Mondelez 2012 Annual Report Download - page 49

Table of Contents
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
We have no off-balance sheet arrangements other than the guarantees and contractual obligations that are discussed below.
Guarantees:
As discussed in Note 12, Commitments and Contingencies , we enter into third-party guarantees primarily to cover the long-term
obligations of our vendors. As part of these transactions, we guarantee that third parties will make contractual payments or achieve
performance measures. At December 31, 2012, we had no material third-party guarantees recorded on our consolidated balance
sheet.
In addition, at December 31, 2012, we were contingently liable for $516 million of guarantees related to our own performance.
These include letters of credit and guarantees related to the payment of custom duties and taxes.
As of December 31, 2012, we and three of our indirect wholly owned subsidiaries are joint and several guarantors of $1.0 billion of
indebtedness issued by an unrelated third party, Cadbury Schweppes US Finance LLC, and maturing on October 1,
2013. Following the Spin-
Off, one of the guarantors of this indebtedness became an indirect wholly owned subsidiary of Kraft Foods
Group. We have agreed to indemnify Kraft Foods Group pursuant to the Separation and Distribution Agreement, in the event its
subsidiary is called upon to satisfy its obligation under the guarantee.
Guarantees do not have, and we do not expect them to have, a material effect on our liquidity.
Aggregate Contractual Obligations:
The following table summarizes our contractual obligations at December 31, 2012.
46
Payments Due
Total
2013
2014
-
15
2016
-
17
2018 and
Thereafter
(in millions)
Debt
$
19,158
$
3,567
$
2,111
$
3,264
$
10,216
Interest expense
11,191
1,064
1,793
1,502
6,832
Capital leases
4
2
2
– –
Operating leases
1,144
330
406
277
131
Purchase obligations:
Inventory and production costs
5,769
3,979
882
458
450
Other
1,540
1,105
331
78
26
7,309
5,084
1,213
536
476
Other long
-
term liabilities
246
28
69
43
106
Total
$
39,052
$
10,075
$
5,594
$
5,622
$
17,761
(1)
Amounts include the expected cash payments of our total debt excluding capital leases which are presented separately in the table above. The amounts also
excludes $11 million of unamortized bond premiums or discounts recorded in total debt and excluded here as they are non
-
cash items.
(2) Amounts represent the expected cash payments of our interest expense on our long-term debt. Interest calculated on our euro notes was forecasted using
the euro to U.S. dollar exchange rate as of December 31, 2012. Interest on our British pound sterling notes was forecasted using the British pound sterling to
U.S. dollar exchange rate as of December 31, 2012. An insignificant amount of interest expense was excluded from the table for a portion of our other
foreign currency obligations due to the complexities involved in forecasting expected interest payments.
(3) Operating leases represent the minimum rental commitments under non-cancelable operating leases.
(4) Purchase obligations for inventory and production costs (such as raw materials, indirect materials and supplies, packaging, co-manufacturing arrangements,
storage and distribution) are commitments for projected needs to be utilized in the normal course of business. Other purchase obligations include
commitments for marketing, advertising, capital expenditures, information technology and professional services. Arrangements are considered purchase
obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure and approximate timing of
the transaction. Most arrangements are cancelable without a significant penalty and with short notice (usually 30 days). Any amounts reflected on the
consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.
(5) Other long-term liabilities primarily consist of estimated future benefit payments for our postretirement health care plans through December 31, 2022 of $164
million. We are unable to reliably estimate the timing of the payments beyond 2022; as such, they are excluded from the above table. There are also another
$82 million of various other long-term liabilities that are expected to be paid over the next 5 years. In addition, the following long-term liabilities included on
the consolidated balance sheet are excluded from the table above: accrued pension costs, income taxes, insurance accruals and other accruals. We are
unable to reliably estimate the timing of the payments (or contributions beyond 2013, in the case of accrued pension costs) for these items. We currently
expect to make approximately $320 million in contributions to our pension plans in 2013. We also expect that our net pension cost will decrease to
approximately $370 million in 2013. The decrease is primarily due to non-recurring costs in 2012 related primarily to certain pension plan obligations
transferred to Kraft Foods Group in the Spin-Off and other 2012 non-recurring costs, partially offset by increased pension plan expenses in 2013 related to
lower discount rates. As of December 31, 2012, our total liability for income taxes, including uncertain tax positions and associated accrued interest and
penalties, was $980 million. We currently estimate receiving approximately $126 million, net of estimated payments of approximately $128 million, related to
these positions over the next 12 months.
(1)
(2)
(3)
(4)
(5)