Mondelez 2012 Annual Report Download - page 16

Table of Contents
We must correctly predict, identify and interpret changes in consumer preferences and demand, and offer new products
to meet those changes.
Consumer preferences for food and snacking products change continually. Our success depends on our ability to predict, identify
and interpret the tastes and dietary habits of consumers and to offer products that appeal to consumer preferences. If we do not
offer products that appeal to consumers, our sales and market share will decrease and our profitability could suffer.
We must distinguish among short-term fads, mid-term trends and long-term changes in consumer preferences. If we do not
accurately predict which shifts in consumer preferences will be long-term, or if we fail to introduce new and improved products to
satisfy those preferences, our sales could decline. In addition, because of our varied consumer base, including by geography, we
must offer an array of products that satisfy the broad spectrum of consumer preferences. If we fail to expand our product offerings
successfully across product categories, or if we do not rapidly develop products in faster growing and more profitable categories,
demand for our products will decrease and our profitability could suffer.
Prolonged negative perceptions concerning the health implications of certain food products could influence consumer preferences
and acceptance of some of our products and marketing programs. For example, recently, consumers have been increasingly
focused on health and wellness, including weight management and reducing sodium consumption. We strive to respond to
consumer preferences and social expectations, but we may be unsuccessful in these efforts. Continued negative perceptions and
failure to satisfy consumer preferences could materially and adversely affect our product sales, financial condition and results of
operations.
We may not successfully identify or complete acquisitions or divestitures or successfully integrate the businesses we
acquire.
From time to time, we evaluate acquisition candidates that may strategically fit our business objectives. If we are unable to
complete acquisitions or to successfully integrate and develop acquired businesses we could fail to achieve anticipated synergies
and cost savings, including the expected increases in revenues and operating results, any of which could materially and adversely
affect our financial results. In addition, we may divest businesses that do not meet our strategic objectives, or do not meet our
growth or profitability targets. We may not be able to complete desired or proposed divestitures on terms favorable to us. Gains or
losses on the sales of, or lost operating income from, those businesses may affect our profitability. Moreover, we may incur asset
impairment charges related to acquisitions or divestitures that reduce our profitability.
Our acquisition or divestiture activities may present financial, managerial and operational risks. Those risks include diversion of
management attention from existing core businesses, difficulties integrating or separating personnel and financial and other
systems, effective and immediate implementation of control environment processes across our diverse employee population,
adverse effects on existing business relationships with suppliers and customers, inaccurate estimates of fair value made in the
accounting for acquisitions and amortization of acquired intangible assets which would reduce future reported earnings, potential
loss of customers or key employees of acquired businesses, and indemnities and potential disputes with the buyers or sellers. Any
of these factors could materially and adversely affect our product sales, financial condition and results of operations.
We are subject to foreign currency exchange rate fluctuations.
The Spin-Off increased the proportion of our business exposed to currency exchange rate fluctuations. Our financial results and
capital ratios are now more sensitive to movements in exchange rates than in prior periods because a larger portion of our assets,
liabilities, revenue and expenses must be translated into U.S. dollars for external reporting purposes or converted into U.S. dollars
to service obligations such as our U.S. dollar-denominated indebtedness and dividends. In addition, movements in foreign
exchange rates can affect transaction costs because we source product ingredients from various countries. We may seek to
mitigate our exposure to currency exchange rate fluctuations, but our efforts may not be successful. Accordingly, a depreciation of
non-U.S. dollar currencies relative to the U.S. dollar, or changes in the relative value of any two currencies that we use for
transactions, could materially and adversely affect our financial condition and results of operations.
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