Mondelez 2014 Annual Report Download - page 71

Table of Contents
A summary of results related to the discontinued operation of Kraft Foods Group within our historical results is presented below:
The results of the Kraft Foods Group discontinued operation exclude certain corporate and business unit costs that were historically
allocated to Kraft Foods Group and continued at Mondelēz International after the Spin-Off. These costs include primarily corporate
overheads, information systems and sales force support. On a pre-tax basis, through the date of the Spin-Off, these costs were
$150 million for the nine months ended October 1, 2012.
Interest expense relating to debt Kraft Foods Group incurred or assumed through the Distribution Date has been included in the
results from discontinued operations for all periods presented and as follows:
On the Distribution Date, we divested net assets totaling $4,358 million, or $4,111 million net of cash retained by Kraft Foods
Group. Additionally, we distributed to Kraft Foods Group $4,308 million of accumulated other comprehensive losses primarily
related to the pension and other benefit plan net liabilities transferred to Kraft Foods Group and $89 million of unearned
compensation recorded within additional paid in capital. In total, we recorded a distribution of $8,755 million of retained earnings in
connection with the Spin-Off.
In order to implement the Spin-Off, we entered into certain agreements with Kraft Foods Group to effect our legal and structural
separation, govern the relationship between us, and allocate various assets, liabilities and obligations between us, including,
among other things, employee benefits, intellectual property and tax-related assets and liabilities (see Note 15, Income Taxes , for
additional information on the current and deferred tax assets and liabilities transferred or retained in the Spin-Off). In addition to
executing the Spin-Off in the manner provided in the agreements, in November 2012, pursuant to these agreements, we paid Kraft
Foods Group $163 million related to targeted cash flows (together with the $247 million of cash divested on the Distribution Date, a
total of $410 million of cash was transferred to Kraft Foods Group in connection with the Spin-Off). To facilitate the management,
including final payment and resolution, of certain obligations, Kraft Foods Group retained certain of our North American net trade
payables and receivables.
We also retained approximately $140 million of workers’ compensation liabilities for claims incurred by Kraft Foods Group
employees prior to the Spin-Off. In November 2012, we paid Kraft Foods Group $95 million to cash settle the net trade payables
and receivables. In March 2013, we collected $55 million from Kraft Foods Group related to the cash settlement of stock awards
held by our respective employees at the time of the Spin-Off as further described in Note 12, Stock Plans .
68
Fourth Quarter Ended
Nine Months Ended
December 31, 2013
October 1, 2012
(in millions)
Net revenues
$
–
$
13,768
Earnings before income taxes $
2,522
$
2,266
Provision for income taxes
919
778
Earnings from discontinued operations, net of income taxes
$
1,603
$
1,488
Nine Months Ended
October 1, 2012
(in millions)
$ 6.0 billion note issuance in June 2012
$
70
$ 3.6 billion notes exchanged in July 2012
171
$ 0.4 billion debt transferred in October 2012
24
Capital leases and other
13
$
278