Kraft 2013 Annual Report Download - page 72

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70
authorization and in what we contended was a violation and breach of our license and supply agreement with
Starbucks related to the Starbucks CPG business (the “Starbucks Agreement”). The dispute was arbitrated in
Chicago, Illinois, and on November 12, 2013, the arbitrator issued a decision awarding us compensation for
Starbucks’ unilateral termination of the Starbucks Agreement. While we remained the named party in the
proceeding, pursuant to the Separation and Distribution Agreement between International and us,
International paid any costs and expenses incurred in connection with the arbitration and we directed the
payment of the recovery we were awarded in the arbitration proceeding to International. The arbitration’s
outcome did not have a material financial impact on us.
While we cannot predict with certainty the results of Legal Matters in which we are currently involved or may in the
future be involved, we do not expect that the ultimate costs to resolve any of the Legal Matters that are currently
pending will have a material adverse effect on our financial condition or results of operation.
Third-Party Guarantees:
We have third-party guarantees primarily covering long-term obligations related to leased properties. The carrying
amount of our third-party guarantees on our consolidated balance sheet was $24 million at December 28, 2013 and
$22 million at December 29, 2012. The maximum potential payment under these guarantees was $53 million at
December 28, 2013 and $64 million at December 29, 2012. Substantially all of these guarantees expire at various
times through 2027.
Leases:
Rental expenses were $176 million in 2013, $150 million in 2012, and $169 million in 2011. As of December 28,
2013, minimum rental commitments under non-cancelable operating leases in effect at year-end were (in millions):
2014 $ 109
2015 85
2016 71
2017 56
2018 49
Thereafter 126
Total $ 496
In the fourth quarter, we entered into a build-to-suit lease on a facility we expect to be completed in early 2015.
Under this agreement, we have committed to pay approximately $70 million over a 21-year lease term.