Mondelez 2012 Annual Report Download - page 63

Table of Contents
Mondelēz International, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
Description of Business:
Mondelēz International, Inc. (formerly Kraft Foods Inc.) was incorporated in 2000 in the Commonwealth of Virginia. Mondelēz
International, Inc., through its subsidiaries (collectively “Mondelēz International,” “we,” “us” and “our”), sells food and beverage
products to consumers in approximately 165 countries.
On October 1, 2012 (the “Distribution Date”), we completed the spin-
off of our former North American grocery business, Kraft Foods
Group, Inc. (“Kraft Foods Group”) by distributing 100% of the outstanding shares of common stock of Kraft Foods Group to holders
of our common stock (the “Spin-Off”). Along with our other food and beverage categories, we also retained our global snacks
business (the “Global Snacks Business.”) See Note 2, Divestitures and Acquisitions, for more information about the Spin-Off.
Changes in Presentation:
The divested Kraft Foods Group is presented as a discontinued operation on the consolidated statements of earnings for all periods
presented. The Kraft Foods Group balance sheet, other comprehensive earnings and cash flows are included within our
consolidated balance sheet and consolidated statements of equity, comprehensive earnings and cash flows through October 1,
2012. The results from discontinued operations are discussed in further detail in Note 2, Divestitures and Acquisitions .
Principles of Consolidation:
The consolidated financial statements include Mondelēz International, as well as our wholly owned and majority owned
subsidiaries. The majority of our operating subsidiaries report results as of the last Saturday of the year. A portion of our
international operating subsidiaries report results as of the last calendar day of the period. In 2011, the last Saturday of the year fell
on December 31, so our 2011 results included one more week of operating results (“53 week”) than 2012 or 2010, which each
had 52 weeks.
In 2011, we changed the consolidation date for certain operations of our Europe segment and in the Latin America, Central and
Eastern Europe (“CEE”) and Middle East and Africa (“MEA”) regions within our Developing Markets segment. Previously, these
operations primarily reported results two weeks prior to the end of the period. Subsequent to the 2011 changes, our Europe
segment reports results as of the last Saturday of each period. Certain operations within our Developing Markets segment now
report results as of the last calendar day of the period or the last Saturday of the period. These changes and the 53 week in 2011
resulted in a favorable impact to net revenues of $679 million and a favorable impact of $93 million to operating income in 2011.
In 2010, we changed the consolidation date for certain European biscuits operations, which are included within our Europe
segment, and certain operations in Asia Pacific and Latin America within our Developing Markets segment. Previously, these
operations primarily reported period-end results one month or two weeks prior to the end of the period. Europe moved the reporting
of these operations to two weeks prior to the end of the period, and Asia Pacific and Latin America moved the reporting of these
operations to the last day of the period. These changes resulted in a favorable impact to net revenues of $193 million and a
favorable impact of $23 million to operating income in 2010.
We believe these changes are preferable and will improve business planning and financial reporting by better matching the close
dates of the operating subsidiaries within our Europe and Developing Markets segments and by bringing the reporting dates closer
to the period-end date. As the effect to prior-period results was not material, we have not revised prior-period results.
We account for investments in which we exercise significant influence (20%-50% ownership interest) under the equity method of
accounting. We use the cost method of accounting for investments in which we have an ownership interest of less than 20% and in
which we do not exercise significant influence. Noncontrolling interest in subsidiaries consists of the equity interest of noncontrolling
investors in consolidated subsidiaries of Mondelēz International. All intercompany transactions are eliminated.
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