Mondelez 2013 Annual Report Download - page 32

Table of Contents
Integration Program
As a result of our combination with Cadbury Limited (formerly, Cadbury plc or “Cadbury”) in 2010, we launched an integration
program (the “Integration Program”) to realize expected annual cost savings of approximately $750 million by the end of 2013 and
revenue synergies from investments in distribution, marketing and product development. We achieved cost savings of
approximately $800 million one year ahead of schedule and achieved our planned revenue synergies by December 31, 2013. To
achieve the expected annual cost savings and synergies and integrate the two businesses, we incurred total integration charges of
approximately $1.5 billion through the end of 2013 and have now completed the Integration Program.
We recorded Integration Program charges of $216 million in 2013, $185 million in 2012 and $521 million in 2011. At December 31,
2013, we had an accrued liability of $145 million related to the Integration Program, of which, $101 million was recorded within
other current liabilities and $44 million, primarily related to leased facilities no longer in use, was recorded within other long-term
liabilities. During 2012, we refined our estimate of 2010 Integration Program charges by $45 million primarily related to planned and
announced position eliminations that did not occur within our Europe segment. The reversal was based on final negotiations with
local workers councils, the majority of which were concluded in April 2012. We recorded Integration Program charges in operations
as a part of selling, general and administrative expenses primarily within our Europe, EEMEA, Asia Pacific and Latin America
segments, as well as within general corporate expenses. See Note 7, Integration Program and Cost Savings Initiatives , to the
consolidated financial statements for additional information.
Cost Savings Initiatives
Cost savings initiatives generally include exit, disposal and other project costs outside of our Integration Program and 2012-2014
Restructuring Program and consist of the following specific initiatives:
Accounting Calendar Changes in 2013 and 2011
The majority of our operating subsidiaries report results as of the last calendar day of the period. In connection with moving toward
a common consolidation date across the Company, in the first quarter of 2013, we changed the consolidation date for our Europe
segment. The change in the consolidation date for our Europe segment had a favorable impact of $37 million on net revenues and
$6 million on operating income in 2013. At this time, primarily our North American operating subsidiaries report results as of the last
Saturday of the period.
Prior to these changes, in 2012 and 2011, the majority of our operating subsidiaries reported results as of the last Saturday of the
year. In 2011, the last Saturday of the year fell on December 31, so our 2011 results included one more week of operating results
(“53
rd
week”) than 2013 or 2012, which each had 52 weeks. In 2011, we also changed the consolidation dates for certain
operations of our Europe, Latin America and EEMEA segments. Previously, these operations primarily reported results two weeks
prior to the end of the period. Subsequent to the 2011 changes, the majority of our Europe segment reported results as of the last
Saturday of each period and certain operations within our Latin America and EEMEA segments began to report results as of the
last calendar day of the period or the last Saturday of the period. These changes and the 53
rd
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.
We believe these changes will improve business planning and financial reporting by better matching the close dates of the
operating subsidiaries and bringing the reporting date closer to the period-end date. As the effect to prior-period results was not
material, we have not revised prior-period results.
28
• In 2013, we recorded a $20 million charge primarily within the segment operating income of Latin America related to severance benefits provided to terminated employees and one-
time charges and within the segment operating income of
North America related to supply chain reinvention team expenses.
• In 2012, we recorded a $21 million charge primarily within the segment operating income of Europe related to severance benefits provided to terminated employees and charges in connection with the reorganization within the Europe and
EEMEA segments (the “Europe reorganization”).
• In 2011, we recorded a $61 million charge primarily within the segment operating income of Europe related to severance
benefits provided to terminated employees and charges in connection with the Europe reorganization. We also reversed
approximately $15 million of cost savings initiative program costs across the North America, Europe and EEMEA
segments.