Mondelez 2012 Annual Report Download - page 36

Table of Contents
On February 8, 2013, the Venezuelan government announced the devaluation of the official Venezuelan bolivar exchange rate from
4.30 bolivars to 6.30 bolivars to the U.S. dollar and the elimination of the second-tier, government-regulated SITME exchange rate
previously applied to value certain types of transactions. The impact of these announced changes resulted in a one-
time $30 million
unfavorable foreign currency impact which we will record within our Latin America operating segment in the first quarter of
2013. We began accounting for the results of our Venezuelan subsidiaries in U.S. dollars on January 1, 2010, as prescribed under
U.S. GAAP for highly inflationary economies. We use the official Venezuelan bolivar exchange rate to translate the results of our
Venezuelan operations into U.S. dollars. During 2012 and 2011, we recorded immaterial foreign currency impacts in connection
with highly inflationary accounting for Venezuela. In 2010, we recorded $115 million of unfavorable foreign currency impacts
including a one-time $34 million charge upon adopting highly inflationary accounting for Venezuela.
In 2012, we divested property of a Developing Markets subsidiary located in Russia for $72 million in net proceeds and recorded a
$55 million pre-tax gain within selling, general and administrative expenses.
In 2012, net changes in unrealized gains / (losses) on hedging activities were favorable, primarily related to gains on foreign
currency contracts and commodity hedging activity of $1 million. In 2011, net changes in unrealized gains / (losses) on hedging
activities were unfavorable, primarily related to losses on foreign currency contracts and commodity hedging activity of $36 million.
In 2010, net changes in unrealized gains / (losses) on hedging activities were favorable, primarily related to gains on foreign
currency contracts and commodity hedging activity of $38 million.
In connection with our 2012-2014 Restructuring Program, during 2012 we recorded restructuring charges of $102 million in
operations, as a part of asset impairment and exit costs and implementation costs of $8 million in operations, as a part of cost of
sales and selling, general and administrative expenses. These charges were recorded primarily within our North America segment.
In 2012, we recorded a $44 million benefit within our Europe segment related to the reversal of reserves carried over from the
Cadbury acquisition in 2010 which was subsequently determined to not be required.
We recorded Integration Program charges of $185 million in 2012, $521 million in 2011 and $646 million in 2010. During 2012, we
reversed $45 million of Integration Program charges previously accrued in 2010 primarily related to planned and announced
position eliminations that did not occur within our Europe segment. We recorded charges in the Integration Program in operations,
as a part of selling, general and administrative expenses primarily within our Europe and Developing Markets segments, as well as
within general corporate expenses.
The 2012 increase in general corporate expenses was due primarily to $407 million of Spin-Off Costs recorded within general
corporate expenses, partially offset by lower Integration Program costs. The 2011 decrease in general corporate expenses was due
primarily to lower Integration Program costs in 2011. In 2010, general corporate expenses included $155 million of Integration
Program costs, as well as the addition of Cadbury’s corporate charges.
In 2012, we received $200 million in proceeds and recorded pre-tax gains of $107 million primarily related to the divestitures in
Germany, Belgium and Italy. In 2011, there were no significant divestitures. In 2010, we divested businesses in Poland and
Romania in connection with the acquisition of Cadbury, and reflected the impacts of these divestitures as adjustments to the
Cadbury purchase price allocations.
In 2010, we acquired Cadbury and incurred $218 million of acquisition-related costs which was recorded within selling, general and
administrative expenses.
The 2012 increase in interest and other expense, net was due primarily to $609 million of Spin-Off Costs recorded within interest
expense, partially offset by a 2011 loss of $157 million related to several interest rate swaps that were settled in 2011, as well as
lower long-term debt interest expense. The 2011 decrease in interest and other expense, net was due primarily to $251 million of
acquisition-related financing fees recorded in 2010, partially offset by the loss of $157 million related to several interest rate swaps
that settled in 2011.
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