Mondelez 2013 Annual Report Download - page 25

Table of Contents
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis contains forward-looking statements. It should be read in conjunction with the other sections
of this Annual Report on Form 10-K, including the consolidated financial statements and related notes contained in Item 8,
“Forward-looking Statements” and “Risk Factors” contained in Item 1A.
Description of the Company
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 have operations in more than
80 countries and sell our products in approximately 165 countries.
Over the last several years, we have been expanding geographically and building our presence in the fast-growing snacking
category. At the same time, we continued to invest in product quality, marketing and innovation behind our iconic brands, while
implementing a series of cost saving initiatives. We expect our global snacks businesses will build upon our strong presence across
numerous fast-growing markets, categories and channels including the high-
margin instant consumption channel. We plan to target
industry-leading revenue growth, leverage our cost structure through supply chain reinvention, productivity programs, overhead
streamlining, volume growth and improved product mix to drive margin gains and grow earnings per share in the top-
tier of our peer
group.
Business and Segment Reorganization
Effective as of January 1, 2013, we reorganized our operations and management into five reportable operating segments:
We changed and flattened our operating structure to reflect our greater concentration of operations in emerging markets and to
further enhance collaboration across regions, expedite decision making and drive greater efficiencies to fuel our growth. Coincident
with the change in segment structure, segment operating income for our North America region also changed to include all U.S.
pension plan expenses, a portion of which was previously excluded from segment operating results evaluated by management as
the costs were centrally managed. See Note 17, Segment Reporting, for additional segment information. Our segment results
reflect the change in segment structure for all periods presented.
Spin-Off of Kraft Foods Group
On October 1, 2012, we completed the spin-off of our North American grocery business, Kraft Foods Group, Inc. (“Kraft Foods
Group”), to our shareholders (the “Spin-Off”). The divested Kraft Foods Group business is presented as a discontinued operation
on the consolidated statements of earnings for all periods presented. The Kraft Foods Group other comprehensive earnings,
changes in equity and cash flows are included within our consolidated statements of comprehensive earnings, equity and cash
flows through October 1, 2012. See Note 2, Divestitures and Acquisition , for more information on the Spin-Off of Kraft Foods
Group.
Revision of Financial Statements
In finalizing our 2013 results, we identified certain out-of-period, non-cash income tax-related errors in prior interim and annual
periods. These errors are not material to any previously reported financial results; however, we have revised our first through third
quarter 2013 and prior-year financial statements in this filing to reflect these items in the appropriate periods. The net effect of the
revision was to lower tax expense in years prior to 2013. The impact of the revision to 2013 results through the third quarter was a
$59 million reduction of net earnings related to both current and prior-year corrections. The impact of the revision to fiscal years
prior to 2013 was an increase in cumulative net earnings of $94 million. For additional details of the adjustments, see Note 1,
Summary of Significant Accounting Policies – Revision of Financial Statements . The following discussion and analysis relates to
revised after-tax results for all periods presented.
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•
Latin America
•
Asia Pacific
•
Eastern Europe, Middle East & Africa (
“
EEMEA
”
)
•
Europe
• North America