EX-99.1 2 d586766dex991.htm EX-99.1 EX-99.1
0
Mondelez International
August 2013
Exhibit 99.1


Forward-looking statements
1
This
presentation
contains
a
number
of
forward-looking
statements.
The
words
“will,”
“expect,”
“outlook,”
“guidance,”
“drive,”
“commitment,”
“accelerate,”
“improve,”
“implied,”
“increase,”
“deliver,”
“growth,”
and similar expressions are intended to identify our forward-looking statements.  Examples of
forward-looking statements include, but are not limited to, statements we make about our future
performance, including future revenue growth, earnings per share, margins and tax rates; the drivers
of our future performance; increasing return of capital to shareholders; our investments in emerging
markets and results of these investments; futures uses and priorities for free cash flow, including share
repurchases and dividends; and confidence in our future.  These forward-looking statements involve
risks and uncertainties, many of which are beyond our control, and important factors that could cause
actual results to differ materially from those in our forward-looking statements include, but are not
limited to, continued global economic weakness, increased competition, continued volatility of
commodity and other input costs, pricing actions, risks from operating globally, and tax law changes. 
For additional information on these and other factors that could
affect our forward-looking statements,
see our risk factors, as they may be amended from time to time, set forth in our filings with the SEC,
including our most recently filed Annual Report on Form 10-K.  We disclaim and do not undertake any
obligation to update or revise any forward-looking statement in this presentation, except as required by
applicable law or regulation.


Creating significant value for shareholders
2
Successfully turned around Kraft Foods by strengthening brand
equities and rewiring the organization
Strategically repositioned the company to concentrate on the core
categories, priority markets and Power Brands to drive top-tier
growth
Drove a virtuous growth cycle to deliver solid operating
performance in a challenging environment
Creating a focused, top-tier, global consumer staples company,
well-positioned to deliver sustainable, profitable growth over the
long term
Fix
2006–2009  
Focus
2007–2010   
Fuel
2010–2012   
Future
2013 and Beyond


In 2006, Kraft was facing significant challenges …
3
Unfocused Portfolio
Concentrated
in Low-Growth Markets
Poor Operating
Fundamentals
Portfolio “harvested”
over time and misaligned with consumer and growth trends
Weak brand equities
with limited pricing
power
Poor product quality
Lack of innovation
Centralized operating
structure
Exodus of top talent
North
America
67%
European
Union
20%
Developing Markets,
Oceania, North Asia
13%
Snacks
29%
Beverages
21%
Cheese
19%
Convenient
Meals
16%
Grocery
15%
(1)
Revenue mix as originally reported in Kraft Foods Inc. 2006 Form
10-K.
(1)
(1)


2002
2003
2004
2005
2006
2002
2003
2004
2005
2006
... which drove margin declines and share losses
4
Gross Margin (ex. items)
OI Margin (ex. items)
% Rev. Gaining / Holding Share
Deteriorating financial performance ...
... and share losses
(1)
See
GAAP
to
non-GAAP
reconciliation
at
the
end
of
this
presentation.
Figures
may
not
be
directly comparable to other adjusted financial results used in this presentation.
(2)
Market share data for U.S.
H1 2007
40.3%
39.2%
37.1%
36.1%
36.2%
(410)bps
21.0%
19.1%
16.5%
15.3% 15.3%
(570)bps
26%
(1)
(1)
(2)


Fixed the base –
2006 to 2009
Rewired Organization
Strengthened
Brand Equities
4%+
4.5%
LT Target
2006-09 CAGR
(3.8%)
4.0%
2002-2006
2006-2009
83%
124%
2006
2009
Rejuvenated Financial
Performance
Organic
Revenue
Growth
(1)
OI
(ex.
items)
CAGRs
(1)(2)
FCF
%
of
Net
Earnings
(1)
5
(1)
See GAAP to non-GAAP reconciliation at the end of this presentation.
(2)
2006-09 includes the frozen pizza business but excludes Post cereal.
(3)
Market share data for U.S.
Improved product quality
~2/3 revenue preferred vs.
~44% in 2006
Developed innovation pipeline
NPD revenue of 8% in
2009, from 6% 
in 2006
Increased A&C support
$600mm in 2009 vs. 2006
Restored pricing power
Fully recovered input cost
increases
Restored market share growth
45% gaining / holding
share in 2009 vs. 26% in
H1 2007
(3)
Upgraded management talent
80% of top leaders new to
company / position
Created accountable business
units with full P&L responsibility
Optimized incentive systems to
align with key drivers of value
creation
Focused on three operating
metrics
Organic revenue growth
Operating income
Free cash flow


Focused the portfolio –
2007 to 2010
Divestitures
Acquisitions
29%
50%
2006
2010
13%
28%
2006
2010
6
~10%
~20%
2006
2010
(1)
As reported originally in Kraft Foods 2006 Form 10-K filed with the SEC on March 1, 2007.
Amounts have not been revised to reflect the Kraft Foods reporting structure in 2010.
(2)
2010 Pro Forma amounts reflect the acquisition of Cadbury on a full-year basis. As presented
at the Consumer Analysts Group of New York conference on February 22, 2011.
(3)
Taxable equivalent.
(1)
(2)
(1)
(2)
(2)
(2)
% Revenue from Snacks
% Revenue from
Developing Markets
% Revenue from Immediate
Consumption Channel
Multiple to LTM EBITDA
12.9x
(3)
14.9x
13.0x
13.2x


Created a virtuous cycle of growth in each region …
7
Expand
Gross Margin
Reinvest
in Growth
Leverage
Overheads
Focus on
Power Brands &
Priority Markets


8.1%
9.9%
11.6%
2010
2011
2012
9mo
KFT
Peer
Avg.
Driving superior performance –
2010-2012
8
Organic Revenue Growth
(1)
Adjusted OI Margin
(1)
Adjusted EPS Growth
(1)
3.2%
6.6%
3.9%
4.6%
3.8%
2010
2011
2012
9mo
KFT
Peer
Avg.
x
Kraft
3-Year
Average
(2)
(3)
16.9%
2010
2011
LTM
9/2012
3-Year
Margin Trend
(2)
(3)
3-Year
Average
(2)
(3)
13.2%
13.3%
14.1%
90bps
(140)bps
Increased margin while making
significant investments in N. America
Revenue performance exceeded that of peers
Outperformed
peer
margins
in
a
period
of
unprecedented
commodity
inflation
Drove EPS growth over 550 bps above peer average
Kraft
Kraft
5.9%
(1)
Reflects KFT results as restated to exclude the frozen pizza business. See GAAP to non-GAAP reconciliation at the end of this presentation.
(2)
Kraft three-year average organic revenue and EPS growth reflect mean of full-year 2010, full-year 2011 and nine months to September 30,
2012. Kraft three-year margin trend reflects OI margin for twelve months to September 30, 2012 vs. full-year 2010.
(3)
Peer
set
includes
Campbell,
Coca-Cola,
ConAgra,
Danone,
General
Mills,
Heinz,
Hershey,
Kellogg,
Nestlé
and
PepsiCo.
KFT
Peer
Avg.


MDLZ
Peer
Avg.
2010
2011
LTM
9/2012
Underlying
strength
at
both
MDLZ
and
KRFT
9
MDLZ organic growth near peers, with dramatic outperformance on margins
KRFT organic growth above peers, with margins constant vs. peer decline
4.1%
7.0%
4.6%
5.2%
6.0%
2010
2011
2012
9mo
MDLZ
Peer
Avg.
2.0%
5.8%
2.6%
3.5%
1.5%
2010
2011
2012
9mo
KRFT
Peer
Avg.
2010
2011
LTM
9/2012
KRFT
Peer
Avg.
Organic Revenue Growth
(1)
Adjusted OI Margin
(1)
MDLZ
3-Year Avg.
(2)
(3)
KRFT
(4)
3-Year Avg.
(2)
(3)
MDLZ
3-Year
Margin Trend
(2)
(3)
3-Year
Margin Trend
(2)
(3)
11.0%
11.5%
12.2%
120bps
(120)bps
16.3%
15.7%
16.3%
flat
(170)bps
(1)
See GAAP to non-GAAP reconciliation at the end of this presentation.
(2)
MDLZ and KRFT three-year average organic revenue growth reflects average of full-year 2010, full-year 2011 and the nine months to
September 30, 2012. Three-year margin trend reflects twelve months to September 30, 2012 vs. fiscal year 2010.
(3)
MDLZ
peer
set
includes
Coca-Cola,
Danone,
Hershey,
Nestlé
and
PepsiCo.
KRFT
peer
set
includes
Campbell,
ConAgra,
General
Mills, Heinz and Kellogg.
(4)
Source: Kraft Foods Group earnings releases and Form S-4.
KRFT
(4)


Separated to focus on distinct strategic priorities
10
Mondelez International –
2011
Kraft Foods Group –
2011
North
America
19%
Europe
37%
Developing
Markets
44%
North
America
100%
Biscuits
30%
Chocolate
27%
Beverages
17%
Cheese &
Grocery
10%
Gum & Candy
16%
U.S.
Grocery
25%
U.S.
Cheese
20%
Canada & NA
Foodservice
21%
U.S.
Beverages
16%
U.S.
Convenient
Meals 18%
Categories / Brands    
Products
Store Presence    
Sales & Distribution
Selling Costs
Focus On
Dividend Policy
Global   
Ubiquitous, Impulse
Snacking Aisle, End Caps, Hot Zone 
DSD, High Touch
High
Profitable Growth
Moderate Payout
Regional
Everyday Staples
Center of Store
Warehouse
Modest
Cash Return
High Dividend Yield
Net Revenues of $36bn
Net Revenues of $19bn
Source:
Mondelez International figures per 2012 Form 10-K. Kraft Foods Group figures per Form 10.
~75% Snacks


46%
39%
MDLZ+KRFT
Peer Avg
85%
57%
MDLZ+KRFT
Peer Avg
Strong performance and separation unlocked value
resulting in superior TSR
11
Source:
FactSet.
Note:
Peer set includes Campbell, Coca-Cola, ConAgra, Danone, General Mills, Heinz (through
June
7,
2013),
Hershey,
Kellogg,
Nestlé
and
PepsiCo.
MDLZ+KRFT
TSR
reflects
return
of
initial portfolio of one share of KFT, with dividends  reinvested on ex. dividend  dates and
portfolio of 100 shares of KFT at close on October 1, 2012 converted to 100 shares of
MDLZ plus 33 1/3 shares of KRFT.
(To June 30, 2013)
98%
86%
MDLZ+KRFT
Peer Avg
Since Spin Announcement
(August 4, 2011)
3-Year
5-Year


Mondelez International is well-positioned for success
12
Advantaged
Geographic
Footprint
Fast-
Growing
Categories
Favorite
Snacks
Brands
Proven
Innovation
Platforms
Strong
Routes-to-
Market
World-Class
Talent &
Capabilities


Virtuous cycle provides framework to achieve
long-term targets ...
13
Operating
EPS Growth
5%-7%
Double-Digit
(cst. FX)
Organic Net
Revenue Growth
Long-Term Targets
Expand
Gross
Margin
Reinvest
in
Growth
Leverage
Overheads
Focus on
Power Brands &
Priority Markets
Operating
Income Growth
High Single-
Digit (cst. FX)


Danone
Nestlé
Campbell
PepsiCo
General Mills
Coca-Cola
Kellogg
ConAgra
Hershey
... that are top-tier in the food industry
14
Revenue
Source:
Company presentations.
General Mills
ConAgra
Kellogg
Campbell
PepsiCo
Danone
Nestlé
Coca-Cola
Hershey
5-7%
5-7%
5-6%
“Mid Single-
Digit”
3-4%
“Low Single-
Digit”
“Double-
Digit”
8-10%
7-9%
5-7%
“High Single-
Digit”
(1)
“High Single-
Digit”
“High Single-
Digit”
EPS
Long-Term Targets
5-6%
3-4%
3-4%
Not Provided       
“At Least
5%”
Not Provided    
7-9%
(1)
“At least 10%” for FY2015-17 as Ralcorp synergies are phased in, followed by long-term target 
of 7-9%.


Top-tier, long-term revenue growth target supported
by advantaged portfolio
15
Double digit
growth
Low-to-mid
single digit
growth
Developed
Markets
Emerging
Markets
By Geography
Low-to-mid
single digit
growth
Mid-to-high
single digit
growth
Chocolate
Biscuits
Gum &
Candy
Beverages
Ch./Groc.
By Category
5% -
7%
Organic Growth
2012
2012


Significant operating income growth driven by
margin expansion
16
Adjusted
Operating
Income
Margin
(1)
(1)
See GAAP to non-GAAP reconciliation at the end of this presentation.
9.2%
9.6%
11.0%
11.5%
12.2%
14%
16%
2008
2009
2010
2011
2012
LT Target
+50bps
excluding
restructuring
Strong track record of margin gains
250 bps of opportunity from gross margin expansion
-


Focused strategy to drive base margin expansion
17
2012
Adj.
OI
Margin
(1)
Target OI Margin
Opportunity
13.0%
13%–16%
+250bps
13.9%
18%–21%
+500bps
Key
Drivers:
Product Focus
Supply Chain
Optimization
Overhead Leverage
Drive Power Brands and
product mix
Upgrade certain Cadbury / LU
facilities to world class costs
Streamline / consolidate network
Deliver 4%+ COGS productivity
Integrate Central Europe into
category model
Leverage service centers in
low-cost locations
Drive Power Brands and
product mix
Leverage greenfield Mexico
biscuits facility for growth
Improve throughput by installing
new technology
Streamline / consolidate network
Deliver 4%+ COGS productivity
Offset dis-synergies through
overhead reductions
Capture synergies by
implementing category model
(1)
See GAAP to non-GAAP reconciliation at the end of this presentation.
Europe
North America


H1 provides solid foundation for strong performance
in H2 and 2014
Strong underlying fundamentals in H1
High-quality revenue growth fueled by strong vol / mix
60% of revenue gained / held share
Power Brands up 8%
Strong growth in Biscuits (+8%)
(1)
and Chocolate (+6%)
(1)
Emerging Markets up 9.5%
Accelerated investments in emerging markets
Difficult operating environment expected in H2
Emerging markets slowing
Continued low-growth environment in developed markets
Continued coffee price headwinds
18
(1)
See GAAP to non-GAAP reconciliation at the end of this presentation.


Maintained 2013 outlook based on strong H2
19
Organic Revenue Growth
3.8%
~6%
Low end
of 5-7%
Adjusted OI Margin
10.8%
~13%
~12%
Adjusted Effective Tax Rate
5.8%
16-20%
12-14%
Adjusted EPS
$0.71
$0.84-$0.89
$1.55-$1.60
% vs PY –
Cst Fx
14-18%
(2)
Implied
H2’13
Actual
H1’13
(1)
Outlook
FY’13
(1)
See
GAAP
to
non-GAAP
reconciliation
at
the
end
of
this
presentation.
(2)
Constant currency calculation excludes the ($0.04) impact from the Venezuelan bolivar
devaluation
imbedded
in
the
current
guidance
range
of
$1.55
-
$1.60.


Accelerating investments in 2013 enables significant
margin expansion in 2014
20
(1)
See
GAAP
to
non-GAAP
reconciliation
at
the
end
of
this
presentation.
Adjusted Operating Income Margin
2012
Base
Margin
Expansion
Emerging
Markets
Investments
Ongoing
Restructuring
+60 to
+90 bps
(10) to
(20) bps
2013
12.2%
(1)
Base
Margin
Expansion
+60 to
+90 bps
High 12s
2014
~12%
Emerging
Markets
Investments
~(10) bps
Ongoing
Restructuring
(50) to
(70) bps
(10) to
(20) bps


Disciplined capital deployment
21
Solid Balance Sheet –
Total Debt
Steady
ROIC
Improvement
(1)
Investment-grade with access to CP
Flexibility for tack-on M&A
Strong improvement since Cadbury acquisition
Ongoing 30-50bps increase through:
Double-digit EPS growth
Tight management of working capital and capex
Return of capital to shareholders
+120bps
KFT
MDLZ
Targeting
improvement
of +30-50bps
per annum
(1)
Calculation excludes non-recurring items.
Net Debt
$15 -
$16bn
7.9%
8.4%
9.1%
7.0%
2010
2011
2012
9mo
2012
$19.4bn
$18.1bn
Dec. 2012
Jun. 2013


Significant increase in return of capital to
shareholders …
22
Reinvest in the business to drive top-tier growth
Tack-on M&A, especially in emerging
markets
Return of capital to shareholders
Significantly increasing share repurchase authorization from
$1.2B to $6B through 2016 ($1-2B annually)
First increase in quarterly dividend since 2008 (+$0.01, +8%)
Pay down debt to preserve balance sheet flexibility
Priorities for Use of Free Cash Flow
1
2
3
4


Consistent with long-standing commitment
23
Cumulative Return of Capital 2006-2013E ($bn)
(cash dividends plus share repurchases)
1.6
3.2
4.9
6.6
8.5
10.6
12.6
13.6
1.3
5.0
5.7
5.7
5.7
5.7
5.7
6.7
$2.8
$8.2
$10.6
$12.3
$14.3
$16.3
$18.4
$20.3
2006
2007
2008
2009
2010
2011
2012
2013E
Cash Dividends
Share Repurchases


Committed to delivering top-tier performance
Mondel  z International is a unique, global consumer staples company
with an advantaged footprint in emerging markets, strong positions in
fast-growing snacking categories and iconic Power Brands
Management has a strong record of delivering TSR well above peers
The company’s virtuous growth cycle provides a framework to deliver
top-tier revenue and EPS growth as well as significant margin
expansion
This performance will translate into superior shareholder returns and
steady improvement in ROIC
24
-
e


14


GAAP to Non-GAAP Reconciliation
26
As
Reported
(GAAP)
Integration
costs
(1)
Separation
Program
costs
(2)
Restructuring
Program
costs
(3)
Asset
Impairment
costs
Loss on Sale
of Food
Factory
Gain on
Redemption of
United Biscuits
investment
(Gain)/Loss on
Divestitures,
net
Excluding
Items (Non-
GAAP)
2002
Net Revenues
29,248
$
-
$          
-
$          
-
$          
-
$          
-
$          
-
$             
-
$             
29,248
$  
Gross Profit
11,785
-
-
-
-
-
-
-
11,785
Gross Profit Margin
40.3%
40.3%
Operating Income
5,961
115
142
-
-
(4)
-
(80)
6,134
OI Margin
20.4%
21.0%
2003
Net Revenues
30,498
$
-
$          
-
$          
-
$          
-
$          
-
$          
-
$             
-
$             
30,498
$  
Gross Profit
11,967
-
-
-
-
-
-
-
11,967
Gross Profit Margin
39.2%
39.2%
Operating Income
5,860
(13)
-
-
6
-
-
(31)
5,822
OI Margin
19.2%
19.1%
2004
Net Revenues
32,168
$
-
$          
-
$          
7
$          
-
$          
-
$          
-
$             
-
$             
32,175
$  
Gross Profit
11,887
-
-
37
-
-
-
-
11,924
Gross Profit Margin
37.0%
37.1%
Operating Income
4,612
-
-
633
67
-
-
3
5,315
OI Margin
14.3%
16.5%
2005
Net Revenues
34,113
$
-
$          
-
$          
2
$          
-
$          
-
$          
-
$             
-
$             
34,115
$  
Gross Profit
12,268
-
-
58
-
-
-
-
12,326
Gross Profit Margin
36.0%
36.1%
Operating Income
4,752
-
-
297
269
-
-
(108)
5,210
OI Margin
13.9%
15.3%
2006
Net Revenues
34,356
$
-
$          
-
$          
-
$          
-
$          
-
$          
-
$             
-
$             
34,356
$  
Gross Profit
12,416
-
-
25
-
-
-
-
12,441
Gross Profit Margin
36.1%
36.2%
Operating Income
4,526
-
-
673
424
-
(251)
(117)
5,255
OI Margin
13.2%
15.3%
(1)
(2)
(3)
Gross Profit/Operating Income and Related Margins
($ in millions except percentages) (Unaudited)
Kraft Foods Inc.
non-recurring costs. For 2004-2006, refers to the 2004-2008 Restructuring Program.
Integration costs relate to the charges incurred to consolidate production lines, close facilities and other consolidation programs associated with the acquisition of Nabisco.
Separation Program costs are the charges incurred in 2002 related to employee acceptances under a voluntary retirement program.
Note:
Reported amounts for 2002-2004 as per the 2004 Form 10-K; Reported amounts for 2005 and 2006 are as presented in each respective year's Form 10-K.
Restructuring Program costs represent non-recurring restructuring and related implementation costs reflecting primarily severance, asset disposals and other manufacturing related


GAAP to Non-GAAP Reconciliation
27
As Reported
(GAAP)
Impact of
Divestitures /
Other
Impact of
Acquisitions
Impact of
Currency
Organic
(Non-GAAP)
December 31, 2007
8.6%
(0.6)pp
0.8pp
3.1pp
5.3%
December 31, 2008
16.9%
(0.8)pp
8.9pp
2.0pp
6.8%
December 31, 2009
(3.7)%
(0.7)pp
0.0pp
(4.5)pp
1.5%
Compound
Annual
Growth
Rate
2006
-
2009:
6.9%
4.5%
Net Revenues to Organic Net Revenue Growth
(percentages) (Unaudited)
Kraft Foods Inc.
For
the
Twelve
Months
Ended:


GAAP to Non-GAAP Reconciliation
28
As
Reported
(GAAP)
Integration
costs
(1)
Separation
Program
costs
(2)
Restructuring
Program
costs
(3)
Asset
Impairment
costs
Loss on Sale
of Food
Factory
Gain on
Redemption of
United Biscuits
investment
(Gain)/Loss on
Divestitures,
net
Excluding
Items (Non-
GAAP)
For
the
Twelve
Months
Ended:
December 31, 2003
(1.7)%
(2.1)
pp
(2.2)
pp
-
pp
0.1
pp
0.1
pp
-
pp
0.7
pp
(5.1)%
December 31, 2004
(21.3)%
0.2
pp
-
pp
10.8
pp
1.1
pp
-
pp
-
pp
0.5
pp
(8.7)%
December 31, 2005
3.0 %
-
pp
-
pp
(6.7)
pp
3.8
pp
-
pp
-
pp
(2.1)
pp
(2.0)%
December 31, 2006
(4.8)%
-
pp
-
pp
7.8
pp
2.7
pp
-
pp
(4.7)
pp
(0.1)
pp
0.9 %
Compound Annual Growth Rate  2002-2006
(6.7)%
(3.8)%
(1)
(2)
(3)
Integration costs relate to the charges incurred to consolidate production lines, close facilities and other consolidation programs associated with the acquisition of Nabisco.
Separation Program costs are the charges incurred in 2002 related to employee acceptances under a voluntary retirement program.
Restructuring
Program
costs
represent
non-recurring
restructuring
and
related
implementation
costs
reflecting
primarily
severance,
asset
disposals
and
other
manufacturing
related
non-recurring
costs.
For
2004-2006,
refers to the 2004-2008 Restructuring Program.
Operating Income Growth
(percentages) (Unaudited)
Kraft Foods Inc.
Note:
Reported amounts for 2002-2004 as per the 2004 Form 10-K; Reported amounts for 2005 and 2006 are as presented in each respective year's Form 10-K.


GAAP to Non-GAAP Reconciliation
29
As
Reported
(GAAP)
Integration
costs
(1)
Restructuring
Program
costs
(3)
Asset
Impairment
costs
Gain on
Redemption of
United Biscuits
investment
(Gain)/Loss on
Divestitures,
net
Excluding
Items (Non-
GAAP)
For the Twelve Months Ended:
December 31, 2007
0.4 %
-
pp
(4.4)
pp
(5.5)
pp
4.6
pp
2.0
pp
(2.9)%
December 31, 2008
(8.0)%
2.0
pp
12.0
pp
0.3
pp
-
pp
2.2
pp
8.5 %
December 31, 2009
43.7 %
(2.2)
pp
(30.2)
pp
(2.7)
pp
-
pp
(1.8)
pp
6.8 %
Compound Annual Growth Rate  2006-2009
9.9 %
4.0 %
(1)
(2)
Integration costs relate to the costs associated with combining the Kraft Foods and LU businesses, and are separate from those costs associated with the acquisition.
Restructuring Program costs represent non-recurring restructuring and related implementation costs reflecting primarily severance, asset disposals and other manufacturing
related non-recurring costs. For 2006-2009, refers to the 2004-2008 Restructuring Program.
Kraft Foods Inc.
Operating Income Growth
(percentages) (Unaudited)
Note:
           Reported amounts for 2007-2009 as per the 2009 Form 10-K which reflected restatements made for all years associated with the spin-off of the Post c ereals business and the
change in the company's method of valuing its U.S. inventories to the average cost method from the LIFO method.


GAAP to Non-GAAP Reconciliation
30
2006
2009
Net Cash Provided by Operating Activities (GAAP)
3,720
$         
5,084
$         
Capital Expenditures
(1,169)
(1,330)
      Free Cash Flow (Non-GAAP)
2,551
$         
3,754
$         
Net Earnings Attributable to Kraft
3,060
3,021
Free Cash Flow / Net Earnings (Non-GAAP)
83%
124%
Free Cash Flow as a Percentage of Net Earnings
($ in millions) (Unaudited)
For the Twelve Months Ended
December 31,
Kraft Foods Inc.


GAAP to Non-GAAP Reconciliation
31
2010
2009
$ Change
% Change
Organic Net Revenues (Non-GAAP)
39,874
$      
38,645
$      
$          1,229
3.2%
Impact of divestitures
21
109
(88)
(0.3)pp
Impact
of
acquisitions
(1)
9,143
-
9,143
23.6pp
Impact of Integration Program
(1)
-
(1)
0.0pp
Impact of accounting calendar changes
201
-
201
0.6pp
Impact of foreign currency
(31)
-
(31)
(0.1)pp
Net Revenues (GAAP)
49,207
$      
38,754
$      
10,453
$      
27.0%
2011
2010
$ Change
% Change
Organic Net Revenues (Non-GAAP)
51,533
$      
48,363
$      
$          3,170
6.6%
91
652
(561)
(1.3)pp
Impact
of
acquisitions
(3)
697
-
697
1.4pp
Impact of Integration Program
(1)
(1)
-
0.0pp
Impact
of
accounting
calendar
changes
(4)
880
193
687
1.4pp
Impact of foreign currency
1,165
-
1,165
2.4pp
Net Revenues (GAAP)
54,365
$      
49,207
$      
5,158
$       
10.5%
2012
2011
$ Change
% Change
Organic Net Revenues (Non-GAAP)
40,761
$      
39,225
$      
$          1,536
3.9%
-
91
(91)
(0.2)pp
Impact
of
accounting
calendar
changes
(4)
-
361
(361)
(0.9)pp
Impact of foreign currency
(1,473)
-
(1,473)
(3.8)pp
Net Revenues (GAAP)
39,288
$      
39,677
$      
(389)
$         
(1.0)%
(1)
(2)
Impact
of
divestitures
includes
for
reporting
purposes
Starbucks
CPG
business.
(3)
Impact of acquisitions reflects the incremental January 2011 operating results from our Cadbury acquisition on
February 2, 2010
(4)
Includes
the
impacts
of
accounting
calendar
changes
and
the
53
rd
week
of
shipments
in
2011.
December 31,
For the Nine Months Ended
September 30,
Kraft Foods Inc.
Net Revenues to Organic Net Revenues
($ in millions, except percentages) (Unaudited)
For the Years Ended
For the Years Ended
December 31,
Impact
of
acquisitions
reflects
the
incremental
February
2010
to
December
2010
operating
results
from
the
company’s Cadbury acquisition
Impact of divestitures
(2)
Impact of divestitures
(2)


GAAP to Non-GAAP Reconciliation
32
As
Reported
(GAAP)
Integration
Program
Costs
(1)
Spin-Off
Costs
(2)
Restructuring
Program
Costs
(3)
Acquisition-
Related
Costs
(4)
Impact of
Divestitures
(5)
Loss on
Divestitures,
net
As Adjusted
(Non-GAAP)
For
the
Year
Ended
December
31,
2010
Net Revenues
$49,207
$
1
$
-
$
-
$
-
$
(652)
$
-
$
48,556
Operating Income
5,666
646
-
(37)
273
(149)
6
6,405
Operating Income Margin
11.5%
13.2%
For
the
Year
Ended
December
31,
2011
Net Revenues
$54,365
$
1
$
-
$
-
$
-
$
(91)
$
-
$
54,275
Operating Income
6,657
521
46
(7)
-
(15)
-
7,202
Operating Income Margin
12.2%
13.3%
For
the
Nine
Months
Ended
September
30,
2012
Net Revenues
$39,288
$
-
$
-
$
-
$
-
$
-
$
-
$
39,288
Operating Income
5,222
64
365
238
-
-
-
5,889
Operating Income Margin
13.3%
15.0%
For
the
Three
Months
Ended
December
31,
2011
Net Revenues
$14,688
$
1
$
-
$
-
$
-
$
-
$
-
$
14,689
Operating Income
1,507
169
46
-
-
-
-
1,722
Operating Income Margin
13.3%
11.7%
For
the
Twelve
Months
Ended
September
30,
2012
Net Revenues
$53,976
$
1
$
-
$
-
$
-
$
-
$
-
$
53,977
Operating Income
6,729
233
411
238
-
-
-
7,611
Operating Income Margin
12.5%
14.1%
Kraft Foods Inc.
Reported to Adjusted Operating Income Margin
($ in millions, except percentages) (Unaudited)


GAAP to Non-GAAP Reconciliation
33
2010
2009
% Change
Adjusted EPS
2.01
$         
1.86
$         
8.1 %
Integration Program costs and other
acquisition integration costs
(1)
(0.29)
(0.01)
Acquisition-related costs
(2)
and financing fees
(3)
(0.21)
(0.04)
U.S. Healthcare legislation impact on deferred taxes
(0.08)
-
Restructuring Program costs
(4)
0.01
0.04
Gains/(Losses) on divestitures, net
-
0.04
Net Earnings from divested businesses
-
-
Dilutes EPS attributable to Kraft Foods from
Continuing Operations
1.44
$         
1.89
$         
(23.8)%
Discontinued Operations
0.95
0.14
Diluted EPS attributable to Kraft Foods
2.39
$         
2.03
$         
17.7 %
2011
2010
% Change
Adjusted EPS
2.28
$         
1.95
$         
16.9 %
Integration Program costs
(1)
(0.28)
(0.29)
Acquisition-related costs
(2)
and financing fees
(3)
-
(0.21)
U.S. Healthcare legislation impact on deferred taxes
-
(0.08)
Restructuring Program costs
(4)
-
0.01
Spin-Off Costs
(0.02)
-
Gains/(Losses) on divestitures, net
-
-
Net Earnings from divested businesses
(5)
0.01
0.06
Dilutes EPS attributable to Kraft Foods from
Continuing Operations
1.99
$         
1.44
$         
38.2 %
Discontinued Operations
-
0.95
Diluted EPS attributable to Kraft Foods
1.99
$         
2.39
$         
(16.7)%
2012
2011
% Change
Adjusted EPS
1.88
$         
1.71
$         
9.9 %
Integration Program costs
(1)
(0.04)
(0.20)
Restructuring Program costs
(0.08)
-
Spin-Off Costs
(0.36)
-
Gains/(Losses) on divestitures, net
-
-
Net Earnings from divested businesses
(4)
-
0.01
Diluted EPS attributable to Kraft Foods
1.40
$         
1.52
$         
(7.9)%
December 31,
For the Years Ended
Kraft Foods Inc.
Diluted EPS to Adjusted EPS
(Unaudited)
For the Years Ended
December 31,
For the Nine Months Ended
September 30,
(1)
(2)
(3)
(4)
(5)
Impact of divestitures includes for reporting purposes Starbucks CPG business.
Integration Program costs are defined as the costs associated with combining the Kraft Foods and Cadbury businesses, and are separate from those costs associated with acquisition.
Other acquisition integration costs are the costs associated with combining the Kraft Foods and LU businesses, and are separate from those costs associated with the acquisition.
Acquisition-related costs relate to the acquisition of Cadbury and include transaction advisory fees, U.K. stamp taxes and the impact of the Cadbury inventory revaluation.
Acquisition-related financing fees include hedging and foreign currency impacts associated with the Cadbury acquisition and other fees associated with the Cadbury Bridge Facility.
Restructuring Program costs represent non-recurring restructuring and related implementation costs reflecting primarily severance, asset disposals and other manufacturing related non-
recurring costs. For 2012, refers to the 2012-2014 Restructuring Program; for 2010 and 2011, refers to reversals of 2004-2008 Restructuring Program costs.


GAAP to Non-GAAP Reconciliation
34
week
of
shipments
in
2011.
2010
2009
$ Change
% Change
Organic Net Revenues (Non-GAAP)
22,369
$      
21,486
$      
$           883
4.1%
Impact of foreign currency
(223)
-
(223)
(1.0)pp
Impact of acquisitions
(1)
9,143
-
9,143
42.6pp
Impact of accounting calendar changes
201
-
201
0.9pp
Impact of Integration Program
(1)
-
(1)
0.0pp
Impact of divestitures
-
73
(73)
(0.5)pp
Net Revenues (GAAP)
31,489
$      
21,559
$      
9,930
$       
46.1%
2011
2010
$ Change
% Change
Organic Net Revenues (Non-GAAP)
33,385
$      
31,192
$      
$        2,193
7.0%
Impact of foreign currency
1,074
-
1,074
3.4pp
Impact of acquisitions
(2)
697
-
697
2.3pp
Impact of accounting calendar changes
(3)
655
193
462
1.4pp
Impact of Integration Program
(1)
(1)
-
0.0pp
Impact of divestitures
-
105
(105)
(0.4)pp
Net Revenues (GAAP)
35,810
$      
31,489
$      
4,321
$       
13.7%
2012
2011
$ Change
% Change
Organic Net Revenues (Non-GAAP)
26,704
$      
25,520
$      
$        1,184
4.6%
Impact of foreign currency
(1,414)
-
(1,414)
(5.4)pp
Impact of accounting calendar changes
-
349
(349)
(1.4)pp
Impact of divestitures
230
262
(32)
(0.1)pp
Net Revenues (GAAP)
25,520
$      
26,131
$      
(611)
$         
(2.3)%
(1)
Impact
of
acquisitions
reflects
the
incremental
February
2010
to
December
2010
operating
results
from
the
company's Cadbury acquisition.
(2)
Impact of acquisitions reflects the incremental January 2011 operating results from our Cadbury acquisition on
February 2, 2010.
(3)
Includes
the
impacts
of
accounting
calendar
changes
and
the
53
rd
December 31,
Net Revenues to Organic Net Revenues
($ in millions, except percentages) (Unaudited)
For the Years Ended
For the Years Ended
December 31,
For the Nine Months Ended
September 30,
Mondelez
International


GAAP to Non-GAAP Reconciliation
35
As
Revised
(GAAP)
Integration
Program Costs
and other
acquisition
integration
costs
(1)
Spin-Off
Costs and
related
adjustments
(2)
Restructuring
Program
Costs
(3)
Acquisition-
Related
Costs
(4)
Impact of
Divestitures
(5)
(Gain)/Loss on
divestitures,
net
As Adjusted
(Non-GAAP)
For
the
Year
Ended
December
31,
2008
Net Revenues
22,872
$
-
$             
-
$            
-
$           
-
$          
(666)
$        
-
$             
22,206
$     
Operating Income
1,148
81
91
708
-
(84)
91
2,035
Operating Income Margin
5.0%
9.2%
For
the
Year
Ended
December
31,
2009
Net Revenues
21,559
$
-
$             
-
$            
-
$           
-
$          
(377)
$        
-
$             
21,182
$     
Operating Income
2,016
27
91
(76)
40
(73)
6
2,031
Operating Income Margin
9.4%
9.6%
For
the
Year
Ended
December
31,
2010
Net Revenues
31,489
$
1
$             
-
$            
-
$           
-
$          
(500)
$        
-
$             
30,990
$     
Operating Income
2,496
646
91
(29)
273
(67)
-
3,410
Operating Income Margin
7.9%
11.0%
For
the
Year
Ended
December
31,
2011
Net Revenues
35,810
$
1
$             
-
$            
-
$           
-
$          
(429)
$        
-
$             
35,382
$     
Operating Income
3,498
521
137
(5)
-
(67)
-
4,084
Operating Income Margin
9.8%
11.5%
For
the
Year
Ended
December
31,
2012
Net Revenues
35,015
$
-
$             
-
$            
-
$           
-
$          
(340)
$        
-
$             
34,675
$     
Operating Income
3,637
140
512
110
1
(58)
(107)
4,235
Operating Income Margin
10.4%
12.2%
Reported to Adjusted Operating Income Margin
($ in millions, except percentages) (Unaudited)
Mondelez
International


GAAP to Non-GAAP Reconciliation
36
As Revised
(GAAP)
Integration
Program
Costs
(1)
Spin-Off  Costs
and  related
adjustments
(2)
2012-2014
Restructuring
Program
Impact of
As Adjusted
(Non-GAAP)
For
the
Nine
Months
Ended
September
30,
2012
Net Revenues
25,520
$
-
$          
-
$            
-
$           
(297)
$        
25,223
$     
Operating Income
2,678
64
433
69
(51)
3,193
Operating Income Margin
10.5%
12.7%
For
the
Three
Months
Ended
December
31,
2011
Net Revenues
9,679
1
$         
-
$            
-
$           
(81)
$          
9,599
$      
Operating Income
823
169
69
-
(12)
1,049
Operating Income Margin
8.5%
10.9%
For
the
Twelve
Months
Ended
September
30,
2012
Net Revenues
35,199
$
1
$         
-
$            
-
$           
(378)
$        
34,822
$     
Operating Income
3,501
233
502
69
(63)
4,242
Operating Income Margin
9.9%
12.2%
Mondelez International
Reported to Adjusted Operating Income Margin
($ in millions, except percentages) (Unaudited)
-
Costs
(3)
(4)
Divestitures
Integration
Program
costs
are
defined
as
the
costs
associated
with
combining
the
Mondelez
International
and
Cadbury
businesses,
and are
separate from those costs associated with the acquisition.
Spin-Off Costs represent transaction and transition costs associated with preparing the businesses for independent operations consisting
primarily of financial advisory fees, legal fees, accounting fees, tax services and information systems infrastructure duplication, and financing
and related costs to redistribute debt and secure investment grade ratings for both the Kraft Foods Group
business
and
the
Mondelez
International
business.
Spin-Off
related
adjustments
refers
to
the
pension
adjustment
defined
as
the estimated
benefit plan expense associated with certain benefit plan obligations transferred to Kraft Foods Group in the Spin-Off.
Restructuring Program costs represent non-recurring restructuring and related implementation costs reflecting primarily severance, asset
disposals and other manufacturing related non-recurring costs.
Includes all divestitures that have occurred through 2013.
-
-
(4)
(3)
(2)
(1)


GAAP to Non-GAAP Reconciliation
37
2010
2009
$ Change
% Change
Organic Net Revenues (Non-GAAP)
17,589
$      
17,248
$      
2.0%
Impact of divestitures
(1)
14
30
(0.1)pp
Impact of foreign currency
194
-
1.1 pp
Net Revenues (GAAP)
17,797
$      
17,278
$      
341
(16)
194
519
$          
3.0%
2011
2010
$ Change
% Change
Organic Net Revenues (Non-GAAP)
18,248
$      
17,250
$      
5.8%
Impact of divestitures
(2)
91
547
(2.8)pp
Impact of the 53rd week of shipments
225
-
1.3 pp
Impact of foreign currency
91
-
0.5 pp
Net Revenues (GAAP)
18,655
$      
17,797
$      
998
(456)
225
91
858
$          
4.8%
2012
2011
$ Change
% Change
Organic Net Revenues (Non-GAAP)
13,885
$      
13,529
$      
2.6%
Impact of foreign currency
(40)
-
(0.3)pp
Impact of the Starbucks CPG business cessation
-
91
(0.6)pp
Net Revenues (GAAP)
13,845
$      
13,620
$      
$             356
(40)
(91)
225
$          
1.7%
(1)
The Starbucks CPG business net revenues were included in 2009 and 2010 within Organic Net Revenues.
(2)
Impact of divestitures includes for reporting purposes the Starbucks CPG business.
For the Years Ended
December 31,
For the Nine Months Ended
September 30,
December 31,
Kraft Foods Group
Net Revenues to Organic Net Revenues
($ in millions, except percentages) (Unaudited)
For the Years Ended
$          
$          


GAAP to Non-GAAP Reconciliation
38
(1)
(2)
Impact of divestitures includes for reporting purposes the Starbucks CPG business.
Restructuring Program costs represent non-recurring restructuring and related implementation costs reflecting primarily severance, asset disposals
and other manufacturing related non-recurring costs. For the years 2010 and 2011, refers to reversals of 2004-2008 Restructuring Program costs. For
the year 2012, refers to costs incurred related to the 2012-2014 Restructuring Program.
As
Reported
(GAAP)
Restructuring
Program
Costs
(1)
Impact of
Divestitures
(2)
Loss on
Divestitures,
net
As Adjusted
(Non-GAAP)
For
the
Twelve
Months
Ended
December
31,
2010
Net Revenues
17,797
$
-
$           
(547)
$        
-
$             
17,250
$     
Operating Income
2,961
(8)
(145)
6
2,814
Operating Income Margin
16.6%
16.3%
For
the
Twelve
Months
Ended
December
31,
2011
Net Revenues
18,655
$
-
$           
(91)
$          
-
$             
18,564
$     
Operating Income
2,923
(2)
(15)
-
2,906
Operating Income Margin
15.7%
15.7%
For
the
Nine
Months
Ended
September
30,
2012
Net Revenues
13,845
$
-
$           
-
$             
-
$             
13,845
$     
Operating Income
2,392
170
-
-
2,562
Operating Income Margin
17.3%
18.5%
For
the
Three
Months
Ended
December
31,
2011
Net Revenues
5,034
-
$           
-
$             
-
$             
5,034
$      
Operating Income
508
-
-
-
508
Operating Income Margin
10.1%
10.1%
For
the
Twelve
Months
Ended
September
30,
2012
Net Revenues
18,879
$
-
$           
-
$             
-
$             
18,879
$     
Operating Income
2,900
170
-
-
3,070
Operating Income Margin
15.4%
16.3%
Kraft Foods Group
Reported to Adjusted Operating Income Margin
($ in millions, except percentages) (Unaudited)


GAAP to Non-GAAP Reconciliation
39
As Revised
(GAAP)
Integration
Program
costs
(1)
Spin-Off Costs
and Related
Adjustments
(2)
2012-2014
Restructuring
Program
costs
(3)
Impact from
Divestitures
(4)
As Adjusted     
(Non-GAAP)
Europe
Net Revenues
13,817
$      
-
$             
-
$                 
-
$               
(197)
$          
13,620
$      
Segment Operating Income
1,762
$        
47
$          
1
$                
6
$             
(51)
$            
1,765
$        
Segment Operating Income Margin
12.8%
13.0%
North
America
Net Revenues
6,903
$        
-
$             
-
$                 
-
$               
(47)
$            
6,856
$        
Segment Operating Income
781
$          
6
$            
77
$             
98
$           
(7)
$               
955
$          
Segment Operating Income Margin
11.3%
13.9%
Mondelez International
Segment Operating Income To Adjusted Segment Operating Income
For the Twelve Months Ended December 31, 2012
($ in millions, except percentages) (Unaudited)


GAAP to Non-GAAP Reconciliation
40
As
Reported/
Revised
(GAAP)
Impact of
Divestitures
Impact of
Acquisitions
(1)
Impact of
Currency
Organic
(Non-GAAP)
As Reported
(GAAP)
Organic
(Non-GAAP)
2013
Biscuits
5,815
$   
(17)
$                
(36)
$                
89
$                   
5,851
$      
5.9%
8.0%
Chocolate
4,559
-
-
121
4,680
3.1%
5.8%
Gum & Candy
2,501
(3)
-
75
2,573
(4.8)%
(1.8)%
Beverage
2,956
-
-
39
2,995
(0.3)%
1.0%
Cheese & Grocery
1,508
-
-
36
1,544
10.9%
(1.7)%
Mondelez International
17,339
(20)
$                
(36)
$                
360
$                 
17,643
$    
0.8%
3.8%
2012
Biscuits
5,489
$   
(69)
$                
-
$                   
-
$                     
5,420
$      
Chocolate
4,422
-
-
-
4,422
Gum & Candy
2,626
(7)
-
-
2,619
Beverage
2,965
(1)
-
-
2,964
Cheese & Grocery
1,692
(122)
-
-
1,570
Mondelez International
17,194
(199)
$             
-
$                   
-
$                     
16,995
$    
(1)
On February 22, 2013, the company acquired the remaining interest in a biscuit operation in Morocco, which is now a wholly-owned subsidiary within the EEMEA segment.
Net Revenues to Organic Net Revenues by Consumer Sector
For the Six Months Ended June 30,
($ in millions, except percentages) (Unaudited)
% Change
Mondelez International


GAAP to Non-GAAP Reconciliation
41
As
Reported/
Revised
(GAAP)
Integration
Program and
other
acquisition
integration
costs
(1)
Spin-Off Costs
and Related
Adjustments
(2)
2012-2014
Restructuring
Program
costs
(3)
Impact of
divestitures
Gains on
acquisition
and
divestitures,
net
(4)
Acquisition-
related costs
As Adjusted
(Non-GAAP)
Net Revenues
17,339
$
-
$            
-
$             
-
$           
(20)
$         
-
$           
-
$           
17,319
$    
Operating income
1,699
$
74
$         
24
$           
99
$        
7
$            
(28)
$        
2
$           
1,877
$      
Operating income margin
9.8%
10.8%
Mondelez International
Operating
Income Margin To Adjusted Operating
Income Margin
For the Six Months Ended June 30, 2013
($ in millions, except percentages)  (Unaudited)
-


GAAP to Non-GAAP Reconciliation
42
As Reported
(GAAP)
Integration
Program and
other
acquisition
integration
costs
(1)
Spin-Off
Costs
(2)
2012-2014
Restructuring
Program
Costs
(3)
Net Earnings
from
divestitures
Gains on
acquisition
and
divestitures,
net 
(4)
Acquisition-
related costs
As Adjusted
(Non-GAAP)
Earnings from continuing operations before income taxes
1,185
$     
74
$         
24
$        
99
$         
7
$           
(28)
$        
7
$           
1,368
$     
Provision for income taxes
(6)
$          
15
$         
10
$        
26
$         
2
$           
39
$         
(7)
$          
79
$          
Effective tax rate
(0.5)%
5.8%
Mondelez International
Effective Tax Rate To Adjusted Effective Tax Rate
For the Six Months Ended June 30, 2013
($ in millions, except percentages)  (Unaudited)


GAAP to Non-GAAP Reconciliation
43
Diluted EPS
Diluted EPS Attributable to Mondelez International for the Six
Months Ended June 30, 2012 (GAAP)
1.03
$         
Discontinued operations, net of income taxes
0.57
Diluted EPS Attributable to Mondelez International from continuing
operations for the Six Months Ended June 30, 2012 (GAAP)
0.46
Integration Program and other acquisition integration costs
(1)
0.04
Spin-Off Costs
(2)
0.11
Spin-Off related adjustments
(3)
0.05
2012-2014 Restructuring Program costs
(4)
0.02
Net earnings from divestitures
(0.01)
Adjusted EPS for the Six Months Ended June 30, 2012 (Non-GAAP)
0.67
Decrease in operations
(0.04)
Gain on sale of property in 2012
(0.03)
Intangible asset impairment charge in 2012
0.01
Lower interest and other expense, net
0.02
Changes in taxes
0.13
Adjusted EPS for the Six Months Ended June 30, 2013 (Constant Currency)
0.76
Unfavorable foreign currency
(5)
(0.05)
Adjusted EPS for the Six Months Ended June 30, 2013 (Non-GAAP)
0.71
Integration Program and other acquisition integration costs
(1)
(0.03)
Spin-Off Costs
(2)
(0.01)
2012-2014 Restructuring Program costs
(4)
(0.04)
Net earnings from divestitures
-
Gains on acquisition and divestitures, net
(6)
0.04
Acquisition-related costs
(0.01)
Diluted EPS Attributable to Mondelez International from continuing
operations for the Six Months Ended June 30, 2013 (GAAP)
0.66
$         
Mondelez International
Diluted EPS to Adjusted EPS
(Unaudited)