Mondelez 2014 Annual Report Download - page 76

Table of Contents
Implementation Costs:
Implementation costs are directly attributable to restructuring activities; however, they do not qualify for special accounting
treatment as exit or disposal activities. We believe the disclosure of implementation costs provides readers of our financial
statements with more information on the total costs of our 2014-2018 Restructuring Program. Implementation costs primarily relate
to reorganizing our operations and facilities in connection with our supply chain reinvention program and other identified productivity
and cost saving initiatives. The costs include incremental expenses related to the closure of facilities, costs to terminate certain
contracts and the simplification of our information systems. Within our continuing results of operations, we recorded implementation
costs of $107 million in 2014. We recorded these costs within cost of sales and general corporate expense within selling, general
and administrative expenses.
Restructuring and Implementation Costs in Operating Income:
During 2014, we recorded restructuring and implementation costs related to the 2014-2018 Restructuring Program within operating
income as follows:
2012-2014 Restructuring Program
In 2012, our Board of Directors approved $1.5 billion of restructuring and related implementation costs (the “2012-2014
Restructuring Program”) reflecting primarily severance, asset disposals and other manufacturing-related one-time costs. The
primary objective of the 2012-2014 Restructuring Program was to ensure that Mondelēz International and Kraft Foods Group were
each set up to operate efficiently and execute on our respective business strategies upon separation and in the future.
Of the $1.5 billion of 2012-2014 Restructuring Program costs, we retained approximately $925 million and Kraft Foods Group
retained the balance of the program. Through the end of 2014, we have incurred total restructuring and related implementation
charges of $899 million, and we do not expect to incur any additional charges on the 2012-2014 Restructuring Program.
Restructuring Costs:
We recorded restructuring charges of $360 million in 2014, $267 million in 2013 and $102 million in 2012 within asset impairment
and exit costs. During 2014, we also recorded out-of-period accruals for $73 million of severance ($52 million related to 2014 and
$21 million related to 2013) in connection with a change in the timing of accruals for ongoing negotiations with workers’ councils
and labor unions.
The activity for the 2012-2014 Restructuring Program liability for the years ended December 31, 2014 and 2013 was:
73
For the Year Ended December 31, 2014
Latin
Asia
North
America
Pacific
EEMEA
Europe
America
Corporate
(1)
Total
(in millions)
Restructuring Costs $
81
$
16
$
19
$
91
$
57
$
10
$
274
Implementation Costs
16
9
4
37
5
36
107
Total $
97
$
25
$
23
$
128
$
62
$
46
$
381
(1)
Includes adjustment for rounding.
Severance
and related
Asset
costs
Write
-
downs
Total
(in millions)
Liability balance, January 1, 2013
$
36
$
–
$
36
Charges
176
91
267
Cash spent
(108
)
–
(
108
)
Non-cash settlements
(36
)
(91
)
(127
)
Liability balance, December 31, 2013
$
68
$
–
$
68
Charges
201
159
360
Cash spent
(130
)
–
(
130
)
Non-cash settlements
(2
)
(159
)
(161
)
Currency
(9
)
–
(
9
)
Liability balance, December 31, 2014
$
128
$
–
$
128