Mondelez 2013 Annual Report Download - page 74

Table of Contents
Mondelēz International, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
Description of Business :
Mondelēz International, Inc. (formerly Kraft Foods Inc.) was incorporated in 2000 in the Commonwealth of Virginia. Mondelēz
International, Inc., through its subsidiaries (collectively “Mondelēz International,” “we,” “us” and “our”), sells food and beverage
products to consumers in approximately 165 countries.
Discontinued Operation :
On October 1, 2012, we completed the spin-off of our former North American grocery business, Kraft Foods Group, Inc. (“Kraft
Foods Group”) by distributing 100% of the outstanding shares of common stock of Kraft Foods Group to holders of our Common
Stock (the “Spin-Off”). We retained our global snacks business along with other food and beverage categories. 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 additional information.
Segment Reorganization:
Effective 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 high-growth 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. We have presented our segment results reflecting these changes for all periods
presented.
Principles of Consolidation :
The consolidated financial statements include Mondelēz International, as well as our wholly owned and majority owned
subsidiaries. We account for investments in which we exercise significant influence (20%-50% ownership interest) under the equity
method of accounting. We use the cost method of accounting for investments in which we have an ownership interest of less than
20% and in which we do not exercise significant influence. Non-controlling interest in subsidiaries consists of the equity interest of
non-controlling investors in consolidated subsidiaries of Mondelēz International. All intercompany transactions are eliminated.
Accounting Calendar Changes
:
In 2013, the majority of our operating subsidiaries report results as of the last calendar day of the period. In connection with moving
to this common consolidation date, in the first quarter of 2013, we changed the consolidation date for our Europe segment from the
last Saturday of each period to the last calendar day of each period. 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 continue to 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 also fell on December 31, and 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.
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• Latin America (formerly in our Developing Markets segment)
• Asia Pacific (formerly in our Developing Markets segment)
• Eastern Europe, Middle East & Africa (“EEMEA”) (formerly in our Developing Markets segment)
• Europe (now includes certain European operations previously managed within the EEMEA segment)
• North America