Mondelez 2013 Annual Report Download - page 58

Table of Contents
Liquidity and Capital Resources
We believe that our cash from operations, our new $4.5 billion revolving credit facility (which supports our commercial paper
program) and our authorized long-term financing will provide sufficient liquidity to meet our working capital needs, planned capital
expenditures, future contractual obligations, share repurchases and payment of our anticipated quarterly dividends. We continue to
maintain investment grade credit ratings on our debt. We continue to utilize our commercial paper program, primarily uncommitted
international credit lines and long-term debt issuances for regular funding requirements. We also use intercompany loans with
foreign subsidiaries to improve financial flexibility. Overall, we do not expect any negative effects to our funding sources that would
have a material effect on our liquidity, including the indefinite reinvestment of our foreign earnings.
The cash flow activity of the Kraft Foods Group discontinued operation, which was divested on October 1, 2012, is included within
our consolidated cash flow results for periods prior to October 1, 2012.
Net Cash Provided by Operating Activities:
Operating activities provided net cash of $6,410 million in 2013, $3,923 million in 2012 and $4,520 million in 2011. The increase in
operating cash flows in 2013 relative to 2012 was primarily related to the receipt of $2.6 billion of net cash received from the
resolution of the Starbucks arbitration, lower spending on Spin-Off Costs and the 2012-2014 Restructuring Program, lengthening of
days payables are outstanding, increased collection of receivables and lower interest payments. The decrease in operating cash
flows in 2012 relative to 2011 was primarily related to higher spending associated with Spin-Off Costs and the 2012-2014
Restructuring Program, partially offset by lower net working capital costs (primarily related to favorable inventory positions due to
higher inventory costs in 2011 and favorable accounts payable positions, partially offset by increased receivables).
Net Cash Used in Investing Activities:
Net cash used in investing activities was $1,483 million in 2013, $1,687 million in 2012 and $1,728 million in 2011. The decrease in
net cash used in investing activities in 2013 relative to 2012 related to payments made to Kraft Foods Group in 2012 related to the
Spin-
Off, partially offset by cash paid, net of cash received, in connection with the 2013 acquisition of a biscuit operation in Morocco
and lower proceeds on divestitures in 2013. The decrease in net cash used in investing activities in 2012 relative to 2011 related to
proceeds received from our divested businesses and lower capital expenditures in the current year, partially offset by cash
transferred to Kraft Foods Group related to the Spin-Off.
Capital expenditures, which were funded by operating activities and include expenditures for Kraft Foods Group in all periods prior
to October 1, 2012, were $1,622 million in 2013, $1,610 million in 2012 and $1,771 million in 2011. The 2013 capital expenditures
were made primarily to modernize manufacturing facilities and support new product and productivity initiatives. We expect 2014
capital expenditures to be up to $2.0 billion, including capital expenditures required for investments in systems and the 2012-2014
Restructuring Program. We expect to continue to fund these expenditures from operations.
Net Cash (Used in) / Provided by Financing Activities:
Net cash used in financing activities was $6,645 million in 2013, $204 million provided in 2012 and $3,175 million used in 2011. The
decrease in net cash provided by financing activities in 2013 relative to 2012 was primarily due to lower net proceeds from the
issuance of long-term debt, higher re-payment of long-term debt and repurchase of Common Stock, partially offset by lower
dividend payments reflecting our new capital structure and dividend rate following the Spin-Off and higher short-term borrowings.
The increase in net cash provided by financing activities in 2012 relative to 2011 was primarily due to higher proceeds from the
issuance of long-term debt (including notes issued by Kraft Foods Group in June 2012 for which we retained the proceeds), offset
by higher long-
term debt repayments. The net cash used in 2011 primarily related to $2,043 million in dividends paid, $1,114 million
in long-term debt repayments and $565 million in repayments of short-term borrowings, partially offset by $492 million in primarily
proceeds from stock option exercises within other financing activities.
Borrowing Arrangements:
On October 11, 2013, we entered into a revolving credit agreement for a $4.5 billion five-year senior unsecured revolving credit
facility. The agreement replaced our former revolving credit agreement, which was terminated upon the signing of the new
agreement. The revolving credit agreement includes a covenant that we maintain a minimum shareholders’ equity of at least
$24.6 billion, excluding accumulated other comprehensive earnings / (losses) and the cumulative effects of any changes in
accounting principles. At December 31, 2013, we met the covenant as our minimum shareholders’ equity was $35.3 billion. The
revolving credit agreement also contains customary representations, covenants and events of default. However, there are no credit
rating triggers, provisions or other financial covenants that could require us to post collateral as security. We intend to use the
revolving credit facility for general corporate purposes, including for working capital purposes and to support our commercial paper
program. As of December 31, 2013, no amounts were drawn on the facility.
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