Mondelez 2012 Annual Report Download - page 70

Table of Contents
Spin-Off Costs:
Our historical results include one-time Spin-Off transaction, transition and financing and related costs (“Spin-Off Costs”) we have
incurred to date. We recorded Spin-Off Costs of $1,053 million in 2012 and $46 million of Spin-Off Costs in 2011. We expect to
reflect all one-time Spin-Off Costs within our reported results. We incurred the following Spin-Off Costs within our pre-tax earnings:
Cadbury Acquisition and related Divestitures:
On January 19, 2010, we announced the terms of our final offer for each outstanding ordinary share of Cadbury Limited (formerly,
Cadbury plc) (“Cadbury”), including each ordinary share represented by an American Depositary Share (“Cadbury ADS”), and the
Cadbury Board of Directors recommended that Cadbury shareholders accept the terms of the final offer. On February 2, 2010, all of
the conditions to the offer were satisfied or validly waived, the initial offer period expired and a subsequent offer period immediately
began. At that point, we had received acceptances of 71.73% of the outstanding Cadbury ordinary shares, including those
represented by Cadbury ADSs (“Cadbury Shares”). As of June 1, 2010, we owned 100% of all outstanding Cadbury Shares.
The Cadbury acquisition was valued at $18.5 billion, or approximately £11.6 billion (based on the average price of $28.36 for a
share of Kraft Foods Inc. Common Stock on February 2, 2010 and an exchange rate of $1.595 per £1.00). On February 2, 2010,
we acquired 71.73% of Cadbury Shares for $13.1 billion and the value attributed to noncontrolling interests was $5.4 billion. From
February 2, 2010 through June 1, 2010, we acquired the remaining 28.27% of Cadbury Shares for $5.4 billion. We recorded a $38
million gain on the noncontrolling interests acquired within additional paid in capital.
As part of our Cadbury acquisition, we incurred and expensed transaction-related fees of $218 million in 2010 and $40 million in
2009. We recorded these expenses within selling, general and administrative expenses. We also incurred acquisition financing fees
of $96 million in 2010. We recorded these expenses within interest and other expense, net.
As a condition to granting approval of the acquisition, the EU required that we divest certain Cadbury confectionery operations in
Poland and Romania. In 2010, we completed the sale of the assets of these businesses and generated $342 million in sale
proceeds. The impact of these divestitures was reflected as adjustments within the Cadbury final purchase accounting.
During 2010, Cadbury contributed net revenues of $9,143 million and net earnings of $530 million from February 2, 2010 through
December 31, 2010. The following unaudited pro forma summary presents our consolidated results of continuing operations as if
Cadbury had been acquired on January 1, 2010. These amounts were calculated after conversion to U.S. GAAP, applying our
accounting policies, and adjusting Cadbury’s results to reflect the additional depreciation and amortization that would have been
charged assuming the fair value adjustments to property, plant and equipment, and intangible assets had been applied from
January 1, 2010, together with the consequential tax effects. These adjustments also reflect the additional interest expense
incurred on the debt to finance the purchase and the divestitures of certain Cadbury confectionery operations in Poland and
Romania.
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For the Years Ended
December 31,
2012
2011
(in millions)
Selling, general and administrative expenses
$
444
$
46
Interest and other expense, net
609
–
Spin-Off Costs
$
1,053
$
46
Pro forma
Year Ended
December 31, 2010
(in millions)
Net revenues
$
32,052
Net earnings attributable to Mondelēz International
2,115