MONDELEZ INTERNATIONAL, INC. 
By DEERFIELD, Ill., Feb. 12, 2014 /PRNewswire/ -- Mondelez International, Inc. (NASDAQ: MDLZ) today reported 2013 results, in line with recent expectations.
(Logo: http://photos.prnewswire.com/prnh/20121003/MM86695LOGO)
"In our first full year as a global snacking company, we delivered solid revenue growth and strong market share performance in the face of a significant slowdown in our categories as 2013 progressed," said Irene Rosenfeld, Chairman and CEO. "At the same time, we accelerated investments in emerging markets, strengthened our balance sheet and returned $3.6 billion of cash to our shareholders. Nevertheless, we're disappointed that our results were below what we and our shareholders originally expected.
"We're committed to improving results in 2014 and beyond. Specifically, we expect to grow organic revenue at or above our category growth rate, which we estimate at approximately 4 percent in 2014. In addition, we remain focused on increasing efficiency and aggressively reducing costs in both our supply chain and overheads to deliver strong margin gains throughout the year. Although we anticipate near-term economic conditions will remain challenging, the plans we are executing give us great confidence in our potential to significantly expand margins and deliver strong top-line growth in 2014 and the years ahead."
Full Year Results
Net revenues were $35.3 billion, up 0.8 percent. Operating income increased 9.2 percent to $4.0 billion, while operating income margin was 11.2 percent. Diluted EPS was $2.19, including $0.90 from discontinued operations reflecting the net gain from the resolution of the Starbucks arbitration(3).
Organic Net Revenues increased 3.9 percent, driven by strong volume/mix of 3.4 percentage points as well as favorable pricing of 0.5 percentage points. Lower coffee revenues, reflecting the pass-through of lower green coffee costs, tempered growth by 0.8 percentage points. Market share performance was strong with nearly 70 percent of revenues gaining or holding share.
Revenues from emerging markets(4) were up 8.8 percent, led by a nearly 10 percent gain in the BRIC markets(5). Developed markets(6) increased 0.8 percent as growth in North America and Europe was partially offset by a mid-single digit decline in Asia Pacific.
Power Brands grew 6.5 percent. Oreo, Tuc, Club Social, belVita and Barni biscuits, Cadbury Dairy Milk and Lacta chocolate and Tassimo coffee each posted double-digit increases.
Adjusted Operating Income increased 4.7 percent on a constant currency basis. Volume/mix-driven gross profit growth was partially offset by increased investments in sales capabilities and route-to-market expansion as well as the net impact of one-time items(7). Adjusted Operating Income margin was 12.0 percent, down 0.2 percentage points, including a negative impact of 0.3 percentage points due to the devaluation of the Venezuelan bolivar.
Adjusted EPS was $1.51, including a negative $0.09 impact from currency. On a constant currency basis, Adjusted EPS increased 13.5 percent, largely reflecting a positive impact of $0.07 from lower taxes and $0.04 from operating gains.
Free Cash Flow excluding items(1) was $2.3 billion driven by earnings growth and working capital improvement.
Revision to Net Earnings and EPS
In the first nine months of 2013, the company incorrectly recorded certain non-cash, tax-related items. The company has corrected the recording of these items, which reduced 2013 diluted EPS by $0.03 and Adjusted EPS by $0.02. These corrections have been reflected as revisions to results for prior years(8).
Fourth Quarter Results
Net revenues were $9.5 billion, down 0.1 percent. Operating income increased 5.3 percent to $1.0 billion, while operating income margin was 10.6 percent. Diluted EPS was $1.00 including $0.91 from discontinued operations reflecting the net gain from the resolution of the Starbucks arbitration.
Organic Net Revenues increased 2.5 percent, nearly all due to volume/mix. The pass-through of lower coffee commodity costs tempered growth by 0.7 percentage points. Revenues from emerging markets increased 5.9 percent, led by low-teens growth in India and mid-to-high single digit growth in Russia and Brazil. China declined double digits due to weak biscuit performance. Developed markets were up 0.5 percent as growth in North America and Europe was mostly offset by a decline in Asia Pacific.
Power Brands continued to grow faster than the company average, up 4.1 percent, led by Tuc, Club Social, belVita and Barni biscuits, Cadbury Dairy Milk, Milka and Lacta chocolate and Tassimo coffee.
Adjusted Operating Income increased 31.5 percent on a constant currency basis, reflecting overhead reductions, particularly in North America, Europe and corporate functions. Other positive factors included the net impact of one-time items(9 )and volume/mix-driven gross profit gains. Adjusted Operating Income margin was 13.9 percent, a sequential improvement from the previous quarter, and up 2.9 percentage points versus prior year.
Adjusted EPS was $0.42, including a negative $0.02 impact from currency. On a constant currency basis, Adjusted EPS increased 15.8 percent, mostly reflecting a $0.08 gain from operations. Other positive impacts from gains on sales of property, shares outstanding and interest expense were offset by higher taxes.
Revenue Results by Region
Latin America: Full year net revenues decreased 0.3 percent. Organic Net Revenues grew 12.3 percent mostly driven by pricing, especially in the inflationary economies of Venezuela and Argentina. Brazil grew double digits with a balanced contribution from volume/mix and pricing. The region's Power Brands grew 13.1 percent, led by Club Social, Oreo and belVita biscuits, Lacta chocolate and Halls candy.
Fourth quarter net revenues decreased 4.5 percent. Organic Net Revenues grew 10.4 percent as pricing in the inflationary economies of Venezuela and Argentina was slightly offset by lower volume/mix in those same geographies. Brazil increased mid-single digits primarily through volume/mix gains. The region's Power Brands grew 8.4 percent.
Asia Pacific: Full year net revenues decreased 4.1 percent. Organic Net Revenues increased 0.6 percent, as higher volume/mix was mostly offset by lower pricing. India grew low-teens on strength in chocolate. China was up slightly, reflecting weak biscuits results offset by strong performance in gum. Increased promotional activity in Australia/New Zealand and soft gum performance in Japan also tempered revenue growth. The region's Power Brands increased 6.5 percent driven by Cadbury Dairy Milk chocolate, Tang powdered beverages and Stride gum.
Fourth quarter net revenues decreased 13.3 percent. Organic Net Revenues were down 6.1 percent due to lower pricing across most of the region and unfavorable volume/mix in China. China decreased mid-teens despite strong gum performance as distributors destocked excess biscuit inventory. India was up low-teens as strong chocolate demand drove volume/mix gains. Increased promotional activity in Australia/New Zealand was a key driver of the region's lower pricing contribution. The region's Power Brands decreased 5.6 percent primarily due to Oreo biscuits in China.
EEMEA: Full year net revenues increased 4.8 percent. Organic Net Revenues grew 9.2 percent, as strong volume/mix gains were partially offset by lower pricing, mostly from coffee in Eastern Europe. Revenue growth was broad-based with double-digit gains in Russia, and strong growth in Egypt, West Africa, the GCC(10 )countries and Ukraine. The region's Power Brands grew 13.6 percent, led by Cadbury Dairy Milk and Milka chocolate, Barni, Oreo, Tuc and belVita biscuits, Jacobs coffee and Tang powdered beverages.
Fourth quarter net revenues increased 2.9 percent. Organic Net Revenues grew 8.2 percent, driven almost entirely by strong volume/mix gains. Russia posted mid-to-high single digit growth driven by coffee and biscuits. The region's Power Brands grew 11.4 percent.
Europe: Full year net revenues increased 1.8 percent. Organic Net Revenues increased 0.8 percent, as strong volume/mix gains, particularly in chocolate, coffee and biscuits were partially offset by lower pricing in coffee and soft performance in gum. Lower coffee revenues tempered Europe's growth by 1.9 percentage points. The region's Power Brands grew 3.6 percent, including double-digit growth in Oreo and chocobakery biscuits, Cadbury Dairy Milk chocolate and Tassimo coffee.
Fourth quarter net revenues increased 4.8 percent. Organic Net Revenues increased 1.0 percent, with continued volume/mix momentum in chocolate, coffee and biscuits. These gains were partially offset by lower pricing in coffee and soft, but improved performance in gum. Lower coffee revenues negatively affected the region's growth by 2.2 percentage points. The region's Power Brands grew 3.0 percent.
North America: Full year net revenues increased 1.3 percent. Organic Net Revenues increased 2.9 percent, with strong biscuits and candy growth partially offset by lower gum revenues. The region's Power Brands grew 3.9 percent fueled by double-digit growth in Oreo, Chips Ahoy! and belVita biscuits.
Fourth quarter net revenues increased 1.5 percent. Organic Net Revenues increased 3.1 percent, driven by strong biscuits volume/mix gains. As expected, gum revenues improved sequentially, but still declined mid-single digits, reflecting stabilization in market shares as most customer shelves have now been reset. The region's Power Brands grew 4.5 percent.
Share Repurchases
During 2013, the company repurchased $2.7 billion of its common stock, including $1.5 billion from the accelerated share repurchase agreement, at an average price of $33.09 per share.
Outlook
"We expect organic revenues to grow approximately 4 percent in 2014, which is at or above the growth of our categories," said David Brearton, Executive Vice President and CFO. "While economic conditions are likely to remain difficult, especially in emerging markets, we intend to leverage market share gains to offset potential volatility.
"Additionally, we expect to drive low double-digit growth in Adjusted Operating Income at constant currency, fueled by our focused efforts to reduce overheads, restructure our global supply chain and improve product mix, while continuing to invest in emerging markets. We anticipate this increase will result in an Adjusted Operating Income margin in the high 12 percent range and be the primary lever in delivering Adjusted EPS of $1.73 to $1.78(11), up double digits on a constant currency basis."
Conference Call
Mondelez International will host a conference call for investors with accompanying slides to review its results at 5 p.m. ET today. Access to a live audio webcast with accompanying slides and a replay of the event will be available at www.mondelezinternational.com/Investor.
About Mondelez International
Mondelez International, Inc. (NASDAQ: MDLZ) is a global snacking powerhouse, with 2013 revenue of $35 billion. Creating delicious moments of joy in 165 countries, Mondelez International is a world leader in biscuits, chocolate, gum, candy, coffee and powdered beverages, with billion-dollar brands such as Oreo, LU and Nabisco biscuits; Cadbury, Cadbury Dairy Milk and Milka chocolate; Trident gum; Jacobs coffee and Tang powdered beverages. Mondelez International is a proud member of the Standard and Poor's 500, NASDAQ 100 and Dow Jones Sustainability Index. Visit www.mondelezinternational.com and www.facebook.com/mondelezinternational.
End Notes
1. Please see discussion of Non-GAAP Financial Measures at the end of this
press release.
2. Market share performance is defined as the percentage of revenues for the
biscuits, chocolate, gum, candy, coffee, powdered beverage and cream
cheese categories in key markets with share either increasing or flat
versus the same prior year period. Based on Global Nielsen data for
measured channels for available periods through December 2013.
3. On December 13, 2013, the independent arbitrator in the dispute between
Kraft Foods Group and Starbucks Coffee Company issued a decision and
Final Award that Starbucks must pay $2.8 billion in total cash
compensation for its unilateral termination of the companies' license and
supply agreement. The award included compensation for the fair market
value of the agreement, a premium for improper termination, interest and
attorney's fees. Starbucks has paid the entire amount owed pursuant to
the ruling, and Kraft Foods Group directed the recovery awarded to the
company. The company recorded a gain, net of taxes, of $1.6 billion
during the fourth quarter of 2013.
4. Emerging markets consist of the Latin America and Eastern Europe, Middle
East and Africa regions in their entirety; the Asia Pacific region,
excluding Australia, New Zealand and Japan; and the following countries
from the Europe region: Poland, Czech & Slovak Republics, Hungary,
Bulgaria, Romania, the Baltics and the East Adriatic countries.
5. The BRIC markets are Brazil, Russia, India and China.
6. Developed markets include the entire North America region, the Europe
region excluding the countries included in the emerging markets
definition, and Australia, New Zealand and Japan from the Asia Pacific
region.
7. Current year one-time items include the gains on sales of properties in
India (Asia Pacific) and the UK, Norway and Italy (Europe), and
accounting calendar changes (Europe). Prior year one-time items include
the gains on sales of properties in Russia and Turkey (EEMEA), an asset
impairment charge related to a trademark in Japan (Asia Pacific), the
reversal of a Cadbury reserve accrual (Europe) and proceeds from
insurance settlements (Latin America and Asia Pacific). The net impact of
these one-time items decreased Adjusted Operating Income growth and
Adjusted Operating Income margin by 0.8 pp and 0.2 pp, respectively.
8. During the fourth quarter, the company determined it needed to revise its
results for certain incorrectly recorded non-cash, tax-related items.
The impact to previously reported 2013 quarters was a $59 million
reduction of net earnings. The impact to fiscal years prior to 2013 was
an increase in net earnings which totaled $90 million. Please see the
schedules detailing the revisions for the first nine months of 2013 at
the end of this press release.
9. Current year one-time items in the fourth quarter include the gains on
sales of properties in India (Asia Pacific) and the UK and Italy (Europe)
and accounting calendar changes (Europe). Prior year one-time items
include an asset impairment charge related to a trademark in Japan (Asia
Pacific). The net impact of these one-time items increased Adjusted
Operating Income growth and Adjusted Operating Income margin by 9.2 pp
and 1.0 pp, respectively.
10. The Gulf Cooperation Council (GCC) countries are Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia and the United Arab Emirates.
11. Adjusted EPS guidance of $1.73-$1.78 is based on 2013 average currency
rates.
Forward-Looking Statements
This press release contains a number of forward-looking statements. Words, and variations of words, such as "will," "expect," "anticipate," "estimate," "intend," "likely," "growth," "deliver," "outlook," "guidance" and similar expressions are intended to identify our forward-looking statements, including, but not limited to, statements about: our future performance, including our future revenue growth, earnings per share and margins; the drivers of our future performance, including cost reductions, productivity and efficiency improvements and investments in emerging markets; economic conditions; category growth; and our Outlook, including 2014 Organic Net Revenue growth, Adjusted Operating Income growth, Adjusted Operating Income margin and Adjusted EPS. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from those indicated in our forward-looking statements. Such factors include, but are not limited to, risks from operating globally and in emerging markets, continued consumer weakness, continued volatility of commodity and other input costs, pricing actions, continued weakness in economic conditions, business disruptions, increased competition and tax law changes. Please also see our risk factors, as they may be amended from time to time, set forth in our filings with the SEC, including our most recently filed Annual Report on Form 10-K.
Mondelez International disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation.
Non-GAAP Financial Measures
The company reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We use certain non-GAAP financial measures to budget, make operating and strategic decisions and evaluate our performance. We disclose non-GAAP financial measures so that you have the same financial data that we use to assist you in making comparisons to our historical operating results and analyzing our underlying performance.
Our non-GAAP financial measures and corresponding metrics reflect how we evaluate our operating results currently and provide improved comparability of operating results. As new events or circumstances arise, these definitions could change over time:
-- "Organic Net Revenues" is defined as net revenues excluding the impacts
of acquisitions, divestitures (including businesses under sales
agreements and exits of major product lines under a sale or licensing
agreement), Integration Program costs, accounting calendar changes and
foreign currency rate fluctuations.
-- "Adjusted Gross Profit" is defined as gross profit excluding the impact
of pension costs related to obligations transferred in the Spin-Off, the
2012-2014 Restructuring Program, the Integration Program and other
acquisition integration costs and the operating results of divestitures
(including businesses under sales agreements and exits of major product
lines under a sale or licensing agreement). We also evaluate growth in
our Adjusted Gross Profit on a constant currency basis.
-- "Adjusted Operating Income" and "Adjusted Segment Operating Income" are
defined as operating income (or segment operating income) excluding the
impact of Spin-Off Costs, pension costs related to the obligations
transferred in the Spin-Off, the 2012-2014 Restructuring Program, the
Integration Program and other acquisition integration costs, the benefit
from the Cadbury acquisition-related indemnification resolution, gains /
losses from divestitures or acquisitions, acquisition-related costs and
the operating results of divestitures (including businesses under sales
agreements and exits of major product lines under a sale or licensing
agreement). We also evaluate growth in our Adjusted Operating Income
and Adjusted Segment Operating Income on a constant currency basis.
-- "Adjusted EPS" (previously referred to as "Operating EPS") is defined
as diluted EPS attributable to Mondelez International from continuing
operations excluding the impact of Spin-Off Costs, pension costs related
to the obligations transferred in the Spin-Off, the 2012-2014
Restructuring Program, the Integration Program and other acquisition
integration costs, the benefit from the Cadbury acquisition-related
indemnification resolution, the loss on debt extinguishment and related
expenses, the residual tax impact from the resolution of the Starbucks
arbitration, gains / losses from divestitures or acquisitions,
acquisition-related costs and net earnings from divestitures (including
businesses under sales agreements and exits of major product lines under
a sale or licensing agreement), and including an interest expense
adjustment related to the Spin-Off transaction. We also evaluate
growth in our Adjusted EPS on a constant currency basis.
-- "Free Cash Flow excluding items" is defined as Free Cash Flow (net cash
provided by operating activities less capital expenditures) excluding
the following: (1) net cash received due to the resolution of the
Starbucks arbitration, and (2) the cash payments made for accrued
interest and other related fees associated with the debt tendered on
December 18, 2013.
We believe that the presentation of these non-GAAP financial measures, when considered together with our U.S. GAAP financial measures and the reconciliations to the corresponding U.S. GAAP financial measures, provides you with a more complete understanding of the factors and trends affecting our business than could be obtained absent these disclosures. In addition, the non-GAAP measures the company is using may differ from non-GAAP measures used by other companies. Because GAAP financial measures on a forward-looking basis are neither accessible nor deemed to be significantly different from the non-GAAP financial measures, and reconciling information is not available without unreasonable effort, the company has not provided that information with regard to the non-GAAP financial measures in the company's Outlook.
See the attached schedules for supplemental financial data and corresponding reconciliations of the non-GAAP financial measures referred to above to the most comparable GAAP financial measures for the three and twelve months ended December 31, 2013 and 2012.
Segment Operating Income
Management uses segment operating income to evaluate segment performance and allocate resources. The company believes 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), general corporate expenses (which are a component of selling, general and administrative expenses), amortization of intangibles, the benefit from the Cadbury acquisition-related indemnification resolution (which is a component of selling, general and administrative expenses), gains and losses from divestitures and acquisitions, and acquisition-related costs (which are a component of selling, general and administrative expenses) for all periods presented. The company excludes 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. We exclude general corporate expenses, amortization of intangibles, the benefit from the Cadbury acquisition-related indemnification resolution, gains and losses on divestitures and acquisitions and acquisition-related costs from segment operating income in order to provide better transparency of our segment operating results.
Mondelez International Inc. and
Subsidiaries
Condensed Consolidated Statements of
Earnings
For the Three Months Ended December 31, Schedule 1
----------
(in millions of dollars, except per share
data) (Unaudited)
As Reported/Revised
(GAAP)
--------------------
2013 2012 % Change
Fav / (Unfav)
-------------
Net
revenues $9,488 $9,495 (0.1)%
Cost
of
sales 5,995 5,945 (0.8)%
----- -----
Gross
profit 3,493 3,550 (1.6)%
Gross
profit
margin 36.8% 37.4%
Selling,
general
and
administrative
expenses 2,294 2,575 10.9%
Asset
impairment
and
exit
costs 138 69 (100.0)%
Gains
on
acquisition
and
divestitures,
net (2) (107) (100.0)%
Amortization
of
intangibles 53 54 1.9%
--- ---
Operating
income 1,010 959 5.3%
Operating
income
margin 10.6% 10.1%
Interest
and
other
expense,
net 847 295 (100.0+)%
--- ---
Earnings
from
continuing
operations
before
income
taxes 163 664 (75.5)%
Provision
/
(benefit)
for
income
taxes (7) 68 100.0+%
Effective
tax
rate (4.3)% 10.2%
----- ----
Earnings
from
continuing
operations $170 $596 (71.5)%
Earnings
from
discontinued
operations,
net
of
income
taxes 1,603 (18) 100.0+%
----- ---
Net
earnings $1,773 $578 100.0+%
Noncontrolling
interest 7 9 22.2%
--- ---
Net
earnings
attributable
to
Mondelez
International $1,766 $569 100.0+%
====== ====
Per
share
data:
Basic
earnings
per
share
attributable
to
Mondelez
International:
-
Continuing
operations $0.09 $0.33 (72.7)%
-
Discontinued
operations 0.92 (0.01) 100.0+%
---- -----
Net
earnings
attributable
to
Mondelez
International $1.01 $0.32 100.0+%
===== =====
Diluted
earnings
per
share
attributable
to
Mondelez
International:
-
Continuing
operations $0.09 $0.33 (72.7)%
-
Discontinued
operations 0.91 (0.01) 100.0+%
---- -----
Net
earnings
attributable
to
Mondelez
International $1.00 $0.32 100.0+%
===== =====
Average
shares
outstanding:
Basic 1,743 1,781 2.1%
Diluted 1,761 1,793 1.8%
Mondelez International, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Net Revenues
For the Three Months Ended December 31, Schedule 2
--------
($ in millions) (Unaudited)
As Reported/Revised (GAAP) Impact of Divestitures (1) Impact of Acquisitions Impact of Accounting
(2) Calendar Changes Impact of Currency Organic (Non-GAAP)
-------------------------- ------------------------- ----------------------- --------------------- ------------------ -----------------
2013
----
Latin America $1,337 $ - $ - $ - $209 $1,546
Asia Pacific 1,209 - - - 100 1,309
Eastern Europe,
Middle East &
Africa 1,065 - (32) - 55 1,088
Europe 4,033 (2) - (19) (135) 3,877
North America 1,844 (8) - - 18 1,854
Mondelez
International $9,488 $(10) $(32) $(19) $247 $9,674
====== ==== ==== ==== ==== ======
2012
----
Latin America $1,400 $ - $ - $ - $ - $1,400
Asia Pacific 1,394 - - - - 1,394
Eastern Europe,
Middle East &
Africa 1,035 (29) - - - 1,006
Europe 3,850 (13) - - - 3,837
North America 1,816 (18) - - - 1,798
Mondelez
International $9,495 $(60) $ - $ - $ - $9,435
====== ==== =============== ============== =========== ======
Organic Growth
Drivers
--------------
Vol / Mix Price
--------- -----
% Change
--------
Latin America (4.5)% - pp - pp - pp 14.9pp 10.4% (1.0)pp 11.4pp
Asia Pacific (13.3)% - - - 7.2 (6.1)% (1.7) (4.4)
Eastern Europe,
Middle East &
Africa 2.9% 3.0 (3.1) - 5.4 8.2% 8.1 0.1
Europe 4.8% 0.3 - (0.5) (3.6) 1.0% 3.0 (2.0)
North America 1.5% 0.6 - - 1.0 3.1% 3.2 (0.1)
Mondelez
International (0.1)% 0.6pp (0.4)pp (0.2)pp 2.6pp 2.5% 2.3pp 0.2pp
===== ===== ======= ======= ===== === ===== =====
(1) Includes (a) 2013
divestitures in Turkey,
South Africa and Spain
and the exit of a
product line in North
America upon the
execution of a
licensing agreement;
and (b) several 2012
divestitures primarily
in Germany, Belgium and
Italy as well as in
North America.
(2) On February 22, 2013,
the company acquired
the remaining interest
in a biscuit operation
in Morocco, which is
now a wholly-owned
subsidiary within the
EEMEA segment.
Mondelez International, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Operating Income
For the Three Months Ended December 31, Schedule 3
----------
($ in millions) (Unaudited)
% Change
--------
As Reported/Revised (GAAP) Integration Program and other Spin-Off Costs and Related 2012-2014 Restructuring Program Operating Income from Gains on Divestitures, net Acquisition-related As Adjusted (Non-GAAP) Impact of Currency As Adjusted Constant FX As Reported (GAAP) As Adjusted (Non- As Adjusted Constant
Acquisition Integration costs (1) Adjustments (2) costs (3) Divestitures costs (Non-GAAP) GAAP) FX (Non-GAAP)
-------------------------- ---------------------------------- --------------------------- ------------------------------- ---------------------- -------------------------- -------------------- --------------------- ------------------ ------------------------ ----------------- ------------------ ----------------------
2013
----
Latin America $145 $25 $ - $12 $ - $ - $ - $182 $44 $226 (31.9)% (19.1)% 0.4%
Asia Pacific 113 19 - 2 - - - 134 20 154 (14.4)% (10.1)% 3.4%
Eastern Europe,
Middle East &
Africa 97 20 - 7 - - - 124 7 131 (19.2)% 1.6% 7.4%
Europe 521 46 - 62 - - - 629 (19) 610 14.5% 27.1% 23.2%
North America 246 - - 85 (1) - - 330 1 331 14.4% 27.4% 27.8%
Unrealized G/
(L) on Hedging
Activities 7 - - - - - - 7 - 7 100.0+% 100.0+% 100.0+%
General
corporate
expenses (68) - 29 - (1) - - (40) - (40) 63.6% 65.8% 65.8%
Amortization of
intangibles (53) - - - - - - (53) (1) (54) 1.9% 1.9% -
Benefit from
indemnification
resolution - - - - - - - - - - - - -
Gains on
divestitures,
net 2 - - - - (2) - - - - (98.1)% - -
Acquisition-
related costs - - - - - - - - - - 100.0% - -
Mondelez
International $1,010 $110 $29 $168 $(2) $(2) $ - $1,313 $52 $1,365 5.3% 26.5% 31.5%
====== ==== === ==== === === ================ ====== === ====== === ==== ====
2012
----
Latin America $213 $10 $2 $ - $ - $ - $ - $225 $ - $225
Asia Pacific 132 17 - - - - - 149 - 149
Eastern Europe,
Middle East &
Africa 120 7 - - (5) - - 122 - 122
Europe 455 38 1 6 (5) - - 495 - 495
North America 215 2 9 37 (4) - - 259 - 259
Unrealized G/
(L) on Hedging
Activities (41) - - - - - - (41) - (41)
General
corporate
expenses (187) 2 67 (2) 3 - - (117) - (117)
Amortization of
intangibles (54) - - - - - - (54) - (54)
Benefit from
indemnification
resolution - - - - - - - - - -
Gains on
divestitures,
net 107 - - - - (107) - - - -
Acquisition-
related costs (1) - - - - - 1 - - -
Mondelez
International $959 $76 $79 $41 $(11) $(107) $1 $1,038 $ - $1,038
==== === === === ==== ===== === ====== =========== ======
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business. Spin-Off related
adjustments include the
pension adjustment defined as
the estimated benefit plan
expense associated with
certain benefit plan
obligations transferred to
Kraft Foods Group in the Spin-
Off.
(3) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs.
Mondelez International, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Condensed Consolidated Statements of Earnings
For the Three Months Ended December 31, Schedule 4
----------
(in millions of dollars, except per share data) (Unaudited)
As Reported/Revised (GAAP) Integration Program and other Spin-Off Spin-Off Interest 2012-2014 Restructuring Program Loss on Debt Extinguishment Residual Tax Associated with Net Earnings from Gains on Divestitures, Acquisition-related
Acquisition Integration costs Costs (2) Adjustment (2) Costs (3) and related expenses (4) Starbucks Arbitration Divestitures net costs
(1) As Adjusted (Non-GAAP)
-------------------------- ------------------------------ --------- ------------------ ------------------------------- ---------------------------- ----------------------------- ------------------ ----------------------- -------------------- ----------------------
2013
----
Operating income $1,010 $110 $29 $ - $168 $ - $ - $(2) $(2) $ - $1,313
Operating income margin 10.6% 13.9%
Interest
and other
expense,
net 847 - - - - (612) - - - - 235
Earnings from continuing
operations before income
taxes 163 110 29 - 168 612 - (2) (2) - 1,078
Provision
for income
taxes (7) 23 13 - 40 224 36 - - - 329
Effective
tax rate (4.3)% 30.5%
Earnings from continuing
operations 170 87 16 - 128 388 (36) (2) (2) - 749
Noncontrolling
interest 7 - - - - - - - - - 7
Net earnings attributable to
Mondelez International from
continuing operations $163 $87 $16 $ - $128 $388 $(36) $(2) $(2) $ - $742
==== === === ================== ==== ==== ==== === === ================ ====
Per share
data:
Diluted earnings per share
attributable to Mondelez
International:
- Continuing operations $0.09 $0.05 $0.01 $ - $0.07 $0.22 $(0.02) $ - $ - $ - $0.42
Average
shares
outstanding:
Diluted 1,761
2012
----
Operating income $959 $76 $79 $ - $41 $ - $ - $(11) $(107) $1 $1,038
-
Operating income margin 10.1% 11.0%
Interest
and other
expense,
net 295 - 10 (26) - - - - - - 279
Earnings from continuing
operations before income
taxes 664 76 69 26 41 - - (11) (107) 1 759
Provision
for income
taxes 68 10 17 10 15 - - (2) (48) - 70
Effective
tax rate 10.2% 9.2%
Earnings from continuing
operations 596 66 52 16 26 - - (9) (59) 1 689
Noncontrolling
interest 9 - - - - - - - - - 9
Net earnings attributable to
Mondelez International from
continuing operations $587 $66 $52 $16 $26 $ - $ - $(9) $(59) $1 $680
==== === === === === ==================== ===================== === ==== === ====
Per share
data:
Diluted earnings per share
attributable to Mondelez
International:
- Continuing operations $0.33 $0.04 $0.03 $0.01 $0.01 $ - $ - $(0.01) $(0.03) $ - $0.38
Average
shares
outstanding:
Diluted 1,793
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business. Spin-Off related
adjustments include: (a) a
pension adjustment defined as
the estimated benefit plan
expense associated with
certain benefit plan
obligations transferred to
Kraft Foods Group in the Spin-
Off; and (b) an interest
adjustment defined as the
interest expense associated
with the assumed reduction of
the $6 billion of our debt on
January 1, 2012, from the
utilization of funds received
from Kraft Foods Group in 2012
in connection with our Spin-
Off capitalization plan. Note
during the year ended December
31, 2012, a portion of the $6
billion of debt was retired.
As such, we adjusted interest
expense during this period as
if this debt had been paid on
January 1, 2012 to ensure
consistency of our assumption
and related results.
(3) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs.
(4) On December 18, 2013, the
company completed a $3.4
billion cash tender offer for
some of its outstanding high
coupon long term debt. The
company recorded a pre-tax
loss on debt extinguishment
and related expenses of $612
million for the amount paid in
excess of the carrying value
of the debt and the
recognition of the remaining
unamortized financing and
related costs.
Mondelez International Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Operating Income
For the Three Months Ended December 31, Schedule 5
----------
($ in millions, except percentages) (Unaudited)
2013 2012
---- ----
As Reported (GAAP) Integration Program and other Spin-Off Costs and 2012-2014 Restructuring Operating Income from Gains on Divestitures, As Adjusted (Non-GAAP) As Revised (GAAP) Integration Program and other Spin-Off Costs and 2012-2014 Restructuring Operating Income from Gains on Divestitures, Acquisition-related
Acquisition Integration costs Related Adjustments (2) Program costs (3) Divestitures net Acquisition Integration costs Related Adjustments (2) Program costs (3) Divestitures net costs
(1) (1) As Adjusted (Non-GAAP)
----------------- ------------------------------ ------------------------ ------------------------ ---------------------- ----------------------- --------------------------- ---------------- ------------------------------ ------------------------ ------------------------ ---------------------- ----------------------- -------------------- ---------------------------
Mondelez
International
--------------
Operating Income $1,010 $110 $29 $168 $(2) $(2) $1,313 $959 $76 $79 $41 $(11) $(107) $1 $1,038
Growth vs. Prior
Year 5.3% 26.5%
Operating Income
Margin 10.6% 13.9% 10.1% 11.0%
Latin America
-------------
Segment
Operating
Income $145 $25 $ - $12 $ - $ - $182 $213 $10 $2 $ - $ - $ - $ - $225
Growth vs. Prior
Year (31.9)% (19.1)%
Segment
Operating
Income Margin 10.8% 13.6% 15.2% 16.1%
Asia Pacific
------------
Segment
Operating
Income $113 $19 $ - $2 $ - $ - $134 $132 $17 $ - $ - $ - $ - $ - $149
Growth vs. Prior
Year (14.4)% (10.1)%
Segment
Operating
Income Margin 9.3% 11.1% 9.5% 10.7%
Eastern Europe,
Middle East &
Africa
---------------
Segment
Operating
Income $97 $20 $ - $7 $ - $ - $124 $120 $7 $ - $ - $(5) $ - $ - $122
Growth vs. Prior
Year (19.2)% 1.6%
Segment
Operating
Income Margin 9.1% 11.6% 11.6% 12.1%
Europe
------
Segment
Operating
Income $521 $46 $ - $62 $ - $ - $629 $455 $38 $1 $6 $(5) $ - $ - $495
Growth vs. Prior
Year 14.5% 27.1%
Segment
Operating
Income Margin 12.9% 15.6% 11.8% 12.9%
North America
-------------
Segment
Operating
Income $246 $ - $ - $85 $(1) $ - $330 $215 $2 $9 $37 $(4) $ - $ - $259
Growth vs. Prior
Year 14.4% 27.4%
Segment
Operating
Income Margin 13.3% 18.0% 11.8% 14.4%
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business. Spin-Off related
adjustments include the
pension adjustment defined as
the estimated benefit plan
expense associated with
certain benefit plan
obligations transferred to
Kraft Foods Group in the Spin-
Off.
(3) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs.
Mondelez International Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Gross Profit
For the Three Months Ended December 31, Schedule 6
----------
($ in millions) (Unaudited)
% Growth
--------
As Reported/Revised (GAAP) Integration Program and Spin-Off Costs and 2012-2014 Restructuring As Adjusted Constant As Adjusted (Non- As Adjusted Constant
other Acquisition Related Adjustments (2) Program costs (3) FX (Non-GAAP) GAAP) FX (Non-GAAP)
Integration costs (1) Impact of Divestitures As Adjusted Impact of Currency As Reported (GAAP)
(Non-GAAP)
---------
2013
----
Net
Revenues $9,488 $ - $ - $ - $(10) $9,478
Gross
Profit $3,493 $20 $ - $8 $(3) $3,518 $78 $3,596 (1.6)% (0.9)% 1.3%
Gross
Profit
Margin 36.8% 37.1%
2012
----
Net
Revenues $9,495 $ - $ - $ - $(60) $9,435
Gross
Profit $3,550 $14 $ - $2 $(17) $3,549
Gross
Profit
Margin 37.4% 37.6%
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business. Spin-Off related
adjustments include the
pension adjustment defined as
the estimated benefit plan
expense associated with
certain benefit plan
obligations transferred to
Kraft Foods Group in the Spin-
Off.
(3) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs.
Mondelez International Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Diluted EPS Schedule 7
----------
(Unaudited)
Diluted EPS % Growth
----------- --------
Diluted EPS
Attributable to
Mondelez International
for the Three
Months Ended December
31, 2012 (GAAP) $0.32
Discontinued
operations, net of
income taxes (0.01)
-----
Diluted EPS
Attributable to
Mondelez International
from continuing
operations for the
Three Months Ended
December 31, 2012
(GAAP) 0.33
Integration Program and
other acquisition
integration costs (1) 0.04
Spin-Off Costs (2) 0.03
Spin-Off related
adjustments (3) 0.01
2012-2014 Restructuring
Program costs (4) 0.01
Gains on acquisition
and divestitures, net (0.03)
Net earnings from
divestitures (0.01)
-----
Adjusted EPS for the
Three Months Ended
December 31, 2012 (Non-
GAAP) 0.38
Increase in operations 0.08
Gains on sales of
property in 2013 0.03
Intangible asset
impairment charge 0.01
Unrealized gains/
(losses) on hedging
activities 0.02
Lower interest expense
and other expense, net 0.02
Changes in shares
outstanding 0.01
Changes in income taxes (0.11)
-----
Adjusted EPS for the
Three Months Ended
December 31, 2013
(Constant Currency) 0.44 15.8%
Unfavorable foreign
currency -translation
(5) (0.02)
-----
Adjusted EPS for the
Three Months Ended
December 31, 2013 (Non-
GAAP) 0.42 10.5%
Integration Program and
other acquisition
integration costs (1) (0.05)
Spin-Off Costs (2) (0.01)
2012-2014 Restructuring
Program costs (4) (0.07)
Loss on debt
extinguishment and
related expenses(6) (0.22)
Residual tax impact
associated with
Starbucks arbitration
resolution 0.02
Acquisition-related
costs -
---
Diluted EPS
Attributable to
Mondelez International
from continuing
operations for the
Three Months Ended
December 31, 2013
(GAAP) 0.09 (72.7)%
Discontinued
operations, net of
income taxes 0.91
----
Diluted EPS
Attributable to
Mondelez International
for the Three
Months Ended December
31, 2013 (GAAP) $1.00 100.0+%
=====
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition. Integration
Program costs were $107
million, or $84 million after-
tax including certain tax
costs associated with the
integration of Cadbury, for
the three months ended
December 31, 2013, as compared
to $76 million, or $66 million
after-tax for the three
months ended December 31,
2012. We also incurred $3
million of integration costs
during the three months ended
December 31, 2013, associated
with the acquisition of the
biscuit operation in Morocco.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business. Spin-Off Costs for
the three months ended
December 31, 2013 were $29
million, or $16 million after-
tax, as compared to $69
million or $52 million after-
tax for the three months ended
December 31, 2012.
(3) Spin-Off related adjustments
include; (a) pension
adjustment defined as the
estimated benefit plan expense
associated with certain
benefit plan obligations
transferred to Kraft Foods
Group in the Spin-Off; and
(b) interest adjustment
defined as the interest
expense associated with the
assumed reduction of the $6
billion of our debt on January
1, 2012, from the utilization
of funds received from Kraft
Foods Group in 2012 in
connection with our Spin-Off
capitalization plan. Note
during the year ended December
31, 2012, a portion of the $6
billion of debt was retired.
As such, we adjusted interest
expense during this period as
if this debt had been paid on
January 1, 2012 to ensure
consistency of our assumption
and related results.
(4) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs. Restructuring Program
costs for the three months
ended December 31, 2013, were
$168 million, or $128 million
after-tax as compared to $41
million, or $26 million after-
tax for the three months ended
December 31, 2012.
(5) Includes the favorable foreign
currency impact on Mondelez
International foreign
denominated debt and interest
expense due to the strength of
the U.S. dollar.
(6) On December 18, 2013, the
company completed a $3.4
billion cash tender offer for
some of its outstanding high
coupon long term debt. The
company recorded a pre-tax
loss on debt extinguishment
and related expenses of $612
million for the amount paid in
excess of the carrying value
of the debt and the
recognition of the remaining
unamortized financing and
related costs.
Mondelez International Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
For the Twelve Months Ended December 31, Schedule 8
----------
(in millions of dollars, except per share data) (Unaudited)
As Reported/Revised (GAAP)
--------------------------
2013 2012 % Change
Fav / (Unfav)
-------------
Net revenues $35,299 $35,015 0.8%
Cost of sales 22,189 21,939 (1.1)%
------ ------
Gross profit 13,110 13,076 0.3%
Gross profit margin 37.1% 37.3%
Selling, general and administrative expenses 8,679 9,176 5.4%
Asset impairment and exit costs 273 153 (78.4)%
Gains on acquisition and divestitures, net (30) (107) (100.0)%
Amortization of intangibles 217 217 -
--- ---
Operating income 3,971 3,637 9.2%
Operating income margin 11.2% 10.4%
Interest and other expense, net 1,579 1,863 15.2%
----- -----
Earnings from continuing operations before income taxes 2,392 1,774 34.8%
Provision / (benefit) for income taxes 60 168 64.3%
Effective tax rate 2.5% 9.5%
--- ---
Earnings from continuing operations $2,332 $1,606 45.2%
Earnings from discontinued operations, net of income taxes 1,603 1,488 7.7%
----- -----
Net earnings $3,935 $3,094 27.2%
Noncontrolling interest 20 27 25.9%
--- ---
Net earnings attributable to Mondelez International $3,915 $3,067 27.7%
====== ======
Per share data:
Basic earnings per share attributable to Mondelez International:
- Continuing operations $1.30 $0.90 44.4%
- Discontinued operations 0.91 0.83 9.6%
---- ----
Net earnings attributable to Mondelez International $2.21 $1.73 27.7%
===== =====
Diluted earnings per share attributable to Mondelez International:
- Continuing operations $1.29 $0.88 46.6%
- Discontinued operations 0.90 0.83 8.4%
---- ----
Net earnings attributable to Mondelez International $2.19 $1.71 28.1%
===== =====
Average shares outstanding:
Basic 1,774 1,777 0.2%
Diluted 1,789 1,789 -
Mondelez International, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Net Revenues
For the Twelve Months Ended December 31, Schedule 9
--------
($ in millions) (Unaudited)
As Reported/Revised (GAAP) Impact of Divestitures (1) Impact of Acquisitions Impact of Accounting
(2) Calendar Changes Impact of Currency Organic (Non-GAAP)
-------------------------- ------------------------- ----------------------- --------------------- ------------------ -----------------
2013
----
Latin America $5,382 $ - $ - $ - $678 $6,060
Asia Pacific 4,952 - - - 245 5,197
Eastern Europe,
Middle East &
Africa 3,915 (20) (93) - 171 3,973
Europe 14,059 (11) - (38) (289) 13,721
North America 6,991 (39) - - 35 6,987
Mondelez
International $35,299 $(70) $(93) $(38) $840 $35,938
======= ==== ==== ==== ==== =======
2012
----
Latin America $5,396 $ - $ - $ - $ - $5,396
Asia Pacific 5,164 - - - - 5,164
Eastern Europe,
Middle East &
Africa 3,735 (96) - - - 3,639
Europe 13,817 (209) - - - 13,608
North America 6,903 (110) - - - 6,793
Mondelez
International $35,015 $(415) $ - $ - $ - $34,600
======= ===== =============== ============== =========== =======
Organic
Growth
Drivers
--------
Vol / Mix Price
--------- -----
% Change
--------
Latin America (0.3)% - pp - pp - pp 12.6pp 12.3% 0.9pp 11.4pp
Asia Pacific (4.1)% - - - 4.7 0.6% 2.5 (1.9)
Eastern Europe,
Middle East &
Africa 4.8% 2.2 (2.5) - 4.7 9.2% 11.0 (1.8)
Europe 1.8% 1.4 - (0.3) (2.1) 0.8% 3.2 (2.4)
North America 1.3% 1.0 - - 0.6 2.9% 2.5 0.4
Mondelez
International 0.8% 1.0pp (0.2)pp (0.1)pp 2.4pp 3.9% 3.4pp 0.5pp
=== ===== ======= ======= ===== === ===== =====
(1) Includes (a) 2013
divestitures in Turkey,
South Africa and Spain
and the exit of a
product line in North
America upon the
execution of a
licensing agreement;
and (b) several 2012
divestitures primarily
in Germany, Belgium and
Italy as well as in
North America.
(2) On February 22, 2013,
the company acquired
the remaining interest
in a biscuit operation
in Morocco, which is
now a wholly-owned
subsidiary within the
EEMEA segment.
Mondelez International, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Operating Income
For the Twelve Months Ended December 31, Schedule 10
-----------
($ in millions) (Unaudited)
% Change
--------
As Reported/Revised (GAAP) Integration Program and other Spin-Off Costs and Related 2012-2014 Restructuring Program Net Benefit from Indemnification Operating Income from Gains on Acquisition and Acquisition-related As Adjusted (Non-GAAP) Impact of Currency As Adjusted Constant FX As Reported (GAAP) As Adjusted As Adjusted Constant FX
Acquisition Integration costs (1) Adjustments (2) costs (3) Resolution (4) Divestitures Divestitures, net (5) costs (Non-GAAP) (Non-GAAP)
(Non-GAAP)
---
2013
----
Latin America $570 $33 $ - $21 $ - $ - $ - $ - $624 $174 $798 (25.9)% (23.3)% (2.0)%
Asia Pacific 512 41 - 2 - - - - 555 38 593 (22.1)% (22.5)% (17.2)%
Eastern Europe,
Middle East &
Africa 379 56 - 14 - 7 - - 456 25 481 (25.1)% (12.0)% (7.1)%
Europe 1,699 88 - 131 - (2) - - 1,916 (42) 1,874 (3.6)% 8.7% 6.3%
North America 889 1 - 160 - (11) - - 1,039 4 1,043 13.8% 11.0% 11.4%
Unrealized G/
(L) on Hedging
Activities 62 - - - - - - - 62 - 62 100.0+% 100.0+% 100.0+%
General
corporate
expenses (6) (287) 1 62 2 - - - - (222) 2 (220) 60.6% 30.0% 30.6%
Amortization of
intangibles (217) - - - - - - - (217) (1) (218) - - (0.5)%
Benefit from
indemnification
resolution 336 - - - (336) - - - - - - 100.0% - -
Gains on
acquisition and
divestitures,
net 30 - - - - - (30) - - - - 72.0% - -
Acquisition-
related costs (2) - - - - - - 2 - - - (100.0)% - -
Mondelez
International $3,971 $220 $62 $330 $(336) $(6) $(30) $2 $4,213 $200 $4,413 9.2% - 4.7%
====== ==== === ==== ===== === ==== === ====== ==== ====== === === ===
2012
----
Latin America $769 $30 $8 $7 $ - $ - $ - $ - $814 $ - $814
Asia Pacific 657 40 19 - - - - - 716 - 716
Eastern Europe,
Middle East &
Africa 506 13 - - - (1) - - 518 - 518
Europe 1,762 47 1 6 - (53) - - 1,763 - 1,763
North America 781 6 77 98 - (26) - - 936 - 936
Unrealized G/
(L) on Hedging
Activities 1 - - - - - - - 1 - 1
General
corporate
expenses (728) 4 407 (1) - 1 - - (317) - (317)
Amortization of
intangibles (217) - - - - - - - (217) - (217)
Benefit from
indemnification
resolution - - - - - - - - - - -
Gains on
acquisition and
divestitures,
net 107 - - - - - (107) - - - -
Acquisition-
related costs (1) - - - - - - 1 - - -
Mondelez
International $3,637 $140 $512 $110 $ - $(79) $(107) $1 $4,214 $ - $4,214
====== ==== ==== ==== ===================== ==== ===== === ====== =========== ======
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business. Spin-Off related
adjustments include the
pension adjustment defined as
the estimated benefit plan
expense associated with
certain benefit plan
obligations transferred to
Kraft Foods Group in the Spin-
Off.
(3) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs.
(4) As part of our 2010 Cadbury
acquisition, the company
became the responsible party
for tax matters under the
Cadbury Schweppes Plc and Dr
Pepper Snapple Group, Inc.
("DPSG") Tax Sharing and
Indemnification Agreement
dated May 1, 2008 ("Tax
Indemnity") for certain 2007
and 2008 transactions relating
to the demerger of Cadbury's
Americas Beverage business. A
U.S. federal tax audit of DPSG
for the 2006-2008 tax years
was concluded with the IRS in
August 2013. As a result, the
company recorded a favorable
impact of $363 million due to
the reversal of the accrued
liability in excess of the
amount paid to DPSG under the
Tax Indemnity. The company
recorded $336 million in
selling, general and
administrative expenses and
$49 million in interest and
other expense, net, partially
offset by $22 million of tax
expense for an impact of $0.20
per diluted share.
(5) On February 22, 2013, the
company acquired the remaining
interest in a biscuit
operation in Morocco, which is
now a wholly-owned subsidiary
within the EEMEA segment. A
pre-tax gain of $22 million
was recorded in connection
with the acquisition. In
addition, during the twelve
months ended December 31,
2013, the company divested a
salty snack business in
Turkey, a confectionery
business in South Africa and a
chocolate business in Spain.
A pre-tax gain of $8 million
was recorded in connection
with these divestitures.
(6) General corporate expenses
include corporate functions
and project expenses as well
as other general corporate
expenses. For the twelve
months ended December 31,
2013, corporate functions and
project expenses decreased $69
million from $277 million to
$208 million.
Mondelez International, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Condensed Consolidated Statements of Earnings
For the Twelve Months Ended December 31, Schedule 11
-----------
(in millions of dollars, except per share data) (Unaudited)
As Reported/Revised (GAAP) Integration Program and other Spin-Off Spin-Off Pension Spin-Off Interest 2012-2014 Restructuring Net Benefit from Loss on Debt Extinguishment Residual Tax Associated with Gains on Acquisition and Acquisition-related
Acquisition Integration costs Costs (2) Adjustment (2) Adjustment (2) Program Costs (3) Indemnification Resolution (4) and related expenses (5) Starbucks Arbitration Divestitures, net (6) costs
(1) Net Earnings from Divestitures As Adjusted (Non-GAAP)
-------------------------- ------------------------------ --------- ----------------- ------------------ ------------------------ ------------------------------- ---------------------------- ----------------------------- ------------------------------ ------------------------- -------------------- ---------------------
2013
----
Operating income $3,971 $220 $62 $ - $ - $330 $(336) $ - $ - $(6) $(30) $2 $4,213
Operating income margin 11.2% 12.0%
Interest
and other
expense,
net 1,579 - - - - - 49 (612) - - - (5) 1,011
Earnings from continuing
operations before income
taxes 2,392 220 62 - - 330 (385) 612 - (6) (30) 7 3,202
Provision
for income
taxes 60 45 23 - - 82 (22) 224 36 (2) 39 - 485
Effective
tax rate 2.5% 15.1%
Earnings from continuing
operations 2,332 175 39 - - 248 (363) 388 (36) (4) (69) 7 2,717
Noncontrolling
interest 20 - - - - - - - - - - - 20
Net earnings attributable to
Mondelez International from
continuing operations $2,312 $175 $39 $ - $ - $248 $(363) $388 $(36) $(4) $(69) $7 $2,697
====== ==== === ================== ================== ==== ===== ==== ==== === ==== === ======
Per share
data:
Diluted earnings per share
attributable to Mondelez
International:
- Continuing operations $1.29 $0.10 $0.02 $ - $ - $0.14 $(0.20) $0.22 $(0.02) $ - $(0.04) $ - $1.51
Average
shares
outstanding:
Diluted 1,789
2012
----
Operating income $3,637 $140 $444 $68 $ - $110 $ - $ - $ - $(79) $(107) $1 $4,214
Operating income margin 10.4% 12.2%
Interest
and other
expense,
net 1,863 - (609) - (161) - - - - - - - 1,093
Earnings from continuing
operations before income
taxes 1,774 140 1,053 68 161 110 - - - (79) (107) 1 3,121
Provision
for income
taxes 168 6 347 26 60 40 - - - (20) (48) - 579
Effective
tax rate 9.5% 18.6%
Earnings from continuing
operations 1,606 134 706 42 101 70 - - - (59) (59) 1 2,542
Noncontrolling
interest 27 - - - - - - - - - - - 27
Net earnings attributable to
Mondelez International from
continuing operations $1,579 $134 $706 $42 $101 $70 $ - $ - $ - $(59) $(59) $1 $2,515
====== ==== ==== === ==== === ===================== ==================== ===================== ==== ==== === ======
Per share
data:
Diluted earnings per share
attributable to Mondelez
International:
- Continuing operations $0.88 $0.08 $0.39 $0.02 $0.06 $0.04 $ - $ - $ - $(0.03) $(0.03) $ - $1.41
Average
shares
outstanding:
Diluted 1,789
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business. Spin-Off related
adjustments include: (a) a
pension adjustment defined as
the estimated benefit plan
expense associated with
certain benefit plan
obligations transferred to
Kraft Foods Group in the Spin-
Off; and (b) an interest
adjustment defined as the
interest expense associated
with the assumed reduction of
the $6 billion of our debt on
January 1, 2012, from the
utilization of funds received
from Kraft Foods Group in 2012
in connection with our Spin-
Off capitalization plan. Note
during the year ended December
31, 2012, a portion of the $6
billion of debt was retired.
As such, we adjusted interest
expense during this period as
if this debt had been paid on
January 1, 2012 to ensure
consistency of our assumption
and related results.
(3) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs.
(4) As part of our 2010 Cadbury
acquisition, the company
became the responsible party
for tax matters under the
Cadbury Schweppes Plc and Dr
Pepper Snapple Group, Inc.
("DPSG") Tax Sharing and
Indemnification Agreement
dated May 1, 2008 ("Tax
Indemnity") for certain 2007
and 2008 transactions relating
to the demerger of Cadbury's
Americas Beverage business. A
U.S. federal tax audit of DPSG
for the 2006-2008 tax years
was concluded with the IRS in
August 2013. As a result, the
company recorded a favorable
impact of $363 million due to
the reversal of the accrued
liability in excess of the
amount paid to DPSG under the
Tax Indemnity. The company
recorded $336 million in
selling, general and
administrative expenses and
$49 million in interest and
other expense, net, partially
offset by $22 million of tax
expense for an impact of $0.20
per diluted share.
(5) On December 18, 2013, the
company completed a $3.4
billion cash tender offer for
some of its outstanding high
coupon long term debt. The
company recorded a pre-tax
loss on debt extinguishment
and related expenses of $612
million for the amount paid in
excess of the carrying value
of the debt and the
recognition of the remaining
unamortized financing and
related costs.
(6) On February 22, 2013, the
company acquired the remaining
interest in a biscuit
operation in Morocco, which is
now a wholly-owned subsidiary
within the EEMEA segment. A
pre-tax gain of $22 million
was recorded in connection
with the acquisition. In
addition, during the twelve
months ended December 31,
2013, the company divested a
salty snack business in
Turkey, a confectionery
business in South Africa and a
chocolate business in Spain.
A pre-tax gain of $8 million
was recorded in connection
with these divestitures.
Mondelez International Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Operating Income
For the Twelve Months Ended December 31, Schedule 12
-----------
($ in millions, except percentages) (Unaudited)
2013 2012
---- ----
As Reported (GAAP) Integration Program and other Spin-Off Costs and 2012-2014 Restructuring Net Benefit from Operating Income from Gains on Acquisition and Acquisition-related As Adjusted (Non-GAAP) As Revised (GAAP) Integration Program and other Spin-Off Costs and 2012-2014 Restructuring Operating Income from Gains on Acquisition and Acquisition-related
Acquisition Integration costs Related Adjustments (2) Program costs (3) Indemnification Resolution Divestitures Divestitures, net (5) costs Acquisition Integration costs Related Adjustments (2) Program costs (3) Divestitures Divestitures, net (5) costs
(1) (4) (1) As Adjusted (Non-GAAP)
----------------- ------------------------------ ------------------------ ------------------------ --------------------------- ---------------------- ------------------------- -------------------- --------------------------- ---------------- ------------------------------ ------------------------ ------------------------ ---------------------- ------------------------- -------------------- ---------------------------
Mondelez
International
--------------
Operating Income $3,971 $220 $62 $330 $(336) $(6) $(30) $2 $4,213 $3,637 $140 $512 $110 $(79) $(107) $1 $4,214
Growth vs. Prior
Year 9.2% (0.0)%
Operating Income
Margin 11.2% 12.0% 10.4% 12.2%
Latin America
-------------
Segment
Operating
Income $570 $33 $ - $21 $ - $ - $ - $ - $624 $769 $30 $8 $7 $ - $ - $ - $814
Growth vs. Prior
Year (25.9)% (23.3)%
Segment
Operating
Income Margin 10.6% 11.6% 14.3% 15.1%
Asia Pacific
------------
Segment
Operating
Income $512 $41 $ - $2 $ - $ - $ - $ - $555 $657 $40 $19 $ - $ - $ - $ - $716
Growth vs. Prior
Year (22.1)% (22.5)%
Segment
Operating
Income Margin 10.3% 11.2% 12.7% 13.9%
Eastern Europe,
Middle East &
Africa
---------------
Segment
Operating
Income $379 $56 $ - $14 $ - $7 $ - $ - $456 $506 $13 $ - $ - $(1) $ - $ - $518
Growth vs. Prior
Year (25.1)% (12.0)%
Segment
Operating
Income Margin 9.7% 11.7% 13.5% 14.2%
Europe
------
Segment
Operating
Income $1,699 $88 $ - $131 $ - $(2) $ - $ - $1,916 $1,762 $47 $1 $6 $(53) $ - $ - $1,763
Growth vs. Prior
Year (3.6)% 8.7%
Segment
Operating
Income Margin 12.1% 13.6% 12.8% 13.0%
North America
-------------
Segment
Operating
Income $889 $1 $ - $160 $ - $(11) $ - $ - $1,039 $781 $6 $77 $98 $(26) $ - $ - $936
Growth vs. Prior
Year 13.8% 11.0%
Segment
Operating
Income Margin 12.7% 14.9% 11.3% 13.8%
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business. Spin-Off related
adjustments include the
pension adjustment defined as
the estimated benefit plan
expense associated with
certain benefit plan
obligations transferred to
Kraft Foods Group in the Spin-
Off.
(3) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs.
(4) As part of our 2010 Cadbury
acquisition, the company
became the responsible party
for tax matters under the
Cadbury Schweppes Plc and Dr
Pepper Snapple Group, Inc.
("DPSG") Tax Sharing and
Indemnification Agreement
dated May 1, 2008 ("Tax
Indemnity") for certain 2007
and 2008 transactions relating
to the demerger of Cadbury's
Americas Beverage business. A
U.S. federal tax audit of DPSG
for the 2006-2008 tax years
was concluded with the IRS in
August 2013. As a result, the
company recorded a favorable
impact of $363 million due to
the reversal of the accrued
liability in excess of the
amount paid to DPSG under the
Tax Indemnity. The company
recorded $336 million in
selling, general and
administrative expenses and
$49 million in interest and
other expense, net, partially
offset by $22 million of tax
expense for an impact of $0.20
per diluted share.
(5) On February 22, 2013, the
company acquired the remaining
interest in a biscuit
operation in Morocco, which is
now a wholly-owned subsidiary
within the EEMEA segment. A
pre-tax gain of $22 million
was recorded in connection
with the acquisition. In
addition, during the twelve
months ended December 31,
2013, the company divested a
salty snack business in
Turkey, a confectionery
business in South Africa and a
chocolate business in Spain.
A pre-tax gain of $8 million
was recorded in connection
with these divestitures.
Mondelez International Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Gross Profit
For the Twelve Months Ended December 31, Schedule 13
-----------
($ in millions) (Unaudited)
% Growth
--------
As Reported/Revised (GAAP) Integration Program and Spin-Off Costs and 2012-2014 Restructuring As Adjusted Constant FX As Adjusted (Non- As Adjusted Constant FX
other Acquisition Related Adjustments (2) Program costs (3) (Non-GAAP) GAAP) (Non-GAAP)
Integration costs (1) Impact of Divestitures As Adjusted Impact of Currency As Reported (GAAP)
(Non-GAAP)
---------
2013
----
Net Revenues $35,299 $ - $ - $ - $(70) $35,229
Gross Profit $13,110 $58 $ - $10 $(18) $13,160 $286 $13,446 0.3% 1.0% 3.2%
Gross Profit Margin 37.1% 37.4%
2012
----
Net Revenues $35,015 $ - $ - $ - $(415) $34,600
Gross Profit $13,076 $28 $33 $2 $(115) $13,024
Gross Profit Margin 37.3% 37.6%
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business. Spin-Off related
adjustments include the
pension adjustment defined as
the estimated benefit plan
expense associated with
certain benefit plan
obligations transferred to
Kraft Foods Group in the Spin-
Off.
(3) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs.
Mondelez International Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Diluted EPS Schedule 14
-----------
(Unaudited)
Diluted EPS % Growth
----------- --------
Diluted EPS
Attributable to
Mondelez International
for the Twelve
Months Ended December
31, 2012 (GAAP) $1.71
Discontinued
operations, net of
income taxes 0.83
----
Diluted EPS
Attributable to
Mondelez International
from continuing
operations for the
Twelve Months Ended
December 31, 2012
(GAAP) 0.88
Integration Program and
other acquisition
integration costs (1) 0.08
Spin-Off Costs (2) 0.39
Spin-Off related
adjustments (3) 0.08
2012-2014 Restructuring
Program costs (4) 0.04
Gains on acquisition
and divestitures, net (0.03)
Net earnings from
divestitures (0.03)
-----
Adjusted EPS for the
Twelve Months Ended
December 31, 2012 (Non-
GAAP) 1.41
Increase in operations 0.04
Gains on sales of
property in 2013 0.03
Gains on sales of
property in 2012 (0.03)
Intangible asset
impairment charge in
2012 0.02
Unrealized gains/
(losses) on hedging
activities 0.03
Lower interest and
other expense, net 0.03
Changes in shares
outstanding -
Changes in income taxes 0.07
----
Adjusted EPS for the
Twelve Months Ended
December 31, 2013
(Constant Currency) 1.60 13.5%
Unfavorable foreign
currency -translation
(5) (0.06)
Unfavorable foreign
currency -Venezuela
net monetary assets (0.03)
-----
Adjusted EPS for the
Twelve Months Ended
December 31, 2013 (Non-
GAAP) 1.51 7.1%
Integration Program and
other acquisition
integration costs (1) (0.10)
Spin-Off Costs (2) (0.02)
2012-2014 Restructuring
Program costs (4) (0.14)
Net earnings from
divestitures -
Net Benefit from
Indemnification
Resolution (6) 0.20
Loss on debt
extinguishment and
related expenses (7) (0.22)
Residual tax impact
associated with
Starbucks arbitration
resolution 0.02
Gains on acquisition
and divestitures, net
(8) 0.04
Acquisition-related
costs -
---
Diluted EPS
Attributable to
Mondelez International
from continuing
operations for the
Twelve Months Ended
December 31, 2013
(GAAP) 1.29 46.6%
Discontinued
operations, net of
income taxes 0.90
----
Diluted EPS
Attributable to
Mondelez International
for the Twelve
Months Ended December
31, 2013 (GAAP) $2.19 28.1%
=====
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition. Integration
Program costs were $216
million, or $171 million
after-tax including certain
tax costs associated with the
integration of Cadbury, for
the twelve months ended
December 31, 2013, as compared
to $140 million, or $134
million after-tax for the
twelve months ended December
31, 2012. We also incurred $4
million of integration costs
during the twelve months ended
December 31, 2013, associated
with the acquisition of the
biscuit operation in Morocco.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business. Spin-Off Costs for
the twelve months ended
December 31, 2013 were $62
million, or $38 million after-
tax, as compared to $1,053
million or $706 million after-
tax for the twelve months
ended December 31, 2012.
(3) Spin-Off related adjustments
include; (a) pension
adjustment defined as the
estimated benefit plan expense
associated with certain
benefit plan obligations
transferred to Kraft Foods
Group in the Spin-Off; and
(b) interest adjustment
defined as the interest
expense associated with the
assumed reduction of the $6
billion of our debt on January
1, 2012, from the utilization
of funds received from Kraft
Foods Group in 2012 in
connection with our Spin-Off
capitalization plan. Note
during the year ended December
31, 2012, a portion of the $6
billion of debt was retired.
As such, we adjusted interest
expense during this period as
if this debt had been paid on
January 1, 2012 to ensure
consistency of our assumption
and related results.
(4) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs. Restructuring Program
costs for the twelve months
ended December 31, 2013, were
$330 million, or $248 million
after-tax as compared to $110
million, or $70 million after-
tax for the twelve months
ended December 31, 2012.
(5) Includes the favorable foreign
currency impact on Mondelez
International foreign
denominated debt and interest
expense due to the strength of
the U.S. dollar.
(6) As part of our 2010 Cadbury
acquisition, the company
became the responsible party
for tax matters under the
Cadbury Schweppes Plc and Dr
Pepper Snapple Group, Inc.
("DPSG") Tax Sharing and
Indemnification Agreement
dated May 1, 2008 ("Tax
Indemnity") for certain 2007
and 2008 transactions relating
to the demerger of Cadbury's
Americas Beverage business. A
U.S. federal tax audit of DPSG
for the 2006-2008 tax years
was concluded with the IRS in
August 2013. As a result, the
company recorded a favorable
impact of $363 million due to
the reversal of the accrued
liability in excess of the
amount paid to DPSG under the
Tax Indemnity. The company
recorded $336 million in
selling, general and
administrative expenses and
$49 million in interest and
other expense, net, partially
offset by $22 million of tax
expense for an impact of $0.20
per diluted share, in the
twelve months ended December
31, 2013.
(7) On December 18, 2013, the
company completed a $3.4
billion cash tender offer for
some of its outstanding high
coupon long term debt. The
company recorded a pre-tax
loss on debt extinguishment
and related expenses of $612
million for the amount paid in
excess of the carrying value
of the debt and the
recognition of the remaining
unamortized financing and
related costs.
(8) On February 22, 2013, the
company acquired the remaining
interest in a biscuit
operation in Morocco, which is
now a wholly-owned subsidiary
within the EEMEA segment. A
pre-tax gain of $22 million
was recorded in connection
with the acquisition. In
addition, during the twelve
months ended December 31,
2013, the company divested a
salty snack business in
Turkey, a confectionery
business in South Africa and a
chocolate business in Spain.
A pre-tax gain of $8 million
was recorded in connection
with these divestitures.
Mondelez International Inc.
and Subsidiaries
Reconciliation of GAAP to
Non-GAAP Measures
Net Cash Provided by
Operating Activities to
Free Cash Flow excluding
items
For the Twelve Months Ended
December 31, 2013 Schedule 15
-----------
($ in millions)
(Unaudited)
Net Cash Provided by
Operating Activities
(GAAP) $6,410
Capital Expenditures (1,622)
------
Free Cash Flow (Non-GAAP) $4,788
Items
-----
Cash impact of the
resolution of the
Starbucks arbitration (1) (2,616)
Cash payments for accrued
interest and other
related fees associated
with debt tendered as of
December 18, 2013. (2) 81
---
Free Cash Flow excluding
items (Non-GAAP) $2,253
(1) During the fourth
quarter of 2013, the
dispute with Starbucks
Coffee Company was
resolved. The amount
noted above reflects
the cash received from
Starbucks of $2,764
million net of $148
million attorney's fees
paid.
(2) On December 18, 2013,
the company completed a
$3.4 billion cash
tender offer for some
of its outstanding high
coupon long-term debt.
The amount above
reflects the cash
payments associated
with accrued interest
and other related fees.
Mondelez International Inc. and Subsidiaries
Select Balance Sheet Items
($ in millions) (Unaudited) Schedule 16
-----------
Working Capital Items Cash and Debt
--------------------- -------------
December 31, December 31, December 31, December 31,
2013 2012 2013 2012
---- ---- ---- ----
Receivables,
net $5,403 $6,129 Short-term borrowings $1,636 $274
Inventories, 3,743 3,741 Current portion of
net long-term debt 1,003 3,577
Accounts
payable 5,345 4,642 Long-term debt 14,482 15,574
----- ----- ------ ------
Total Debt $17,121 $19,425
Net Working
Capital $3,801 $5,228 Cash and cash
Items equivalents 2,664 4,475
====== ====== ----- -----
Net Debt (1) $14,457 $14,950
======= =======
(1) Net debt is defined as
total debt, which
includes short-term
borrowings, current
portion of long-term
debt and long-term
debt, less cash and cash
equivalents.
Mondelez International, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Condensed Consolidated Statements of Earnings
For the Three Months Ended March 31, 2013 Schedule 17
-----------
(in millions of dollars, except per share data) (Unaudited)
As Reported (GAAP) Prior Period Tax As Revised (GAAP) Integration Program and other Spin-Off 2012-2014 Restructuring Program Net Earnings from Acquisition-related
Revisions Acquisition Integration costs Costs (2) Costs (3) Divestitures costs
(1) Gain on Acquisition (4) As Adjusted (Non-GAAP)
----------------- ----------------- ---------------- ------------------------------ --------- ------------------------------- ------------------ ---------------------- -------------------- ---------------------
Operating
income $834 $ - $834 $21 $9 $44 $1 $(22) $2 $889
Operating
income
margin 9.5% 9.5% 10.2%
Interest and
other
expense, net 279 - 279 - - - - - (5) 274
--- --- --- --- --- --- --- --- --- ---
Earnings from
continuing
operations
before
income taxes 555 - 555 21 9 44 1 (22) 7 615
Provision for
income taxes (19) 32 13 4 4 11 - - - 32
Effective tax
rate (3.4)% 2.3% 5.2%
----- --- ---
Earnings from
continuing
operations 574 (32) 542 17 5 33 1 (22) 7 583
Noncontrolling
interest 6 - 6 - - - - - - 6
--- --- --- --- --- --- --- --- --- ---
Net earnings
attributable
to Mondelez
International
from
continuing
operations $568 $(32) $536 $17 $5 $33 $1 $(22) $7 $577
==== ==== ==== === === === === ==== === ====
Per share
data:
Diluted
earnings per
share
attributable
to Mondelez
International:
- Continuing
operations $0.32 $(0.02) $0.30 $0.01 $ - $0.02 $ - $(0.01) $ - $0.32
Average
shares
outstanding:
Diluted 1,798 1,798
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business.
(3) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs.
(4) On February 22, 2013, the
company acquired the remaining
interest in a biscuit
operation in Morocco, which is
now a wholly-owned subsidiary
within the EEMEA segment. A
pre-tax gain of $22 million
was recorded in connection
with the acquisition.
Mondelez International, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Condensed Consolidated Statements of Earnings
For the Three Months Ended June 30, 2013 Schedule 18
-----------
(in millions of dollars, except per share data) (Unaudited)
As Reported (GAAP) Prior Period Tax As Revised (GAAP) Integration Program and other Spin-Off 2012-2014 Restructuring Program Net Earnings from Gains on Divestitures,
Revisions Acquisition Integration costs Costs (2) Costs (3) Divestitures net (4)
(1) As Adjusted (Non-GAAP)
----------------- ----------------- ---------------- ------------------------------ --------- ------------------------------- ------------------ ----------------------- ---------------------
Operating
income $865 $ - $865 $53 $15 $55 $(3) $(6) $979
Operating
income
margin 10.1% 10.1% 11.4%
Interest and
other
expense, net 235 - 235 - - - - - 235
--- --- --- --- --- --- --- --- ---
Earnings from
continuing
operations
before
income taxes 630 - 630 53 15 55 (3) (6) 744
Provision for
income taxes 13 15 28 11 (1) 15 (1) 39 91
Effective tax
rate 2.1% 4.4% 12.2%
--- --- ----
Earnings from
continuing
operations 617 (15) 602 42 16 40 (2) (45) 653
Noncontrolling
interest 1 - 1 - - - - - 1
--- --- --- --- --- --- --- --- ---
Net earnings
attributable
to Mondelez
International
from
continuing
operations $616 $(15) $601 $42 $16 $40 $(2) $(45) $652
==== ==== ==== === === === === ==== ====
Per share
data:
Diluted
earnings per
share
attributable
to Mondelez
International:
- Continuing
operations $0.34 $(0.01) $0.33 $0.02 $0.01 $0.02 $ - $(0.02) $0.36
Average
shares
outstanding:
Diluted 1,803 1,803
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business.
(3) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs.
(4) During the three months ended
June 30, 2013, the company
completed two divestitures, a
salty snack business in Turkey
and a confectionery business
in South Africa. A pre-tax
gain of $6 million (or an
after-tax gain of $45
million) was recorded in
connection with these
divestitures.
Mondelez International, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Measures
Condensed Consolidated Statements of Earnings
For the Three Months Ended September 30, 2013 Schedule 19
-----------
(in millions of dollars, except per share data) (Unaudited)
As Reported (GAAP) Prior Period Tax As Revised (GAAP) Integration Program and other Spin-Off 2012-2014 Restructuring Program Net Benefit from Net Earnings from
Revisions Acquisition Integration costs Costs (2) Costs (3) Indemnification Resolution (4) Divestitures
(1) As Adjusted (Non-GAAP)
----------------- ----------------- ---------------- ------------------------------ --------- ------------------------------- ------------------------------- ------------------ ---------------------
Operating
income $1,262 $ - $1,262 $36 $9 $63 $(336) $(2) $1,032
Operating
income
margin 14.9% 14.9% 12.2%
Interest and
other
expense, net 218 - 218 - - - 49 - 267
--- --- --- --- --- --- --- --- ---
Earnings from
continuing
operations
before
income taxes 1,044 - 1,044 36 9 63 (385) (2) 765
Provision for
income taxes 14 12 26 7 7 16 (22) (1) 33
Effective tax
rate 1.3% 2.5% 4.3%
--- --- ---
Earnings from
continuing
operations 1,030 (12) 1,018 29 2 47 (363) (1) 732
Noncontrolling
interest 6 - 6 - - - - - 6
--- --- --- --- --- --- --- --- ---
Net earnings
attributable
to Mondelez
International
from
continuing
operations $1,024 $(12) $1,012 $29 $2 $47 $(363) $(1) $726
====== ==== ====== === === === ===== === ====
Per share
data:
Diluted
earnings per
share
attributable
to Mondelez
International:
- Continuing
operations $0.57 $(0.01) $0.56 $0.01 $ - $0.03 $(0.20) $ - $0.40
Average
shares
outstanding:
Diluted 1,794 1,794
(1) Integration Program costs are
defined as the costs
associated with combining the
Mondelez International and
Cadbury businesses, and are
separate from those costs
associated with the
acquisition.
(2) Spin-Off Costs represent
transaction and transition
costs associated with
preparing the businesses for
independent operations
consisting primarily of
financial advisory fees, legal
fees, accounting fees, tax
services and information
systems infrastructure
duplication, and financing and
related costs to redistribute
debt and secure investment
grade ratings for both the
Kraft Foods Group business and
the Mondelez International
business.
(3) Restructuring Program costs
represent restructuring and
related implementation costs
reflecting primarily
severance, asset disposals and
other manufacturing-related
costs.
(4) As part of our 2010 Cadbury
acquisition, the company
became the responsible party
for tax matters under the
Cadbury Schweppes Plc and Dr
Pepper Snapple Group, Inc.
("DPSG") Tax Sharing and
Indemnification Agreement
dated May 1, 2008 ("Tax
Indemnity") for certain 2007
and 2008 transactions relating
to the demerger of Cadbury's
Americas Beverage business. A
U.S. federal tax audit of DPSG
for the 2006-2008 tax years
was concluded with the IRS in
August 2013. As a result, the
company recorded a favorable
impact of $363 million due to
the reversal of the accrued
liability in excess of the
amount paid to DPSG under the
Tax Indemnity. The company
recorded $336 million in
selling, general and
administrative expenses and
$49 million in interest and
other expense, net, partially
offset by $22 million of tax
expense for an impact of $0.20
per diluted share.
SOURCE Mondelez International, Inc.
