Mondelez 2013 Annual Report Download - page 31

Table of Contents
In December 2013, a dispute over a license and supply agreement between Starbucks and Kraft Foods Group was resolved when
an independent arbitrator issued a decision and Final Award that resulted in Starbucks paying $2.8 billion for its unilateral
termination of the agreement. The dispute arose within the Kraft Foods Group discontinued operation and was directed to
Mondelēz International as part of the Spin-Off recapitalization plans. The net $1.6 billion after-tax gain on the resolution of the
arbitration was recorded in earnings from discontinued operations in the fourth quarter of 2013. See Item 3, Legal Proceedings ,
and Notes 2, Divestitures and Acquisition , and 12, Commitments and Contingencies , for additional information.
Acquisition, Other Divestitures and Sales of Property
On February 22, 2013, we acquired the remaining interest in a biscuit operation in Morocco, which is now a wholly-owned
subsidiary within our EEMEA segment. We paid net cash consideration of $119 million, consisting of a $155 million purchase price
net of cash acquired of $36 million. Prior to the acquisition, our interest in the operation was accounted for under the equity method.
As a result of obtaining a controlling interest, we consolidated the operation and recorded the fair value of acquired assets
(including identifiable intangible assets of $48 million), the liabilities assumed and goodwill of $209 million. We also recorded a pre-
tax gain of $22 million related to the remeasurement of our previously-held equity interest in the operation to fair value in
accordance with U.S. GAAP. Acquisition costs of $7 million were included within selling, general and administrative expenses and
interest and other expense, net during the year ended December 31, 2013. The operating results of the acquisition were not
material to our condensed consolidated financial statements during the periods presented.
In 2013, we completed several divestitures primarily in our EEMEA and Europe segments which generated cash proceeds of $60
million and pre-tax gains of $8 million. The divestitures included a salty snacks business in Turkey, a confectionery business in
South Africa and a chocolate business in Spain.
In 2012, we completed several divestitures within our Europe segment that generated cash proceeds of $200 million and pre-tax
gains of $107 million. The divestitures primarily included a dinners and sauces grocery business in Germany and Belgium and a
canned meat business in Italy.
The aggregate operating results of the 2013 and 2012 divestitures were not material to our financial statements in any of the
periods presented.
In 2013, we sold properties in Italy, the United Kingdom and Norway within our Europe segment and in India within our Asia Pacific
segment. The Europe property sales generated $29 million in pre-tax net gains and $37 million of cash proceeds. We also have a
$52 million receivable related to the United Kingdom property sale. The India property sale generated a $39 million pre-
tax gain and
$53 million of cash proceeds. The gains were recorded within selling, general and administrative expenses and cash proceeds
were recorded in cash flows from other investing activities in the year ended December 31, 2013.
In 2012, we also sold property in Russia and Turkey within our EEMEA segment. The Russia property sale generated a $55 million
pre-tax gain and $72 million of cash proceeds and the Turkey property sale generated a $22 million pre-tax gain and $29 million of
cash proceeds. The gains were recorded within selling, general and administrative expenses and the cash proceeds were recorded
in cash flows from other investing activities in the year ended December 31, 2012.
2012-2014 Restructuring Program
In 2012, our Board of Directors approved $1.5 billion of restructuring and related implementation costs (“2012-2014 Restructuring
Program”) reflecting primarily severance, asset disposals and other manufacturing-related one-time costs. The primary objective of
the restructuring and implementation activities was to ensure that both Mondelēz International and Kraft Foods Group were each
set up to operate efficiently and execute on our respective business strategies upon separation and in the future.
Of the $1.5 billion of anticipated 2012-2014 Restructuring Program costs, we retained approximately $925 million and Kraft Foods
Group retained the balance of the program. Since inception, we have incurred $440 million of our estimated $925 million total 2012-
2014 Restructuring Program charges.
We recorded restructuring charges of $267 million in 2013 and $102 million in 2012 within asset impairment and exit costs. We also
incurred implementation costs of $63 million in 2013 and $8 million in 2012, which were recorded within cost of sales and selling,
general and administrative expenses. See Note 6, 2012-2014 Restructuring Program , and Note 10, Benefit Plans , for additional
information.
27