Mondelez 2014 Annual Report Download - page 34

Table of Contents
Operating Income – Operating income increased $334 million (9.2%) to $3,971 million in 2013, Adjusted Operating Income
(1)
increased $1 million (0.0%) to $4,267 million and Adjusted Operating Income on a constant currency basis
(1)
increased $147
million (3.4%) to $4,413 million due to the following:
Favorable volume/mix was driven primarily by volume gains across all segments except Asia Pacific. Higher net pricing in Latin
America and North America was partially offset by lower net pricing in Europe, Asia Pacific and EEMEA, primarily due to lower
coffee pricing. During 2013, increased input costs outpaced higher net pricing. The increase in input costs was driven by higher raw
material costs, in part due to higher currency exchange transaction costs on imported materials, partially offset by lower
manufacturing costs.
Total selling, general and administrative expenses decreased $497 million from 2012, due in part to lower Spin-Off Costs, a benefit
from the resolution of the Cadbury acquisition-related indemnification, a favorable currency impact net of the negative impact from
the devaluation of our net monetary assets in Venezuela, gains on the sales of properties in 2013 and the impact of businesses
divested in 2013 and 2012, which were partially offset by gains on sales of properties in 2012, higher Integration Program costs,
higher 2012-
2014 Restructuring Program costs and the inclusion of expenses related to the acquired biscuit operations in Morocco.
31
Operating
Income
Change
(in millions)
(percentage point)
Operating Income for the Year Ended December 31, 2012
$
3,637
Spin-Off Costs
444
10.5pp
2012-2014 Restructuring Program costs
110
2.3pp
Integration Program costs
140
3.0pp
Spin-Off pension expense adjustment
(2)
68
1.7pp
Intangible asset impairment charge
52
1.5pp
Gains on divestitures, net
(107
)
(2.4)pp
Acquisition-related costs
1
–
Operating income from divestitures
(79
)
(1.7)pp
Adjusted Operating Income
(1)
for the Year Ended December 31, 2012
$
4,266
Higher net pricing
157
3.7pp
Higher input costs
(333
)
(7.9)pp
Favorable volume/mix
495
11.6pp
Higher selling, general and administrative expenses
(246
)
(5.7)pp
Change in unrealized gains / (losses) on hedging activities
61
1.4pp
Gains on sales of property in 2013
68
1.6pp
Gains on sales of property in 2012
(77
)
(1.8)pp
Impact from acquisition
16
0.4pp
Impact of accounting calendar changes
6
0.1pp
Total change in Adjusted Operating Income (constant currency)
(1)
147
3.4%
Unfavorable currency
-
translation
(146
)
(3.4)pp
Total change in Adjusted Operating Income
1
(0.0)%
Adjusted Operating Income
(1)
for the Year Ended December 31, 2013
$
4,267
Spin-Off Costs
(62
)
(1.5)pp
2012-2014 Restructuring Program costs
(330
)
(7.7)pp
Integration Program and other integration costs
(220
)
(5.0)pp
Benefit from indemnification resolution
336
9.3pp
Remeasurement of net monetary assets in Venezuela
(54
)
(1.5)pp
Gains on acquisition and divestitures, net
30
0.7pp
Acquisition-related costs
(2
)
(0.1)pp
Operating income from divestitures
6
0.1pp
Operating Income for the Year Ended December 31, 2013
$
3,971
9.2%
(1)
Please see the
Non
-
GAAP Financial Measures
section at the end of this item.
(2)
Represents the estimated annual benefit plan expense associated with certain benefit plan obligations transferred to Kraft Foods Group, Inc. in the
Spin
-
Off.