Mondelez 2012 Annual Report Download - page 99

Table of Contents
Note 16. Segment Reporting
We manufacture and market primarily snack food and beverage products, including biscuits (cookies, crackers and salted snacks),
chocolate, gum & candy, coffee & powdered beverages and various cheese & grocery products. We manage our global business
and report operating results through three geographic units: Developing Markets, Europe and North America. In connection with the
divestiture of Kraft Foods Group, we divested and no longer report on the following segments within our results from continuing
operations: U.S. Beverages, U.S. Cheese, U.S. Convenient Meals and U.S. Grocery. Our remaining businesses within North
America are predominantly snacks businesses. Our segment results in this Annual Report on Form 10-K reflect these changes for
all periods presented.
Beginning in 2013, our segment structure will change. In December 2012, we announced a reorganization of our business and
reporting structure following the Spin-Off. Effective January 1, 2013, our operations, management and segments will be
reorganized into five operating segments: Asia Pacific; Eastern Europe, Middle East & Africa (“EEMEA”); Europe; Latin America
and North America. Accordingly, we will begin to report on our new segment structure during the first quarter of 2013 and reflect the
change for all the historical periods we present.
We use segment operating income to evaluate segment performance and allocate resources. We believe it is appropriate to
disclose this measure to help investors analyze segment performance and trends. Segment operating income excludes unrealized
gains and losses on hedging activities (which are a component of cost of sales), certain components of our U.S. pension plan cost
(which are a component of cost of sales and selling, general and administrative expenses), general corporate expenses (which are
a component of selling, general and administrative expenses), amortization of intangibles, gains and losses on divestitures and
acquisition-related costs (which are a component of selling, general and administrative expenses) in all periods presented. We
exclude the unrealized gains and losses on hedging activities from segment operating income in order to provide better
transparency of our segment operating results. Once realized, the gains and losses on hedging activities are recorded within
segment operating results. We exclude certain components of our U.S. pension plan cost from segment operating income because
we centrally manage pension plan funding decisions and the determination of discount rate, expected rate of return on plan assets
and other actuarial assumptions. Therefore, we allocate only the service cost component of our U.S. pension plan expense to
segment operating income. Furthermore, we centrally manage interest and other expense, net. Accordingly, we do not present
these items by segment because they are excluded from the segment profitability measure that management reviews. We use the
same accounting policies for the segments as those described in Note 1, Summary of Significant Accounting Policies .
Our segment net revenues and earnings were:
96
For the Years Ended December 31,
2012
2011
2010
(in millions)
Net revenues:
Developing Markets
$
15,655
$
15,621
$
13,420
Europe
12,457
13,356
11,628
North America
6,903
6,833
6,441
Net revenues
$
35,015
$
35,810
$
31,489
Earnings from continuing operations before income taxes:
Operating income:
Developing Markets
$
2,067
$
2,003
$
1,533
Europe
1,613
1,406
1,115
North America
873
863
805
Unrealized gains / (losses) on hedging activities
1
(36
)
38
Certain U.S. pension plan costs
(92
)
(76
)
(56
)
General corporate expenses
(714
)
(437
)
(511
)
Amortization of intangibles
(217
)
(225
)
(210
)
Gains on divestitures, net
107
–
–
Acquisition
-
related costs
(1
)
–
(
218
)
Operating income
3,637
3,498
2,496
Interest and other expense, net
(1,863
)
(1,618
)
(1,770
)
Earnings from continuing operations before income taxes
$
1,774
$
1,880
$
726