(3,658	)	$	79		$	(3,890	)

- Definition

This label may include the following: 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income. Components of comprehensive income include: (1) foreign currency translation adjustments; (2) gains and losses on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity; (3) gains and losses on intercompany foreign currency transactions that are of a long-term-investment nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements; (4) change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value; (5) unrealized holding gains and losses on available-for-sale securities and that resulting from transfers of debt securities from the held-to-maturity category to the available-for-sale category; (6) a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost; and (7) the net gain or loss and net prior service cost or credit for pension plans and other postretirement benefit plans.

+ References+ Details

Stock Plans

12 Months Ended

Dec. 31, 2010

Stock Plans

Stock Plans

Note 10. Stock Plans:

We align our annual and long-term incentive compensation programs with shareholder returns. Under the Amended and Restated 2005 Performance Incentive Plan (the "2005 Plan"), we may grant to eligible employees awards of stock options, stock appreciation rights, restricted stock, restricted and deferred stock units, and other awards based on our Common Stock, as well as performance-based annual and long-term incentive awards. We are authorized to issue a maximum of 168.0 million shares of our Common Stock under the 2005 Plan. In addition, under the Kraft Foods 2006 Stock Compensation Plan for Non-Employee Directors (the "2006 Directors Plan"), we may grant up to 500,000 shares of our Common Stock to members of the Board of Directors who are not our full-time employees. At December 31, 2010, there were 73,897,346 shares available to be granted under the 2005 Plan and 326,766 shares available to be granted under the 2006 Directors Plan. Restricted or deferred shares available for grant under the 2005 Plan at December 31, 2010, were 23,599,273.

All stock awards are issued to employees from treasury stock. We have no specific policy to repurchase Common Stock to mitigate the dilutive impact of options; however, we have historically made adequate discretionary purchases, based on cash availability, market trends and other factors, to satisfy stock option exercise activity.

Stock Options:

Stock options are granted at an exercise price equal to the market value of the underlying stock on the grant date, generally become exercisable in three annual installments beginning on the first anniversary of the grant date and have a maximum term of ten years. Prior to 2008, we had not granted stock options through a broad-based program since 2002.

We account for our employee stock options under the fair value method of accounting using a modified Black-Scholes methodology to measure stock option expense at the date of grant. The fair value of the stock options at the date of grant is amortized to expense over the vesting period. We recorded compensation expense related to stock options of $46 million in 2010, $31 million in 2009 and $18 million in 2008. The deferred tax benefit recorded related to this compensation expense was $15 million in 2010, $11 million in 2009 and $6 million in 2008. The unamortized compensation expense related to our stock options was $60 million at December 31, 2010 and is expected to be recognized over a weighted-average period of two years. Our weighted-average Black-Scholes fair value assumptions were as follows:

		ExercisenPrice		ExercisenPrice		ExercisenPrice		ExercisenPrice		ExercisenPrice
	Risk-Free Interest Rate		Expected Life		Expected Volatility		Expected Dividend Yield		Fair Value at Grant Date

2010		2.82%		6 years		19.86%		4.14%	$	3.69
2009		2.46%		6 years		21.36%		4.90%	$	2.68
2008		3.08%		6 years		21.04%		3.66%	$	4.49

The risk-free interest rate represents the constant maturity U.S. government treasuries rate with a remaining term equal to the expected life of the options. The expected life is the period over which our employees are expected to hold their options. It is based on the simplified method from the SEC's safe harbor guidelines. Volatility reflects historical movements in our stock price for a period commensurate with the expected life of the options. Dividend yield is estimated over the expected life of the options based on our stated dividend policy.

Stock option activity for the year ended December 31, 2010 was:

	ExercisenPrice		ExercisenPrice			ExercisenPrice		ExercisenPrice		ExercisenPrice
		Shares Subject to Option			Weighted- Average Exercise Price		Average Remaining Contractual Term		Aggregate Intrinsic Value

Balance at January 1, 2010			46,727,697		$	25.56
Options granted			18,077,470			29.24
Options exercised			(7,611,479	)		18.25
Options cancelled			(2,957,527	)		27.56

Balance at December 31, 2010			54,236,161			27.71		6.5 years	$	206 million

Exercisable at December 31, 2010			23,564,404			27.89		3.9 years	$	85 million

In February 2010, as part of our annual equity program, we granted 15.0 million stock options to eligible employees at an exercise price of $29.15. We also issued 3.1 million off-cycle shares of stock options during 2010 at a weighted-average exercise price of $29.73 on the date of grant, including options issued to Cadbury employees under our annual equity program.

In February 2009, as part of our annual equity program, we granted 16.3 million stock options to eligible employees at an exercise price of $23.64.

In February 2008, as part of our annual equity program, we granted 13.5 million stock options to eligible employees at an exercise price of $29.49. We also granted 0.1 million off-cycle stock options during 2008 at an exercise price of $30.78.

The total intrinsic value of options exercised was $92 million in 2010, $72 million in 2009, and $76 million in 2008. Cash received from options exercised was $134 million in 2010, $79 million in 2009, and $80 million in 2008. The actual tax benefit realized for the tax deductions from the option exercises totaled $60 million in 2010, $52 million in 2009, and $44 million in 2008.

Restricted and Deferred Stock:

We may grant shares of restricted or deferred stock to eligible employees, giving them in most instances all of the rights of shareholders, except that they may not sell, assign, pledge or otherwise encumber the shares. Shares of restricted and deferred stock are subject to forfeiture if certain employment conditions are not met. Restricted and deferred stock generally vest on the third anniversary of the grant date.

Shares granted in connection with our long-term incentive plan vest based on varying performance, market and service conditions. The unvested shares have no voting rights and do not pay dividends.

The fair value of the restricted and deferred shares at the date of grant is amortized to earnings over the restriction period. We recorded compensation expense related to restricted and deferred stock of $128 million in 2010, $133 million in 2009, and $160 million in 2008. The deferred tax benefit recorded related to this compensation expense was $39 million in 2010, $44 million in 2009, and $53 million in 2008. The unamortized compensation expense related to our restricted and deferred stock was $150 million at December 31, 2010 and is expected to be recognized over a weighted-average period of two years.

Our restricted and deferred stock activity for the year ended December 31, 2010 was:

		Weighted-Average			Weighted-Average
	Number of Shares			Weighted-Average Grant Date Fair Value Per Share

Balance at January 1, 2010		13,854,953		$	29.30
Granted		5,782,531			28.82
Vested		(4,063,589	)		34.17
Forfeited		(1,352,401	)		27.91

Balance at December 31, 2010		14,221,494			27.84

In January 2010, we granted 1.7 million shares of stock in connection with our long-term incentive plan, and the market value per share was $27.33 on the date of grant. During 2010, we granted an additional 0.6 million shares of stock in connection with our long-term incentive plan and market value per share was $29.15 on the date of grant. In February 2010, as part of our annual equity program, we issued 2.5 million shares of restricted and deferred stock to eligible employees, and the market value per restricted or deferred share was $29.15 on the date of grant. During 2010, we issued an additional 1.0 million off-cycle shares of restricted and deferred stock at a weighted-average market value per restricted or deferred share of $29.57 on the date of grant, including shares issued to Cadbury employees under our annual equity program. In aggregate, we issued 5.8 million restricted and deferred shares during 2010, including those issued as part of our long-term incentive plan.

In January 2009, we granted 1.5 million shares of stock in connection with our long-term incentive plan, and the market value per share was $27.00 on the date of grant. In February 2009, as part of our annual equity program, we issued 4.1 million shares of restricted and deferred stock to eligible employees, and the market value per restricted or deferred share was $23.64 on the date of grant. We also issued 0.2 million off-cycle shares of restricted and deferred stock during 2009, and the weighted-average market value per restricted or deferred share was $25.55 on the date of grant.

In January 2008, we granted 1.4 million shares of stock in connection with our long-term incentive plan, and the market value per share was $32.26 on the date of grant. In February 2008, as part of our annual equity program, we issued 3.4 million shares of restricted and deferred stock to eligible employees, and the market value per restricted or deferred share was $29.49 on the date of grant. We also issued 0.2 million off-cycle shares of restricted and deferred stock during 2008, and the weighted-average market value per restricted or deferred share was $30.38 on the date of grant. The total number of restricted and deferred shares issued in 2008 was 5.0 million.

The weighted-average grant date fair value of restricted and deferred stock granted was $167 million, or $28.82 per restricted or deferred share, in 2010, $143 million, or $24.68 per restricted or deferred share, in 2009, and $151 million, or $30.38 per restricted or deferred share, in 2008. The vesting date fair value of restricted and deferred stock was $117 million in 2010, $153 million in 2009, and $196 million in 2008.

Benefit Plans

12 Months Ended

Dec. 31, 2010

Benefit Plans

Benefit Plans

Note 11. Benefit Plans:

Pension Plans

Obligations and Funded Status:

The projected benefit obligations, plan assets and funded status of our pension plans at December 31, 2010 and 2009 were:

		00000000			00000000			00000000			00000000		00000000
	U.S. Plans						Non-U.S. Plans
	2010			2009			2010			2009
	(in millions)

Benefit obligation at January 1	$	6,195		$	6,133		$	4,401		$	3,211
Service cost		145			152			162			67
Interest cost		368			369			419			215
Benefits paid		(322	)		(310	)		(462	)		(225	)
Settlements paid		(244	)		(187	)		(49	)		(14	)
Curtailment gain		(23	)		(168	)		(3	)		-
Actuarial losses		368			203			265			619
Acquisition		206			-			4,375			-
Currency		-			-			(164	)		510
Other		10			3			(49	)		18

Benefit obligation at December 31		6,703			6,195			8,895			4,401


Fair value of plan assets at January 1		5,496			4,386			3,397			2,618
Actual return on plan assets		671			1,180			624			400
Contributions		85			427			326			209
Benefits paid		(322	)		(310	)		(462	)		(225	)
Settlements paid		(244	)		(187	)		(49	)		(14	)
Acquisition		114			-			3,702			-
Currency		-			-			(84	)		414
Other		-			-			(1	)		(5	)

Fair value of plan assets at December 31		5,800			5,496			7,453			3,397


Net pension liability recognized at December 31	$	(903	)	$	(699	)	$	(1,442	)	$	(1,004	)

Our projected benefit obligation decreased $23 million in 2010 due to the divestiture of our Frozen Pizza business and its effect on certain of our U.S. pension plans. In 2009, our projected benefit obligation decreased $168 million due to the freeze of certain of our U.S. pension plans.

The accumulated benefit obligation, which represents benefits earned to the measurement date, was $6,208 million at December 31, 2010 and $5,673 million at December 31, 2009 for the U.S. pension plans. The accumulated benefit obligation for the non-U.S. pension plans was $8,549 million at December 31, 2010 and $4,115 million at December 31, 2009.

The combined U.S. and non-U.S. pension plans resulted in a net pension liability of $2,345 million at December 31, 2010 and $1,703 million at December 31, 2009. We recognized these amounts in our consolidated balance sheets at December 31, 2010 and 2009 as follows:

		00000000			00000000		00000000	00000000	00000000

	2010			2009
	(in millions)

Prepaid pension assets	$	86		$	115
Other accrued liabilities		(49	)		(53	)
Accrued pension costs		(2,382	)		(1,765	)

	$	(2,345	)	$	(1,703	)

Certain of our U.S. and non-U.S. plans are underfunded and have accumulated benefit obligations in excess of plan assets. For these plans, the projected benefit obligations, accumulated benefit obligations and the fair value of plan assets at December 31, 2010 and 2009 were:

		00000000		00000000		00000000		00000000
	U.S. Plans				Non-U.S. Plans
	2010		2009		2010		2009
			(in millions)

Projected benefit obligation	$	5,097	$	4,666	$	7,934	$	3,703
Accumulated benefit obligation		4,627		4,166		7,668		3,478
Fair value of plan assets		4,156		3,932		6,471		2,629

We used the following weighted-average assumptions to determine our benefit obligations under the pension plans at December 31:

		00000000		00000000		00000000		00000000
	U.S. Plans				Non-U.S. Plans
	2010		2009		2010		2009

Discount rate		5.53%		5.93%		5.11%		5.21%
Expected rate of return on plan assets		7.95%		8.00%		6.77%		7.26%
Rate of compensation increase		4.00%		4.00%		3.68%		3.08%

Year-end discount rates for our U.S. and Canadian plans were developed from a model portfolio of high quality, fixed-income debt instruments with durations that match the expected future cash flows of the benefit obligations. Year-end discount rates for our non-U.S. plans (other than Canadian plans) were developed from local bond indices that match local benefit obligations as closely as possible. Changes in our discount rates were primarily the result of changes in bond yields year-over-year. We determine our expected rate of return on plan assets from the plan assets' historical long-term investment performance, current asset allocation and estimates of future long-term returns by asset class.

Components of Net Pension Cost:

Net pension cost consisted of the following for the years ended December 31, 2010, 2009, and 2008:


	U.S. Plans									Non-U.S. Plans
	2010			2009			2008			2010			2009			2008
	(in millions)

Service cost	$	145		$	152		$	149		$	162		$	67		$	91
Interest cost		368			369			371			419			215			222
Expected return on plan assets		(490	)		(486	)		(526	)		(467	)		(242	)		(285	)
Amortization:
Net loss from experience differences		170			160			85			77			23			31
Prior service cost		6			6			7			7			6			7
Other expenses		123			112			74			11			8			16

Net pension cost	$	322		$	313		$	160		$	209		$	77		$	82

A significant portion of the 2010 increase in non-U.S. net periodic pension cost related to the Cadbury acquisition. The following costs are included within other expenses above. Severance payments related to our Cost Savings Initiatives and Restructuring Program, and retired employees who elected lump-sum payments resulted in settlement losses for our U.S. plans of $118 million in 2010, $107 million in 2009, and $74 million in 2008. In addition, we incurred a $5 million curtailment charge in 2010 related to the divestiture of our Frozen Pizza business. Non-U.S. plant closures and early retirement benefits resulted in curtailment and settlement losses of $11 million in 2010, $8 million in 2009, and $16 million in 2008.

For the U.S. plans, we determine the expected return on plan assets component of net periodic benefit cost using a calculated market return value that recognizes the cost over a four year period. For our non-U.S. plans, we utilize a similar approach with varying cost recognition periods for some plans, and with others, we determine the expected return on plan assets based on asset fair values as of the measurement date.

As of December 31, 2010, for the combined U.S. and non-U.S. pension plans, we expected to amortize from accumulated other comprehensive earnings / (losses) into net periodic pension cost during 2011:

•

an estimated $318 million of net loss from experience differences; and

•

an estimated $7 million of prior service cost.

We used the following weighted-average assumptions to determine our net pension cost for the years ended December 31:

		Unobservable		Unobservable		Unobservable		Unobservable		Unobservable		Unobservable
	U.S. Plans						Non-U.S. Plans
	2010		2009		2008		2010		2009		2008

Discount rate		5.85%		6.10%		6.30%		5.21%		6.41%		5.44%
Expected rate of return on plan assets		7.99%		8.00%		8.00%		6.68%		7.25%		7.43%
Rate of compensation increase		3.98%		4.00%		4.00%		3.59%		3.09%		3.13%

Plan Assets:

The fair value of pension plan assets at December 31, 2010 was determined using:

		Unobservable		Unobservable		Unobservable		Unobservable

Asset Category	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category	(in millions)

U.S. equity securities	$	280	$	276	$	4	$	-
Non-U.S. equity securities		1,915		1,912		3		-
Pooled funds - equity securities		4,971		281		4,690		-

Total equity securities		7,166		2,469		4,697		-

Government bonds		1,405		731		674		-
Pooled funds - fixed income securities		1,893		52		1,841		-
Corporate bonds and other fixed income securities		1,749		5		993		751

Total fixed income securities		5,047		788		3,508		751

Real estate		343		86		7		250
Other		542		155		11		376

Total	$	13,098	$	3,498	$	8,223	$	1,377

The fair value of pension plan assets at December 31, 2009 was determined using:

		Unobservable		Unobservable		Unobservable		Unobservable

Asset Category	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category	(in millions)

U.S. equity securities	$	289	$	289	$	-	$	-
Non-U.S. equity securities		1,991		1,988		2		1
Pooled funds - equity securities		3,014		-		3,014		-

Total equity securities		5,294		2,277		3,016		1

Government bonds		1,037		931		106		-
Pooled funds - fixed income securities		945		-		945		-
Corporate bonds and other fixed income securities		988		54		932		2

Total fixed income securities		2,970		985		1,983		2

Real estate		131		22		109		-
Other		326		322		2		2

Total	$	8,721	$	3,606	$	5,110	$	5

We excluded plan assets of $155 million at December 31, 2010 and $172 million at December 31, 2009 from the above tables related to certain insurance contracts as they are reported at contract value, in accordance with authoritative guidance. U.S. and non-U.S. equity securities and government bonds are primarily classified as level one and are valued using quoted prices in active markets. Corporate bonds and other fixed income securities are primarily classified as level two and are valued using independent observable market inputs, such as matrix pricing, yield curves and indices. Pooled funds, including assets in real estate pooled funds, are primarily classified as level two and are valued using net asset values of participation units held in common collective trusts, as reported by the managers of the trusts and as supported by the unit prices of actual purchase and sale transactions. Level three assets are valued using unobservable inputs that reflect the plans' assumptions that market participants would use in pricing the assets, based on the best information available. Fair value estimates are calculated by the general partners for limited partnership and private equity investments using the market approach to estimate the fair value of private investments. The market approach utilizes prices and other relevant information generated by market transactions, type of security, degree of liquidity, restrictions on the disposition, latest round of financing data, company financial statements, relevant valuation multiples and discounted cash flow analyses. Fair value estimates are calculated for real estate investments by the investment managers using the present value of future cash flows expected to be received from the investments, based on valuation methodologies such as appraisals, local market conditions, and current and projected operating performance. Fair value estimates are calculated for investments in hedge fund-of-funds by the investment managers using the net asset value per share of the investment as reported by the money managers of the underlying funds. Fair value estimates are calculated for insurance contracts based on the future stream of benefit payments discounted using prevailing interest rates based on the valuation date.

Below is a rollforward of our Level 3 assets for the year ended December 31, 2010.


Asset Category	January 1, 2010 Balance		Net Realized and Unrealized Gains/(Losses)		Net Purchases, Issuances and Settlements			Net Transfers Into/(Out of) Level 3		Currency Impact Level 3			December 31, 2010 Balance
Asset Category	(in millions)
Non-U.S. equity securities	$	1	$	-	$	(1	)	$	-	$	-		$	-
Corporate bond and other fixed income securities		2		23		(44	)		789		(19	)		751
Real Estate		-		34		(1	)		220		(3	)		250
Other		2		29		12			341		(8	)		376

Total Level 3 investments		5		86		(34	)		1,350		(30	)		1,377

The increases in Level 3 pension plan investments from December 31, 2009 were due to our Cadbury acquisition and the types of investments we acquired in those plans. A rollforward of our Level 3 assets for 2009 was omitted as their value was insignificant to the total overall pension plan assets.

The percentage of fair value of pension plan assets at December 31, 2010 and 2009 was:


	U.S. Plans				Non-U.S. Plans
Asset Category	2010		2009		2010		2009

Equity securities		69%		68%		41%		50%
Fixed-income securities		31%		28%		47%		43%
Real estate		-		-		5%		4%
Other		-		4%		7%		3%

Total		100%		100%		100%		100%

Our investment strategy is based on our expectation that equity securities will outperform fixed-income securities over the long term. Accordingly, approximately 70% of our U.S. plan assets are in equity securities and approximately 30% are in fixed-income securities. The strategy uses indexed U.S. equity securities, actively managed and indexed international equity securities and actively managed and indexed U.S. and international investment grade fixed-income securities (which constitute 90% or more of fixed-income securities) with lesser allocations to high yield fixed-income securities. The other asset balance of our non-U.S. plans at December 31, 2010 primarily related to $374 million in hedge funds and private equity investments and $150 million in cash accounts held across various investment managers.

For the plans outside the U.S., the investment strategy is subject to local regulations and the asset / liability profiles of the plans in each individual country. These specific circumstances result in a level of equity exposure that is typically less than the U.S. plans. In aggregate, the asset allocation targets of our non-U.S. plans are broadly characterized as a mix of 41% equity securities, 46% fixed-income securities and 13% real estate / other.

We attempt to maintain our target asset allocation by rebalancing between asset classes as we make contributions and monthly benefit payments.

Employer Contributions:

In 2010, we contributed $85 million to our U.S. pension plans and $303 million to our non-U.S. pension plans. In addition, employees contributed $23 million to our non-U.S. plans. We make contributions to our U.S. and non-U.S. pension plans, primarily, to the extent that they are tax deductible and do not generate an excise tax liability. Based on current tax law, we plan to make contributions of approximately $540 million to our U.S. plans and approximately $400 million to our non-U.S. plans in 2011. Of our total 2011 pension contributions, approximately $510 million will be voluntary. However, our actual contributions may be different due to many factors, including changes in tax and other benefit laws, or significant differences between expected and actual pension asset performance or interest rates.

Future Benefit Payments:

The estimated future benefit payments from our pension plans at December 31, 2010 were:


	U.S. Plans		Non-U.S. Plans
	(in millions)

2011	$	484	$	449
2012		454		461
2013		459		471
2014		450		479
2015		470		499
2016-2020		2,722		2,726

Other Costs:

We sponsor and contribute to employee savings plans. These plans cover eligible salaried, non-union and union employees. Our contributions and costs are determined by the matching of employee contributions, as defined by the plans. Amounts charged to expense for defined contribution plans totaled $104 million in 2010, $94 million in 2009, and $93 million in 2008.

We also made contributions to multiemployer pension plans totaling $30 million in 2010, $29 million in 2009, and $27 million in 2008.

Postretirement Benefit Plans

Obligations:

Our postretirement health care plans are not funded. The changes in the accrued benefit obligation and net amount accrued at December 31, 2010 and 2009 were:


	2010			2009
	(in millions)

Accrued postretirement benefit obligation at January 1	$	3,032		$	2,899
Service cost		39			35
Interest cost		172			174
Benefits paid		(213	)		(210	)
Plan amendments		(7	)		-
Currency		10			25
Assumption changes		147			157
Actuarial losses / (gains)		42			(48	)
Acquisition		41			-

Accrued postretirement health care costs at December 31	$	3,263		$	3,032

The current portion of our accrued postretirement health care costs of $217 million at December 31, 2010 and $216 million at December 31, 2009 was included in other accrued liabilities.

We used the following weighted-average assumptions to determine our postretirement benefit obligations at December 31:

		(innmillions)		(innmillions)		(innmillions)		(innmillions)	(innmillions)	(innmillions)
	U.S. Plans				Non-U.S. Plans
	2010		2009		2010		2009

Discount rate		5.30%		5.70%		5.02%		5.25%
Health care cost trend rate assumed for next year		7.50%		7.00%		8.83%		9.00%
Ultimate trend rate		5.00%		5.00%		6.00%		6.00%
Year that the rate reaches the ultimate trend rate		2016		2014		2017		2016

Year-end discount rates for our U.S. and Canadian plans were developed from a model portfolio of high quality, fixed-income debt instruments with durations that match the expected future cash flows of the benefit obligations. Year-end discount rates for our non-U.S. plans (other than Canadian plans) were developed from local bond indices that match local benefit obligations as closely as possible. Changes in our discount rates were primarily the result of changes in bond yields year-over-year. Our expected health care cost trend rate is based on historical costs.

Assumed health care cost trend rates have a significant impact on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects as of December 31, 2010:

(innmillions)

One-Percentage-Point

Increase

Decrease

Effect on total of service and interest cost

12.7%

(10.4%)

Effect on postretirement benefit obligation

10.5%

(8.8%)

Components of Net Postretirement Health Care Costs:

Net postretirement health care costs consisted of the following for the years ended December 31, 2010, 2009 and 2008:

		(innmillions)			(innmillions)			(innmillions)		(innmillions)	(innmillions)	(innmillions)
	2010			2009			2008
				(in millions)

Service cost	$	39		$	35		$	44
Interest cost		172			174			183
Amortization:
Net loss from experience differences		55			44			55
Prior service credit		(32	)		(32	)		(28	)
Other expense		-			-			-

Net postretirement health care costs	$	234		$	221		$	254

As of December 31, 2010, we expected to amortize from accumulated other comprehensive earnings / (losses) into net postretirement health care costs during 2011:

•

an estimated $64 million of net loss from experience differences; and

•

an estimated $31 million of prior service credit.

We used the following weighted-average assumptions to determine our net postretirement cost for the years ended December 31:

		(innmillions)		(innmillions)		(innmillions)		(innmillions)		(innmillions)		(innmillions)
	U.S. Plans						Non-U.S. Plans
	2010		2009		2008		2010		2009		2008

Discount rate		5.70%		6.10%		6.10%		5.28%		7.60%		5.80%
Health care cost trend rate		7.00%		7.00%		7.50%		8.79%		9.00%		9.00%

Future Benefit Payments:

Our estimated future benefit payments for our postretirement health care plans at December 31, 2010 were:

		Non-U.S.nPlans		Non-U.S.nPlans	Non-U.S.nPlans	Non-U.S.nPlans
	U.S. Plans		Non-U.S. Plans
	(in millions)

2011	$	207	$	12
2012		207		12
2013		208		13
2014		210		13
2015		210		14
2016-2020		1,037		76

Other Costs:

We made contributions to multiemployer medical plans totaling $35 million, $35 million in 2009, and $33 million in 2008.

Postemployment Benefit Plans

Obligations:

Our postemployment plans are not funded. The changes in the benefit obligations of the plans and net amount accrued at December 31, 2010 and 2009 were:

		Non-U.S.nPlans			Non-U.S.nPlans		Non-U.S.nPlans	Non-U.S.nPlans
	2010			2009
	(in millions)

Accrued benefit obligation at January 1	$	116		$	115
Service cost		9			8
Interest cost		10			8
Severance		-			-
Benefits paid		(24	)		(35	)
Assumption changes		(8	)		26
Actuarial gains		(12	)		(7	)
Acquisition		49			-
Currency		-			1

Accrued postemployment costs at December 31	$	140		$	116

The accrued postemployment costs exclude severance costs related to other Cost Savings Initiatives of $280 million in 2010 and $430 million in 2009. The accrued benefit obligation was determined using a weighted-average discount rate of 6.3% in 2010 and 6.5% in 2009, an assumed ultimate annual turnover rate of 0.5% in 2010 and 2009, assumed compensation cost increases of 4.0% in 2010 and 2009, 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.

Components of Net Postemployment Costs:

Net postemployment costs consisted of the following for the years ended December 31, 2010, 2009 and 2008:

		Non-U.S.nPlans			Non-U.S.nPlans		Non-U.S.nPlans		Non-U.S.nPlans
	2010			2009		2008
	(in millions)

Service cost	$	9		$	8	$	6
Interest cost		10			8		7
Amortization of net (gains) / losses		(2	)		2		(2	)

Net postemployment costs	$	17		$	18	$	11

The net postemployment costs exclude severance costs related to other Cost Savings Initiatives of $25 million in 2010 and $125 million in 2009. As of December 31, 2010, the estimated net gain for the postemployment benefit plans that we expected to amortize from accumulated other comprehensive earnings / (losses) into net postemployment costs during 2011 was insignificant.

- Definition

Description containing the entire pension and other postretirement benefits disclosure as a single block of text.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 158

-Paragraph 7, 21, 22

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5, 6, 7, 8

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 8

-Subparagraph m

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 106

-Paragraph 518

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 87

-Paragraph 264

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph b

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph a

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph h

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 132R

-Paragraph 5

-Subparagraph q

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name FASB Staff Position (FSP)

-Number FAS106-2

-Paragraph 20, 21, 22

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Emerging Issues Task Force (EITF)

-Number 03-2

-Paragraph 8

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Accounting Principles Board Opinion (APB)

-Number 30

-Paragraph 26

Reference 13: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Implementation Guide (Q and A)

-Number FAS88

-Paragraph 63

+ Details

Financial Instruments

12 Months Ended

Dec. 31, 2010

Financial Instruments

Financial Instruments

Note 12. Financial Instruments:

Fair Value of Derivative Instruments:

The fair values of derivative instruments recorded in the consolidated balance sheet as of December 31, 2010 and 2009 were:


	December 31, 2010				December 31, 2009
	Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
	(in millions)

Derivatives designated as hedging instruments:
Foreign exchange contracts	$	24	$	115	$	8	$	158
Commodity contracts		74		5		25		14
Interest rate contracts		58		13		153		-

	$	156	$	133	$	186	$	172

Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	21	$	48	$	2	$	-
Commodity contracts		202		114		71		62
Interest rate contracts		59		21		-		-

	$	282	$	183	$	73	$	62

Total fair value	$	438	$	316	$	259	$	234

The majority of the increase in derivatives not designated as hedging instruments was a result of the Cadbury acquisition as we did not re-designate them for hedge accounting. We include the fair value of our asset derivatives within other current assets and the fair value of our liability derivatives within other current liabilities.

The fair values (asset / (liability)) of our derivative instruments at December 31, 2010 were determined using:


	Total Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Foreign exchange contracts	$	(118	)	$	-	$	(118	)	$	-
Commodity contracts		157			129		28			-
Interest rate contracts		83			-		83			-

Total derivatives	$	122		$	129	$	(7	)	$	-

The fair values (asset / (liability)) of our derivative instruments at December 31, 2009 were determined using:


	Total Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)

Foreign exchange contracts	$	(148	)	$	-	$	(148	)	$	-
Commodity contracts		20			11		8			1
Interest rate contracts		153			-		153			-

Total derivatives	$	25		$	11	$	13		$	1

Level 2 financial assets and liabilities consist of commodity forwards; foreign exchange forwards, currency swaps, and options; and interest rate swaps.

Commodity derivatives are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied by the notional amount. Foreign currency contracts are valued using an income approach based on observable market forward rates less the contract rate multiplied by the notional amount. Our calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the observable market interest rate curve. Our calculation of the fair value of financial instruments takes into consideration the risk of nonperformance, including counterparty credit risk.

Cash Flow Hedges:

Cash flow hedges affected accumulated other comprehensive earnings / (losses), net of income taxes, as follows:


	2010			2009			2008
	(in millions)

Accumulated gain / (loss) at beginning of period	$	101		$	(23	)	$	27
Transfer of realized (gains) / losses in fair value to earnings		(25	)		111			26
Unrealized gain / (loss) in fair value		3			13			(76	)

Accumulated gain / (loss) at December 31	$	79		$	101		$	(23	)

The effect of cash flow hedges for the years ended December 31, 2010 and 2009 was:


	2010						2009
	Gain / (Loss) Recognized in OCI			(Gain) / Loss Reclassified from AOCI into Earnings			Gain / (Loss) Recognized in OCI			(Gain) /Loss Reclassified from AOCI into Earnings
	(in millions)						(in millions)

Foreign exchange contracts - intercompany loans	$	2		$	(10	)	$	(12	)	$	-
Foreign exchange contracts - forecasted transactions		17			(1	)		(40	)		(27	)
Commodity contracts		74			(15	)		(27	)		138
Interest rate contracts		(90	)		1			92			-

Total	$	3		$	(25	)	$	13		$	111


	2010						2009
	Gain / (Loss) on Ineffectiveness Recognized in Earnings			Gain / (Loss) on Amount Excluded from Effectiveness Testing Recognized in Earnings			Gain / (Loss) on Ineffectiveness Recognized in Earnings			Gain / (Loss) on Amount Excluded from Effectiveness Testing Recognized in Earnings
	(in millions)						(in millions)

Foreign exchange contracts - intercompany loans	$	-		$	-		$	-		$	-
Foreign exchange contracts - forecasted transactions		-			-			-			-
Commodity contracts		(6	)		3			12			1
Interest rate contracts		-			-			-			-

Total	$	(6	)	$	3		$	12		$	1

We record (i) the gain or loss reclassified from accumulated other comprehensive earnings / (losses) into earnings, (ii) the gain or loss on ineffectiveness, and (iii) the gain or loss on the amount excluded from effectiveness testing in:

•

cost of sales for commodity contracts;

•

cost of sales or selling, general and administrative expenses for foreign exchange contracts related to forecasted transactions, depending on the type of transaction; and

•

interest and other expense, net for interest rate contracts and foreign exchange contracts related to intercompany loans.

We expected to transfer unrealized gains of $52 million (net of taxes) for commodity cash flow hedges and unrealized gains of $16 million (net of taxes) for foreign currency cash flow hedges and unrealized losses of $1 million (net of taxes) for interest rate cash flow hedges to earnings during the next 12 months.

Hedge Coverage:

As of December 31, 2010, we had hedged forecasted transactions for the following durations:

•

commodity transactions for periods not exceeding the next 17 months;

•

interest rate transactions for periods not exceeding the next 32 years and 4 months; and

•

foreign currency transactions for periods not exceeding the next 13 months.

Fair Value Hedges:

The effect of fair value hedges for the years ended December 31, 2010 and 2009 was:

		InterestExpense		InterestExpense			InterestExpense		InterestExpense
	2010					2009
	Gain / (Loss) Recognized in Income on Derivatives		Gain / (Loss) Recognized in Income on Borrowings			Gain / (Loss) Recognized in Income on Derivatives		Gain / (Loss) Recognized in Income on Borrowings
	(in millions)					(in millions)

Interest rate contracts	$	1	$	(1	)	$	7	$	(7	)

We include the gain or loss on hedged long-term debt and the offsetting loss or gain on the related interest rate swap in interest and other expense, net.

Hedges of Net Investments in Foreign Operations:

The effect of hedges of net investments in foreign operations for the years ended December 31, 2010 and 2009 was:

InterestExpense

2010

2009

Gain / (Loss)
Recognized
in OCI

Location of
Gain / (Loss)
Recorded
in AOCI

Gain / (Loss)
Recognized
in OCI

Location of
Gain / (Loss)
Recorded
in AOCI

(in millions)

Euro notes

170

Currency
Translation

(65

)

Currency
Translation

Pound sterling notes

Adjustment

Economic Hedges:

The effect of economic hedges, derivatives that are not designated as hedging instruments, for the years ended December 31, 2010 and 2009 was:

		InterestExpense			InterestExpense			InterestExpense	InterestExpense
	2010			2009			Location of Gain / (Loss) Recognized in Earnings
	Gain / (Loss) Recognized in Earnings			Gain / (Loss) Recognized in Earnings			Location of Gain / (Loss) Recognized in Earnings
	(in millions)

Foreign exchange contracts:
Intercompany loans and forecasted interest payments	$	28		$	(10	)		Interest expense
Forecasted transactions		(11	)		(10	)		Cost of sales
Forecasted transactions		(17	)		-			Interest expense
Cadbury acquisition related		(395	)		-			Interest expense
Interest rate contracts		4			-			Interest expense
Commodity contracts		126			37			Cost of sales

Total	$	(265	)	$	17

The hedging losses related to the Cadbury acquisition were economically offset by foreign exchange movement net gains of $240 million on the pound sterling cash, Cadbury Bridge Facility and payable balances associated with the acquisition. For commodity contracts not designated as hedging instruments, the impact to earnings was insignificant in 2008. For foreign exchange contracts not designated as hedging instruments, we recognized net losses of $50 million in 2008. The majority of these losses were attributable to hedges of intercompany loans and were economically offset with foreign currency gains from the intercompany receivable.

Volume:

As of December 31, 2010 and 2009, we had the following notional amounts of outstanding hedges:


	2010		2009
	(in millions)

Foreign exchange contracts:
Intercompany loans and forecasted interest payments	$	2,183	$	1,376
Forecasted transactions		1,946		631
Commodity contracts		630		1,832
Interest rate contracts		5,167		2,350
Net investment hedge - euro notes		3,814		4,081
Net investment hedge - pound sterling notes		1,015		-

Commitments and Contingencies

12 Months Ended

Dec. 31, 2010

Commitments and Contingencies

Commitments and Contingencies

Note 13. Commitments and Contingencies:

Legal Proceedings:

We routinely are involved in legal proceedings, claims, and governmental inspections or investigations, arising in the ordinary course of our business.

On February 1, 2011, we received a subpoena from the SEC. The subpoena, issued in connection with an investigation under the Foreign Corrupt Practices Act, primarily relates to a Cadbury facility in India that we acquired in the Cadbury acquisition and primarily requests information regarding dealings with Indian governmental agencies and officials to obtain approvals related to the operation of that facility. We are cooperating with the U.S. government in its investigation of these matters.

While we cannot predict with certainty the results of this or any other legal matters in which we are currently involved, we do not expect that the ultimate costs to resolve any of these matters will have a material effect on our financial results.

In 2010, we recorded an insignificant amount of legal charges. In 2009, we recorded $50 million of charges for legal matters related to certain of our European operations.

Third-Party Guarantees:

We have third-party guarantees primarily covering the 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 31, 2010, the carrying amount of our third-party guarantees on our consolidated balance sheet and the maximum potential payment under these guarantees was $26 million. Substantially all of these guarantees expire at various times through 2018.

Leases:

Rental expenses were $514 million in 2010, $505 million in 2009, and $505 million in 2008. As of December 31, 2010, minimum rental commitments under non-cancelable operating leases in effect at year-end were (in millions):


2011	$	470
2012		324
2013		225
2014		169
2015		130
Thereafter		244

Income Taxes

12 Months Ended

Dec. 31, 2010

Income Taxes

Income Taxes

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, 2010, 2009, and 2008:


	2010			2009			2008
	(in millions)

Earnings from continuing operations before income taxes:
United States	$	1,071		$	2,047		$	1,136
Outside United States		2,571			1,899			1,200

Total	$	3,642		$	3,946		$	2,336

Provision for income taxes:
United States federal:
Current	$	91		$	335		$	321
Deferred		322			108			(12	)

		413			443			309
State and local:
Current		47			82			52
Deferred		61			(39	)		(21	)

		108			43			31

Total United States		521			486			340

Outside United States:
Current		763			681			490
Deferred		(137	)		(31	)		(172	)

Total outside United States		626			650			318

Total provision for income taxes	$	1,147		$	1,136		$	658

The 2010 earnings and gain from discontinued operations from the sale of the Frozen Pizza business included tax expense of $1.2 billion. 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, 2010, our unrecognized tax benefits were $829 million. If we had recognized all of these benefits, the net impact on our income tax provision would have been $661 million. Our unrecognized tax benefits were $1,281 million at December 31, 2010, and if we had recognized all of these benefits, the net impact on our income tax provision would have been $1,062 million. The amount of unrecognized tax benefits could decrease by approximately $50 million during the next 12 months due to the potential resolution of certain foreign, U.S. federal and state examinations. Furthermore, we recorded $357 million of unrecognized tax benefits and $47 million of accrued interest and penalties as part of our purchase price allocations for Cadbury. We include accrued interest and penalties related to uncertain tax positions in our tax provision. We had accrued interest and penalties of $210 million as of January 1, 2010 and $246 million as of December 31, 2010. Our 2010 provision for income taxes included a $3 million net benefit for interest and penalties as reversals exceeded expense accruals during the year, due to the resolution of a federal tax audit, 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 $11 million during 2010.

The changes in our unrecognized tax benefits for the years ended December 31, 2010, 2009 and 2008 were (in millions):


	2010			2009			2008

January 1	$	829		$	807		$	850
Increases from positions taken during prior periods		49			90			17
Decreases from positions taken during prior periods		(146	)		(205	)		(90	)
Increases from positions taken during the current period		229			146			98
(Decreases) / increases from acquisition adjustments		357			-			(22	)
Decreases relating to settlements with taxing authorities		(19	)		(26	)		(8	)
Reductions resulting from the lapse of the applicable statute of limitations		(10	)		(14	)		(13	)
Currency / other		(8	)		31			(25	)

December 31	$	1,281		$	829		$	807

We are regularly examined by federal and various state and foreign tax authorities. The U.S. federal statute of limitations remains open for the year 2004 and onward. During 2010, we reached a final resolution on a federal tax audit for the years 2000 through 2003. In addition, we are currently under examination by tax authorities in various U.S. state and foreign jurisdictions. U.S. state and foreign jurisdictions have statutes of limitations generally ranging from three to five years. Years still open to examination by foreign tax authorities in major jurisdictions include Australia (2008 onward), Brazil (2005 onward), Canada (2003 onward), France (2006 onward), Germany (1999 onward), India (2003 onward), Russia (2004 onward), Spain (2002 onward), and United Kingdom (2006 onward).

At December 31, 2010, applicable U.S. federal income taxes and foreign withholding taxes had not been provided on approximately $8.4 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, 2010, 2009 and 2008:


	2010			2009			2008
	(2009 & 2008 revised)

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%			1.9%			2.7%
Benefit principally related to reversal of federal and state reserves on IRS audit settlements		(2.3%	)		(3.1%)			-
Reversal of other tax accruals no longer required		(0.5%	)		(0.4%	)		(1.8%	)
U.S. Health Care Legislation		3.8%			-			-
Foreign rate differences		(6.0%	)		(2.2%	)		(5.7%	)
Other		(0.4%	)		(2.4%	)		(2.0%	)

Effective tax rate		31.5%			28.8%			28.2%

Our 2010 effective tax rate included net tax benefits of $123 million, primarily due to the favorable resolution of a federal tax audit and the resolution of several items in our international operations, partially offset by a $137 million write-off of deferred tax assets as a result of the U.S. health care legislation enacted in March 2010.

Our 2009 effective tax rate included net tax benefits of $225 million, primarily due to an agreement we reached with the IRS on specific matters related to years 2000 through 2003, settlements with various foreign and state tax authorities, the expiration of the statutes of limitations in various jurisdictions and the divestiture of our Balance bar operations in the U.S.

Our 2008 effective tax rate included net tax benefits of $222 million from discrete tax events. Of the total net tax benefits, approximately $50 million related to fourth quarter corrections of state, federal and foreign tax liabilities and a third quarter reconciliation of our inventory of deferred tax items that resulted in a write-down of our net deferred tax liabilities. The remaining net tax benefits primarily related to the resolution of various tax audits and the expiration of statutes of limitations in various jurisdictions. Other discrete tax benefits included the impact from divestitures of a Nordic and Baltic snacks operation and several operations in Spain and the tax benefit from impairment charges taken in 2008. In addition, the 2008 tax rate benefited from foreign earnings taxed below the U.S. federal statutory tax rate and from the expected tax benefit of 2008 restructuring expenses. These benefits were only partially offset by state tax expense and certain foreign costs.

The tax effects of temporary differences that gave rise to deferred income tax assets and liabilities consisted of the following at December 31, 2010 and 2009:

		00000000			00000000		00000000	00000000
	2010			2009
	(in millions)

Deferred income tax assets:
Accrued postretirement and postemployment benefits	$	1,103		$	1,472
Accrued pension costs		458			456
Other		2,064			1,997

Total deferred income tax assets		3,625			3,925

Valuation allowance		(400	)		(97	)


Net deferred income tax assets	$	3,225		$	3,828


Deferred income tax liabilities:
Trade names	$	(7,606	)	$	(4,431	)
Property, plant and equipment		(1,845	)		(2,029	)
Other		(611	)		(1,055	)

Total deferred income tax liabilities		(10,062	)		(7,515	)

Net deferred income tax liabilities	$	(6,837	)	$	(3,687	)

The majority of the increase in valuation allowances on deferred tax assets was a result of our Cadbury acquisition. Our significant allowances reside within our operating subsidiaries in Ireland, Brazil, China, U.S., Nigeria and Japan.

Earnings Per Share

12 Months Ended

Dec. 31, 2010

Earnings Per Share

Earnings Per Share

Note 15. Earnings Per Share:

Basic and diluted EPS from continuing and discontinued operations were calculated using the following:

		00000000		00000000		00000000	00000000
	For the Years Ended December 31,
	2010		2009		2008
	(in millions, except per share data; 2009 & 2008 revised)

Earnings from continuing operations	$	2,495	$	2,810	$	1,678
Earnings and gain from discontinued operations, net of income taxes		1,644		218		1,215

Net earnings		4,139		3,028		2,893
Noncontrolling interest		25		7		9

Net earnings attributable to Kraft Foods	$	4,114	$	3,021	$	2,884


Weighted-average shares for basic EPS		1,715		1,478		1,505
Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares		5		8		10


Weighted-average shares for diluted EPS		1,720		1,486		1,515


Basic earnings per share attributable to Kraft Foods:
Continuing operations	$	1.44	$	1.90	$	1.11
Discontinued operations		0.96		0.14		0.81

Net earnings attributable to Kraft Foods	$	2.40	$	2.04	$	1.92


Diluted earnings per share attributable to Kraft Foods:
Continuing operations	$	1.44	$	1.89	$	1.10
Discontinued operations		0.95		0.14		0.80

Net earnings attributable to Kraft Foods	$	2.39	$	2.03	$	1.90

We exclude antidilutive Kraft Foods stock options from our calculation of weighted-average shares for diluted EPS. We excluded 28.5 million antidilutive options for the year ended December 31, 2010, 23.0 million antidilutive options for the year ended December 31, 2009 and 11.3 million antidilutive options for the year ended December 31, 2008.

Segment Reporting

12 Months Ended

Dec. 31, 2010

Segment Reporting

Segment Reporting

Note 16. Segment Reporting:

We manufacture and market packaged food products, including snacks, beverages, cheese, convenient meals and various packaged grocery products. We manage and report operating results through three geographic units: Kraft Foods North America, Kraft Foods Europe and Kraft Foods Developing Markets. We manage the operations of Kraft Foods North America and Kraft Foods Europe by product category, and we manage the operations of Kraft Foods Developing Markets by location. Our reportable segments are U.S. Beverages, U.S. Cheese, U.S. Convenient Meals, U.S. Grocery, U.S. Snacks, Canada & N.A. Foodservice, Kraft Foods Europe and Kraft Foods Developing Markets. The results of operations from our Cadbury acquisition are reflected within our U.S. Snacks, Canada & N.A. Foodservice, Kraft Foods Europe and Kraft Foods Developing Markets segments.

Management uses segment operating income to evaluate segment performance and allocate resources. We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends. Segment operating income excludes unrealized gains and losses on hedging activities (which are a component of cost of sales), certain components of our U.S. pension plan cost (which is a component of cost of sales and selling, general and administrative expenses), general corporate expenses (which are a component of selling, general and administrative expenses) and amortization of intangibles for all periods presented. We exclude certain components of our U.S. pension plan cost from segment operating income because we centrally manage pension plan funding decisions and the determination of discount rate, expected rate of return on plan assets and other actuarial assumptions. Therefore, we allocate only the service cost component of our U.S. pension plan expense to segment operating income. We exclude the unrealized gains and losses on hedging activities from segment operating income in order to provide better transparency of our segment operating results. Once realized, the gains and losses on hedging activities are recorded within segment operating results. Furthermore, we centrally manage interest and other expense, net. Accordingly, we do not present these items by segment because they are excluded from the segment profitability measure that management reviews. We use the same accounting policies for the segments as those described in Note 1, Summary of Significant Accounting Policies.

Segment data were:


	For the Years Ended December 31,
	2010		2009		2008
	(in millions; 2009 & 2008 revised)
Net revenues:
Kraft Foods North America:
U.S. Beverages	$	3,212	$	3,057	$	3,001
U.S. Cheese		3,528		3,605		4,007
U.S. Convenient Meals		3,131		3,029		2,947
U.S. Grocery		3,398		3,453		3,389
U.S. Snacks		6,001		4,964		5,025
Canada & N.A. Foodservice		4,696		3,922		4,147
Kraft Foods Europe		11,628		8,768		9,728
Kraft Foods Developing Markets		13,613		7,956		8,248

Net revenues	$	49,207	$	38,754	$	40,492


	For the Years Ended December 31,
	2010			2009			2008
	(in millions; 2009 & 2008 revised)

Earnings from continuing operations before income taxes:
Operating income:
Kraft Foods North America:
U.S. Beverages	$	564		$	511		$	381
U.S. Cheese		598			667			563
U.S. Convenient Meals		268			234			125
U.S. Grocery		1,164			1,146			1,009
U.S. Snacks		845			723			638
Canada & N.A. Foodservice		582			462			395
Kraft Foods Europe		1,115			785			182
Kraft Foods Developing Markets		1,577			936			815
Unrealized gains / (losses) on hedging activities		67			203			(205	)
Certain U.S. pension plan costs		(179	)		(165	)		-
General corporate expenses		(724	)		(293	)		(304	)
Amortization of intangibles		(211	)		(26	)		(23	)

Operating income		5,666			5,183			3,576
Interest and other expense, net		(2,024	)		(1,237	)		(1,240	)

Earnings from continuing operations before income taxes	$	3,642		$	3,946		$	2,336

Our largest customer, Wal-Mart Stores, Inc. and its affiliates, accounted for approximately 14% of consolidated net revenues in 2010, 16% in 2009 and 16% in 2008. These net revenues occurred primarily in the Kraft Foods North America segment.

In 2010, the change in unrealized gains on hedging activities of $67 million primarily resulted from gains associated with commodity hedging activities. In 2009, the change in unrealized gains on hedging activities of $203 million primarily resulted from the 2008 unrealized losses on energy derivatives becoming realized in 2009 and therefore, included in segment operating income. In 2008, the change in unrealized losses on hedging activities of $205 million primarily related to energy derivatives, including heating oil (used primarily to hedge transportation costs) and natural gas contracts.

The 2010 increase in general corporate expenses was primarily due to acquisition-related transaction fees, Integration Program costs and the impact of Cadbury's corporate charges. We incurred acquisition-related transaction fees of $218 million in 2010 and $40 million in 2009. We recorded these charges in operations as part of general corporate expenses. In 2009, general corporate expenses included $50 million of charges for legal matters related to certain of our European operations. In 2008, we recorded $72 million in charges for legal matters related to certain of our U.S. and European operations, including U.S. coffee operations and represented the primary reason general corporate expenses increased $101 million in 2008.

As described in Note 2, Acquisitions and Divestitures, we divested several operations, and recorded net gains / (losses) on these divestitures in segment operating income as follows:


	For the Years Ended December 31,
	2010			2009			2008
				(in millions)

Kraft Foods North America:
U.S. Beverages	$	-		$	-		$	(1	)
U.S. Cheese		(6	)		-			-
U.S. Convenient Meals		-			-			-
U.S. Grocery		-			-			-
U.S. Snacks		-			11			-
Canada & N.A. Foodservice		-			-			-
Kraft Foods Europe		-			(17	)		(91	)
Kraft Foods Developing Markets		-			-			-

Gains / (losses) on divestitures, net	$	(6	)	$	(6	)	$	(92	)

Total assets, depreciation expense and capital expenditures by segment were:


	2010		2009
	(in millions)

Total assets:
Kraft Foods North America:
U.S. Beverages	$	2,513	$	2,382
U.S. Cheese		4,633		4,589
U.S. Convenient Meals		2,064		3,063
U.S. Grocery		5,574		5,565
U.S. Snacks		20,895		16,418
Canada & N.A. Foodservice		7,207		5,051
Kraft Foods Europe		24,261		16,073
Kraft Foods Developing Markets		25,738		11,087
Unallocated assets ⁽¹⁾		2,404		2,486

Total assets	$	95,289	$	66,714

(1)

Unallocated assets consist primarily of cash and cash equivalents, deferred income taxes, centrally held property, plant and equipment, prepaid pension assets and derivative financial instrument balances.


	For the Years Ended December 31,
	2010		2009		2008
	(in millions; 2009 & 2008 revised)

Depreciation expense:
Kraft Foods North America:
U.S. Beverages	$	73	$	69	$	68
U.S. Cheese		67		66		66
U.S. Convenient Meals		61		67		62
U.S. Grocery		88		82		78
U.S. Snacks		139		127		129
Canada & N.A. Foodservice		110		83		93
Kraft Foods Europe		355		237		265
Kraft Foods Developing Markets		320		157		160

Total - continuing operations		1,213		888		921
Discontinued operations		16		17		42

Total depreciation expense	$	1,229	$	905	$	963


	For the Years Ended December 31,
	2010		2009		2008
	(in millions)

Capital expenditures:
Kraft Foods North America:
U.S. Beverages	$	88	$	82	$	110
U.S. Cheese		88		72		97
U.S. Convenient Meals		109		135		143
U.S. Grocery		76		85		87
U.S. Snacks		245		190		122
Canada & N.A. Foodservice		112		94		98
Kraft Foods Europe		334		292		285
Kraft Foods Developing Markets		607		319		368

Total - continuing operations		1,659		1,269		1,310
Discontinued operations		2		61		57

Total capital expenditures	$	1,661	$	1,330	$	1,367

Net revenues by consumer sector, which reflects Kraft macaroni and cheese dinners in the Convenient Meals sector and separates Canada & N.A. Foodservice, Kraft Foods Europe and Kraft Foods Developing Markets into sector components, were:


	For the Year Ended December 31, 2010
	Kraft Foods North America		Kraft Foods Europe		Kraft Foods Developing Markets		Total


	(in millions)

Biscuits ⁽¹⁾	$	5,646	$	2,322	$	2,815	$	10,783
Confectionery ⁽¹⁾		1,807		5,224		6,657		13,688
Beverages		3,742		2,522		2,536		8,800
Cheese		5,090		982		904		6,976
Grocery		3,088		334		579		4,001
Convenient Meals		4,593		244		122		4,959

Total net revenues	$	23,966	$	11,628	$	13,613	$	49,207


	For the Year Ended December 31, 2009
	Kraft Foods North America		Kraft Foods Europe		Kraft Foods Developing Markets		Total
	(in millions; as revised)

Biscuits ⁽¹⁾	$	5,628	$	2,330	$	2,446	$	10,404
Confectionery ⁽¹⁾		301		2,446		1,891		4,638
Beverages		3,545		2,390		2,094		8,029
Cheese		4,980		972		844		6,796
Grocery		3,136		369		566		4,071
Convenient Meals		4,440		261		115		4,816

Total net revenues	$	22,030	$	8,768	$	7,956	$	38,754


	For the Year Ended December 31, 2008
	Kraft Foods North America		Kraft Foods Europe		Kraft Foods Developing Markets		Total
	(in millions; as revised)

Biscuits ⁽¹⁾	$	5,659	$	2,706	$	2,592	$	10,957
Confectionery ⁽¹⁾		292		2,585		2,076		4,953
Beverages		3,509		2,625		2,081		8,215
Cheese		5,525		1,109		828		7,462
Grocery		3,211		394		567		4,172
Convenient Meals		4,320		309		104		4,733

Total net revenues	$	22,516	$	9,728	$	8,248	$	40,492

(1)

We previously reported Biscuits and Confectionery combined as Snacks. With the Cadbury acquisition, the Biscuits and Confectionery sectors have been broken out separately. The Biscuits sector primarily includes Cookies, Crackers and Salted Snacks. The Confectionery sector primarily includes Chocolate, Gum and Candy.

Geographic data for net revenues, long-lived assets and total assets were:


	For the Years Ended December 31,
	2010		2009		2008
	(in millions; 2009 & 2008 revised)
Net revenues:
United States	$	20,934	$	19,713	$	20,168
Europe		15,733		11,471		12,868
Other		12,540		7,570		7,456

Total net revenues	$	49,207	$	38,754	$	40,492

		00000000		00000000	00000000	00000000	00000000
	2010		2009
	(in millions)
Long-lived assets:
United States	$	35,200	$	31,773
Europe		25,333		16,077
Other		18,535		6,410

Total long-lived assets	$	79,068	$	54,260

Total assets:
United States	$	40,085	$	35,816
Europe		31,811		21,915
Other		23,393		8,983

Total assets	$	95,289	$	66,714

Quarterly Financial Data

12 Months Ended

Dec. 31, 2010

Quarterly Financial Data

Quarterly Financial Data

Note 17. Quarterly Financial Data (Unaudited):

		00000000		00000000		00000000		00000000	00000000
	2010 Quarters
	First		Second		Third		Fourth
	(in millions, except per share data)

Net revenues	$	11,318	$	12,253	$	11,863	$	13,773

Gross profit	$	4,089	$	4,694	$	4,321	$	4,798

Earnings from continuing operations	$	249	$	939	$	760	$	547

Earnings and gain from discontinued operations, net of income taxes		1,644		-		-		-

Net earnings		1,893		939		760		547
Noncontrolling interest		10		2		6		7

Net earnings attributable to Kraft Foods	$	1,883	$	937	$	754	$	540


Weighted-average shares for diluted EPS		1,620		1,752		1,754		1,757

Per share data:
Basic EPS attributable to Kraft Foods:
Continuing operations	$	0.15	$	0.54	$	0.43	$	0.31
Discontinued operations		1.02		-		-		-

Net earnings attributable to Kraft Foods	$	1.17	$	0.54	$	0.43	$	0.31

Diluted EPS attributable to Kraft Foods:
Continuing operations	$	0.15	$	0.53	$	0.43	$	0.31
Discontinued operations		1.01		-		-		-

Net earnings attributable to Kraft Foods	$	1.16	$	0.53	$	0.43	$	0.31

Dividends declared	$	0.29	$	0.29	$	0.29	$	0.29

Market price - high	$	30.98	$	31.09	$	31.98	$	32.67
- low	$	27.09	$	27.49	$	27.59	$	29.80


	2009 Quarters
	First		Second		Third		Fourth
	(in millions, except per share data; as revised)

Net revenues	$	8,979	$	9,781	$	9,397	$	10,597

Gross profit	$	3,100	$	3,512	$	3,378	$	3,945

Earnings from continuing operations	$	603	$	781	$	774	$	652

Earnings and gain from discontinued operations, net of income taxes		59		48		52		59

Net earnings		662		829		826		711
Noncontrolling interest		2		2		2		1

Net earnings attributable to Kraft Foods	$	660	$	827	$	824	$	710


Weighted-average shares for diluted EPS		1,483		1,484		1,487		1,487

Per share data:
Basic EPS attributable to Kraft Foods:
Continuing operations	$	0.41	$	0.53	$	0.52	$	0.44
Discontinued operations		0.04		0.03		0.04		0.04

Net earnings attributable to Kraft Foods	$	0.45	$	0.56	$	0.56	$	0.48

Diluted EPS attributable to Kraft Foods:
Continuing operations	$	0.41	$	0.53	$	0.52	$	0.44
Discontinued operations		0.04		0.03		0.03		0.04

Net earnings attributable to Kraft Foods	$	0.45	$	0.56	$	0.55	$	0.48


Dividends declared	$	0.29	$	0.29	$	0.29	$	0.29

Market price - high	$	29.84	$	27.24	$	29.11	$	27.84
- low	$	20.81	$	21.94	$	25.41	$	25.72

Basic and diluted EPS are computed independently for each of the periods presented. Accordingly, the sum of the quarterly EPS amounts may not equal the total for the year.

During 2010, we recorded the following pre-tax charges / (gains) in earnings from continuing operations:


	2010 Quarters
	First		Second		Third			Fourth
	(in millions)

Asset impairment and exit costs	$	-	$	-	$	(9	)	$	27
(Gains) / losses on divestitures, net		-		-		-			6

	$	-	$	-	$	(9	)	$	33

During 2009, we recorded the following pre-tax charges / (gains) in earnings from continuing operations:


	2009 Quarters
	First		Second			Third		Fourth
	(in millions)

Asset impairment and exit costs	$	-	$	(26	)	$	-	$	(38	)
(Gains) / losses on divestitures, net		-		17			-		(11	)

	$	-	$	(9	)	$	-	$	(49	)

Basic and diluted EPS are computed independently for each of the periods presented. Accordingly, the sum of the quarterly EPS amounts may not equal the total for the year.

- Definition

This element can be used to disclose the entire quarterly financial data disclosure in the annual financial statements as a single block of text. The disclosure includes a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income (loss) before extraordinary items and cumulative effect of a change in accounting principle and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished. Alternatively, the details of this disclosure can be reported using the elements in this group, or by using other taxonomy elements and applying the appropriate quarterly date and period contexts when creating an instance document. For example, the element for "Interest and Dividend Income, Operating" may be used by financial institutions from the Statement of Income, applying the appropriate quarterly date and period context when creating an instance document.

+ References+ Details

Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2010

Valuation and Qualifying Accounts

Valuation and Qualifying Accounts

Kraft Foods Inc. and Subsidiaries

Valuation and Qualifying Accounts

for the years ended December 31, 2010, 2009 and 2008

(in millions)

		Balancenat		Balancenat		Balancenat			Balancenat		Balancenat
Col. A	Col. B		Col. C					Col. D		Col. E
	Balance at Beginning of Period		Additions					Deductions		Balance at End of Period
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts			Deductions		Balance at End of Period
					(a)			(b)

2010:
Allowance for discounts	$	8	$	49	$	1		$	47	$	11
Allowance for doubtful accounts		138		89		82			32		277
Allowance for deferred taxes		97		30		305			32		400

	$	243	$	168	$	388		$	111	$	688

2009:
Allowance for discounts	$	28	$	35	$	4		$	59	$	8
Allowance for doubtful accounts		128		32		13			35		138
Allowance for deferred taxes		84		19		13			19		97

	$	240	$	86	$	30		$	113	$	243

2008:
Allowance for discounts	$	5	$	73	$	17		$	67	$	28
Allowance for doubtful accounts		118		47		(22	)		15		128
Allowance for deferred taxes		105		11		(16	)		16		84

	$	228	$	131	$	(21	)	$	98	$	240

Notes:

(a)	Primarily related to divestitures, acquisitions and currency translation.

(b)	Represents charges for which allowances were created.

Summary of Significant Accounting Policies (Policy)	12 Months Ended
Summary of Significant Accounting Policies (Policy)	Dec. 31, 2010
Summary of Significant Accounting Policies
Nature of Operations and Basis of Presentation	Nature of Operations and Basis of Presentation: Kraft Foods Inc. was incorporated in 2000 in the Commonwealth of Virginia. Kraft Foods Inc., through its subsidiaries (collectively "Kraft Foods," "we," "us" and "our"), sells packaged food and beverage products to consumers in approximately 170 countries.
Principles of Consolidation	Principles of Consolidation: The consolidated financial statements include Kraft Foods, as well as our wholly owned and majority owned subsidiaries. Our domestic operating subsidiaries report results as of the last Saturday of the year, and our international operating subsidiaries generally report results two weeks prior to the last Saturday of the year. The results of operations of the newly acquired Cadbury Limited (formerly, Cadbury plc) ("Cadbury") are reported on the last day of the calendar month. In 2010, we changed the consolidation date for certain European biscuits operations, which are included within our Kraft Foods Europe segment, and certain operations in Asia Pacific and Latin America, which are included within our Kraft Foods Developing Markets segment. Previously, these operations primarily reported period-end results one month or two weeks prior to the end of the period. Now our Kraft Foods Europe segment primarily reports period-end results two weeks prior to the last Saturday of the period, and certain of our operations in Asia Pacific and Latin America report results through the last day of the period. We believe the change is preferable and will improve financial reporting by better matching the close dates of the operating subsidiaries within our Kraft Foods Europe segment and those operations with Asia Pacific and Latin America with our consolidated reporting. This change resulted in a favorable impact to net revenues of approximately $200 million and an insignificant impact on operating income and net income in 2010. As the impacts to prior period results were not material to our financial results, we have not revised the prior period results for this change. Our domestic operating subsidiaries will continue to report period-end results as of the Saturday closest to the end of each period, and our international operating subsidiaries will continue to report period-end results two weeks prior to the Saturday closest to the end of each period. We account for investments in which we exercise significant influence (20%-50% ownership interest) under the equity method of accounting. We use the cost method of accounting for investments in which we have an ownership interest of less than 20% and in which we do not exercise significant influence. Noncontrolling interest in subsidiaries consists of the equity interest of noncontrolling investors in consolidated subsidiaries of Kraft Foods. All intercompany transactions are eliminated.
Use of Estimates	Use of Estimates: We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), which require us to make estimates and assumptions that affect a number of amounts in our financial statements. Significant accounting policy elections, estimates and assumptions include, among others, pension and benefit plan assumptions, lives and valuation assumptions of goodwill and intangible assets, marketing programs and income taxes. We base our estimates on historical experience and other assumptions that we believe are reasonable. If actual amounts differ from estimates, we include the revisions in our consolidated results of operations in the period the actual amounts become known. Historically, the aggregate differences, if any, between our estimates and actual amounts in any year have not had a significant impact on our consolidated financial statements.
Foreign Currencies	Foreign Currencies: We translate the results of operations of our foreign subsidiaries using average exchange rates during each period, whereas balance sheet accounts are translated using exchange rates at the end of each period. We record currency translation adjustments as a component of equity. Transaction gains and losses are recorded in earnings and were not significant for any of the periods presented.
Highly Inflationary Accounting	Highly Inflationary Accounting: In the fourth quarter of 2009, the Venezuelan economy was classified as highly inflationary under U.S. GAAP. Effective January 1, 2010, we began accounting for our Venezuelan subsidiaries under highly inflationary accounting rules, which principally means all transactions are recorded in U.S. dollars. On January 8, 2010, the Venezuelan government devalued its currency and established a preferential exchange rate for imports of food, medicine and other essential items. Accordingly, we were required to revalue our net assets in Venezuela. In July 2010, the Venezuelan government eliminated the secondary (or parallel) market exchange rate and replaced it with the government-regulated Transaction System for Foreign Currency Denominate Securities ("SITME") rate. Accordingly, we were required to revalue those of our net assets in Venezuela that we maintained at the parallel rate. Then on December 30, 2010, the Venezuelan government eliminated the preferential exchange rate. Although the elimination of the preferential exchange rate did not immediately cause us to revalue our net assets in Venezuela, it will have further impacts to our operating results in future periods. Venezuela now has two exchange rates: the official rate and the SITME rate. We used both the official rate and the SITME rate to translate our Venezuelan operations into U.S. dollars, based on the nature of the operations of each individual subsidiary. During 2010, we recorded approximately $115 million of unfavorable foreign currency impacts relating to highly inflationary accounting in Venezuela. This included a one-time impact to translate cash of $34 million that we previously carried at the secondary rate. Upon the change to highly inflationary accounting in January, we were required to translate those U.S. dollars on hand using the official rate.
Cash and Cash Equivalents	Cash and Cash Equivalents: Cash equivalents include demand deposits with banks and all highly liquid investments with original maturities of three months or less.
Inventories	Inventories: Inventories are stated at the lower of cost or market. We value all our inventories using the average cost method. We also record inventory allowances for overstocked and obsolete inventories due to ingredient and packaging changes.
Long-Lived Assets	Long-Lived Assets: Property, plant and equipment are stated at historical cost and depreciated by the straight-line method over the estimated useful lives of the assets. Machinery and equipment are depreciated over periods ranging from 3 to 20 years and buildings and building improvements over periods up to 40 years. We review long-lived assets, including amortizable intangible assets, for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. We perform undiscounted operating cash flow analyses to determine if an impairment exists. When testing for impairment of assets held for use, we group assets and liabilities at the lowest level for which cash flows are separately identifiable. If an impairment is determined to exist, the loss is calculated based on estimated fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal.
Software Costs	Software Costs: We capitalize certain computer software and software development costs incurred in connection with developing or obtaining computer software for internal use. Capitalized software costs are included in property, plant and equipment and amortized on a straight-line basis over the estimated useful lives of the software, which do not exceed seven years.
Goodwill and Intangible Assets	Goodwill and Intangible Assets: We test goodwill and non-amortizable intangible assets at least annually for impairment. We have recognized goodwill in our reporting units, which are generally one level below our operating segments. We use a two step process to test goodwill at the reporting unit level. The first step involves a comparison of the estimated fair value of each reporting unit with its carrying value. Fair value is estimated using discounted cash flows of the reporting unit based on planned growth rates, and estimates of discount rates and residual values. If the carrying value exceeds the fair value, we must proceed with the second step of the process. The second step measures the difference between the carrying value and implied fair value of goodwill. To test non-amortizable intangible assets for impairment, we compare the fair value of the intangible asset with its carrying value. Fair value of non-amortizable intangible assets is determined using our planned growth rates, and estimates of discount rates and royalty rates. If the carrying value exceeds fair value, the intangible asset is considered impaired and is reduced to fair value. Definite-lived intangible assets are amortized over their estimated useful lives. We perform our annual impairment review of goodwill and non-amortizable intangible assets as of October 1 each year. The basis of our valuation methodology for estimating the fair value of our 21 reporting units is a 20-year projection of discounted cash flows that is based on our annual strategic planning process. Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding our future plans, industry and economic conditions. For reporting units within our Kraft Foods North America and Kraft Foods Europe geographic units, we used a market-participant, weighted-average cost of capital of 7.5% to discount the projected cash flows of those operations. For reporting units within our Kraft Foods Developing Markets geographic unit, we used a risk-rated discount rate of 10.5%.
Insurance and Self-Insurance	Insurance and Self-Insurance: We use a combination of insurance and self-insurance for a number of risks, including workers' compensation, general liability, automobile liability, product liability and our obligation for employee healthcare benefits. Liabilities associated with the risks are estimated by considering historical claims experience and other actuarial assumptions.
Revenue Recognition	Revenue Recognition: We recognize revenues when title and risk of loss pass to customers, which generally occurs upon shipment or delivery of goods. Revenues are recorded net of consumer incentives and trade promotions and include all shipping and handling charges billed to customers. Kraft Foods' shipping and handling costs are classified as part of cost of sales. A provision for product returns and allowances for bad debts are also recorded as reductions to revenues within the same period that the revenue is recognized.
Selling, general and administrative expenses	Selling, general and administrative expenses: Marketing - We promote our products with advertising, consumer incentives and trade promotions. These programs include, but are not limited to, discounts, coupons, rebates, in-store display incentives and volume-based incentives. We expense advertising costs either in the period the advertising first takes place or as incurred. Consumer incentive and trade promotion activities are recorded as a reduction to revenues based on amounts estimated as being due to customers and consumers at the end of a period. We base these estimates principally on historical utilization and redemption rates. For interim reporting purposes, advertising and consumer incentive expenses are charged to operations as a percentage of volume, based on estimated volume and related expense for the full year. We do not defer costs on our year-end consolidated balance sheet and all marketing costs are recorded as an expense in the year incurred. Advertising expense was $2,269 million in 2010, $1,581 million in 2009, and $1,598 million in 2008.
Research	Research - We expense costs as incurred for product research and development. Research and development expense was $583 million in 2010, $466 million in 2009, and $487 million in 2008.
Environmental Costs	Environmental Costs: We are subject to laws and regulations relating to the protection of the environment. We accrue for environmental remediation obligations on an undiscounted basis when amounts are probable and can be reasonably estimated. The accruals are adjusted as new information develops or circumstances change. Recoveries of environmental remediation costs from third parties are recorded as assets when recovery of those costs is deemed probable. At December 31, 2010, our subsidiaries were involved in 74 active actions in the U.S. under Superfund legislation (and other similar actions and legislation) related to current operations and certain former or divested operations for which we retain liability. Outside the U.S., we are subject to applicable multi-national, national and local environmental laws and regulations in the countries in which we do business. Outside the U.S., we have specific programs across our business units designed to meet applicable environmental compliance requirements. As of December 31, 2010, we had accrued an insignificant amount for environmental remediation. Based on information currently available, we believe that the ultimate resolution of existing environmental remediation actions and our compliance in general with environmental laws and regulations will not have a material effect on our financial results. However, we cannot quantify with certainty the potential impact of future compliance efforts and environmental remediation actions.
Employee Benefit Plans	Employee Benefit Plans: We provide a range of benefits to our employees and retired employees. These include pension benefits, postretirement health care benefits and postemployment benefits, consisting primarily of severance. We provide pension coverage for certain employees of our non-U.S. subsidiaries through separate plans. Local statutory requirements govern many of these plans. For salaried and non-union hourly employees hired in the U.S. after January 1, 2009, we discontinued benefits under our U.S. pension plans, and we replaced them with an enhanced company contribution to our employee savings plan. Additionally, we will be freezing the U.S. pension plans for current salaried and non-union hourly employees effective December 31, 2019. Pension accruals for all salaried and non-union employees who are currently earning pension benefits will end on December 31, 2019, and continuing pay and service will be used to calculate the pension benefits through December 31, 2019. Our projected benefit obligation decreased $168 million in 2009, and we incurred a $5 million curtailment charge in 2009 related to the freeze. Our U.S., Canadian, and United Kingdom subsidiaries provide health care and other benefits to most retired employees. Local government plans generally cover health care benefits for retirees outside the U.S., Canada, and United Kingdom. Our postemployment benefit plans cover most salaried and certain hourly employees. The cost of these plans is charged to expense over the working life of the covered employees. In September 2006, new guidance was issued surrounding employers' accounting for defined benefit pension and other postretirement plans. The new guidance required us to measure plan assets and benefit obligations as of the balance sheet date beginning in 2008. We previously measured our non-U.S. pension plans (other than certain Canadian and French pension plans) at September 30 of each year. On December 31, 2008, we recorded an after-tax decrease of $8 million to retained earnings using the 15-month approach to proportionally allocate the transition adjustment required upon adoption of the measurement provision of the new guidance.
Financial Instruments	Financial Instruments: As we operate globally, we use certain financial instruments to manage our foreign currency exchange rate, commodity price and interest rate risks. We monitor and manage these exposures as part of our overall risk management program. Our risk management program focuses on the unpredictability of financial markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on our operating results. We maintain foreign currency, commodity price and interest rate risk management strategies that seek to reduce significant, unanticipated earnings fluctuations that may arise from volatility in foreign currency exchange rates, commodity prices and interest rates, principally through the use of derivative instruments. Financial instruments qualifying for hedge accounting must maintain a specified level of effectiveness between the hedging instrument and the item being hedged, both at inception and throughout the hedged period. We formally document the nature of and relationships between the hedging instruments and hedged items, as well as our risk management objectives, strategies for undertaking the various hedge transactions and method of assessing hedge effectiveness. Additionally, for hedges of forecasted transactions, the significant characteristics and expected terms of the forecasted transaction must be specifically identified, and it must be probable that each forecasted transaction will occur. If we deem it probable that the forecasted transaction will not occur, we recognize the gain or loss in earnings currently. By using derivatives to hedge exposures to changes in exchange rates, commodity prices and interest rates, we have exposure on these derivatives to credit and market risk. We are exposed to credit risk that the counterparty might fail to fulfill its performance obligations under the terms of the derivative contract. We minimize our credit risk by entering into transactions with high quality counterparties with investment grade credit ratings, limiting the amount of exposure we have with each counterparty and monitoring the financial condition of our counterparties. We also maintain a policy of requiring that all significant, non-exchange traded derivative contracts with a duration greater than one year be governed by an International Swaps and Derivatives Association master agreement. Market risk is the risk that the value of the financial instrument might be adversely affected by a change in foreign currency exchange rates, commodity prices or interest rates. We manage market risk by incorporating monitoring parameters within our risk management strategy that limit the types of derivative instruments and derivative strategies we use, and the degree of market risk that may be undertaken by the use of derivative instruments. We record derivative financial instruments at fair value in our consolidated balance sheets as either current assets or current liabilities. Cash flows from hedging instruments are classified in the same manner as the affected hedged item in the consolidated statement of cash flows.
Commodity cash flow hedges	Commodity cash flow hedges - We are exposed to price risk related to forecasted purchases of certain commodities that we primarily use as raw materials. Accordingly, we use commodity forward contracts as cash flow hedges, primarily for meat, coffee, dairy, sugar, cocoa and wheat. Commodity forward contracts generally qualify for the normal purchase exception under guidance for derivative instruments and hedging activities, and therefore are not subject to its provisions. We use commodity futures and options to hedge the price of certain input costs, including dairy, coffee, cocoa, wheat, corn products, soybean oils, meat products, sugar, natural gas and heating oil. Some of these derivative instruments are highly effective and qualify for hedge accounting treatment. We also sell commodity futures to unprice future purchase commitments, and we occasionally use related futures to cross-hedge a commodity exposure. We are not a party to leveraged derivatives and, by policy, do not use financial instruments for speculative purposes. For those derivative instruments that are highly effective and qualify for hedge accounting treatment, we defer the effective portion of unrealized gains and losses on commodity futures and option contracts as a component of accumulated other comprehensive earnings / (losses). We recognize the deferred portion as a component of cost of sales when the related inventory is sold. Ineffectiveness is directly recorded as a component of cost of sales. For the derivative instruments that we consider economic hedges but do not designate for hedge accounting treatment, we recognize gains and losses directly as a component of cost of sales.
Foreign currency cash flow hedges	Foreign currency cash flow hedges - We use various financial instruments to mitigate our exposure to changes in exchange rates from third-party and intercompany actual and forecasted transactions. These instruments include forward foreign exchange contracts, foreign currency swaps and foreign currency options. Based on the size and location of our businesses, we use these instruments to hedge our exposure to certain currencies, including the euro, Swiss franc, pound sterling and Canadian dollar. For those derivative instruments that are highly effective and qualify for hedge accounting treatment, we defer the effective portion of unrealized gains and losses associated with forward, swap and option contracts as a component of accumulated other comprehensive earnings / (losses) until the underlying hedged transactions are reported in earnings. We recognize the deferred portion as a component of cost of sales when the related inventory is sold or as interest and other expense, net for our hedges of intercompany loans, when the payments are made. For those derivative instruments that we consider economic hedges but do not designate for hedge accounting treatment, we recognize gains and losses directly as a component of cost of sales or interest and other expense, net, depending on the nature of the underlying transaction.
Interest rate cash flow and fair value hedges	Interest rate cash flow and fair value hedges - We manage interest rate volatility by modifying the repricing or maturity characteristics of certain liabilities so that the net interest margin is not, on a material basis, adversely affected by movements in interest rates. As a result of interest rate fluctuations, hedged fixed-rate liabilities appreciate or depreciate in market value. We expect the effect of this unrealized appreciation or depreciation to be substantially offset by our gains or losses on the derivative instruments that are linked to these hedged liabilities. We use derivative instruments, including interest rate swaps that have indices related to the pricing of specific liabilities as part of our interest rate risk management strategy. As a matter of policy, we do not use highly leveraged derivative instruments for interest rate risk management. We use interest rate swaps to economically convert a portion of our nonprepayable fixed-rate debt into variable-rate debt. Under the interest rate swap contracts, we agree with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts, which is calculated based on an agreed-upon notional amount. We also use interest rate swaps to hedge the variability of interest payment cash flows on a portion of our future debt obligations. Substantially all of these derivative instruments are highly effective and qualify for hedge accounting treatment. For those derivative instruments that are highly effective and qualify for hedge accounting treatment, we either record the impacts in current period earnings or defer the effective portion of unrealized gains and losses as a component of accumulated other comprehensive earnings / (losses), depending on whether the hedging relationship satisfies the criteria for a fair value or cash flow hedge. For fair value hedges, we record both (i) the gains or losses on interest rate swaps and (ii) the corresponding changes in fair value of the hedged long-term debt directly as a component of interest and other expense, net. For cash flow hedges, we recognize the deferred portion as a component of interest and other expense, net when we incur the interest expense. The ineffective portion is directly recorded as a component of interest and other expense, net. For the derivative instruments that we consider economic hedges but do not designate for hedge accounting treatment, we recognize gains and losses directly as a component of interest and other expense, net.
Hedges of net investments in foreign operations	Hedges of net investments in foreign operations - We have numerous investments in our foreign subsidiaries. The net assets of these subsidiaries are exposed to volatility in foreign currency exchange rates. We use foreign-currency-denominated debt to hedge our net investment in foreign operations against adverse movements in exchange rates. We designated our euro and pound sterling denominated borrowings as a net investment hedge of a portion of our overall European operations. The gains and losses on our net investment in these designated European operations are economically offset by losses and gains on our euro and pound sterling denominated borrowings. The change in the debt's fair value is recorded in the currency translation adjustment component of accumulated other comprehensive earnings / (losses).
Guarantees	Guarantees: Authoritative guidance related to guarantor's accounting and disclosure requirements for guarantees requires us to disclose certain guarantees and to recognize a liability for the fair value of the obligation of qualifying guarantee activities. See Note 13, Commitments and Contingencies for a further discussion of guarantees.
Income Taxes	Income Taxes: We recognize tax benefits in our financial statements when our uncertain tax positions are more likely than not to be sustained upon audit. The amount we recognize is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We recognize deferred tax assets for deductible temporary differences, operating loss carryforwards and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
New Accounting Pronouncements	New Accounting Pronouncements: In June 2009, new guidance was issued on the consolidation of variable interest entities. We adopted the guidance effective January 1, 2010. This guidance increases the likelihood of an enterprise being classified as a variable interest entity. The adoption of this guidance did not have a material impact on our financial results.

Acquisitions and Divestitures (Tables)

12 Months Ended

Dec. 31, 2010

Cadbury [Member]

Dec. 31, 2010

Frozen Pizza [Member]

Dec. 31, 2008

Post Cereals Business [Member]

Pro forma - Balance Sheet


	Pro forma for the Years Ended December 31,
	2010		2009
	(in millions)

Net revenues	$	49,770	$	47,852
Net earnings attributable to Kraft Foods		3,938		2,586

Assets and liabilities acquired


Receivables ⁽¹⁾	$	1,333
Inventories		1,298
Other current assets		660
Property, plant and equipment		3,293
Goodwill ⁽²⁾		9,530
Intangible assets ⁽³⁾		12,905
Other assets		593
Short-term borrowings		(1,206	)
Accounts payable		(1,605	)
Other current liabilities ⁽⁴⁾		(1,866	)
Long-term debt		(2,437	)
Deferred income taxes		(3,218	)
Accrued pension costs		(817	)
Other liabilities		(927	)
Noncontrolling interest		(33	)

Operations for business

Summary results of operations for the Frozen Pizza business through March 1, 2010 were as follows:

		00000000			00000000			00000000
	For the Years Ended December 31,
	2010			2009			2008
	(in millions)

Net revenues	$	335		$	1,632		$	1,440

Earnings before income taxes		73			341			267
Provision for income taxes		(25	)		(123	)		(97	)
Gain on discontinued operations, net of income taxes		1,596			-			-

Earnings and gain from discontinued operations, net of income taxes	$	1,644		$	218		$	170

Summary results of operations for the Post cereals business through August 4, 2008, were as follows:


	For the Year Ended December 31, 2008
	(in millions)

Net revenues	$	666

Earnings before income taxes		189
Provision for income taxes		(70	)
Gain on discontinued operations, net of income taxes		926

Earnings and gain from discontinued operations, net of income taxes	$	1,045

Assets included in divestiture

The following assets of the Frozen Pizza business were included in the Frozen Pizza divestiture (in millions):

		00000000
Inventories, net	$	102
Property, plant and equipment, net		317
Goodwill		475

Distributed assets of the Frozen Pizza business	$	894

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2010

Goodwill and Intangible Assets

Schedule of goodwill by reportable segment

2010			2009
	(in millions)
Kraft Foods North America:
U.S. Beverages	$	1,290		$	1,290
U.S. Cheese		3,000			3,000
U.S. Convenient Meals		985			1,460
U.S. Grocery		3,046			3,046
U.S. Snacks		9,125			6,948
Canada & N.A. Foodservice		3,430			2,340
Kraft Foods Europe		9,023			6,756
Kraft Foods Developing Markets		7,957			3,924

Total goodwill	$	37,856		$	28,764

Intangible assets disclosure


	2010			2009
	(in millions)

Non-amortizable intangible assets	$	23,351		$	13,262
Amortizable intangible assets		2,928			278

		26,279			13,540
Accumulated amortization		(316	)		(111	)

Intangible assets, net	$	25,963		$	13,429

Schedule of movements in goodwill and intangible assets

		Assets,natncost			Assets,natncost			Assets,natncost			Assets,natncost
	2010						2009
	Goodwill			Intangible Assets, at cost			Goodwill			Intangible Assets, at cost
	(in millions)

Balance at January 1	$	28,764		$	13,540		$	27,581		$	13,012
Changes due to:
Foreign currency		37			48			1,200			544
Acquisitions		9,530			12,907			-			-
Divestitures		(475	)		(168	)		(17	)		-
Asset impairments		-			(43	)		-			(12	)
Other		-			(5	)		-			(4	)

Balance at December 31	$	37,856		$	26,279		$	28,764		$	13,540

Schedule of Units Most Sensitive To DCF Assumptions

		Assets,natncost		Assets,natncost	Assets,natncost	Assets,natncost
	Percentage of Excess Fair Value over Carrying Value		October 1, 2010 Carrying Value of Goodwill
			(in millions)

U.S. Confections		17%	$	2,177
U.S. Grain Snacks		10%		5,778
U.S. Salty Snacks		12%		1,170
Central and Eastern Europe, Middle East and Africa		8%		3,390
Asia Pacific		18%		2,517

Restructuring Costs (Tables)

12 Months Ended

Dec. 31, 2010

Restructuring Costs

Schedule of Liability Activity for Integration Program

		00000000
Liability assumed upon acquisition	$	228
Charges		657
Cash spent		(463	)
Asset impairments		(13	)
Currency / other		(3	)

Liability balance, December 31, 2010	$	406

Schedule of Restructuring Liability Activity

		00000000
Liability balance, January 1, 2009		489
Reversal of charges		(85	)
Cash spent		(176	)
Currency		42

Liability balance, December 31, 2009		270
Reversal of charges		(37	)
Cash spent		(94	)
Currency		(14	)

Liability balance, December 31, 2010	$	125

Schedule of Implementation Costs Associated with Restructuring Program


	2008
	(in millions)

Cost of sales	$	38
Selling, general and administrative costs		67

Total implementation costs	$	105

Schedule of Asset Impairment/Exit Implementation Costs by Segment


	For the Year Ended December 31, 2008
	Restructuring Costs		Implementation Costs		Total
	(in millions)

Kraft Foods North America:
U.S. Beverages	$	59	$	8	$	67
U.S. Cheese		31		7		38
U.S. Convenient Meals		31		7		38
U.S. Grocery		36		5		41
U.S. Snacks		72		9		81
Canada & N.A. Foodservice		100		10		110
Kraft Foods Europe		418		56		474
Kraft Foods Developing Markets		137		3		140

Total	$	884	$	105	$	989

Capital Stock (Tables)

12 Months Ended

Dec. 31, 2010

Authorized Common Stock repurchase programs


		Share Repurchase Program Authorized by the Board of Directors						$5.0 billion

		Authorized / completed period for repurchase						April 2007 - March 2009

		Aggregate cost of shares repurchased in 2008 (millions of shares)						$777 million (25.3 shares)

		Aggregate cost of shares repurchased life-to-date under program (millions of shares)						$4.3 billion (130.9 shares)

Common Class A [Member]

Class A Common stock



	Shares Issued		Shares Repurchased			Shares Outstanding

Balance at January 1, 2008		1,735,000,000		(201,222,380	)		1,533,777,620

Repurchase of shares		-		(25,272,255	)		(25,272,255	)
Shares tendered		-		(46,119,899	)		(46,119,899	)
Exercise of stock options and issuance of other stock awards		-		6,915,974			6,915,974

Balance at December 31, 2008		1,735,000,000		(265,698,560	)		1,469,301,440
Exercise of stock options and issuance of other stock awards		-		8,583,463			8,583,463

Balance at December 31, 2009		1,735,000,000		(257,115,097	)		1,477,884,903
Shares issued		261,537,778		-			261,537,778
Exercise of stock options and issuance of other stock awards		-		8,643,868			8,643,868

Balance at December 31, 2010		1,996,537,778		(248,471,229	)		1,748,066,549

- Definition

This element is used to capture the complete disclosure pertaining to an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation. Stock by Class includes common, convertible and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued and outstanding.

+ References+ Details

Accumulated Other Comprehensive Earnings / (Losses) (Tables)

12 Months Ended

Dec. 31, 2010

Accumulated Other Comprehensive Earnings / (Losses)

Accumulated Other Comprehensive Earnings / (Losses)

		OthermBenefits			OthermBenefits			OthermBenefits			OthermBenefits
	Currency Translation Adjustments			Pension and Other Benefits			Derivatives Accounted for as Hedges			Total
	(in millions)

Balances at January 1, 2008	$	(51)		$	(1,811)		$	27		$	(1,835)
Other comprehensive earnings / (losses), net of income taxes:
Currency translation adjustments		(2,348	)		114			-			(2,234	)
Amortization of experience losses and prior service costs		-			98			-			98
Settlement losses		-			48			-			48
Net actuarial loss arising during period		-			(2,021	)		-			(2,021	)
Change in fair value of cash flow hedges		-			-			(50	)		(50	)

Total other comprehensive losses											(4,159	)

Balances at December 31, 2008	$	(2,399	)	$	(3,572	)	$	(23	)	$	(5,994	)
Other comprehensive earnings / (losses), net of income taxes:
Currency translation adjustments		1,893			(116	)		-			1,777
Amortization of experience losses and prior service costs		-			126			-			126
Settlement losses		-			76			-			76
Net actuarial loss arising during period		-			(64	)		-			(64	)
Change in fair value of cash flow hedges		-			-			124			124

Total other comprehensive earnings											2,039

Balances at December 31, 2009	$	(506	)	$	(3,550	)	$	101		$	(3,955	)
Other comprehensive earnings / (losses), net of income taxes:		-			-			-			-
Currency translation adjustments		195			(13	)		-			182
Amortization of experience losses and prior service costs		-			186			-			186
Settlement losses		-			96			-			96
Net actuarial loss arising during period		-			(377	)		-			(377	)
Change in fair value of cash flow hedges		-			-			(22	)		(22	)

Total other comprehensive earnings											65

Balances at December 31, 2010	$	(311	)	$	(3,658	)	$	79		$	(3,890	)

Stock Plans (Tables)

12 Months Ended

Dec. 31, 2010

Stock Plans

Weighted-average Black-Scholes fair value assumptions

		ExercisenPrice		ExercisenPrice		ExercisenPrice		ExercisenPrice		ExercisenPrice
	Risk-Free Interest Rate		Expected Life		Expected Volatility		Expected Dividend Yield		Fair Value at Grant Date

2010		2.82%		6 years		19.86%		4.14%	$	3.69
2009		2.46%		6 years		21.36%		4.90%	$	2.68
2008		3.08%		6 years		21.04%		3.66%	$	4.49

Stock option rollforward

	ExercisenPrice		ExercisenPrice			ExercisenPrice		ExercisenPrice		ExercisenPrice
		Shares Subject to Option			Weighted- Average Exercise Price		Average Remaining Contractual Term		Aggregate Intrinsic Value

Balance at January 1, 2010			46,727,697		$	25.56
Options granted			18,077,470			29.24
Options exercised			(7,611,479	)		18.25
Options cancelled			(2,957,527	)		27.56

Balance at December 31, 2010			54,236,161			27.71		6.5 years	$	206 million

Exercisable at December 31, 2010			23,564,404			27.89		3.9 years	$	85 million

Restricted and deferred stock activity

		Weighted-Average			Weighted-Average
	Number of Shares			Weighted-Average Grant Date Fair Value Per Share

Balance at January 1, 2010		13,854,953		$	29.30
Granted		5,782,531			28.82
Vested		(4,063,589	)		34.17
Forfeited		(1,352,401	)		27.91

Balance at December 31, 2010		14,221,494			27.84

Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Pension Plans [Member]

Funded status of pension plans

		00000000			00000000			00000000			00000000		00000000
	U.S. Plans						Non-U.S. Plans
	2010			2009			2010			2009
	(in millions)

Benefit obligation at January 1	$	6,195		$	6,133		$	4,401		$	3,211
Service cost		145			152			162			67
Interest cost		368			369			419			215
Benefits paid		(322	)		(310	)		(462	)		(225	)
Settlements paid		(244	)		(187	)		(49	)		(14	)
Curtailment gain		(23	)		(168	)		(3	)		-
Actuarial losses		368			203			265			619
Acquisition		206			-			4,375			-
Currency		-			-			(164	)		510
Other		10			3			(49	)		18

Benefit obligation at December 31		6,703			6,195			8,895			4,401


Fair value of plan assets at January 1		5,496			4,386			3,397			2,618
Actual return on plan assets		671			1,180			624			400
Contributions		85			427			326			209
Benefits paid		(322	)		(310	)		(462	)		(225	)
Settlements paid		(244	)		(187	)		(49	)		(14	)
Acquisition		114			-			3,702			-
Currency		-			-			(84	)		414
Other		-			-			(1	)		(5	)

Fair value of plan assets at December 31		5,800			5,496			7,453			3,397


Net pension liability recognized at December 31	$	(903	)	$	(699	)	$	(1,442	)	$	(1,004	)

Pension plans resulted in net pension liability

		00000000			00000000		00000000	00000000	00000000

	2010			2009
	(in millions)

Prepaid pension assets	$	86		$	115
Other accrued liabilities		(49	)		(53	)
Accrued pension costs		(2,382	)		(1,765	)

	$	(2,345	)	$	(1,703	)

Projected benefit obligations, accumulated benefit obligations and the fair value of plan assets

		00000000		00000000		00000000		00000000
	U.S. Plans				Non-U.S. Plans
	2010		2009		2010		2009
			(in millions)

Projected benefit obligation	$	5,097	$	4,666	$	7,934	$	3,703
Accumulated benefit obligation		4,627		4,166		7,668		3,478
Fair value of plan assets		4,156		3,932		6,471		2,629

Weighted-average assumptions to determine our benefit obligations, net pension cost, postretirement benefit obligations and postretirement cost

		00000000		00000000		00000000		00000000
	U.S. Plans				Non-U.S. Plans
	2010		2009		2010		2009

Discount rate		5.53%		5.93%		5.11%		5.21%
Expected rate of return on plan assets		7.95%		8.00%		6.77%		7.26%
Rate of compensation increase		4.00%		4.00%		3.68%		3.08%

Schedule of Defined Benefit Plans Disclosures


	U.S. Plans									Non-U.S. Plans
	2010			2009			2008			2010			2009			2008
	(in millions)

Service cost	$	145		$	152		$	149		$	162		$	67		$	91
Interest cost		368			369			371			419			215			222
Expected return on plan assets		(490	)		(486	)		(526	)		(467	)		(242	)		(285	)
Amortization:
Net loss from experience differences		170			160			85			77			23			31
Prior service cost		6			6			7			7			6			7
Other expenses		123			112			74			11			8			16

Net pension cost	$	322		$	313		$	160		$	209		$	77		$	82

Weighted-average assumptions to determine our net pension cost

		Unobservable		Unobservable		Unobservable		Unobservable		Unobservable		Unobservable
	U.S. Plans						Non-U.S. Plans
	2010		2009		2008		2010		2009		2008

Discount rate		5.85%		6.10%		6.30%		5.21%		6.41%		5.44%
Expected rate of return on plan assets		7.99%		8.00%		8.00%		6.68%		7.25%		7.43%
Rate of compensation increase		3.98%		4.00%		4.00%		3.59%		3.09%		3.13%

Fair value of pension plan assets

		Unobservable		Unobservable		Unobservable		Unobservable

Asset Category	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category	(in millions)

U.S. equity securities	$	280	$	276	$	4	$	-
Non-U.S. equity securities		1,915		1,912		3		-
Pooled funds - equity securities		4,971		281		4,690		-

Total equity securities		7,166		2,469		4,697		-

Government bonds		1,405		731		674		-
Pooled funds - fixed income securities		1,893		52		1,841		-
Corporate bonds and other fixed income securities		1,749		5		993		751

Total fixed income securities		5,047		788		3,508		751

Real estate		343		86		7		250
Other		542		155		11		376

Total	$	13,098	$	3,498	$	8,223	$	1,377

		Unobservable		Unobservable		Unobservable		Unobservable

Asset Category	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category	(in millions)

U.S. equity securities	$	289	$	289	$	-	$	-
Non-U.S. equity securities		1,991		1,988		2		1
Pooled funds - equity securities		3,014		-		3,014		-

Total equity securities		5,294		2,277		3,016		1

Government bonds		1,037		931		106		-
Pooled funds - fixed income securities		945		-		945		-
Corporate bonds and other fixed income securities		988		54		932		2

Total fixed income securities		2,970		985		1,983		2

Real estate		131		22		109		-
Other		326		322		2		2

Total	$	8,721	$	3,606	$	5,110	$	5

Schedule of roll forward of level 3


Asset Category	January 1, 2010 Balance		Net Realized and Unrealized Gains/(Losses)		Net Purchases, Issuances and Settlements			Net Transfers Into/(Out of) Level 3		Currency Impact Level 3			December 31, 2010 Balance
Asset Category	(in millions)
Non-U.S. equity securities	$	1	$	-	$	(1	)	$	-	$	-		$	-
Corporate bond and other fixed income securities		2		23		(44	)		789		(19	)		751
Real Estate		-		34		(1	)		220		(3	)		250
Other		2		29		12			341		(8	)		376

Total Level 3 investments		5		86		(34	)		1,350		(30	)		1,377

Percentage of fair value of pension plan assets


	U.S. Plans				Non-U.S. Plans
Asset Category	2010		2009		2010		2009

Equity securities		69%		68%		41%		50%
Fixed-income securities		31%		28%		47%		43%
Real estate		-		-		5%		4%
Other		-		4%		7%		3%

Total		100%		100%		100%		100%

Estimated future benefit payments from pension plans and postretirement health care plans


	U.S. Plans		Non-U.S. Plans
	(in millions)

2011	$	484	$	449
2012		454		461
2013		459		471
2014		450		479
2015		470		499
2016-2020		2,722		2,726

Postretirement Benefit Plans [Member]

Weighted-average assumptions to determine our benefit obligations, net pension cost, postretirement benefit obligations and postretirement cost

		(innmillions)		(innmillions)		(innmillions)		(innmillions)	(innmillions)	(innmillions)
	U.S. Plans				Non-U.S. Plans
	2010		2009		2010		2009

Discount rate		5.30%		5.70%		5.02%		5.25%
Health care cost trend rate assumed for next year		7.50%		7.00%		8.83%		9.00%
Ultimate trend rate		5.00%		5.00%		6.00%		6.00%
Year that the rate reaches the ultimate trend rate		2016		2014		2017		2016

Schedule of Defined Benefit Plans Disclosures

		(innmillions)			(innmillions)			(innmillions)		(innmillions)	(innmillions)	(innmillions)
	2010			2009			2008
				(in millions)

Service cost	$	39		$	35		$	44
Interest cost		172			174			183
Amortization:
Net loss from experience differences		55			44			55
Prior service credit		(32	)		(32	)		(28	)
Other expense		-			-			-

Net postretirement health care costs	$	234		$	221		$	254

Weighted-average assumptions to determine our net pension cost

		(innmillions)		(innmillions)		(innmillions)		(innmillions)		(innmillions)		(innmillions)
	U.S. Plans						Non-U.S. Plans
	2010		2009		2008		2010		2009		2008

Discount rate		5.70%		6.10%		6.10%		5.28%		7.60%		5.80%
Health care cost trend rate		7.00%		7.00%		7.50%		8.79%		9.00%		9.00%

Estimated future benefit payments from pension plans and postretirement health care plans

		Non-U.S.nPlans		Non-U.S.nPlans	Non-U.S.nPlans	Non-U.S.nPlans
	U.S. Plans		Non-U.S. Plans
	(in millions)

2011	$	207	$	12
2012		207		12
2013		208		13
2014		210		13
2015		210		14
2016-2020		1,037		76

Benefit obligation of pension plans and postretirement benefit plans


	2010			2009
	(in millions)

Accrued postretirement benefit obligation at January 1	$	3,032		$	2,899
Service cost		39			35
Interest cost		172			174
Benefits paid		(213	)		(210	)
Plan amendments		(7	)		-
Currency		10			25
Assumption changes		147			157
Actuarial losses / (gains)		42			(48	)
Acquisition		41			-

Accrued postretirement health care costs at December 31	$	3,263		$	3,032

Effect of assumed health care cost trend rates

(innmillions)

One-Percentage-Point

Increase

Decrease

Effect on total of service and interest cost

12.7%

(10.4%)

Effect on postretirement benefit obligation

10.5%

(8.8%)

Postemployment Benefit Plans [Member]

Schedule of Defined Benefit Plans Disclosures

		Non-U.S.nPlans			Non-U.S.nPlans		Non-U.S.nPlans		Non-U.S.nPlans
	2010			2009		2008
	(in millions)

Service cost	$	9		$	8	$	6
Interest cost		10			8		7
Amortization of net (gains) / losses		(2	)		2		(2	)

Net postemployment costs	$	17		$	18	$	11

Benefit obligation of pension plans and postretirement benefit plans

		Non-U.S.nPlans			Non-U.S.nPlans		Non-U.S.nPlans	Non-U.S.nPlans
	2010			2009
	(in millions)

Accrued benefit obligation at January 1	$	116		$	115
Service cost		9			8
Interest cost		10			8
Severance		-			-
Benefits paid		(24	)		(35	)
Assumption changes		(8	)		26
Actuarial gains		(12	)		(7	)
Acquisition		49			-
Currency		-			1

Accrued postemployment costs at December 31	$	140		$	116

Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Schedule of the fair values of designated and non-designated derivative instruments


	December 31, 2010				December 31, 2009
	Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
	(in millions)

Derivatives designated as hedging instruments:
Foreign exchange contracts	$	24	$	115	$	8	$	158
Commodity contracts		74		5		25		14
Interest rate contracts		58		13		153		-

	$	156	$	133	$	186	$	172

Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	21	$	48	$	2	$	-
Commodity contracts		202		114		71		62
Interest rate contracts		59		21		-		-

	$	282	$	183	$	73	$	62

Total fair value	$	438	$	316	$	259	$	234

Schedule of derivative instruments fair values and measurement inputs


	Total Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)
Foreign exchange contracts	$	(118	)	$	-	$	(118	)	$	-
Commodity contracts		157			129		28			-
Interest rate contracts		83			-		83			-

Total derivatives	$	122		$	129	$	(7	)	$	-


	Total Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in millions)

Foreign exchange contracts	$	(148	)	$	-	$	(148	)	$	-
Commodity contracts		20			11		8			1
Interest rate contracts		153			-		153			-

Total derivatives	$	25		$	11	$	13		$	1

Schedule of cash flow hedges effect on Accumulated Other Comprehensive Income, net of taxes


	2010			2009			2008
	(in millions)

Accumulated gain / (loss) at beginning of period	$	101		$	(23	)	$	27
Transfer of realized (gains) / losses in fair value to earnings		(25	)		111			26
Unrealized gain / (loss) in fair value		3			13			(76	)

Accumulated gain / (loss) at December 31	$	79		$	101		$	(23	)

Schedule of outstanding hedges: (notional amount)


	2010		2009
	(in millions)

Foreign exchange contracts:
Intercompany loans and forecasted interest payments	$	2,183	$	1,376
Forecasted transactions		1,946		631
Commodity contracts		630		1,832
Interest rate contracts		5,167		2,350
Net investment hedge - euro notes		3,814		4,081
Net investment hedge - pound sterling notes		1,015		-

Fair Value Hedging [Member]

Schedule of effects of derivative instruments

		InterestExpense		InterestExpense			InterestExpense		InterestExpense
	2010					2009
	Gain / (Loss) Recognized in Income on Derivatives		Gain / (Loss) Recognized in Income on Borrowings			Gain / (Loss) Recognized in Income on Derivatives		Gain / (Loss) Recognized in Income on Borrowings
	(in millions)					(in millions)

Interest rate contracts	$	1	$	(1	)	$	7	$	(7	)

Cash Flow Hedging [Member]

Schedule of effects of derivative instruments


	2010						2009
	Gain / (Loss) Recognized in OCI			(Gain) / Loss Reclassified from AOCI into Earnings			Gain / (Loss) Recognized in OCI			(Gain) /Loss Reclassified from AOCI into Earnings
	(in millions)						(in millions)

Foreign exchange contracts - intercompany loans	$	2		$	(10	)	$	(12	)	$	-
Foreign exchange contracts - forecasted transactions		17			(1	)		(40	)		(27	)
Commodity contracts		74			(15	)		(27	)		138
Interest rate contracts		(90	)		1			92			-

Total	$	3		$	(25	)	$	13		$	111


	2010						2009
	Gain / (Loss) on Ineffectiveness Recognized in Earnings			Gain / (Loss) on Amount Excluded from Effectiveness Testing Recognized in Earnings			Gain / (Loss) on Ineffectiveness Recognized in Earnings			Gain / (Loss) on Amount Excluded from Effectiveness Testing Recognized in Earnings
	(in millions)						(in millions)

Foreign exchange contracts - intercompany loans	$	-		$	-		$	-		$	-
Foreign exchange contracts - forecasted transactions		-			-			-			-
Commodity contracts		(6	)		3			12			1
Interest rate contracts		-			-			-			-

Total	$	(6	)	$	3		$	12		$	1

Net Investment Hedging [Member]

Schedule of effects of derivative instruments

InterestExpense

2010

2009

Gain / (Loss)
Recognized
in OCI

Location of
Gain / (Loss)
Recorded
in AOCI

Gain / (Loss)
Recognized
in OCI

Location of
Gain / (Loss)
Recorded
in AOCI

(in millions)

Euro notes

170

Currency
Translation

(65

)

Currency
Translation

Pound sterling notes

Adjustment

Economic Hedging [Member]

Schedule of effects of derivative instruments

		InterestExpense			InterestExpense			InterestExpense	InterestExpense
	2010			2009			Location of Gain / (Loss) Recognized in Earnings
	Gain / (Loss) Recognized in Earnings			Gain / (Loss) Recognized in Earnings			Location of Gain / (Loss) Recognized in Earnings
	(in millions)

Foreign exchange contracts:
Intercompany loans and forecasted interest payments	$	28		$	(10	)		Interest expense
Forecasted transactions		(11	)		(10	)		Cost of sales
Forecasted transactions		(17	)		-			Interest expense
Cadbury acquisition related		(395	)		-			Interest expense
Interest rate contracts		4			-			Interest expense
Commodity contracts		126			37			Cost of sales

Total	$	(265	)	$	17

- Definition

This element represents the disclosure related to the fair value measurement of assets and liabilities which includes [financial] instruments measured at fair value that are classified in stockholders' equity. Such assets and liabilities may be measured on a recurring or nonrecurring basis. The disclosures which may be required or desired include: (1) for assets and liabilities measured on a recurring basis, disclosure may include: (a) the fair value measurements at the reporting date; (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); (c) for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (ii) purchases, sales, issuances, and settlements (net); (iii) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs); (d) the amount of the total gains or losses for the period in subparagraph (c) (i) above included in earnings (or changes in net assets) that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of income (or activities); (e) the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period and (2) for assets and liabilities that are measured at fair value on a nonrecurring basis (for example, impaired assets) disclosure may include, in addition to (a) above: (a) the reasons for the fair value measurements recorded; (b) the same as (b) above; (c) for fair value measurements using significant unobservable inputs (Level 3), a description of the inputs and the information used to develop the inputs; and (d) the valuation technique(s) used to measure fair value and a discussion of changes, if any, in the valuation technique(s) used to measure similar assets and/or liabilities in prior periods.

+ References+ Details

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2010

Commitments and Contingencies

Minimum rental commitments


2011	$	470
2012		324
2013		225
2014		169
2015		130
Thereafter		244

- Definition

General description of lessee's leasing arrangements including: (1) The basis on which contingent rental payments are determined, (2) The existence and terms of renewal or purchase options and escalation clauses, (3) Restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, (4) Rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions. Disclosure may also include the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. Additionally, for operating leases having initial or remaining noncancelable lease terms in excess of one year: (a) future minimum rental payments required as of the date of the latest balance sheet presented, in the aggregate and for each of the five succeeding fiscal years, (b) the total of minimum rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented, and (c) for all operating leases, rental expense for each period for which an income statement is presented, with separate amounts for minimum rentals, contingent rentals, and sublease rentals. Rental payments under leases with terms of a month or less that were not renewed need not be included.

+ References+ Details

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2010

Income Taxes

Provision for income taxes


	2010			2009			2008
	(in millions)

Earnings from continuing operations before income taxes:
United States	$	1,071		$	2,047		$	1,136
Outside United States		2,571			1,899			1,200

Total	$	3,642		$	3,946		$	2,336

Provision for income taxes:
United States federal:
Current	$	91		$	335		$	321
Deferred		322			108			(12	)

		413			443			309
State and local:
Current		47			82			52
Deferred		61			(39	)		(21	)

		108			43			31

Total United States		521			486			340

Outside United States:
Current		763			681			490
Deferred		(137	)		(31	)		(172	)

Total outside United States		626			650			318

Total provision for income taxes	$	1,147		$	1,136		$	658

Changes in unrecognized tax benefits


	2010			2009			2008

January 1	$	829		$	807		$	850
Increases from positions taken during prior periods		49			90			17
Decreases from positions taken during prior periods		(146	)		(205	)		(90	)
Increases from positions taken during the current period		229			146			98
(Decreases) / increases from acquisition adjustments		357			-			(22	)
Decreases relating to settlements with taxing authorities		(19	)		(26	)		(8	)
Reductions resulting from the lapse of the applicable statute of limitations		(10	)		(14	)		(13	)
Currency / other		(8	)		31			(25	)

December 31	$	1,281		$	829		$	807

Effective tax rate reconciliation


	2010			2009			2008
	(2009 & 2008 revised)

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%			1.9%			2.7%
Benefit principally related to reversal of federal and state reserves on IRS audit settlements		(2.3%	)		(3.1%)			-
Reversal of other tax accruals no longer required		(0.5%	)		(0.4%	)		(1.8%	)
U.S. Health Care Legislation		3.8%			-			-
Foreign rate differences		(6.0%	)		(2.2%	)		(5.7%	)
Other		(0.4%	)		(2.4%	)		(2.0%	)

Effective tax rate		31.5%			28.8%			28.2%

Deferred tax assets and liabilities temporary differences

		00000000			00000000		00000000	00000000
	2010			2009
	(in millions)

Deferred income tax assets:
Accrued postretirement and postemployment benefits	$	1,103		$	1,472
Accrued pension costs		458			456
Other		2,064			1,997

Total deferred income tax assets		3,625			3,925

Valuation allowance		(400	)		(97	)


Net deferred income tax assets	$	3,225		$	3,828


Deferred income tax liabilities:
Trade names	$	(7,606	)	$	(4,431	)
Property, plant and equipment		(1,845	)		(2,029	)
Other		(611	)		(1,055	)

Total deferred income tax liabilities		(10,062	)		(7,515	)

Net deferred income tax liabilities	$	(6,837	)	$	(3,687	)

- Definition

The disclosure required for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ References+ Details

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2010

Earnings Per Share

Earnings Per Share

		00000000		00000000		00000000	00000000
	For the Years Ended December 31,
	2010		2009		2008
	(in millions, except per share data; 2009 & 2008 revised)

Earnings from continuing operations	$	2,495	$	2,810	$	1,678
Earnings and gain from discontinued operations, net of income taxes		1,644		218		1,215

Net earnings		4,139		3,028		2,893
Noncontrolling interest		25		7		9

Net earnings attributable to Kraft Foods	$	4,114	$	3,021	$	2,884


Weighted-average shares for basic EPS		1,715		1,478		1,505
Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares		5		8		10


Weighted-average shares for diluted EPS		1,720		1,486		1,515


Basic earnings per share attributable to Kraft Foods:
Continuing operations	$	1.44	$	1.90	$	1.11
Discontinued operations		0.96		0.14		0.81

Net earnings attributable to Kraft Foods	$	2.40	$	2.04	$	1.92


Diluted earnings per share attributable to Kraft Foods:
Continuing operations	$	1.44	$	1.89	$	1.10
Discontinued operations		0.95		0.14		0.80

Net earnings attributable to Kraft Foods	$	2.39	$	2.03	$	1.90

Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2010

Segment Reporting

Net revenues: Table

For the Years Ended December 31,
		2010		2009		2008
		(in millions; 2009 & 2008 revised)
	Net revenues:
	Kraft Foods North America:
	U.S. Beverages	$	3,212	$	3,057	$	3,001
	U.S. Cheese		3,528		3,605		4,007
	U.S. Convenient Meals		3,131		3,029		2,947
	U.S. Grocery		3,398		3,453		3,389
	U.S. Snacks		6,001		4,964		5,025
	Canada & N.A. Foodservice		4,696		3,922		4,147
	Kraft Foods Europe		11,628		8,768		9,728
	Kraft Foods Developing Markets		13,613		7,956		8,248

	Net revenues	$	49,207	$	38,754	$	40,492

Earnings from continuing operations before income taxes:

For the Years Ended December 31,
		2010			2009			2008
		(in millions; 2009 & 2008 revised)

	Earnings from continuing operations before income taxes:
	Operating income:
	Kraft Foods North America:
	U.S. Beverages	$	564		$	511		$	381
	U.S. Cheese		598			667			563
	U.S. Convenient Meals		268			234			125
	U.S. Grocery		1,164			1,146			1,009
	U.S. Snacks		845			723			638
	Canada & N.A. Foodservice		582			462			395
	Kraft Foods Europe		1,115			785			182
	Kraft Foods Developing Markets		1,577			936			815
	Unrealized gains / (losses) on hedging activities		67			203			(205	)
	Certain U.S. pension plan costs		(179	)		(165	)		-
	General corporate expenses		(724	)		(293	)		(304	)
	Amortization of intangibles		(211	)		(26	)		(23	)

	Operating income		5,666			5,183			3,576
	Interest and other expense, net		(2,024	)		(1,237	)		(1,240	)

	Earnings from continuing operations before income taxes	$	3,642		$	3,946		$	2,336

Gains (losses) on acquisitions and divestitures

For the Years Ended December 31,
		2010			2009			2008
					(in millions)

	Kraft Foods North America:
	U.S. Beverages	$	-		$	-		$	(1	)
	U.S. Cheese		(6	)		-			-
	U.S. Convenient Meals		-			-			-
	U.S. Grocery		-			-			-
	U.S. Snacks		-			11			-
	Canada & N.A. Foodservice		-			-			-
	Kraft Foods Europe		-			(17	)		(91	)
	Kraft Foods Developing Markets		-			-			-

	Gains / (losses) on divestitures, net	$	(6	)	$	(6	)	$	(92	)

Total assets by segment

2010		2009
		(in millions)

	Total assets:
	Kraft Foods North America:
	U.S. Beverages	$	2,513	$	2,382
	U.S. Cheese		4,633		4,589
	U.S. Convenient Meals		2,064		3,063
	U.S. Grocery		5,574		5,565
	U.S. Snacks		20,895		16,418
	Canada & N.A. Foodservice		7,207		5,051
	Kraft Foods Europe		24,261		16,073
	Kraft Foods Developing Markets		25,738		11,087
	Unallocated assets ⁽¹⁾		2,404		2,486

	Total assets	$	95,289	$	66,714

Depreciation expense

For the Years Ended December 31,
		2010		2009		2008
		(in millions; 2009 & 2008 revised)

	Depreciation expense:
	Kraft Foods North America:
	U.S. Beverages	$	73	$	69	$	68
	U.S. Cheese		67		66		66
	U.S. Convenient Meals		61		67		62
	U.S. Grocery		88		82		78
	U.S. Snacks		139		127		129
	Canada & N.A. Foodservice		110		83		93
	Kraft Foods Europe		355		237		265
	Kraft Foods Developing Markets		320		157		160

	Total - continuing operations		1,213		888		921
	Discontinued operations		16		17		42

	Total depreciation expense	$	1,229	$	905	$	963

Capital expenditures

For the Years Ended December 31,
		2010		2009		2008
		(in millions)

	Capital expenditures:
	Kraft Foods North America:
	U.S. Beverages	$	88	$	82	$	110
	U.S. Cheese		88		72		97
	U.S. Convenient Meals		109		135		143
	U.S. Grocery		76		85		87
	U.S. Snacks		245		190		122
	Canada & N.A. Foodservice		112		94		98
	Kraft Foods Europe		334		292		285
	Kraft Foods Developing Markets		607		319		368

	Total - continuing operations		1,659		1,269		1,310
	Discontinued operations		2		61		57

	Total capital expenditures	$	1,661	$	1,330	$	1,367

Net revenues by consumer sector

For the Year Ended December 31, 2010
	Kraft Foods North America			Kraft Foods Europe			Kraft Foods Developing Markets			Total


		(in millions)

	Biscuits ⁽¹⁾	$	5,646		$	2,322		$	2,815		$	10,783
	Confectionery ⁽¹⁾		1,807			5,224			6,657			13,688
	Beverages		3,742			2,522			2,536			8,800
	Cheese		5,090			982			904			6,976
	Grocery		3,088			334			579			4,001
	Convenient Meals		4,593			244			122			4,959

	Total net revenues	$	23,966		$	11,628		$	13,613		$	49,207


		For the Year Ended December 31, 2009
		Kraft Foods North America			Kraft Foods Europe			Kraft Foods Developing Markets			Total
		(in millions; as revised)

	Biscuits ⁽¹⁾	$	5,628		$	2,330		$	2,446		$	10,404
	Confectionery ⁽¹⁾		301			2,446			1,891			4,638
	Beverages		3,545			2,390			2,094			8,029
	Cheese		4,980			972			844			6,796
	Grocery		3,136			369			566			4,071
	Convenient Meals		4,440			261			115			4,816

	Total net revenues	$	22,030		$	8,768		$	7,956		$	38,754


		For the Year Ended December 31, 2008
		Kraft Foods North America			Kraft Foods Europe			Kraft Foods Developing Markets			Total
		(in millions; as revised)

	Biscuits ⁽¹⁾	$	5,659		$	2,706		$	2,592		$	10,957
	Confectionery ⁽¹⁾		292			2,585			2,076			4,953
	Beverages		3,509			2,625			2,081			8,215
	Cheese		5,525			1,109			828			7,462
	Grocery		3,211			394			567			4,172
	Convenient Meals		4,320			309			104			4,733

	Total net revenues	$	22,516		$	9,728		$	8,248		$	40,492

(1)

Net revenues by geographic segment

For the Years Ended December 31,
		2010		2009		2008
		(in millions; 2009 & 2008 revised)
	Net revenues:
	United States	$	20,934	$	19,713	$	20,168
	Europe		15,733		11,471		12,868
	Other		12,540		7,570		7,456

	Total net revenues	$	49,207	$	38,754	$	40,492

Long-lived assets and total assets by geographic segment

		00000000		00000000	00000000	00000000	00000000
	2010		2009
	(in millions)
Long-lived assets:
United States	$	35,200	$	31,773
Europe		25,333		16,077
Other		18,535		6,410

Total long-lived assets	$	79,068	$	54,260

Total assets:
United States	$	40,085	$	35,816
Europe		31,811		21,915
Other		23,393		8,983

Total assets	$	95,289	$	66,714

Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Quarterly Financial Data

Quarterly Statement of Income

		00000000		00000000		00000000		00000000	00000000
	2010 Quarters
	First		Second		Third		Fourth
	(in millions, except per share data)

Net revenues	$	11,318	$	12,253	$	11,863	$	13,773

Gross profit	$	4,089	$	4,694	$	4,321	$	4,798

Earnings from continuing operations	$	249	$	939	$	760	$	547

Earnings and gain from discontinued operations, net of income taxes		1,644		-		-		-

Net earnings		1,893		939		760		547
Noncontrolling interest		10		2		6		7

Net earnings attributable to Kraft Foods	$	1,883	$	937	$	754	$	540


Weighted-average shares for diluted EPS		1,620		1,752		1,754		1,757

Per share data:
Basic EPS attributable to Kraft Foods:
Continuing operations	$	0.15	$	0.54	$	0.43	$	0.31
Discontinued operations		1.02		-		-		-

Net earnings attributable to Kraft Foods	$	1.17	$	0.54	$	0.43	$	0.31

Diluted EPS attributable to Kraft Foods:
Continuing operations	$	0.15	$	0.53	$	0.43	$	0.31
Discontinued operations		1.01		-		-		-

Net earnings attributable to Kraft Foods	$	1.16	$	0.53	$	0.43	$	0.31

Dividends declared	$	0.29	$	0.29	$	0.29	$	0.29

Market price - high	$	30.98	$	31.09	$	31.98	$	32.67
- low	$	27.09	$	27.49	$	27.59	$	29.80


	2009 Quarters
	First		Second		Third		Fourth
	(in millions, except per share data; as revised)

Net revenues	$	8,979	$	9,781	$	9,397	$	10,597

Gross profit	$	3,100	$	3,512	$	3,378	$	3,945

Earnings from continuing operations	$	603	$	781	$	774	$	652

Earnings and gain from discontinued operations, net of income taxes		59		48		52		59

Net earnings		662		829		826		711
Noncontrolling interest		2		2		2		1

Net earnings attributable to Kraft Foods	$	660	$	827	$	824	$	710


Weighted-average shares for diluted EPS		1,483		1,484		1,487		1,487

Per share data:
Basic EPS attributable to Kraft Foods:
Continuing operations	$	0.41	$	0.53	$	0.52	$	0.44
Discontinued operations		0.04		0.03		0.04		0.04

Net earnings attributable to Kraft Foods	$	0.45	$	0.56	$	0.56	$	0.48

Diluted EPS attributable to Kraft Foods:
Continuing operations	$	0.41	$	0.53	$	0.52	$	0.44
Discontinued operations		0.04		0.03		0.03		0.04

Net earnings attributable to Kraft Foods	$	0.45	$	0.56	$	0.55	$	0.48


Dividends declared	$	0.29	$	0.29	$	0.29	$	0.29

Market price - high	$	29.84	$	27.24	$	29.11	$	27.84
- low	$	20.81	$	21.94	$	25.41	$	25.72

Pre-Tax Charges / (Gains) in Earnings from Continuing Operations


	2010 Quarters
	First		Second		Third			Fourth
	(in millions)

Asset impairment and exit costs	$	-	$	-	$	(9	)	$	27
(Gains) / losses on divestitures, net		-		-		-			6

	$	-	$	-	$	(9	)	$	33


	2009 Quarters
	First		Second			Third		Fourth
	(in millions)

Asset impairment and exit costs	$	-	$	(26	)	$	-	$	(38	)
(Gains) / losses on divestitures, net		-		17			-		(11	)

	$	-	$	(9	)	$	-	$	(49	)

Valuation and Qualifying Accounts (Tables)

12 Months Ended

Dec. 31, 2010

Valuation and Qualifying Accounts

Schedule of Valuation and Qualifying Accounts


Col. A	Col. B		Col. C					Col. D		Col. E
	Balance at Beginning of Period		Additions					Deductions		Balance at End of Period
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts			Deductions		Balance at End of Period
					(a)			(b)

2010:
Allowance for discounts	$	8	$	49	$	1		$	47	$	11
Allowance for doubtful accounts		138		89		82			32		277
Allowance for deferred taxes		97		30		305			32		400

	$	243	$	168	$	388		$	111	$	688

2009:
Allowance for discounts	$	28	$	35	$	4		$	59	$	8
Allowance for doubtful accounts		128		32		13			35		138
Allowance for deferred taxes		84		19		13			19		97

	$	240	$	86	$	30		$	113	$	243

2008:
Allowance for discounts	$	5	$	73	$	17		$	67	$	28
Allowance for doubtful accounts		118		47		(22	)		15		128
Allowance for deferred taxes		105		11		(16	)		16		84

	$	228	$	131	$	(21	)	$	98	$	240

Notes:

(a)	Primarily related to divestitures, acquisitions and currency translation.

(b)	Represents charges for which allowances were created.

Summary of Significant Accounting Policies (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended													12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2010 Building and Building Improvements [Member]	Dec. 31, 2010 Machinery and Equipment [Member]	Dec. 31, 2010 Software [Member]	Dec. 31, 2010 Common Class A [Member]	Dec. 31, 2009 Common Class A [Member]	Dec. 31, 2008 Common Class A [Member]	Dec. 31, 2007 Common Class A [Member]	Dec. 31, 2010 Common Class B [Member]	Dec. 31, 2009 Common Class B [Member]	Dec. 31, 2008 Common Class B [Member]	Dec. 31, 2009 U.S. Pension Plans [Member]
Initial public offering	1,996,537,778	1,735,000,000					1,996,537,778	1,735,000,000	1,735,000,000	1,735,000,000	0	0	0
Translation Adjustment Functional to Reporting Currency, Net of Tax	$ 34
New Accounting Pronouncements	New Accounting Pronouncements: In June 2009, new guidance was issued on the consolidation of variable interest entities. We adopted the guidance effective January 1, 2010. This guidance increases the likelihood of an enterprise being classified as a variable interest entity. The adoption of this guidance did not have a material impact on our financial results.
Impact of net revenues	200
Minimum useful life, in years					3
Maximum useful life, in years				40	20	7
Advertising expense	2,269	1,581	1,598
Unfavorable foreign currency	115
Research and development expense	583	466	487
Decrease in retained earnings after-tax			8
Projected benefit obligation decreased	23	168												168
Curtailment charge		$ 5

Acquisitions and Divestitures (Narrative) (Details)	0 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	12 Months Ended							11 Months Ended	12 Months Ended			12 Months Ended			7 Months Ended
Acquisitions and Divestitures (Narrative) (Details)	Jun. 01, 2010 USD ($)	Mar. 01, 2010 USD ($)	Mar. 31, 2010 USD ($)	Aug. 04, 2008 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2008 USD ($)	Feb. 02, 2010 USD ($)	Feb. 02, 2010 GBP (£)	Feb. 02, 2010 Cadbury Ordinary Share [Member] USD ($)	Feb. 02, 2010 Cadbury ADS [Member] USD ($)	Dec. 31, 2010 Cadbury [Member] USD ($)	Dec. 31, 2010 Cadbury [Member] USD ($)	Jun. 01, 2010 Cadbury [Member]	Feb. 02, 2010 Cadbury [Member] USD ($)	Dec. 31, 2009 Balance Bar [Member] USD ($)	Dec. 31, 2008 Nordic And Baltic Snacks [Member] USD ($)	Dec. 31, 2008 LU Biscuit [Member] USD ($)	Aug. 04, 2008 Cable Holdco [Member] USD ($)
Cash paid per share in acquisition										$ 5	$ 20
Kraft Shares issued per Cadbury Share										0.1874	0.7496
Cadbury value								$ 18,500,000,000	£ 11,600,000,000						$ 18,547,000,000
Business acquisition cost of acquired entity purchase price excluding noncontrolling interest								13,100,000,000
Kraft Foods common stock average price per share								28.36
U.S. dollars at foreign currency exchange rate for one pound sterling								1.595
Transaction related fees					218,000,000	40,000,000
Acquisition financing fees					96,000,000
Cadbury net revenues												9,143,000,000
Cadbury net earnings												530,000,000
Percentage of Cadbury shares acquired	28.27%							71.73%	71.73%					100.00%
Value of Cadbury acquisition attributable to noncontrolling interest								5,400,000,000
Business acquisition cost remaining shares	5,400,000,000
Gain on noncontrolling interest acquired					38,000,000
Cadbury acquisition value, net of cash and cash equivalents															17,503,000,000
Sale of Frozen Pizza		3,700,000,000
Common Stock tendered							1,644,000,000
Debt issued by split-off company																			665,000,000
Line of credit assumed by split-off company																			300,000,000
Amount tendered for split off transaction				1,644,000,000
Shares of Kraft Foods Common Stock issued as a result of the split-off transaction				46,000,000
Proceeds from split-off																			960,000,000
Allocated overheads excluded from earnings before income taxes					25,000,000	108,000,000	112,000,000
Tax expense included in gain on discontinued operations			1,200,000,000
Proceeds from Sale of Productive Assets													342,000,000			41,000,000	153,000,000	86,000,000
Pre-Tax Gains/Losses																6,000,000	92,000,000	74,000,000
Gain on discontinued operations, net of income taxes																$ 58,000,000	$ 64,000,000

Acquisitions and Divestitures (Pro forma summary if Cadbury had been acquired on January 1, 2009) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Acquisitions and Divestitures
Net revenues	$ 49,770	$ 47,852
Net earnings attributable to Kraft Foods	$ 3,938	$ 2,586

Acquisitions and Divestitures (Cadbury acquisition, assets and liabilities) (Details) (USD $)

12 Months Ended

Dec. 31, 2010

Feb. 02, 2010

Dec. 31, 2010

Customer Relationships [Member]

Dec. 31, 2010

Technology [Member]

Dec. 31, 2010

Kraft Foods Developing Markets [Member]

Receivables

$ 1,333,000,000

^[1]

Inventories

1,298,000,000

Other current assets

660,000,000

Property, plant and equipment

3,293,000,000

Goodwill

9,530,000,000

^[2]

Intangible assets

12,905,000,000

^[3]

Other assets

593,000,000

Short-term borrowings

(1,206,000,000)

Accounts payable

(1,605,000,000)

Other current liabilities

(1,866,000,000)

^[4]

Long-term debt

(2,437,000,000)

Deferred income taxes

(3,218,000,000)

Accrued pension costs

(817,000,000)

Other liabilities

(927,000,000)

Noncontrolling interest

(33,000,000)

Gross amount due under receivable acquired

1,474,000,000

Intangible assets acquired, indefinite lived

10,300,000,000

Amortizable intangible assets acquired

2,600,000,000

Amortizable intangible assets acquired, useful life

Reserve for exposure

150,000,000

70,000,000

Uncollectable receivables acquired

$ 141,000,000

[1]	The gross amount due under the receivables we acquired is $1,474 million, of which $141 million is expected to be uncollectable.
[2]	Goodwill will not be deductible for statutory tax purposes and is attributable to Cadbury's workforce and the significant synergies we expect from the acquisition.
[3]	We acquired $10.3 billion of indefinitely lived intangible assets, primarily trademarks, and $2.6 billion of amortizable intangible assets, primarily customer relationships and technology. Customer relationships will be amortized over approximately 13 years and technology will be amortized over approximately 12 years.
[4]	Within other current liabilities, a reserve for exposures related to taxes of approximately $70 million was established within our Developing Markets segment. The cumulative exposure was approximately $150 million at December 31, 2010.

Acquisitions and Divestitures (Results of operations for the Frozen Pizza business) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Earnings and gain from discontinued operations, net of income taxes	$ 1,644	$ 218	$ 1,215
Frozen Pizza [Member]
Net revenues	335	1,632	1,440
Earnings before income taxes	73	341	267
Provision for income taxes	(25)	(123)	(97)
Gain on discontinued operations, net of income taxes	1,596
Earnings and gain from discontinued operations, net of income taxes	$ 1,644	$ 218	$ 170

- Definition

This element represents the overall income (loss) from a disposal group that is classified as a component of the entity, net of income tax, reported as a separate component of income before extraordinary items and the cumulative effect of accounting changes before deduction or consideration of the amount which may be allocable to noncontrolling interests, if any. Includes the following (net of tax): income (loss) from operations during the phase-out period, gain (loss) on disposal, provision (or any reversals of earlier provisions) for loss on disposal, and adjustments of a prior period gain (loss) on disposal.

+ References+ Details

Acquisitions and Divestitures (Assets of the Frozen Pizza business) (Details) (Frozen Pizza [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2010
Frozen Pizza [Member]
Inventories, net	$ 102
Property, plant and equipment, net	317
Goodwill	475
Distributed assets of the Frozen Pizza business	$ 894

Acquisitions and Divestitures (Summary Results of Discontinued Operations) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Earnings and gain from discontinued operations, net of income taxes	$ 1,644	$ 218	$ 1,215
Post Cereals Business [Member]
Net revenues	666
Earnings before income taxes	189
Provision for income taxes	(70)
Gain on discontinued operations, net of income taxes	926
Earnings and gain from discontinued operations, net of income taxes	$ 1,045

- Definition

+ References+ Details

Inventories (Components of Inventories) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Inventories
Raw materials	$ 1,743	$ 1,410
Finished product	3,567	2,365
Inventories, net	$ 5,310	$ 3,775

Property, Plant and Equipment (Components of Property, Plant and Equipment) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Property, Plant and Equipment
Land and land improvements	$ 795	$ 492
Buildings and building equipment	4,934	4,231
Machinery and equipment	16,147	13,872
Construction in progress	1,154	828
Property, plant and equipment, gross	23,030	19,423
Accumulated depreciation	(9,238)	(8,730)
Property, plant and equipment, net	$ 13,792	$ 10,693

Goodwill and Intangible Assets (Narrative) (Details) (USD $)
In Millions, unless otherwise specified

3 Months Ended

12 Months Ended

3 Months Ended

Dec. 31, 2008

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

Dec. 31, 2010

U.S. Snacks [Member]

Dec. 31, 2010

Canada & N.A. Foodservice [Member]

Dec. 31, 2010

Kraft Foods Europe [Member]

Dec. 31, 2010

Kraft Foods Developing Markets [Member]

Dec. 31, 2008

Nordic And Baltic [Member]

Dec. 31, 2009

Norway [Member]

Dec. 31, 2008

Australia [Member]

Dec. 31, 2010

Netherlands [Member]

Dec. 31, 2009

Netherlands [Member]

Dec. 31, 2010

China [Member]

Dec. 31, 2010

Biscuit Plant and Related Property, Plant and Equipment in France [Member]

Weighted-average life of our amortizable intangible assets (in years)

13.2

Acquisitions, Goodwill

$ 9,530

$ 2,177

$ 937

$ 2,671

$ 3,745

Intangible assets increase, Cadbury acquisition

12,907

Amortization expense

211

Estimated amortization expense for each of the next five years

220

Write-off associated goodwill

475

Asset impairment charges

Impairment of intangible assets indefinite-lived

Write-off associated intangible assets

(168)

Property, plant and equipment impairment

$ 4

$ 16

Annual impairment review

•

Goodwill and Intangible Assets (Intangible assets) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Non-amortizable intangible assets	$ 23,351	$ 13,262
Amortizable intangible assets	2,928	278
Total intangible assets, gross	26,279	13,540	13,012
Accumulated amortization	(316)	(111)
Intangible assets, net	$ 25,963	$ 13,429

Goodwill and Intangible Assets (Movements in goodwill and intangible assets) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended
	Dec. 31, 2008	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Goodwill and Intangible Assets
Balance at January 1, Goodwill		$ 28,764	$ 27,581
Foreign currency, Goodwill		37	1,200
Acquisitions, Goodwill		9,530
Divestitures, Goodwill		(475)	(17)	(34)
Balance at December 31, Goodwill	27,581	37,856	28,764	27,581
Balance at January 1, Intangible Assets, at cost		13,540	13,012
Foreign currency, Intangible Assets, at cost		48	544
Acquisitions, Intangible Assets, at cost		12,907
Divestitures, Intangible Assets, at costs	8	(168)
Impairment of intangible assets		(43)	(12)	(44)
Other, Intangible Assets, at cost		(5)	(4)
Balance at December 31, Intangible Assets	$ 13,012	$ 26,279	$ 13,540	$ 13,012

Restructuring Costs (Narrative) (Details) (USD $)	12 Months Ended			60 Months Ended		12 Months Ended		12 Months Ended		36 Months Ended
Restructuring Costs (Narrative) (Details) (USD $)	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2008	Dec. 31, 2008 2004-2008 Restructuring Program [Member]	Dec. 31, 2010 Integration Charges [Member]	Dec. 31, 2009 Integration Charges [Member]	Dec. 31, 2008 Implementation Costs [Member]	Dec. 31, 2010 Integration Charges [Member]	Dec. 31, 2013 Integration Charges [Member]
Expected cost savings upon completion of acquisition integration						$ 750,000,000
Restructuring and related cost, expected cost										1,500,000,000
Charges incurred under the Integration Program						657,000,000			657,000,000
Restructuring and related cost, incurred cost			989,000,000					105,000,000
Pre-tax charges reflecting asset disposals, severance and implementation costs					2,900,000,000
Facilities, closure				35
Number of positions eliminated					18,200
Expected cash payments	1,900,000,000	1,900,000,000
Accrual charges relating to previous periods	228,000,000
Cost savings initiatives costs	170,000,000	318,000,000	0
Reversal of Restructuring Program costs	37,000,000	85,000,000
Loss on the divestiture of the plant		17,000,000
Reversal of restructuring program charges		50,000,000
Cash paid to date, Restructuring Program		1,800,000,000
Severance costs		35,000,000
Asset impairment and exit costs			884,000,000
Cash paid, Restructuring Program	94,000,000	176,000,000				463,000,000
Restructuring reserve	125,000,000	270,000,000	489,000,000	489,000,000		406,000,000	228,000,000
Implementation costs			$ 989,000,000					$ 105,000,000

Restructuring Costs (Liability Activity Program) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended
	Dec. 31, 2008	Dec. 31, 2010	Dec. 31, 2009
Liability balance		$ 270	$ 489
Cash spent		(94)	(176)
Asset impairments	13
Currency		(14)	42
Liability balance	489	125	270
Integration Charges [Member]
Liability balance		228
Charges		657
Cash spent		(463)
Asset impairments		(13)
Currency		(3)
Liability balance		$ 406

Restructuring Costs (Restructuring Liability Activity) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Restructuring Costs [Abstract]
Liability balance	$ 270	$ 489
Restructuring program previously accrued charges reversed	(37)	(85)
Cash spent	(94)	(176)
Currency	(14)	42
Liability balance	$ 125	$ 270

Restructuring Costs (Schedule of Total Restructuring Program Costs) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2008
Restructuring and related cost, incurred cost	$ 989
Segment, Continuing Operations [Member] \| U.S. Beverage [Member]
Restructuring and related cost, incurred cost	67
Segment, Continuing Operations [Member] \| U.S. Cheese [Member]
Restructuring and related cost, incurred cost	38
Segment, Continuing Operations [Member] \| U.S. Convenient Meals [Member]
Restructuring and related cost, incurred cost	38
Segment, Continuing Operations [Member] \| U.S. Grocery [Member]
Restructuring and related cost, incurred cost	41
Segment, Continuing Operations [Member] \| U.S. Snacks [Member]
Restructuring and related cost, incurred cost	81
Segment, Continuing Operations [Member] \| Canada & N.A. Foodservice [Member]
Restructuring and related cost, incurred cost	110
Segment, Continuing Operations [Member] \| Kraft Foods Europe [Member]
Restructuring and related cost, incurred cost	474
Segment, Continuing Operations [Member] \| Kraft Foods Developing Markets [Member]
Restructuring and related cost, incurred cost	140
Restructuring Costs [Member]
Restructuring and related cost, incurred cost	884
Restructuring Costs [Member] \| Segment, Continuing Operations [Member] \| U.S. Beverage [Member]
Restructuring and related cost, incurred cost	59
Restructuring Costs [Member] \| Segment, Continuing Operations [Member] \| U.S. Cheese [Member]
Restructuring and related cost, incurred cost	31
Restructuring Costs [Member] \| Segment, Continuing Operations [Member] \| U.S. Convenient Meals [Member]
Restructuring and related cost, incurred cost	31
Restructuring Costs [Member] \| Segment, Continuing Operations [Member] \| U.S. Grocery [Member]
Restructuring and related cost, incurred cost	36
Restructuring Costs [Member] \| Segment, Continuing Operations [Member] \| U.S. Snacks [Member]
Restructuring and related cost, incurred cost	72
Restructuring Costs [Member] \| Segment, Continuing Operations [Member] \| Canada & N.A. Foodservice [Member]
Restructuring and related cost, incurred cost	100
Restructuring Costs [Member] \| Segment, Continuing Operations [Member] \| Kraft Foods Europe [Member]
Restructuring and related cost, incurred cost	418
Restructuring Costs [Member] \| Segment, Continuing Operations [Member] \| Kraft Foods Developing Markets [Member]
Restructuring and related cost, incurred cost	137
Implementation Costs [Member]
Restructuring and related cost, incurred cost	105
Implementation Costs [Member] \| Segment, Continuing Operations [Member] \| U.S. Beverage [Member]
Restructuring and related cost, incurred cost	8
Implementation Costs [Member] \| Segment, Continuing Operations [Member] \| U.S. Cheese [Member]
Restructuring and related cost, incurred cost	7
Implementation Costs [Member] \| Segment, Continuing Operations [Member] \| U.S. Convenient Meals [Member]
Restructuring and related cost, incurred cost	7
Implementation Costs [Member] \| Segment, Continuing Operations [Member] \| U.S. Grocery [Member]
Restructuring and related cost, incurred cost	5
Implementation Costs [Member] \| Segment, Continuing Operations [Member] \| U.S. Snacks [Member]
Restructuring and related cost, incurred cost	9
Implementation Costs [Member] \| Segment, Continuing Operations [Member] \| Canada & N.A. Foodservice [Member]
Restructuring and related cost, incurred cost	10
Implementation Costs [Member] \| Segment, Continuing Operations [Member] \| Kraft Foods Europe [Member]
Restructuring and related cost, incurred cost	56
Implementation Costs [Member] \| Segment, Continuing Operations [Member] \| Kraft Foods Developing Markets [Member]
Restructuring and related cost, incurred cost	$ 3

Debt and Borrowing Arrangements (Borrowing Arrangements Narrative) (Details)	12 Months Ended	3 Months Ended					12 Months Ended
	Dec. 31, 2010 USD ($)	Mar. 31, 2010 Cadbury [Member] USD ($)	Mar. 31, 2010 Cadbury [Member] GBP (£)	Dec. 31, 2010 Cadbury [Member] GBP (£)	Dec. 31, 2010 International subsidiaries [Member] USD ($)	Dec. 31, 2009 International subsidiaries [Member] USD ($)	Dec. 31, 2010 Revolving Credit Facility [Member] USD ($)	Dec. 31, 2010 Revolving Credit Facility [Member] Cadbury [Member] USD ($)
Revolving credit facility, maximum borrowing capacity				£ 450,000,000	$ 2,400,000,000		$ 4,500,000,000
Line of credit facility expiration date							November 2012
Line of credit facility, amount outstanding					267,000,000	191,000,000	0
Revolving credit facility debt covenant	28,600,000,000						28,600,000,000
Covenant terms increase due to acquisition								5,600,000,000
Total shareholders' equity, excluding accumulated other comprehensive earnings / (losses)							39,700,000,000
Cadbury Bridge Facility, amount borrowed			807,000,000
Repayments of bridge loan, under Cadbury Bridge Facility		$ 1,205,000,000

Debt and Borrowing Arrangements (Long-term Debt Narrative) (Details)	1 Months Ended		0 Months Ended	12 Months Ended				12 Months Ended
	Dec. 20, 2010 USD ($)	Dec. 20, 2010 GBP (£)	Aug. 11, 2010 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Dec. 31, 2008 USD ($)	Dec. 31, 2010 Cadbury [Member] USD ($)	Dec. 31, 2009 Commercial Paper [Member] USD ($)	Dec. 31, 2010 $9.5 Billion 5.364% Senior Unsecured Notes [Member] USD ($)	Dec. 31, 2010 5.375% Notes Due February 10, 2020 [Member] USD ($)	Dec. 31, 2010 6.500% Notes Due February 9, 2040 [Member] USD ($)	Dec. 31, 2010 4.125% Notes Due February 9, 2016 [Member] USD ($)	Dec. 31, 2010 2.625% Notes Due May 8, 2013 [Member] USD ($)	Dec. 31, 2010 4.875% Notes Due December 20, 2010 [Member] USD ($)	Dec. 31, 2010 4.875% Notes Due December 20, 2010 [Member] GBP (£)	Dec. 31, 2010 C$150 Million Canadian Bank Loan Agreement Expiring 2012 [Member] USD ($)	Dec. 31, 2010 C$150 Million Canadian Bank Loan Agreement Expiring 2012 [Member] CAD	Dec. 31, 2010 5.125% Notes Due October 1, 2013 [Member] USD ($)	Dec. 31, 2010 5.375% Notes Due December 11, 2014 [Member] USD ($)	Dec. 31, 2010 5.375% Notes Due December 11, 2014 [Member] GBP (£)	Dec. 31, 2010 6.25% Notes Due 2012 [Member] USD ($)	Dec. 31, 2010 7.250% Notes Due July 18, 2018 [Member] USD ($)	Dec. 31, 2010 7.250% Notes Due July 18, 2018 [Member] GBP (£)	Dec. 31, 2010 7% Debenture Due 2011 [Member] USD ($)	Dec. 31, 2010 5.625% Notes Due 2011 [Member] USD ($)
Senior unsecured notes issued									$ 9,500,000,000	$ 3,750,000,000	$ 3,000,000,000	$ 1,750,000,000	$ 1,000,000,000
Debt Instrument, Issuance Date									February 8, 2010
Debt Instrument, Maturity Date										Feb. 10, 2020	Feb. 09, 2040	Feb. 09, 2016	May 08, 2013	Dec. 20, 2010	Dec. 20, 2010	Aug. 30, 2012	Aug. 30, 2012	Oct. 01, 2013	Dec. 11, 2014	Dec. 11, 2014		Jul. 18, 2018	Jul. 18, 2018
Debt acquired in acquisition														123,000,000	77,000,000	140,000,000	150,000,000	1,000,000,000	478,000,000	300,000,000		558,000,000	350,000,000
Debt instrument, interest rate, stated percentage										5.375%	6.50%	4.125%	2.625%	4.875%	4.875%	1.573%	1.573%	5.125%	5.375%	5.375%	6.25%	7.25%	7.25%	7.00%	5.625%
Date of first semi-annual payment										August 10, 2010	August 9, 2010	August 9, 2010	November 8, 2010
Price percentage to the aggregate principal amount, purchase offer									101.00%
Date of acquisition of Cadbury notes							Feb. 02, 2010
Repurchase date of notes																									Dec. 29, 2010
Repurchase of notes																					600,000,000				900,000,000
Long-term debt repaid	119,000,000	77,000,000	500,000,000	2,134,000,000	968,000,000	795,000,000		750,000,000
Aggregate consideration paid for repurchase of notes				1,596,000,000
Convertible notes redemption date																								Sep. 03, 2009
Debt instrument par value																								200,000,000
Loss on redemption of debt																								14,000,000
Proceeds from issuance of unsecured debt									9,379,000,000
Weighted-average effective rate									5.364%
Fair value of long-term debt as part of Cadbury acquisition							2,437,000,000
Fair value of debt				31,459,000,000	20,222,000,000
Carrying value of debt				$ 28,724,000,000	$ 18,990,000,000

Debt and Borrowing Arrangements (Short-term borrowings) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Amount Outstanding	$ 750	$ 453
Commercial Paper [Member]
Amount Outstanding	483	262
Average Year-End Rate	0.50%	0.50%
Bank Loans [Member]
Amount Outstanding	$ 267	$ 191
Average Year-End Rate	6.30%	10.50%

Debt and Borrowing Arrangements (Long-term debt) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Debt and Borrowing Arrangements
Notes	$ 22,872	$ 14,395
Euro notes	3,808	4,072
Sterling notes	1,091
Other foreign currency obligations	158	5
Capital lease and other	45	65
Long-term Debt	27,974	18,537
Less current portion of long-term debt	(1,115)	(513)
Long-term debt	$ 26,859	$ 18,024

Debt and Borrowing Arrangements (Long-term debt) (Parenthetical)	12 Months Ended
	Dec. 31, 2010
Notes (USD) Member
Debt instrument, interest rate, effective percentage rate range, minimum	2.63
Debt instrument, interest rate, effective percentage rate range, maximum	7.55
Debt instrument interest rate effective percentage rate range average	5.86%
Euro notes Member
Debt instrument, interest rate, effective percentage rate range, minimum	5.75
Debt instrument, interest rate, effective percentage rate range, maximum	6.25
Debt instrument interest rate effective percentage rate range average	5.98%
Sterling Notes [Member]
Debt instrument, interest rate, effective percentage rate range, minimum	5.38
Debt instrument, interest rate, effective percentage rate range, maximum	7.25
Debt instrument interest rate effective percentage rate range average	4.94%

Debt and Borrowing Arrangements (Aggregate maturities of long-term debt) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010
Debt and Borrowing Arrangements
2011	$ 1,115
2012	3,738
2013	3,557
2014	972
2015	1,541
Thereafter	$ 17,062

Debt and Borrowing Arrangements (Interest and other expense) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Debt and Borrowing Arrangements
Interest expense, debt	$ 1,790	$ 1,260	$ 1,272
Acquisition-related financing fees	251
Other income, net	(17)	(23)	(32)
Total interest and other expense, net	$ 2,024	$ 1,237	$ 1,240

Capital Stock (Details) (USD $)	12 Months Ended
Capital Stock (Details) (USD $)	Dec. 31, 2010	Dec. 31, 2008	Dec. 31, 2009	Mar. 30, 2009	Aug. 04, 2008
Common Stock, shares authorized	5,000,000,000
Preferred Stock, shares authorized	500,000,000
Common Stock, shares issued	1,996,537,778		1,735,000,000
Preferred Stock, shares issued	0	0	0
Preferred Stock, shares outstanding	0	0	0
Common stock reserved for stock option and other stock awards	136,402,967
Class A Common Stock, shares issued, Cadbury Acquisition	262,000,000
Fair value of Class A common stock issued in Cadbury Acquisition	$ 7,457,000,000
Shares tendered, shares					46,000,000
Shares tendered, value					1,644,000,000
Share repurchase authority				5,000,000,000
Common Stock repurchased	130,900,000	25,300,000
Common stock repurchased		$ (777,000,000)
Common Class B [Member]
Common Stock, shares issued	0	0	0
Common Stock, shares outstanding	0	0	0

Capital Stock (Class A Common Stock) (Details)	12 Months Ended
Capital Stock (Class A Common Stock) (Details)	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Common Stock, Shares Issued, Beginning Balance	1,735,000,000
Repurchase of shares, Shares Repurchased	(130,900,000)		(25,300,000)
Common Stock, Shares Issued, Ending Balance	1,996,537,778
Common Class A [Member]
Common Stock, Shares Issued, Beginning Balance	1,735,000,000	1,735,000,000	1,735,000,000
Treasury Stock, Shares, Beginning Balance	(257,115,097)	(265,698,560)	(201,222,380)
Common Stock, Shares Outstanding, Beginning Balance	1,477,884,903	1,469,301,440	1,533,777,620
Repurchase of shares, Shares Repurchased			(25,272,255)
Repurchase of shares, Shares Outstanding			(25,272,255)
Shares Repurchased, tendered			(46,119,899)
Shares Outstanding, tendered			(46,119,899)
Exercise of Stock Options and Issuance of Other Stock Awards, Shares Repurchased	8,643,868	8,583,463	6,915,974
Exercise of Stock Options and Issuance of Other Stock Awards, Shares Outstanding	8,643,868	8,583,463	6,915,974
Shares issued	261,537,778
Shares issued, Shares Outstanding	261,537,778
Common Stock, Shares Issued, Ending Balance	1,996,537,778	1,735,000,000	1,735,000,000
Treasury Stock, Shares, Ending Balance	(248,471,229)	(257,115,097)	(265,698,560)
Common Stock, Shares Outstanding, Ending Balance	1,748,066,549	1,477,884,903	1,469,301,440

Capital Stock (Authorized Common Stock repurchase programs) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2008
Capital Stock
Authorized/completed period for repurchase	April 2007 - March 2009
Common Stock repurchased	130.9	25.3
Number of shares repurchased, value	$ 4,300	$ 777

Accumulated Other Comprehensive Earnings / (Losses) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Beginning Balance	$ (3,955)
Total other comprehensive earnings (losses)	46	2,073	(4,168)
Ending Balance	(3,890)	(3,955)
Accumulated Other Comprehensive Earnings / (Losses) [Member]
Beginning Balance	(3,955)	(5,994)	(1,835)
Currency translation adjustments	182	1,777	(2,234)
Amortization of experience losses and prior service costs	186	126	98
Settlement losses	96	76	48
Net actuarial loss arising during period	(377)	(64)	(2,021)
Change in fair value of cash flow hedges	(22)	124	(50)
Total other comprehensive earnings (losses)	65	2,039	(4,159)
Ending Balance	(3,890)	(3,955)	(5,994)
Pension and Other Benefits [Member]
Beginning Balance	(3,550)	(3,572)	(1,811)
Currency translation adjustments	(13)	(116)	114
Amortization of experience losses and prior service costs	186	126	98
Settlement losses	96	76	48
Net actuarial loss arising during period	(377)	(64)	(2,021)
Change in fair value of cash flow hedges
Total other comprehensive earnings (losses)
Ending Balance	(3,658)	(3,550)	(3,572)
Derivatives Accounted for as Hedges [Member]
Beginning Balance	101	(23)	27
Currency translation adjustments
Amortization of experience losses and prior service costs
Settlement losses
Net actuarial loss arising during period
Change in fair value of cash flow hedges	(22)	124	(50)
Total other comprehensive earnings (losses)
Ending Balance	79	101	(23)
Currency Translation Adjustments [Member]
Beginning Balance	(506)	(2,399)	(51)
Currency translation adjustments	195	1,893	(2,348)
Amortization of experience losses and prior service costs
Settlement losses
Net actuarial loss arising during period
Change in fair value of cash flow hedges
Total other comprehensive earnings (losses)
Ending Balance	$ (311)	$ (506)	$ (2,399)

- Definition

The amount of net (gain) loss recognized in net periodic benefit cost as a result of an irrevocable action that relieves the employer (or the plan) of primary responsibility for a benefit obligation and eliminates significant risks related to the obligation and the assets used to effect the settlement. Examples of transactions that constitute a settlement include (a) making lump-sum cash payments to plan participants in exchange for their rights to receive specified benefits and (b) purchasing nonparticipating annuity contracts to cover vested benefits.

+ References+ Details

- Definition

Net of tax effect change in accumulated gains and losses from derivative instruments designated and qualifying as the effective portion of cash flow hedges after taxes. A cash flow hedge is a hedge of the exposure to variability in the cash flows of a recognized asset or liability or a forecasted transaction that is attributable to a particular risk. The change includes an entity's share of an equity investee's increase (decrease) in deferred hedging gains or losses.

+ References+ Details

Stock Plans (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended						12 Months Ended
	Feb. 28, 2010	Jan. 31, 2010	Feb. 28, 2009	Jan. 31, 2009	Feb. 29, 2008	Jan. 31, 2008	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Restricted or deferred shares available for grant under the 2005 Plan							23,599,273
Exercisable options maximum term							10
Compensation expense related to stock options							$ 46	$ 31	$ 18
Deferred tax benefit related to compensation expense							15	11	6
Off cycle stock options issued							3,100,000
Weighted average exercise price at grant date							$ 29.73
Unamortized compensation expense related to our stock options							60
Stock options granted to eligible employees	15,000,000		16,300,000		13,500,000		18,077,470
Exercise price for stock options granted to eligible employees	$ 29.15		$ 23.64		$ 29.49				$ 30.78
Off-cycle stock options granted									100,000
Intrinsic value of stock options exercised							92	72	76
Cash received from options exercised							134	79	80
Actual tax benefit realized for the tax deductions from the option exercises							60	52	44
Unamortized compensation expense recognition period							2
Employee Service Share-based Compensation, Unrecognized Compensation Costs on Nonvested Awards, Weighted Average Period of Recognition							2
Shares of stock granted in connection with our long-term incentive plan		1,700,000		1,500,000		1,400,000	600,000		5,000,000
Market value per share on the grant date		$ 27.33		$ 27.00		$ 32.26	$ 29.15
Number of restricted and deferred shares of stock issued to employees under long-term incentive plan	2,500,000						5,800,000
Additional shares issued of restricted and deferred stock							1,000,000
Weighted-average market value per restricted or deferred share							$ 29.57	$ 25.55	$ 30.38
Off-cycle shares of restricted and deferred stock issued								200,000	200,000
Restricted and deferred stock issued as part of annual equity program			4,100,000		3,400,000
Weighted-average grant date fair value per restricted or deferred share							$ 3.69	$ 2.68	$ 4.49
Number of vested restricted and deferred shares of stock issued to employees under long-term incentive plan							(4,063,589)
Market value per share on grant date	$ 29.15		$ 23.64		$ 29.49
Granted shares fair value, per share							$ 28.82
Restricted And Deferred Stock [Member]
Deferred tax benefit related to compensation expense							39	44	53
Unamortized compensation expense related to our stock options							150
Compensation expense related to restricted and deferred stock							128	133	160
Weighted-average grant date fair value of restricted and deferred stock granted							167	143	151
Weighted-average grant date fair value per restricted or deferred share									$ 30.38
Vesting date fair value of restricted and deferred stock							$ 117	$ 153	$ 196
Granted shares fair value, per share							$ 28.82	$ 24.68
2005 Plan [Member]
Shares authorized to be issued under stock option plan							168,000,000
Shares available to be granted							73,897,346
2006 Directors Plan [Member]
Shares available to be granted							326,766
Non-Employee Directors [Member]
Shares available to be granted							500,000

Stock Plans (Weighted Average Black Scholes Fair Value Assumptions) (Details) (USD $)	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Stock Plans
Risk-Free Interest Rate	2.82%	2.46%	3.08%
Expected Life (in years)	6	6	6
Expected Volatility	19.86%	21.36%	21.04%
Expected Dividend Yield	4.14%	4.90%	3.66%
Fair Value at Grant Date	$ 3.69	$ 2.68	$ 4.49

Stock Plans (Stock Option Activity) (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended			12 Months Ended
	Feb. 28, 2010	Feb. 28, 2009	Feb. 29, 2008	Dec. 31, 2010
Stock Plans
Shares Subject to Option beginning balance				46,727,697
Shares Subject to Option options granted	15,000,000	16,300,000	13,500,000	18,077,470
Shares Subject to Option options exercised				(7,611,479)
Shares Subject to Option options cancelled				(2,957,527)
Shares Subject to Option ending balance				54,236,161
Shares Subject to Option exercisable				23,564,404
Weighted Average Exercise Price beginning balance				$ 25.56
Weighted Average Exercise Price options granted				$ 29.24
Weighted Average Exercise Price options exercised				$ 18.25
Weighted Average Exercise Price options cancelled				$ 27.56
Weighted Average Exercise Price ending balance				$ 27.71
Weighted Average Exercise Price exercisable				$ 27.89
Average Remaining Contractual Term ending balance				6.5
Average Remaining Contractual Term exercisable				3.9
Aggregate Intrinsic Value ending balance				$ 206
Aggregate Intrinsic Value exercisable				$ 85

Stock Plans (Restricted And Deferred Stock Activity) (Details) (USD $)	12 Months Ended
	Dec. 31, 2010
Stock Plans
Number of Shares Beginning balance	13,854,953
Number of Shares Granted	5,782,531
Number of Shares Vested	(4,063,589)
Number of Shares Forfeited	(1,352,401)
Number of Shares Ending balance	14,221,494
Weighted Average Grant Date Fair Value Per Share Beginning balance	$ 29.30
Weighted Average Grant Date Fair Value Per Share Granted	$ 28.82
Weighted Average Grant Date Fair Value Per Share Vested	$ 34.17
Weighted Average Grant Date Fair Value Per Share Forfeited	$ 27.91
Weighted Average Grant Date Fair Value Per Share Ending balance	$ 27.84

Benefit Plans (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Decreases in benefit obligation	$ 23	$ 168
Pension plans resulted in net pension liability	2,345	1,703
Plan assets related to certain insurance contracts	155	172
U.S. Pension Plans [Member]
Decreases in benefit obligation		168
Accumulated benefit obligation	6,208	5,673
Settlement losses	118	107	74
Curtailment charge	(5)
Contributions	85
Estimated future employer contributions	540
Non-U.S. Pension Plans [Member]
Accumulated benefit obligation	8,549	4,115
Curtailment charge	11	8	16
Allocation on equity securities	41.00%
Allocation on debt securities	46.00%
Allocation on real estate	13.00%
Contributions	303
Contributions	23
Estimated future employer contributions	400
U.S. and International Investment Grade Debt Securities [Member]
Allocation on debt securities	90.00%
Non-U.S. Plans [Member]
Defined pension assets in hedge funds and priavte equity investments	374
Defined pension assets in cash accounts with various investment managers	150
Pension Plans [Member]
Estimated from experience differences	(318)
Estimated prior service cost	7
Allocation on equity securities	70.00%
Allocation on debt securities	30.00%
Expense for defined contribution plans	104	94	93
Multiemployer pension plans	30	29	27
Pension Plans [Member] \| U.S. Pension Plans [Member]
Pension plans resulted in net pension liability	(903)	(699)
Contributions	85	427
Increase in compensation cost	3.98%	4.00%	4.00%
Pension Plans [Member] \| Non-U.S. Pension Plans [Member]
Pension plans resulted in net pension liability	(1,442)	(1,004)
Contributions	326	209
Increase in compensation cost	3.59%	3.09%	3.13%
Postretirement Benefit Plans [Member]
Pension plans resulted in net pension liability	2,345	1,703
Multiemployer pension plans	35	35	33
Current portion of our accrued postretirement health care costs	217	216
Postemployment Benefit Plans [Member]
Weighted-average discount rate	6.30%	6.50%
Ultimate annual turnover rate	0.50%	0.50%
Increase in compensation cost	4.00%	4.00%
Severance charges	25	125
Other cost savings initiatives	280	430
Forecast 2011 [Member] \| Postretirement Benefit Plans [Member]
Estimated from experience differences	64
Estimated prior service cost	$ 31

Benefit Plans (Benefit Obligation of Pension Plans) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Fair value of plan assets, ending balance	$ 13,098	$ 8,721
Net pension liability, ending balance	2,345	1,703
U.S. Pension Plans [Member]
Contributions	85
U.S. Pension Plans [Member] \| Pension Plans [Member]
Benefit obligation at January 1	6,195	6,133
Service cost	145	152	149
Interest cost	368	369	371
Benefits paid	(322)	(310)
Settlements paid	(244)	(187)
Curtailment gain	(23)	(168)
Actuarial losses	368	203
Acquisitions	206
Other	10	3
Benefit obligation at December 31	6,703	6,195	6,133
Fair value of plan assets, beginning balance	5,496	4,386
Actual return on plan assets	671	1,180
Contributions	85	427
Settlements paid	(244)	(187)
Acquisition	114
Fair value of plan assets, ending balance	5,800	5,496	4,386
Net pension liability, ending balance	(903)	(699)
Non-U.S. Pension Plans [Member]
Contributions	303
Non-U.S. Pension Plans [Member] \| Pension Plans [Member]
Benefit obligation at January 1	4,401	3,211
Service cost	162	67	91
Interest cost	419	215	222
Benefits paid	(462)	(225)
Settlements paid	(49)	(14)
Curtailment gain	(3)
Actuarial losses	265	619
Acquisitions	4,375
Currency	(164)	510
Other	(49)	18
Benefit obligation at December 31	8,895	4,401	3,211
Fair value of plan assets, beginning balance	3,397	2,618
Actual return on plan assets	624	400
Contributions	326	209
Settlements paid	(49)	(14)
Acquisition	3,702
Currency Impact	(84)	414
Other	(1)	(5)
Fair value of plan assets, ending balance	7,453	3,397	2,618
Net pension liability, ending balance	$ (1,442)	$ (1,004)

Benefit Plans (Pension Plans Resulted In Net Pension Liability) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Prepaid pension assets	$ 86	$ 115
Other accrued liabilities	(49)	(53)
Accrued pension costs	(2,382)	(1,765)
Total	$ (2,345)	$ (1,703)

Benefit Plans (Projected Benefit Obligations, Accumulated Benefit Obligations and The Fair Value of Plan Assets) (Details) (Pension Plans [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
U.S. Plans [Member]
Projected benefit obligation	$ 5,097	$ 4,666
Accumulated benefit obligation	4,627	4,166
Fair value of plan assets	4,156	3,932
Non-U.S. Pension Plans [Member]
Projected benefit obligation	7,934	3,703
Accumulated benefit obligation	7,668	3,478
Fair value of plan assets	$ 6,471	$ 2,629

Benefit Plans (Weighted-average Assumptions to Determine Benefit Obligations) (Details) (Pension Plans [Member])	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
U.S. Plans [Member]
Discount rate	5.53%	5.93%
Expected rate of return on plan assets	7.95%	8.00%
Rate of compensation increase	4.00%	4.00%
Non-U.S. Pension Plans [Member]
Discount rate	5.11%	5.21%
Expected rate of return on plan assets	6.77%	7.26%
Rate of compensation increase	3.68%	3.08%

Benefit Plans (Components of Net Pension Cost) (Details) (Pension Plans [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
U.S. Pension Plans [Member]
Service cost	$ 145	$ 152	$ 149
Interest cost	368	369	371
Expected return on plan assets	(490)	(486)	(526)
Net loss from experience differences	170	160	85
Prior service cost	6	6	7
Other expenses	123	112	74
Net periodic benefit cost	322	313	160
Non-U.S. Pension Plans [Member]
Service cost	162	67	91
Interest cost	419	215	222
Expected return on plan assets	(467)	(242)	(285)
Net loss from experience differences	77	23	31
Prior service cost	7	6	7
Other expenses	11	8	16
Net periodic benefit cost	$ 209	$ 77	$ 82

Benefit Plans (Weighted-Average Assumptions To Determine Our Net Pension Cost) (Details) (Pension Plans [Member])	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
U.S. Pension Plans [Member]
Discount rate	5.85%	6.10%	6.30%
Expected rate of return on plan assets	7.99%	8.00%	8.00%
Rate of compensation increase	3.98%	4.00%	4.00%
Non-U.S. Pension Plans [Member]
Discount rate	5.21%	6.41%	5.44%
Expected rate of return on plan assets	6.68%	7.25%	7.43%
Rate of compensation increase	3.59%	3.09%	3.13%

Benefit Plans (Fair Value of Pension Plan Assets) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Defined Benefit Plan, Fair Value of Plan Assets	$ 13,098	$ 8,721
Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	3,498	3,606
Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	8,223	5,110
Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	1,377	5
US Equity Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	280	289
US Equity Securities [Member] \| Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	276	289
US Equity Securities [Member] \| Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	4
Non US Equity Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	1,915	1,991
Non US Equity Securities [Member] \| Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	1,912	1,988
Non US Equity Securities [Member] \| Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	3	2
Non US Equity Securities [Member] \| Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Fair Value of Plan Assets		1
Pooled Funds Equity Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	4,971	3,014
Pooled Funds Equity Securities [Member] \| Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	281
Pooled Funds Equity Securities [Member] \| Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	4,690	3,014
Total Equity Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	7,166	5,294
Total Equity Securities [Member] \| Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	2,469	2,277
Total Equity Securities [Member] \| Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	4,697	3,016
Total Equity Securities [Member] \| Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Fair Value of Plan Assets		1
Government Bonds [Member]
Defined Benefit Plan, Fair Value of Plan Assets	1,405	1,037
Government Bonds [Member] \| Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	731	931
Government Bonds [Member] \| Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	674	106
Pooled Funds Fixed Income Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	1,893	945
Pooled Funds Fixed Income Securities [Member] \| Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	52
Pooled Funds Fixed Income Securities [Member] \| Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	1,841	945
Corporate Bonds and Other Fixed Income Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	1,749	988
Corporate Bonds and Other Fixed Income Securities [Member] \| Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	5	54
Corporate Bonds and Other Fixed Income Securities [Member] \| Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	993	932
Corporate Bonds and Other Fixed Income Securities [Member] \| Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	751	2
Total Fixed Income Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	5,047	2,970
Total Fixed Income Securities [Member] \| Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	788	985
Total Fixed Income Securities [Member] \| Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	3,508	1,983
Total Fixed Income Securities [Member] \| Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	751	2
Real Estate [Member]
Defined Benefit Plan, Fair Value of Plan Assets	343	131
Real Estate [Member] \| Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	86	22
Real Estate [Member] \| Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	7	109
Real Estate [Member] \| Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	250
Other [Member]
Defined Benefit Plan, Fair Value of Plan Assets	542	326
Other [Member] \| Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	155	322
Other [Member] \| Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	11	2
Other [Member] \| Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	$ 376	$ 2

Benefit Plans (Schedule of Roll Forward of Level 3) (Details) (USD $) In Millions, unless otherwise specified											12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2010 Non US Equity Securities [Member]	Dec. 31, 2009 Non US Equity Securities [Member]	Dec. 31, 2010 Corporate Bonds and Other Fixed Income Securities [Member]	Dec. 31, 2009 Corporate Bonds and Other Fixed Income Securities [Member]	Dec. 31, 2010 Real Estate [Member]	Dec. 31, 2009 Real Estate [Member]	Dec. 31, 2010 Other [Member]	Dec. 31, 2009 Other [Member]	Dec. 31, 2010 Fair Value, Inputs, Level 3 [Member]	Dec. 31, 2010 Fair Value, Inputs, Level 3 [Member] Non US Equity Securities [Member]	Dec. 31, 2010 Fair Value, Inputs, Level 3 [Member] Corporate Bonds and Other Fixed Income Securities [Member]	Dec. 31, 2010 Fair Value, Inputs, Level 3 [Member] Real Estate [Member]	Dec. 31, 2010 Fair Value, Inputs, Level 3 [Member] Other [Member]
Fair value of plan assets, beginning balance	$ 13,098	$ 8,721	$ 1,915	$ 1,991	$ 1,749	$ 988	$ 343	$ 131	$ 542	$ 326	$ 5	$ 1	$ 2		$ 2
Net Realized and Unrealized Gains/(Losses)											86		23	34	29
Net Purchases, Issuances and Settlements											(34)	(1)	(44)	(1)	12
Net Transfers Into/(Out of) Level 3											1,350		789	220	341
Currency Impact											(30)		(19)	(3)	(8)
Fair value of plan assets, ending balance	$ 13,098	$ 8,721	$ 1,915	$ 1,991	$ 1,749	$ 988	$ 343	$ 131	$ 542	$ 326	$ 1,377		$ 751	$ 250	$ 376

Benefit Plans (Percentage of Fair Value of Pension Plan Assets) (Details) (Pension Plans [Member])	Dec. 31, 2010	Dec. 31, 2009
U.S. Pension Plans [Member]
Equity securities	69.00%	68.00%
Debt securities	31.00%	28.00%
Other		4.00%
Total	100.00%	100.00%
Non-U.S. Pension Plans [Member]
Equity securities	41.00%	50.00%
Debt securities	47.00%	43.00%
Real estate	5.00%	4.00%
Other	7.00%	3.00%
Total	100.00%	100.00%

Benefit Plans (Future Benefit Payments for Pension Plans) (Details) (Pension Plans [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2010
U.S. Pension Plans [Member]
2011	$ 484
2012	454
2013	459
2014	450
2015	470
2016-2020	2,722
Non-U.S. Pension Plans [Member]
2011	449
2012	461
2013	471
2014	479
2015	499
2016-2020	$ 2,726

Benefit Plans (Benefit Obligation of Postretirement Benefit Plans) (Details) (Postretirement Benefit Plans [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Postretirement Benefit Plans [Member]
Benefit obligation at January 1	$ 3,032	$ 2,899
Service cost	39	35	44
Interest cost	172	174	183
Benefits paid	(213)	(210)
Plan amendments	(7)
Currency	10	25
Assumption changes	147	157
Actuarial (gains) / losses	42	(48)
Acquisitions	41
Benefit obligation at December 31	$ 3,263	$ 3,032	$ 2,899

- Definition

1) For defined benefit pension plans, the benefit obligation is the projected benefit obligation, which is the actuarial present value as of a date of all benefits attributed by the pension benefit formula to employee service rendered prior to that date. The projected benefit obligation is measured using assumptions as to future compensation levels if the pension benefit formula is based on those future compensation levels (pay-related, final-pay, final-average-pay, or career-average-pay plans). For plans with flat-benefit or nonpay-related pension benefit formulas, the accumulated benefit obligation and the projected benefit obligation are the same. 2) For other postretirement defined benefit plans, the benefit obligation is the accumulated postretirement benefit obligation, which is the actuarial present value of benefits attributed to employee service rendered to a particular date. Prior to an employee's full eligibility date, the accumulated postretirement benefit obligation as of a particular date for an employee is the portion of the expected postretirement benefit obligation attributed to that employee's service rendered to that date; on and after the full eligibility date, the accumulated and expected postretirement benefit obligations for an employee are the same.

+ References+ Details

Benefit Plans (Weighted-Average Assumptions to Determine Our Postretirement Benefit Obligations) (Details) (Postretirement Benefit Plans [Member])	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
U.S. Pension Plans [Member]
Discount rate	5.30%	5.70%
Health care cost trend rate assumed for next year	7.50%	7.00%
Ultimate trend rate	5.00%	5.00%
Year that the rate reaches the ultimate trend rate	2016	2014
Non-U.S. Pension Plans [Member]
Discount rate	5.02%	5.25%
Health care cost trend rate assumed for next year	8.83%	9.00%
Ultimate trend rate	6.00%	6.00%
Year that the rate reaches the ultimate trend rate	2017	2016

Benefit Plans (One-Percentage-Point Change in Assumed Health Care Cost Trend Rates) (Details) (Postretirement Benefit Plans [Member])	12 Months Ended
	Dec. 31, 2010
Postretirement Benefit Plans [Member]
Effect on total of service and interest cost, Increase	12.70%
Effect on postretirement benefit obligation, Increase	10.50%
Effect on total of service and interest cost, Decrease	(10.40%)
Defined Benefit Plan Effect Of One Percentage Point Decrease On Accumulated Postretirement Benefit Obligation Percent	(8.80%)

Benefit Plans (Components of Net Postretirement Health Care Costs) (Details) (Postretirement Benefit Plans [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Postretirement Benefit Plans [Member]
Service cost	$ 39	$ 35	$ 44
Interest cost	172	174	183
Net loss from experience differences	55	44	55
Prior service cost	(32)	(32)	(28)
Net periodic benefit cost	$ 234	$ 221	$ 254

Benefit Plans (Future Benefit Payments for Postretirement Health Care Plans) (Details) (Postretirement Benefit Plans [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2010
U.S. Pension Plans [Member]
2011	$ 207
2012	207
2013	208
2014	210
2015	210
2016-2020	1,037
Non-U.S. Pension Plans [Member]
2011	12
2012	12
2013	13
2014	13
2015	14
2016-2020	$ 76

Benefit Plans (Benefit Obligations of the Plans and Net Amount Accrued) (Details) (Postemployment Benefit Plans [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Postemployment Benefit Plans [Member]
Benefit obligation at January 1	$ 116	$ 115
Service cost	9	8	6
Interest cost	10	8	7
Benefits paid	(24)	(35)
Assumption changes	(8)	26
Actuarial (gains) / losses	(12)	(7)
Acquisitions	49
Currency		1
Benefit obligation at December 31	$ 140	$ 116	$ 115

- Definition

+ References+ Details

Benefit Plans (Components of Net Postemployment Costs) (Details) (Postemployment Benefit Plans [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Postemployment Benefit Plans [Member]
Service cost	$ 9	$ 8	$ 6
Interest cost	10	8	7
Net loss from experience differences	(2)	2	(2)
Net periodic benefit cost	$ 17	$ 18	$ 11

Financial Instruments (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net		$ (25)	$ 111
Unrealized losses foreign currency cash flow hedges	1
Gains on currency translation adjustment		240
Commodity Contracts [Member]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net		(15)	138
Derivative instruments maturity period		17M
Interest Rate Contracts [Member]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net		1
Derivative instruments maturity period		32Y4M
Foreign Exchange Contracts [Member]
Net losses on foreign exchange contracts not designated as hedging instruments				50
Foreign Exchange Contracts [Member] \| Intercompany Loan [Member]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net		(10)
Foreign Currency Transactions [Member] \| Intercompany Loan [Member]
Derivative instruments maturity period		13M
Fair Value Hedging [Member] \| Interest Rate Contracts [Member]
Gain / (Loss) Recognized in Income on Derivatives		1	7
Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	52	(25)	111	26
Cash Flow Hedging [Member] \| Foreign Exchange Contracts [Member]
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	$ 16

Financial Instruments (Fair value of derivative instruments) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Asset Derivatives designated as hedging instruments	$ 156	$ 186
Asset Derivatives not designated as hedging instruments	282	73
Liability Derivatives designated as hedging instruments	133	172
Liability Derivatives not designated as hedging instruments	183	62
Total Fair Value of derivative assets	438	259
Total Fair Value of derivative liabilities	316	234
Foreign Exchange Contracts [Member]
Asset Derivatives designated as hedging instruments	24	8
Asset Derivatives not designated as hedging instruments	21	2
Liability Derivatives designated as hedging instruments	115	158
Liability Derivatives not designated as hedging instruments	48
Commodity Contracts [Member]
Asset Derivatives designated as hedging instruments	74	25
Asset Derivatives not designated as hedging instruments	202	71
Liability Derivatives designated as hedging instruments	5	14
Liability Derivatives not designated as hedging instruments	114	62
Interest Rate Contracts [Member]
Asset Derivatives designated as hedging instruments	58	153
Asset Derivatives not designated as hedging instruments	59
Liability Derivatives designated as hedging instruments	13
Liability Derivatives not designated as hedging instruments	$ 21

Financial Instruments (Effect of cash flow hedges on accumulated other comprehensive earnings) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Transfer of realized (gains) / losses in fair value to earnings		$ (25)	$ 111
Unrealized gain / (loss) in fair value		3	13
Cash Flow Hedging [Member]
Accumulated gain / (loss) at beginning of period	79	101	(23)	27
Transfer of realized (gains) / losses in fair value to earnings	52	(25)	111	26
Unrealized gain / (loss) in fair value		3	13	(76)
Accumulated gain / (loss) at December 31		$ 79	$ 101	$ (23)

Financial Instruments (Effects of cash flow hedges) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Gain / (Loss) Recognized in OCI		$ 3	$ 13
(Gain) / Loss Reclassified from AOCI into Earnings		(25)	111
Gain / (Loss) on Ineffectiveness Recognized in Earnings		(6)	12
Gain/(Loss) Amount Excluded from Effectiveness Testing Recognized in Earnings		3	1
Foreign Exchange Contracts [Member] \| Intercompany Loan [Member]
Gain / (Loss) Recognized in OCI		2	(12)
(Gain) / Loss Reclassified from AOCI into Earnings		(10)
Foreign Exchange Contracts [Member] \| Forecasted Transactions [Member]
Gain / (Loss) Recognized in OCI		17	(40)
(Gain) / Loss Reclassified from AOCI into Earnings		(1)	(27)
Commodity Contracts [Member]
Gain / (Loss) Recognized in OCI		74	(27)
(Gain) / Loss Reclassified from AOCI into Earnings		(15)	138
Gain / (Loss) on Ineffectiveness Recognized in Earnings		(6)	12
Gain/(Loss) Amount Excluded from Effectiveness Testing Recognized in Earnings		3	1
Interest Rate Contracts [Member]
Gain / (Loss) Recognized in OCI		(90)	92
(Gain) / Loss Reclassified from AOCI into Earnings		1
Cash Flow Hedging [Member]
Gain / (Loss) Recognized in OCI		3	13	(76)
(Gain) / Loss Reclassified from AOCI into Earnings	52	(25)	111	26
Cash Flow Hedging [Member] \| Foreign Exchange Contracts [Member]
(Gain) / Loss Reclassified from AOCI into Earnings	$ 16

Financial Instruments (Fair value hedges) (Details) (Interest Rate Contracts [Member], Fair Value Hedging [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Interest Rate Contracts [Member] \| Fair Value Hedging [Member]
Gain / (Loss) Recognized in Income on Derivatives	$ 1	$ 7
Gain / (Loss) Recognized in Income on Borrowings	$ (1)	$ (7)

Financial Instruments (Economic hedges) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Economic Hedging [Member]
Gain / (Loss) Recognized in Income on Derivatives	$ (265)	$ 17
Fair Value Hedging [Member] \| Interest Rate Contracts [Member]
Gain / (Loss) Recognized in Income on Derivatives	1	7
Interest Expense [Member] \| Economic Hedging [Member] \| Forecasted Transactions [Member]
Gain / (Loss) Recognized in Income on Derivatives	(17)
Interest Expense [Member] \| Economic Hedging [Member] \| Forecasted Interest Payments [Member] \| Intercompany Loan [Member]
Gain / (Loss) Recognized in Income on Derivatives	28	(10)
Interest Expense [Member] \| Economic Hedging [Member] \| Cadbury acquisition-related [Member]
Gain / (Loss) Recognized in Income on Derivatives	(395)
Interest Expense [Member] \| Economic Hedging [Member] \| Interest Rate Contracts [Member]
Gain / (Loss) Recognized in Income on Derivatives	4
Cost of Sales [Member] \| Economic Hedging [Member] \| Forecasted Transactions [Member]
Gain / (Loss) Recognized in Income on Derivatives	(11)	(10)
Cost of Sales [Member] \| Economic Hedging [Member] \| Commodity Contracts [Member]
Gain / (Loss) Recognized in Income on Derivatives	$ 126	$ 37

Commitments and Contingencies (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Commitments and Contingencies
Legal charges	$ 50	$ 72
Additional legal charges		50
Maximum potential payment	26
Rental expenses	$ 514	$ 505	$ 505

Commitments and Contingencies (Minimum Rental Commitments) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010
Commitments and Contingencies
2011	$ 470
2012	324
2013	225
2014	169
2015	130
Thereafter	$ 244

Income Taxes (Narrative) (Details) (USD $)	12 Months Ended
Income Taxes (Narrative) (Details) (USD $)	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007
Earnings and gain from discontinued operations	$ 1,200,000,000		$ 104,000,000
Unrecognized tax benefits	1,281,000,000	829,000,000	807,000,000	850,000,000
Unrecognized tax benefits that would impact effective tax rate	1,062,000,000	661,000,000
Decrease in unrecognized tax benefits	50,000,000
(Decreases) / increases from acquisition adjustments	357,000,000		(22,000,000)
Unrecognized tax benefits, income tax penalties and interest accrued	246,000,000	210,000,000
Net benefit for interest and penalties	3,000,000
Interest and penalties paid	11,000,000
Accumulated earnings of foreign subsidiaries	8,400,000,000
Settlements with various foreign and state tax authorities	123,000,000	225,000,000
Write-off of deferred tax assets	137,000,000
Tax benefit from discrete tax events	222,000,000
Corrections of state, federal and foreign tax liabilities	50,000,000
Cadbury Acquisition [Member]
Unrecognized tax benefits, income tax penalties and interest accrued	$ 47,000,000

Income Taxes (Provision For Income Taxes) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Income Taxes
United States	$ 1,071	$ 2,047	$ 1,136
Outside United States	2,571	1,899	1,200
Earnings from continuing operations before income taxes	3,642	3,946	2,336
United States federal current	91	335	321
United States federal deferred	322	108	(12)
Federal income tax	413	443	309
State and local current	47	82	52
State and local deferred	61	(39)	(21)
State and local taxes	108	43	31
Total United States	521	486	340
Outside United States current	763	681	490
Outside United States deferred	(137)	(31)	(172)
Total outside United States	626	650	318
Total provision for income taxes	$ 1,147	$ 1,136	$ 658

Income Taxes (Changes In Unrecognized Tax Benefits) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Income Taxes
January 1	$ 829	$ 807	$ 850
Increases from positions taken during prior periods	49	90	17
Decreases from positions taken during prior periods	(146)	(205)	(90)
Increases from positions taken during the current period	229	146	98
(Decreases) / increases from acquisition adjustments	357		(22)
Decreases relating to settlements with taxing authorities	(19)	(26)	(8)
Reductions resulting from the lapse of the applicable statute of limitations	(10)	(14)	(13)
Currency / other	(8)	31	(25)
December 31	$ 1,281	$ 829	$ 807

Income Taxes (Effective Income Tax Rate) (Details)	12 Months Ended
Income Taxes (Effective Income Tax Rate) (Details)	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Income Taxes
U.S. federal statutory rate	35.00%	35.00%	35.00%
State and local income taxes, net of federal tax benefit excluding IRS audit impacts	1.90%	1.90%	2.70%
Benefit principally related to reversal of federal and state reserves on IRS audit settlements	(2.30%)	(3.10%)
Reversal of other tax accruals no longer required	(0.50%)	(0.40%)	(1.80%)
US Health Care Legislation	3.80%
Foreign rate differences, net of repatriation impacts	(6.00%)	(2.20%)	(5.70%)
Other	(0.40%)	(2.40%)	(2.00%)
Effective tax rate	31.50%	28.80%	28.20%

Income Taxes (Deferred Tax Assets And Liabilities Temporary Differences) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Income Taxes
Accrued postretirement and postemployment benefits	$ 1,103	$ 1,472
Accrued pension costs	458	456
Other	2,064	1,997
Total deferred income tax assets	3,625	3,925
Valuation allowance	(400)	(97)
Net deferred income tax assets	3,225	3,828
Trade names	(7,606)	(4,431)
Property, plant and equipment	(1,845)	(2,029)
Other	(611)	(1,055)
Total deferred income tax liabilities	(10,062)	(7,515)
Net deferred income tax liabilities	$ (6,837)	$ (3,687)

Earnings Per Share (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Earnings Per Share
Earnings from continuing operations	$ 2,495	$ 2,810	$ 1,678
Earnings and gain from discontinued operations, net of income taxes	1,644	218	1,215
Net earnings	4,139	3,028	2,893
Noncontrolling interest	25	7	9
Net earnings attributable to Kraft Foods	$ 4,114	$ 3,021	$ 2,884
Weighted-average shares for basic EPS	1,715	1,478	1,505
Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares	5	8	10
Weighted-average shares for diluted EPS	1,720	1,486	1,515
Basic earnings per share attributable to Kraft Foods:
Continuing operations	$ 1.44	$ 1.9	$ 1.11
Discontinued operations	$ 0.96	$ 0.14	$ 0.81
Net earnings attributable to Kraft Foods	$ 2.4	$ 2.04	$ 1.92
Diluted earnings per share attributable to Kraft Foods:
Continuing operations	$ 1.44	$ 1.89	$ 1.1
Discontinued operations	$ 0.95	$ 0.14	$ 0.8
Net earnings attributable to Kraft Foods	$ 2.39	$ 2.03	$ 1.9
Antidilutive Kraft Foods stock options excluded from the calculation of diluted EPS	28.5	23.0	11.3

Segment Reporting (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Largest customer, percentage of net revenues	14.00%	16.00%	16.00%
Unrealized gains/(losses) on hedging instruments	$ 67	$ 203	$ (205)
Acquisition costs related to Cadbury's corporate charges	218	40
Charges for legal matters	50	72
Increase in general corporate expenses			$ 101

Segment Reporting (Operating income by segment) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Unrealized gains/(losses) on hedging instruments	$ 67	$ 203	$ (205)
Certain U.S. pension plan costs	(179)	(165)
General corporate expenses	(724)	(293)	(304)
Amortization of intangibles	(211)	(26)	(23)
Operating income	5,666	5,183	3,576
Interest and other expense, net	(2,024)	(1,237)	(1,240)
Earnings from continuing operations before income taxes	3,642	3,946	2,336
U.S. Beverages [Member]
Operating income	564	511	381
U.S. Cheese [Member]
Operating income	598	667	563
U.S. Convenient Meals [Member]
Operating income	268	234	125
U.S. Grocery [Member]
Operating income	1,164	1,146	1,009
U.S. Snacks [Member]
Operating income	845	723	638
Canada & N.A. Foodservice [Member]
Operating income	582	462	395
Kraft Foods Europe [Member]
Operating income	1,115	785	182
Kraft Foods Developing Markets [Member]
Operating income	$ 1,577	$ 936	$ 815

Segment Reporting (Depreciation Expense) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Total depreciation expense continuing operations	$ 1,213	$ 888	$ 921
Depreciation expense discontinued operations	16	17	42
Total depreciation expense	1,229	905	963
U.S. Beverages [Member]
Total depreciation expense continuing operations	73	69	68
U.S. Cheese [Member]
Total depreciation expense continuing operations	67	66	66
U.S. Convenient Meals [Member]
Total depreciation expense continuing operations	61	67	62
U.S. Grocery [Member]
Total depreciation expense continuing operations	88	82	78
U.S. Snacks [Member]
Total depreciation expense continuing operations	139	127	129
Canada & N.A. Foodservice [Member]
Total depreciation expense continuing operations	110	83	93
Kraft Foods Europe [Member]
Total depreciation expense continuing operations	355	237	265
Kraft Foods Developing Markets [Member]
Total depreciation expense continuing operations	$ 320	$ 157	$ 160

Segment Reporting (Net revenues by consumer sector) (Details) (USD $)
In Millions, unless otherwise specified

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

Sector Reporting, Sector Revenue

$ 49,207

$ 38,754

$ 40,492

Biscuits [Member]

Sector Reporting, Sector Revenue

10,783

^[1]

10,404

^[1]

10,957

^[1]

Confectionery [Member]

Sector Reporting, Sector Revenue

13,688

^[1]

4,638

^[1]

4,953

^[1]

Beverages [Member]

Sector Reporting, Sector Revenue

8,800

8,029

8,215

Cheese [Member]

Sector Reporting, Sector Revenue

6,976

6,796

7,462

Grocery [Member]

Sector Reporting, Sector Revenue

4,001

4,071

4,172

Convenient Meals [Member]

Sector Reporting, Sector Revenue

4,959

4,816

4,733

Kraft Foods North America [Member]

Sector Reporting, Sector Revenue

23,966

22,030

22,516

Kraft Foods North America [Member] | Biscuits [Member]

Sector Reporting, Sector Revenue

5,646

^[1]

5,628

^[1]

5,659

^[1]

Kraft Foods North America [Member] | Confectionery [Member]

Sector Reporting, Sector Revenue

1,807

^[1]

301

^[1]

292

^[1]

Kraft Foods North America [Member] | Beverages [Member]

Sector Reporting, Sector Revenue

3,742

3,545

3,509

Kraft Foods North America [Member] | Cheese [Member]

Sector Reporting, Sector Revenue

5,090

4,980

5,525

Kraft Foods North America [Member] | Grocery [Member]

Sector Reporting, Sector Revenue

3,088

3,136

3,211

Kraft Foods North America [Member] | Convenient Meals [Member]

Sector Reporting, Sector Revenue

4,593

4,440

4,320

Kraft Foods Europe [Member]

Sector Reporting, Sector Revenue

11,628

8,768

9,728

Kraft Foods Europe [Member] | Biscuits [Member]

Sector Reporting, Sector Revenue

2,322

^[1]

2,330

^[1]

2,706

^[1]

Kraft Foods Europe [Member] | Confectionery [Member]

Sector Reporting, Sector Revenue

5,224

^[1]

2,446

^[1]

2,585

^[1]

Kraft Foods Europe [Member] | Beverages [Member]

Sector Reporting, Sector Revenue

2,522

2,390

2,625

Kraft Foods Europe [Member] | Cheese [Member]

Sector Reporting, Sector Revenue

982

972

1,109

Kraft Foods Europe [Member] | Grocery [Member]

Sector Reporting, Sector Revenue

334

369

394

Kraft Foods Europe [Member] | Convenient Meals [Member]

Sector Reporting, Sector Revenue

244

261

309

Kraft Foods Developing Markets [Member]

Sector Reporting, Sector Revenue

13,613

7,956

8,248

Kraft Foods Developing Markets [Member] | Biscuits [Member]

Sector Reporting, Sector Revenue

2,815

^[1]

2,446

^[1]

2,592

^[1]

Kraft Foods Developing Markets [Member] | Confectionery [Member]

Sector Reporting, Sector Revenue

6,657

^[1]

1,891

^[1]

2,076

^[1]

Kraft Foods Developing Markets [Member] | Beverages [Member]

Sector Reporting, Sector Revenue

2,536

2,094

2,081

Kraft Foods Developing Markets [Member] | Cheese [Member]

Sector Reporting, Sector Revenue

904

844

828

Kraft Foods Developing Markets [Member] | Grocery [Member]

Sector Reporting, Sector Revenue

579

566

567

Kraft Foods Developing Markets [Member] | Convenient Meals [Member]

Sector Reporting, Sector Revenue

$ 122

$ 115

$ 104

[1]

Segment Reporting (Long Lived Assets And Total Assets by Geographic Segment) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Total long-lived assets	$ 79,068	$ 54,260
Total assets	95,289	66,714
United States [Member]
Total long-lived assets	35,200	31,773
Total assets	40,085	35,816
Europe [Member]
Total long-lived assets	25,333	16,077
Total assets	31,811	21,915
Other Foreign [Member]
Total long-lived assets	18,535	6,410
Total assets	$ 23,393	$ 8,983

Quarterly Financial Data (Quarterly Statement of Income) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended			3 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2010 Quarterly Financial Data (Unaudited) [Member]	Sep. 30, 2010 Quarterly Financial Data (Unaudited) [Member]	Jun. 30, 2010 Quarterly Financial Data (Unaudited) [Member]	Mar. 31, 2010 Quarterly Financial Data (Unaudited) [Member]	Dec. 31, 2009 Quarterly Financial Data (Unaudited) [Member]	Sep. 30, 2009 Quarterly Financial Data (Unaudited) [Member]	Jun. 30, 2009 Quarterly Financial Data (Unaudited) [Member]	Mar. 31, 2009 Quarterly Financial Data (Unaudited) [Member]
Net revenues	$ 49,207	$ 38,754	$ 40,492	$ 13,773	$ 11,863	$ 12,253	$ 11,318	$ 10,597	$ 9,397	$ 9,781	$ 8,979
Gross profit	17,902	13,935	13,328	4,798	4,321	4,694	4,089	3,945	3,378	3,512	3,100
Earnings from continuing operations	2,495	2,810	1,678	547	760	939	249	652	774	781	603
Earnings and gain from discontinued operations, net of income taxes	1,644	218	1,215				1,644	59	52	48	59
Net earnings	4,139	3,028	2,893	547	760	939	1,893	711	826	829	662
Noncontrolling interest	25	7	9	7	6	2	10	1	2	2	2
Net earnings attributable to Kraft Foods	$ 4,114	$ 3,021	$ 2,884	$ 540	$ 754	$ 937	$ 1,883	$ 710	$ 824	$ 827	$ 660
Weighted-average shares for diluted EPS	1,720	1,486	1,515	1,757	1,754	1,752	1,620	1,487	1,487	1,484	1,483
Continuing operations	$ 1.44	$ 1.9	$ 1.11	$ 0.31	$ 0.43	$ 0.54	$ 0.15	$ 0.44	$ 0.52	$ 0.53	$ 0.41
Discontinued operations	$ 0.96	$ 0.14	$ 0.81				$ 1.02	$ 0.04	$ 0.04	$ 0.03	$ 0.04
Net earnings attributable to Kraft Foods	$ 2.4	$ 2.04	$ 1.92	$ 0.31	$ 0.43	$ 0.54	$ 1.17	$ 0.48	$ 0.56	$ 0.56	$ 0.45
Continuing operations	$ 1.44	$ 1.89	$ 1.1	$ 0.31	$ 0.43	$ 0.53	$ 0.15	$ 0.44	$ 0.52	$ 0.53	$ 0.41
Discontinued operations	$ 0.95	$ 0.14	$ 0.8				$ 1.01	$ 0.04	$ 0.03	$ 0.03	$ 0.04
Net earnings attributable to Kraft Foods	$ 2.39	$ 2.03	$ 1.9	$ 0.31	$ 0.43	$ 0.53	$ 1.16	$ 0.48	$ 0.55	$ 0.56	$ 0.45
Dividends declared	$ 1.16	$ 1.16	$ 1.12	$ 0.29	$ 0.29	$ 0.29	$ 0.29	$ 0.29	$ 0.29	$ 0.29	$ 0.29
Market price, high				$ 32.67	$ 31.98	$ 31.09	$ 30.98	$ 27.84	$ 29.11	$ 27.24	$ 29.84
Market price, low				$ 29.80	$ 27.59	$ 27.49	$ 27.09	$ 25.72	$ 25.41	$ 21.94	$ 20.81

Quarterly Financial Data (Pre-Tax Charges/(Gains) in Earnings from Continuing Operations) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended			3 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2010 Quarterly Financial Data (Unaudited) [Member]	Sep. 30, 2010 Quarterly Financial Data (Unaudited) [Member]	Dec. 31, 2009 Quarterly Financial Data (Unaudited) [Member]	Jun. 30, 2009 Quarterly Financial Data (Unaudited) [Member]
Asset impairment and exit costs	$ (18)	$ 64	$ (1,024)	$ 27	$ (9)	$ (38)	$ (26)
(Gains) / losses on divestitures, net	(6)	(6)	(92)	6		(11)	17
Pre-tax charges / (gains) in earnings from continuing operations				$ 33	$ (9)	$ (49)	$ (9)

Valuation and Qualifying Accounts (Details) (USD $)
In Millions, unless otherwise specified

12 Months Ended

Dec. 31, 2010

Dec. 31, 2009

Dec. 31, 2008

Balance at Beginning of Period

$ 243

$ 240

$ 228

Charged to Cost and Expense

168

131

Charged to Other Accounts

388

^[1]

(21)

^[1]

Deductions

111

^[2]

113

^[2]

Balance at End of Period

688

243

240

Allowance for discounts [Member]

Balance at Beginning of Period

Charged to Cost and Expense

Charged to Other Accounts

^[1]

Deductions

^[2]

Balance at End of Period

Allowance for doubtful accounts [Member]

Balance at Beginning of Period

138

128

118

Charged to Cost and Expense

Charged to Other Accounts

^[1]

(22)

^[1]

Deductions

^[2]

Balance at End of Period

277

138

128

Allowance for deferred taxes [Member]

Balance at Beginning of Period

105

Charged to Cost and Expense

Charged to Other Accounts

305

^[1]

(16)

^[1]

Deductions

^[2]

Balance at End of Period

$ 400

$ 97

$ 84

[1]	Primarily related to divestitures, acquisitions and currency translation.
[2]	Represents charges for which allowances were created.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2010
Subsequent Events
Subsequent Events	Note 18. Subsequent Events: We evaluated subsequent events and included all accounting and disclosure requirements related to subsequent events in our financial statements.

Goodwill and Intangible Assets (Annual impairment review and asset impairment charges) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Oct. 02, 2010 U.S. Salty Snacks [Member]	Oct. 02, 2010 U.S. Confections [Member]	Oct. 02, 2010 U.S. Grain Snacks [Member]	Oct. 02, 2010 CEEMA [Member]	Oct. 02, 2010 Asia Pacific [Member]
Percentage of excess fair value over carrying value				12.00%	17.00%	10.00%	8.00%	18.00%
Goodwill	$ 37,856	$ 28,764	$ 27,581	$ 1,170	$ 2,177	$ 5,778	$ 3,390	$ 2,517

Financial Instruments (Fair values of derivative instruments with levels) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Total derivatives	$ 122	$ 25
Foreign Exchange Contracts [Member]
Total derivatives	(118)	(148)
Commodity Contracts [Member]
Total derivatives	157	20
Interest Rate Contracts [Member]
Total derivatives	83	153
Fair Value, Inputs, Level 1 [Member]
Total derivatives	129	11
Fair Value, Inputs, Level 1 [Member] \| Commodity Contracts [Member]
Total derivatives	129	11
Fair Value, Inputs, Level 2 [Member]
Total derivatives	(7)	13
Fair Value, Inputs, Level 2 [Member] \| Foreign Exchange Contracts [Member]
Total derivatives	(118)	(148)
Fair Value, Inputs, Level 2 [Member] \| Commodity Contracts [Member]
Total derivatives	28	8
Fair Value, Inputs, Level 2 [Member] \| Interest Rate Contracts [Member]
Total derivatives	83	153
Fair Value, Inputs, Level 3 [Member]
Total derivatives		1
Fair Value, Inputs, Level 3 [Member] \| Commodity Contracts [Member]
Total derivatives		$ 1

Financial Instruments (Volume) (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
Forecasted Transactions [Member]
Notional Amount	$ 1,946	$ 631
Commodity Contracts [Member]
Notional Amount	630	1,832
Interest Rate Contracts [Member]
Notional Amount	5,167	2,350
Forecasted Interest Payments [Member] \| Intercompany Loan [Member]
Notional Amount	2,183	1,376
Euro notes Member
Notional Amount	3,814	4,081
Sterling Notes [Member]
Notional Amount	$ 1,015