Mondelez International Reports Q3 Results; Raises Guidance
Financial Schedules and GAAP to Non-GAAP Information
Earnings Release
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"We continue to drive top-tier earnings growth and margin expansion in a challenging operating environment," said
"By successfully reducing costs in the near term while investing for the long term, we've driven Adjusted Operating Income margin expansion of at least 100 basis points and double-digit Adjusted EPS growth on a constant-currency basis for three consecutive quarters, while delivering solid organic revenue growth. As a result, we're raising our full-year guidance for both Adjusted Operating Income margin and EPS and maintaining our organic revenue outlook for 2014."
On a reported basis for the third quarter, net revenues were
Year to date, reported net revenues were
Organic Net Revenue
$ in millions |
Reported |
Organic Net Revenue Growth |
||||||||||||
Net |
Power |
|||||||||||||
Revenues |
vs PY |
Total |
Vol/Mix |
Pricing |
Brands |
|||||||||
Quarter 3 |
||||||||||||||
|
|
0.5 % |
18.5 % |
(3.1)pp |
21.6 pp |
16.9 % |
||||||||
|
1,153 |
1.5 |
1.3 |
(2.3) |
3.6 |
9.8 |
||||||||
|
894 |
(5.7) |
5.6 |
(2.3) |
7.9 |
11.7 |
||||||||
|
3,215 |
(2.4) |
(2.4) |
(5.5) |
3.1 |
(0.3) |
||||||||
|
1,760 |
(1.4) |
(0.2) |
0.3 |
(0.5) |
1.0 |
||||||||
|
|
(1.6)% |
2.7 % |
(3.1)pp |
5.8 pp |
5.1 % |
||||||||
September Year-to-Date |
||||||||||||||
|
|
(3.3)% |
15.0 % |
(3.7)pp |
18.7 pp |
13.4 % |
||||||||
|
3,460 |
(7.6) |
(3.3) |
(5.4) |
2.1 |
(3.4) |
||||||||
|
2,740 |
(3.9) |
6.5 |
2.1 |
4.4 |
10.1 |
||||||||
|
10,151 |
1.2 |
(1.8) |
(2.1) |
0.3 |
(0.1) |
||||||||
|
5,150 |
0.1 |
1.6 |
0.9 |
0.7 |
3.3 |
||||||||
|
|
(1.5)% |
2.2 % |
(1.8)pp |
4.0 pp |
3.7 % |
Third quarter Organic Net Revenue increased 2.7 percent. Overall, pricing was up 5.8 percentage points, as the company realized the effects of cost-driven pricing actions implemented over the course of the year. Volume/mix declined 3.1 percentage points. In addition to price elasticity, the decline was largely due to a slow response by competitors to higher input costs and continued significant price-related customer disruptions, primarily in
In the third quarter, Organic Net Revenue from emerging markets7 was up 9.0 percent, while developed markets8 decreased 1.3 percent. Overall, Power Brands grew 5.1 percent.
On a regional basis:
-
Latin America increased 18.5 percent, largely driven by pricing gains, especially in the inflationary economies ofVenezuela and Argentina.Brazil grew mid-teens including a positive contribution from volume/mix and solid growth across all categories. -
Asia Pacific was up 1.3 percent as higher pricing was mostly offset by lower volume/mix.China was up high-single digits behind stepped-up innovation and marketing support as the business cycled the prior year's weak results in biscuits.India delivered another quarter of double-digit growth. -
EEMEA was up 5.6 percent despite political and economic volatility as higher pricing was partially offset by lower volume/mix.
Russia grew mid-teens, with solid performance across most categories and contributions from both volume/mix and pricing. -
Europe was down 2.4 percent. Volume/mix declined due to pricing-related elasticity across the region and customer disruptions, particularly inFrance . -
North America was essentially flat, down 0.2 percent, reflecting slower growth in biscuits offset by declines in confections.
Operating Income and Diluted EPS
$ in millions |
Reported |
||||||||||||
Q3 |
vs PY |
Sep |
vs PY |
||||||||||
Gross Profit |
|
(0.1)% |
|
(1.7)% |
|||||||||
Gross Profit Margin |
37.7 % |
0.6 pp |
37.2 % |
(0.1)pp |
|||||||||
Operating Income |
|
(32.4)% |
|
(10.4)% |
|||||||||
Operating Income Margin |
10.2 % |
(4.7)pp |
10.4 % |
(1.1)pp |
|||||||||
Net Earnings9 |
|
(11.2)% |
|
(21.6)% |
|||||||||
Diluted EPS |
|
(5.4)% |
|
(18.3)% |
|||||||||
Adjusted1 |
|||||||||||||
Q3 |
vs PY |
vs PY |
Sep |
vs PY |
vs PY |
||||||||
Gross Profit |
|
(0.3)% |
3.1 % |
|
(1.9)% |
1.3 % |
|||||||
Gross Profit Margin |
37.7 % |
0.4 pp |
37.2 % |
(0.2)pp |
|||||||||
Operating Income |
|
10.3 % |
16.5 % |
|
10.1 % |
14.7 % |
|||||||
Operating Income Margin |
13.6 % |
1.4 pp |
12.8 % |
1.3 pp |
|||||||||
Net Earnings |
|
17.1 % |
|
9.7 % |
|||||||||
Diluted EPS |
|
25.0 % |
32.5 % |
|
15.2 % |
22.3 % |
In the third quarter, Adjusted Gross Profit1 increased 3.1 percent on a constant-currency basis. Adjusted Gross Profit margin was 37.7 percent, up 0.4 percentage points. Higher prices and a strong contribution from supply chain productivity offset input cost inflation.
Adjusted Operating Income grew 16.5 percent on a constant-currency basis. Adjusted Operating Income margin expanded 1.4 percentage points to 13.6 percent, driven primarily by strong gains in
Adjusted EPS grew 32.5 percent on a constant-currency basis, driven by operating gains, lower interest expense and share repurchases.
Share Repurchases
In the first nine months of the year, the company repurchased
Outlook
Item |
FY 2014 Outlook |
|||||
Organic Net Revenue Growth |
2.0% to 2.5% |
|||||
Adjusted Operating Income Growth |
Approximately 10% on a constant-currency basis |
|||||
Adjusted Operating Income Margin |
Approximately 13% |
|||||
Lower End |
Upper End |
|||||
Adjusted EPS - Constant Currency10 |
$ 1.82 |
$ 1.87 |
||||
Estimated Currency Impact11 |
(0.15) |
(0.15) |
||||
Adjusted EPS |
$ 1.67 |
$ 1.72 |
"We took another strong step toward our longer term margin goals in the third quarter," said
Conference Call
About
End Notes
- Please see discussion of Non-GAAP Financial Measures at the end of this press release.
-
As part of the 2010
Cadbury acquisition, the company became the responsible party for tax matters under theCadbury Schweppes Plc and Dr Pepper Snapple Group, Inc. ("DPSG") Tax Sharing and Indemnification Agreement datedMay 1, 2008 ("Tax Indemnity") for certain 2007 and 2008 transactions relating to the demerger ofCadbury's Americas Beverage business. A U.S. federal tax audit of DPSG for the 2006-2008 tax years was concluded with theIRS inAugust 2013 . As a result, the company recorded a favorable impact of$363 million due to the reversal of the accrued liability in excess of the amount we paid to DPSG under the Tax Indemnity, including$336 million in selling, general and administrative expenses and$49 million in interest and other expense / (income), partially offset by$22 million of tax expense for an impact of$0.20 per diluted share, in the three and nine months endedSeptember 30, 2013 . - Includes both the 2012-2014 Restructuring Program and the 2014-2018 Restructuring Program. Please see discussion of Non-GAAP Financial Measures at the end of this press release for more details about both programs.
-
In connection with the planned coffee business transactions, the company entered into euro to U.S. dollar currency exchange forward contracts to hedge an expected cash receipt of €4 billion upon closing. Unrealized gains were recorded within interest and other expense in the amounts of
$420 million for the three months and$413 million for the nine months endedSeptember 30, 2014 , respectively. -
On
February 6, 2014 , the company completed a$1.6 billion cash tender offer for some of its outstanding high coupon long term debt and recorded a pre-tax loss of$495 million during the first nine months of 2014. -
On
March 31, 2014 , the company remeasured its Venezuelan bolivar-denominated net monetary assets and recognized a pre-tax loss of$142 million . In addition, the company recognized$19 million of additional remeasurement charges in operating income in the three months endedSeptember 30, 2014 . The impact of the remeasurement of the net monetary assets inVenezuela , both in current and prior years, is no longer included in the company's non-GAAP financial measures of Adjusted Operating Income and Adjusted EPS. Please see discussion of Items Impacting Comparability of Operating Results at the end of this press release for more details. -
Emerging markets consist of the
Latin America andEastern Europe ,Middle East andAfrica regions in their entirety; theAsia Pacific region, excludingAustralia ,New Zealand andJapan ; and the following countries from theEurope region:Poland , Czech & Slovak Republics,Hungary ,Bulgaria ,Romania , the Baltics and the East Adriatic countries. -
Developed markets include the entire
North America region, theEurope region excluding the countries included in the emerging markets definition, andAustralia ,New Zealand andJapan from theAsia Pacific region. -
Net earnings attributable to
Mondelez International . -
Adjusted EPS - Constant Currency guidance of
$1.82-$1.87 is based on 2013 average currency rates. -
Currency estimate includes the impact of currency recorded in the company's results for the first nine months of 2014 and the estimated impact of currency for the remaining three months using spot rates as of the close of business on
October 31, 2014 .
Forward-Looking Statements
This press release contains a number of forward-looking statements. Words, and variations of words, such as "will," "expect," "intend," "would," "anticipate," "target," "outlook," "guidance" and similar expressions are intended to identify our forward-looking statements, including, but not limited to, statements about: our future performance, including our future revenue growth, operating income, earnings per share and margins; global retail and consumer demand; currency; category growth, including in emerging markets; the cash proceeds and ownership interest to be received in the coffee transactions; the costs of and timing of expenditures under the restructuring program; and our Outlook, including 2014 Organic Net Revenue growth, Adjusted Operating Income growth, Adjusted Operating Income margin and Adjusted EPS. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from those indicated in our forward-looking statements. Such factors include, but are not limited to, risks from operating globally and in emerging markets, continued volatility of commodity and other input costs, pricing actions, weakness in economic conditions, weakness in consumer spending, customer and consumer dislocation, other unanticipated disruptions to our business, increased competition, the restructuring program not yielding the anticipated benefits, changes in the assumptions on which the restructuring program is based and tax law changes. Please also see our risk factors, as they may be amended from time to time, set forth in our filings with the
Schedule 1 |
||||||||||||||
|
||||||||||||||
Condensed Consolidated Statements of Earnings |
||||||||||||||
(in millions of U.S. dollars, except per share data) (Unaudited) |
||||||||||||||
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||||
2014 |
2013 |
% Change |
2014 |
2013 |
% Change |
|||||||||
Net revenues |
|
|
(1.6)% |
|
|
(1.5)% |
||||||||
Cost of sales |
5,195 |
5,328 |
2.5 % |
15,963 |
16,194 |
1.4 % |
||||||||
Gross profit |
3,142 |
3,144 |
(0.1)% |
9,451 |
9,617 |
(1.7)% |
||||||||
Gross profit margin |
37.7% |
37.1% |
37.2% |
37.3% |
||||||||||
Selling, general and administrative expenses |
2,053 |
1,784 |
(15.1)% |
6,356 |
6,385 |
0.5 % |
||||||||
Asset impairment and exit costs |
188 |
43 |
(100.0+)% |
285 |
135 |
(100.0+)% |
||||||||
Gains on acquisition and divestitures, net |
- |
- |
- |
- |
(28) |
(100.0)% |
||||||||
Amortization of intangibles |
48 |
55 |
12.7 % |
157 |
164 |
4.3 % |
||||||||
Operating income |
853 |
1,262 |
(32.4)% |
2,653 |
2,961 |
(10.4)% |
||||||||
Operating income margin |
10.2% |
14.9% |
10.4% |
11.5% |
||||||||||
Interest and other expense / (income) |
(227) |
218 |
100.0+% |
717 |
732 |
2.0 % |
||||||||
Earnings before income taxes |
1,080 |
1,044 |
3.4 % |
1,936 |
2,229 |
(13.1)% |
||||||||
Provision / (benefit) for income taxes |
178 |
26 |
(100.0+)% |
242 |
67 |
(100.0+)% |
||||||||
Effective tax rate |
16.5% |
2.5% |
12.5% |
3.0% |
||||||||||
Net earnings |
902 |
1,018 |
(11.4)% |
1,694 |
2,162 |
(21.6)% |
||||||||
Noncontrolling interest |
3 |
6 |
50.0% |
10 |
13 |
23.1% |
||||||||
Net earnings attributable to |
$ 899 |
$ 1,012 |
(11.2)% |
$ 1,684 |
$ 2,149 |
(21.6)% |
||||||||
Per share data: |
||||||||||||||
Basic earnings per share attributable to |
$ 0.53 |
$ 0.57 |
(7.0)% |
$ 0.99 |
$ 1.21 |
(18.2)% |
||||||||
Diluted earnings per share attributable to |
$ 0.53 |
$ 0.56 |
(5.4)% |
$ 0.98 |
$ 1.20 |
(18.3)% |
||||||||
Average shares outstanding: |
||||||||||||||
Basic |
1,688 |
1,779 |
5.1 % |
1,695 |
1,783 |
4.9 % |
||||||||
Diluted |
1,705 |
1,794 |
5.0 % |
1,713 |
1,798 |
4.7 % |
Schedule 2 |
||||||
|
||||||
Condensed Consolidated Balance Sheets |
||||||
(in millions of U.S. dollars) (Unaudited) |
||||||
|
|
|
||||
2014 |
2013 |
2013 |
||||
ASSETS |
||||||
Cash and cash equivalents |
$ 1,704 |
$ 2,664 |
$ 3,692 |
|||
Receivables, net |
5,352 |
5,403 |
6,202 |
|||
Inventories, net |
4,122 |
3,743 |
4,161 |
|||
Deferred income taxes |
433 |
517 |
579 |
|||
Other current assets |
1,235 |
889 |
838 |
|||
Total current assets |
12,846 |
13,216 |
15,472 |
|||
Property, plant and equipment, net |
10,152 |
10,247 |
10,085 |
|||
Goodwill |
24,399 |
25,597 |
25,623 |
|||
Intangible assets, net |
21,110 |
21,994 |
22,111 |
|||
Prepaid pension assets |
65 |
54 |
29 |
|||
Other assets |
1,395 |
1,449 |
1,483 |
|||
TOTAL ASSETS |
$ 69,967 |
|
$ 74,803 |
|||
LIABILITIES AND EQUITY |
||||||
Short-term borrowings |
$ 1,807 |
$ 1,636 |
$ 2,527 |
|||
Current portion of long-term debt |
2,084 |
1,003 |
2,303 |
|||
Accounts payable |
5,184 |
5,345 |
4,533 |
|||
Accrued marketing |
1,920 |
2,318 |
2,191 |
|||
Accrued employment costs |
990 |
1,043 |
1,079 |
|||
Other current liabilities |
2,630 |
3,051 |
2,633 |
|||
Total current liabilities |
14,615 |
14,396 |
15,266 |
|||
Long-term debt |
13,988 |
14,482 |
15,089 |
|||
Deferred income taxes |
5,753 |
6,282 |
6,153 |
|||
Accrued pension costs |
1,826 |
1,962 |
2,807 |
|||
Accrued postretirement health care costs |
439 |
412 |
470 |
|||
Other liabilities |
2,390 |
2,491 |
2,521 |
|||
TOTAL LIABILITIES |
39,011 |
40,025 |
42,306 |
|||
TOTAL EQUITY |
30,956 |
32,532 |
32,497 |
|||
TOTAL LIABILITIES AND EQUITY |
$ 69,967 |
|
$ 74,803 |
|||
|
|
|||||
2014 |
2013 |
|
||||
Short-term borrowings |
$ 1,807 |
$ 1,636 |
$ 171 |
|||
Current portion of long-term debt |
2,084 |
1,003 |
1,081 |
|||
Long-term debt |
13,988 |
14,482 |
(494) |
|||
Total Debt |
17,879 |
17,121 |
758 |
|||
Cash and cash equivalents |
1,704 |
2,664 |
(960) |
|||
Net Debt (1) |
$ 16,175 |
$ 14,457 |
$ 1,718 |
|||
(1) |
Net debt is defined as total debt, which includes short-term borrowings, current portion of long-term debt and long-term debt, less cash and cash equivalents. |
Schedule 3 |
|||
|
|||
Condensed Consolidated Statements of Cash Flows |
|||
(in millions of U.S. dollars) |
|||
(Unaudited) |
|||
For the Nine Months Ended |
|||
2014 |
2013 |
||
CASH PROVIDED BY / (USED IN) OPERATING ACTIVITIES |
|||
Net earnings |
|
$ 2,162 |
|
Adjustments to reconcile net earnings to operating cash flows: |
|||
Depreciation and amortization |
797 |
808 |
|
Stock-based compensation expense |
104 |
98 |
|
Deferred income tax benefit |
(255) |
(176) |
|
Gains on acquisition and divestitures, net |
- |
(28) |
|
Asset impairments |
77 |
36 |
|
Benefit from indemnification resolution |
- |
(385) |
|
Loss on early extinguishment of debt |
493 |
- |
|
Unrealized gain on planned coffee business divestiture currency hedge |
(413) |
- |
|
Other non-cash items, net |
(28) |
52 |
|
Change in assets and liabilities, net of acquisitions and divestitures: |
|||
Receivables, net |
(163) |
(100) |
|
Inventories, net |
(625) |
(502) |
|
Accounts payable |
19 |
(30) |
|
Other current assets |
(106) |
17 |
|
Other current liabilities |
(430) |
(796) |
|
Change in pension and postretirement assets and liabilities, net |
(15) |
42 |
|
Net cash provided by operating activities |
1,149 |
1,198 |
|
CASH PROVIDED BY / (USED IN) INVESTING ACTIVITIES |
|||
Capital expenditures |
(1,129) |
(1,028) |
|
Acquisition, net of cash received |
- |
(119) |
|
Proceeds from divestitures, net of disbursements |
- |
48 |
|
Cash received from Kraft Foods Group related to the Spin-Off |
- |
55 |
|
Other |
29 |
29 |
|
Net cash used in investing activities |
(1,100) |
(1,015) |
|
CASH PROVIDED BY / (USED IN) FINANCING ACTIVITIES |
|||
Issuances of commercial paper, maturities greater than 90 days |
1,986 |
726 |
|
Repayments of commercial paper, maturities greater than 90 days |
(2,072) |
(70) |
|
Net (repayments) / issuances of other short-term borrowings, net |
279 |
1,604 |
|
Long-term debt proceeds |
3,032 |
- |
|
Long-term debt repaid |
(2,524) |
(1,750) |
|
Repurchase of Common Stock |
(1,020) |
(793) |
|
Dividends paid |
(713) |
(696) |
|
Other |
163 |
98 |
|
Net cash used in financing activities |
(869) |
(881) |
|
Effect of exchange rate changes on cash and cash equivalents |
(140) |
(85) |
|
Cash and cash equivalents: |
|||
Increase / (decrease) |
(960) |
(783) |
|
Balance at beginning of period |
2,664 |
4,475 |
|
Balance at end of period |
|
$ 3,692 |
Reconciliation of GAAP and Non-GAAP Financial Measures
(Unaudited)
The company reports its financial results in accordance with accounting principles generally accepted in
DEFINITIONS OF THE COMPANY'S NON-GAAP FINANCIAL MEASURES
The company's non-GAAP financial measures and corresponding metrics reflect how the company evaluates its operating results currently and provide improved comparability of operating results. As new events or circumstances arise, these definitions could change over time:
- "Organic Net Revenue" is defined as net revenues excluding the impacts of acquisitions, divestitures (including businesses under sales agreements and exits of major product lines under a sale or licensing agreement), Integration Program costs, accounting calendar changes and currency rate fluctuations.
- "Adjusted Gross Profit" is defined as gross profit excluding the impacts of pension costs related to obligations transferred in the Spin-Off, the 2012-2014 Restructuring Program, the Integration Program and other acquisition integration costs and the operating results of divestitures (including businesses under sales agreements and exits of major product lines under a sale or licensing agreement). The company also evaluates growth in the company's Adjusted Gross Profit on a constant currency basis.
-
"Adjusted Operating Income" and "Adjusted Segment Operating Income" are defined as operating income (or segment operating income) excluding the impacts of Spin-Off Costs, pension costs related to the obligations transferred in the Spin-Off, the 2012-2014 Restructuring Program, the 2014-2018 Restructuring Program, the Integration Program and other acquisition integration costs, the remeasurement of net monetary assets in Venezuela, the benefit from the
Cadbury acquisition-related indemnification resolution, incremental costs associated with the JDE coffee transactions, impairment charges related to goodwill and intangible assets, gains / losses from divestitures or acquisitions, acquisition-related costs and the operating results of divestitures (including businesses under sales agreements and exits of major product lines under a sale or licensing agreement). The company also evaluates growth in the company's Adjusted Operating Income and Adjusted Segment Operating Income on a constant currency basis. -
"Adjusted EPS" is defined as diluted EPS attributable to
Mondelez International from continuing operations excluding the impacts of Spin-Off Costs, pension costs related to the obligations transferred in the Spin-Off, the 2012-2014 Restructuring Program, the 2014-2018 Restructuring Program, the Integration Program and other acquisition integration costs, the remeasurement of net monetary assets inVenezuela , the net benefit from theCadbury acquisition-related indemnification resolution, the loss on debt extinguishment and related expenses, the residual tax benefit impact from the resolution of the Starbucks arbitration, hedging gains / losses and incremental costs associated with the JDE coffee transactions, impairment charges related to goodwill and intangible assets, gains / losses from divestitures or acquisitions, acquisition-related costs and net earnings from divestitures (including businesses under sales agreements and exits of major product lines under a sale or licensing agreement), and including an interest expense adjustment related to the Spin-Off transaction. The company also evaluates growth in the company's Adjusted EPS on a constant currency basis.
See the attached schedules for supplemental financial data and corresponding reconciliations of the non-GAAP financial measures referred to above to the most comparable GAAP financial measures for the three and nine months ended
SEGMENT OPERATING INCOME
The company uses segment operating income to evaluate segment performance and allocate resources. The company believes it is appropriate to disclose this measure to help investors analyze segment performance and trends. Segment operating income excludes unrealized gains and losses on hedging activities (which are a component of cost of sales), general corporate expenses (which are a component of selling, general and administrative expenses), amortization of intangibles, the benefit from the
ITEMS IMPACTING COMPARABILITY OF OPERATING RESULTS
The following information is provided to give qualitative and quantitative information related to items impacting comparability of operating results. The company determines which items to consider as "items impacting comparability" based on how management views the company's business; makes financial, operating and planning decisions; and evaluates the company's ongoing performance. In addition, the company provides the impact that changes in currency exchange rates had on the company's financial results (referred to as "constant currency").
Divestitures
The company excludes the operating results of businesses divested, including businesses under sales agreements and exits of major product lines under a sale or licensing agreement. The company did not divest any businesses during the three months and nine months ended
Acquisition
On
Accounting Calendar Change
In connection with moving toward a common consolidation date across the company, in the first quarter of 2013, the company changed the consolidation date for the
Integration Program and other acquisition integration costs
Integration Program costs
Integration Program costs are defined as the costs associated with combining the
Other acquisition integration costs
In connection with the acquisition of a biscuit operation in
Spin-Off Costs
On
2012-2014 Restructuring Program
In 2012, the company's Board of Directors approved
Restructuring costs
The company recorded within asset impairment and exit costs charges of
Implementation costs
Implementation costs are directly attributable to restructuring activities; however, they do not qualify for accounting treatment as exit or disposal activities. The company recorded implementation costs of
Acquisition-related costs
In connection, with the acquisition of the biscuit operation in
Net benefit from Indemnification Resolution
As part of our 2010
Remeasurement of Venezuelan net monetary assets
As a result of recent Venezuelan currency exchange developments and the expected impact on the company's Venezuelan operations, the company remeasured its Venezuelan bolivar-denominated net monetary assets as of
In the nine months ended
The company continues to monitor developments in the currency and actively manage its investment and exposures in Venezuela. If any of the rates, or application of the rates to the company's business, were to change, the company would recognize additional currency losses or gains, which could be significant.
Loss on debt extinguishment and related costs
On
2014-2018 Restructuring Program
On
Restructuring costs
The company recorded within asset impairment and exit costs charges of
Implementation costs
Implementation costs are directly attributable to restructuring activities; however, they do not qualify for accounting treatment as exit or disposal activities. The company recorded implementation costs of
Hedging gains / losses and incremental costs for the JDE coffee transactions
On
Upon completion of all proposed transactions, the company will receive cash of approximately €4 billion and a 49 percent equity interest in the new company, to be called Jacobs Douwe Egberts. AHBV will hold a majority share in the proposed combined company and will have a majority of the seats on the board, which will be chaired by current D.E Master Blenders 1753 Chairman
Certain expenses related to readying the businesses for the planned transactions have been incurred. Within selling, general and administrative expenses, incremental costs were
Constant currency
Management evaluates the operating performance of the company and its international subsidiaries on a constant currency basis. The company determines its constant currency operating results by dividing or multiplying, as appropriate, the current period local currency operating results by the currency exchange rates used to translate the company's financial statements in the comparable prior year period to determine what the current period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior year period.
Schedule 4 |
|||||||||||
|
|||||||||||
Reconciliation of GAAP to Non-GAAP Measures |
|||||||||||
Net Revenues |
|||||||||||
(in millions of U.S. dollars) (Unaudited) |
|||||||||||
|
|
EEMEA |
|
|
|
||||||
For the Three Months Ended |
|||||||||||
Reported (GAAP) |
$ 1,315 |
$ 1,153 |
$ 894 |
$ 3,215 |
$ 1,760 |
$ 8,337 |
|||||
Divestitures |
- |
- |
- |
- |
- |
- |
|||||
Currency |
235 |
(2) |
107 |
(21) |
12 |
331 |
|||||
Organic (Non-GAAP) |
$ 1,550 |
$ 1,151 |
$ 1,001 |
$ 3,194 |
$ 1,772 |
$ 8,668 |
|||||
For the Three Months Ended |
|||||||||||
Reported (GAAP) |
$ 1,308 |
$ 1,136 |
$ 948 |
$ 3,295 |
$ 1,785 |
$ 8,472 |
|||||
Divestitures |
- |
- |
- |
(3) |
(9) |
(12) |
|||||
Accounting calendar change |
- |
- |
- |
(19) |
- |
(19) |
|||||
Organic (Non-GAAP) |
$ 1,308 |
$ 1,136 |
$ 948 |
$ 3,273 |
$ 1,776 |
$ 8,441 |
|||||
% Change |
|||||||||||
Reported (GAAP) |
0.5 % |
1.5 % |
(5.7)% |
(2.4)% |
(1.4)% |
(1.6)% |
|||||
Divestitures |
- pp |
- pp |
- pp |
0.1 pp |
0.5 pp |
0.1 pp |
|||||
Accounting calendar change |
- |
- |
- |
0.6 |
- |
0.2 |
|||||
Currency |
18.0 |
(0.2) |
11.3 |
(0.7) |
0.7 |
4.0 |
|||||
Organic (Non-GAAP) |
18.5 % |
1.3 % |
5.6 % |
(2.4)% |
(0.2)% |
2.7 % |
|||||
|
|
EEMEA |
|
|
|
||||||
For the Nine Months Ended |
|||||||||||
Reported (GAAP) |
$ 3,913 |
$ 3,460 |
$ 2,740 |
|
$ 5,150 |
$ 25,414 |
|||||
Divestitures |
- |
- |
- |
- |
- |
- |
|||||
Acquisitions |
- |
- |
(14) |
- |
- |
(14) |
|||||
Currency |
738 |
158 |
289 |
(331) |
48 |
902 |
|||||
Organic (Non-GAAP) |
$ 4,651 |
$ 3,618 |
$ 3,015 |
$ 9,820 |
$ 5,198 |
$ 26,302 |
|||||
For the Nine Months Ended |
|||||||||||
Reported (GAAP) |
$ 4,045 |
$ 3,743 |
$ 2,850 |
|
$ 5,147 |
$ 25,811 |
|||||
Divestitures |
- |
- |
(20) |
(9) |
(31) |
(60) |
|||||
Accounting calendar change |
- |
- |
- |
(19) |
- |
(19) |
|||||
Organic (Non-GAAP) |
$ 4,045 |
$ 3,743 |
$ 2,830 |
$ 9,998 |
$ 5,116 |
$ 25,732 |
|||||
% Change |
|||||||||||
Reported (GAAP) |
(3.3)% |
(7.6)% |
(3.9)% |
1.2 % |
0.1 % |
(1.5)% |
|||||
Divestitures |
- pp |
- pp |
0.7 pp |
0.1 pp |
0.6 pp |
0.2 pp |
|||||
Acquisitions |
- |
- |
(0.5) |
- |
- |
(0.1) |
|||||
Accounting calendar change |
- |
- |
- |
0.2 |
- |
0.1 |
|||||
Currency |
18.3 |
4.3 |
10.2 |
(3.3) |
0.9 |
3.5 |
|||||
Organic (Non-GAAP) |
15.0 % |
(3.3)% |
6.5 % |
(1.8)% |
1.6 % |
2.2 % |
Schedule 5 |
|||||||||
|
|||||||||
Reconciliation of GAAP to Non-GAAP Measures |
|||||||||
Gross Profit / Operating Income |
|||||||||
(in millions of U.S. dollars) (Unaudited) |
|||||||||
For the Three Months Ended |
|||||||||
Net Revenues |
Gross Profit |
Gross Profit Margin |
Operating Income |
Operating Income margin |
|||||
Reported (GAAP) |
$ 8,337 |
|
37.7% |
$ 853 |
10.2% |
||||
Integration Program and other acquisition integration costs |
- |
- |
(1) |
||||||
Spin-Off Costs |
- |
- |
4 |
||||||
2012-2014 Restructuring Program |
- |
3 |
186 |
||||||
Remeasurement of net monetary assets in |
- |
- |
19 |
||||||
2014-2018 Restructuring Program |
- |
1 |
67 |
||||||
Costs associated with the JDE coffee transactions |
- |
- |
10 |
||||||
Adjusted (Non-GAAP) |
$ 8,337 |
|
37.7% |
|
13.6% |
||||
Currency |
110 |
64 |
|||||||
Adjusted @ Constant FX (Non-GAAP) |
|
|
|||||||
For the Three Months Ended |
|||||||||
Net Revenues |
Gross Profit |
Gross Profit Margin |
Operating Income |
Operating Income margin |
|||||
Reported (GAAP) |
$ 8,472 |
|
37.1% |
|
14.9% |
||||
Integration Program and other acquisition integration costs |
- |
13 |
36 |
||||||
Spin-Off Costs |
- |
- |
9 |
||||||
2012-2014 Restructuring Program |
- |
2 |
63 |
||||||
Net Benefit from Indemnification Resolution |
- |
- |
(336) |
||||||
Divestitures |
(12) |
(2) |
(2) |
||||||
Adjusted (Non-GAAP) |
$ 8,460 |
|
37.3% |
|
12.2% |
||||
Currency |
- |
- |
|||||||
Adjusted @ Constant FX (Non-GAAP) |
|
|
|||||||
Gross Profit |
Operating Income |
||||||||
% Change - Reported (GAAP) |
(0.1)% |
(32.4)% |
|||||||
% Change - Adjusted (Non-GAAP) |
(0.3)% |
10.3 % |
|||||||
% Change - Adjusted @ Constant FX (Non-GAAP) |
3.1 % |
16.5 % |
|||||||
For the Nine Months Ended |
|||||||||
Net Revenues |
Gross Profit |
Gross Profit Margin |
Operating Income |
Operating Income margin |
|||||
Reported (GAAP) |
|
|
37.2% |
|
10.4% |
||||
Integration Program and other acquisition integration costs |
- |
- |
(3) |
||||||
Spin-Off Costs |
- |
- |
23 |
||||||
2012-2014 Restructuring Program |
- |
9 |
325 |
||||||
Remeasurement of net monetary assets in |
- |
- |
161 |
||||||
2014-2018 Restructuring Program |
- |
1 |
77 |
||||||
Costs associated with the JDE coffee transactions |
- |
- |
15 |
||||||
Adjusted (Non-GAAP) |
|
|
37.2% |
|
12.8% |
||||
Currency |
303 |
138 |
|||||||
Adjusted @ Constant FX (Non-GAAP) |
|
|
|||||||
For the Nine Months Ended |
|||||||||
Net Revenues |
Gross Profit |
Gross Profit Margin |
Operating Income |
Operating Income margin |
|||||
Reported (GAAP) |
|
|
37.3% |
|
11.5% |
||||
Integration Program and other acquisition integration costs |
- |
38 |
110 |
||||||
Spin-Off Costs |
- |
- |
33 |
||||||
2012-2014 Restructuring Program |
- |
2 |
162 |
||||||
Acquisition-related costs |
- |
- |
2 |
||||||
Net Benefit from Indemnification Resolution |
- |
- |
(336) |
||||||
Remeasurement of net monetary assets in |
- |
- |
54 |
||||||
Gains on acquisition and divestitures, net |
- |
- |
(28) |
||||||
Divestitures |
(60) |
(15) |
(4) |
||||||
Adjusted (Non-GAAP) |
|
|
37.4% |
|
11.5% |
||||
Currency |
- |
- |
|||||||
Adjusted @ Constant FX (Non-GAAP) |
|
|
|||||||
Gross Profit |
Operating Income |
||||||||
% Change - Reported (GAAP) |
(1.7)% |
(10.4)% |
|||||||
% Change - Adjusted (Non-GAAP) |
(1.9)% |
10.1 % |
|||||||
% Change - Adjusted @ Constant FX (Non-GAAP) |
1.3 % |
14.7 % |
Schedule 6 |
|||||||||||||||
|
|||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures |
|||||||||||||||
Condensed Consolidated Statements of Earnings |
|||||||||||||||
(in millions of U.S. dollars, except per share data) (Unaudited) |
|||||||||||||||
For the Three Months Ended |
|||||||||||||||
Operating Income |
Interest and other expense / (income) |
Earnings before taxes |
Income taxes |
Effective tax rate |
Non-controlling interest |
Net Earnings attributable to |
Diluted EPS attributable to |
||||||||
Reported (GAAP) |
$ 853 |
$ (227) |
$ 1,080 |
$ 178 |
16.5 % |
$ 3 |
$ 899 |
$ 0.53 |
|||||||
Integration Program and other acquisition integration costs |
(1) |
- |
(1) |
- |
- |
(1) |
- |
||||||||
Spin-Off Costs |
4 |
- |
4 |
2 |
- |
2 |
- |
||||||||
2012-2014 Restructuring Program |
186 |
- |
186 |
39 |
- |
147 |
0.08 |
||||||||
Remeasurement of net monetary assets in |
19 |
- |
19 |
5 |
- |
14 |
0.01 |
||||||||
Loss on debt extinguishment and related expenses |
- |
- |
- |
- |
- |
- |
- |
||||||||
2014-2018 Restructuring Program |
67 |
- |
67 |
20 |
- |
47 |
0.03 |
||||||||
Income / (costs) associated with the JDE coffee transactions |
10 |
420 |
(410) |
(152) |
- |
(258) |
(0.15) |
||||||||
Adjusted (Non-GAAP) |
$ 1,138 |
$ 193 |
$ 945 |
$ 92 |
9.7 % |
$ 3 |
$ 850 |
$ 0.50 |
|||||||
Diluted Average Shares Outstanding |
1,705 |
||||||||||||||
For the Three Months Ended |
|||||||||||||||
Operating Income |
Interest and other expense / (income) |
Earnings before taxes |
Income taxes |
Effective tax rate |
Non-controlling interest |
Net Earnings attributable to |
Diluted EPS attributable to |
||||||||
Reported (GAAP) |
$ 1,262 |
$ 218 |
$ 1,044 |
$ 26 |
2.5 % |
$ 6 |
$ 1,012 |
$ 0.56 |
|||||||
Integration Program and other acquisition integration costs |
36 |
- |
36 |
7 |
- |
29 |
0.01 |
||||||||
Spin-Off Costs |
9 |
- |
9 |
7 |
- |
2 |
- |
||||||||
2012-2014 Restructuring Program |
63 |
- |
63 |
16 |
- |
47 |
0.03 |
||||||||
Acquisition-related costs |
- |
- |
- |
- |
- |
- |
- |
||||||||
Net Benefit from Indemnification Resolution |
(336) |
49 |
(385) |
(22) |
- |
(363) |
(0.20) |
||||||||
Remeasurement of net monetary assets in |
- |
- |
- |
- |
- |
- |
- |
||||||||
Gains on acquisition and divestitures, net |
- |
- |
- |
- |
- |
- |
- |
||||||||
Divestitures |
(2) |
- |
(2) |
(1) |
- |
(1) |
- |
||||||||
Adjusted (Non-GAAP) |
$ 1,032 |
$ 267 |
$ 765 |
$ 33 |
4.3 % |
$ 6 |
$ 726 |
$ 0.40 |
|||||||
Diluted Average Shares Outstanding |
1,794 |
||||||||||||||
For the Nine Months Ended |
|||||||||||||||
Operating Income |
Interest and other expense / (income) |
Earnings before taxes |
Income taxes |
Effective tax rate |
Non-controlling interest |
Net Earnings attributable to |
Diluted EPS attributable to |
||||||||
Reported (GAAP) |
$ 2,653 |
$ 717 |
$ 1,936 |
$ 242 |
12.5 % |
$ 10 |
$ 1,684 |
$ 0.98 |
|||||||
Integration Program and other acquisition integration costs |
(3) |
- |
(3) |
- |
- |
(3) |
- |
||||||||
Spin-Off Costs |
23 |
- |
23 |
9 |
- |
14 |
0.01 |
||||||||
2012-2014 Restructuring Program |
325 |
- |
325 |
72 |
- |
253 |
0.15 |
||||||||
Remeasurement of net monetary assets in |
161 |
- |
161 |
11 |
- |
150 |
0.09 |
||||||||
Loss on debt extinguishment and related expenses |
- |
(495) |
495 |
188 |
- |
307 |
0.18 |
||||||||
2014-2018 Restructuring Program |
77 |
- |
77 |
23 |
- |
54 |
0.03 |
||||||||
Income / (costs) associated with the JDE coffee transactions |
15 |
413 |
(398) |
(149) |
- |
(249) |
(0.15) |
||||||||
Adjusted (Non-GAAP) |
$ 3,251 |
$ 635 |
$ 2,616 |
$ 396 |
15.1 % |
$ 10 |
$ 2,210 |
$ 1.29 |
|||||||
Diluted Average Shares Outstanding |
1,713 |
||||||||||||||
For the Nine Months Ended |
|||||||||||||||
Operating Income |
Interest and other expense / (income) |
Earnings before taxes |
Income taxes |
Effective tax rate |
Non-controlling interest |
Net Earnings attributable to |
Diluted EPS attributable to |
||||||||
Reported (GAAP) |
$ 2,961 |
$ 732 |
$ 2,229 |
$ 67 |
3.0 % |
$ 13 |
$ 2,149 |
$ 1.20 |
|||||||
Integration Program and other acquisition integration costs |
110 |
- |
110 |
22 |
- |
88 |
0.05 |
||||||||
Spin-Off Costs |
33 |
- |
33 |
10 |
- |
23 |
0.01 |
||||||||
2012-2014 Restructuring Program |
162 |
- |
162 |
42 |
- |
120 |
0.07 |
||||||||
Acquisition-related costs |
2 |
(5) |
7 |
- |
- |
7 |
- |
||||||||
Net Benefit from Indemnification Resolution |
(336) |
49 |
(385) |
(22) |
- |
(363) |
(0.20) |
||||||||
Remeasurement of net monetary assets in |
54 |
- |
54 |
(5) |
- |
59 |
0.03 |
||||||||
Gains on acquisition and divestitures, net |
(28) |
- |
(28) |
39 |
- |
(67) |
(0.04) |
||||||||
Divestitures |
(4) |
- |
(4) |
(2) |
- |
(2) |
- |
||||||||
Adjusted (Non-GAAP) |
$ 2,954 |
$ 776 |
$ 2,178 |
$ 151 |
6.9 % |
$ 13 |
$ 2,014 |
$ 1.12 |
|||||||
Diluted Average Shares Outstanding |
1,798 |
Schedule 7 |
|||||||||
|
|||||||||
Reconciliation of GAAP to Non-GAAP Measures |
|||||||||
Diluted EPS |
|||||||||
(Unaudited) |
|||||||||
For the Three Months Ended |
For the Nine Months Ended |
||||||||
Diluted EPS |
% Growth |
Diluted EPS |
% Growth |
||||||
2013 Diluted EPS Attributable to |
$ 0.56 |
$ 1.20 |
|||||||
Integration Program and other acquisition integration costs |
0.01 |
0.05 |
|||||||
Spin-Off Costs |
- |
0.01 |
|||||||
2012-2014 Restructuring Program costs |
0.03 |
0.07 |
|||||||
Acquisition-related costs |
- |
- |
|||||||
Net Benefit from Indemnification Resolution |
(0.20) |
(0.20) |
|||||||
Remeasurement of net monetary assets in |
- |
0.03 |
|||||||
Gains on acquisition and divestitures, net |
- |
(0.04) |
|||||||
2013 Adjusted EPS (Non-GAAP) |
0.40 |
1.12 |
|||||||
Increase in operations |
0.06 |
0.22 |
|||||||
Gain on sale of property in 2014 |
- |
- |
|||||||
Unrealized gains/(losses) on hedging activities |
0.01 |
(0.03) |
|||||||
Lower interest and other expense, net |
0.03 |
0.06 |
|||||||
Changes in shares outstanding |
0.03 |
0.06 |
|||||||
Changes in income taxes |
- |
(0.06) |
|||||||
2014 Adjusted EPS (Constant Currency) (Non-GAAP) |
0.53 |
32.5% |
1.37 |
22.3% |
|||||
Unfavorable foreign currency - translation |
(0.03) |
(0.08) |
|||||||
2014 Adjusted EPS (Non-GAAP) |
0.50 |
25.0% |
1.29 |
15.2% |
|||||
Integration Program and other acquisition integration costs |
- |
- |
|||||||
Spin-Off Costs |
- |
(0.01) |
|||||||
2012-2014 Restructuring Program costs |
(0.08) |
(0.15) |
|||||||
Remeasurement of net monetary assets in |
(0.01) |
(0.09) |
|||||||
Loss on debt extinguishment and related expenses |
- |
(0.18) |
|||||||
2014-2018 Restructuring Program costs |
(0.03) |
(0.03) |
|||||||
Income / (costs) associated with the JDE coffee transactions |
0.15 |
0.15 |
|||||||
2014 Diluted EPS Attributable to |
$ 0.53 |
(5.4)% |
$ 0.98 |
(18.3)% |
Schedule 8a |
||||||||||||||||||||
|
||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures |
||||||||||||||||||||
Segment Data |
||||||||||||||||||||
(in millions of U.S. dollars) (Unaudited) |
||||||||||||||||||||
For the Three Months Ended |
||||||||||||||||||||
|
|
EEMEA |
|
|
Unrealized G/(L) on Hedging Activities |
General Corporate Expenses |
Amortization of Intangibles |
Other Items |
|
|||||||||||
Net Revenue |
||||||||||||||||||||
Reported (GAAP) |
|
|
$ 894 |
|
|
$ - |
$ - |
$ - |
$ - |
$ 8,337 |
||||||||||
Divestitures |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
||||||||||
Adjusted (Non-GAAP) |
|
|
$ 894 |
|
|
$ - |
$ - |
$ - |
$ - |
$ 8,337 |
||||||||||
Operating Income |
||||||||||||||||||||
Reported (GAAP) |
$ 120 |
$ 65 |
$ 93 |
$ 368 |
$ 272 |
$ 39 |
$ (56) |
$ (48) |
$ - |
$ 853 |
||||||||||
Integration Program and other acquisition integration costs |
- |
- |
- |
- |
- |
- |
(1) |
- |
- |
(1) |
||||||||||
Spin-Off Costs |
- |
- |
- |
- |
- |
- |
4 |
- |
- |
4 |
||||||||||
2012-2014 Restructuring Program |
3 |
28 |
14 |
99 |
41 |
- |
1 |
- |
- |
186 |
||||||||||
Remeasurement of net monetary assets in |
19 |
- |
- |
- |
- |
- |
- |
- |
- |
19 |
||||||||||
2014-2018 Restructuring Program |
32 |
4 |
3 |
14 |
1 |
- |
13 |
- |
- |
67 |
||||||||||
Costs associated with the JDE coffee transactions |
- |
- |
- |
10 |
- |
- |
- |
- |
- |
10 |
||||||||||
Adjusted (Non-GAAP) |
$ 174 |
$ 97 |
$ 110 |
$ 491 |
$ 314 |
$ 39 |
$ (39) |
$ (48) |
$ - |
$ 1,138 |
||||||||||
Currency |
50 |
(2) |
13 |
(5) |
1 |
- |
7 |
- |
- |
64 |
||||||||||
Adjusted @ Constant FX (Non-GAAP) |
$ 224 |
$ 95 |
$ 123 |
$ 486 |
$ 315 |
$ 39 |
$ (32) |
$ (48) |
$ - |
$ 1,202 |
||||||||||
% Change - Reported (GAAP) |
(29.8)% |
(19.8)% |
(14.7)% |
(8.7)% |
(2.5)% |
n/m |
24.3 % |
12.7 % |
n/m |
(32.4)% |
||||||||||
% Change - Adjusted (Non-GAAP) |
(3.3)% |
6.6 % |
(6.0)% |
8.9 % |
5.0 % |
n/m |
38.1 % |
12.7 % |
n/m |
10.3 % |
||||||||||
% Change - Adjusted @ Constant FX (Non-GAAP) |
24.4 % |
4.4 % |
5.1 % |
7.8 % |
5.4 % |
n/m |
49.2 % |
12.7 % |
n/m |
16.5 % |
||||||||||
Operating Income Margin |
||||||||||||||||||||
Reported % |
9.1 % |
5.6 % |
10.4 % |
11.4 % |
15.5 % |
10.2 % |
||||||||||||||
Reported pp change |
(4.0)pp |
(1.5)pp |
(1.1)pp |
(0.8)pp |
(0.1)pp |
(4.7)pp |
||||||||||||||
Adjusted % |
13.2 % |
8.4 % |
12.3 % |
15.3 % |
17.8 % |
13.6 % |
||||||||||||||
Adjusted pp change |
(0.6)pp |
0.4 pp |
- pp |
1.6 pp |
1.0 pp |
1.4 pp |
||||||||||||||
For the Three Months Ended |
||||||||||||||||||||
|
|
EEMEA |
|
|
Unrealized G/(L) on Hedging Activities |
General Corporate Expenses |
Amortization of Intangibles |
Other Items |
|
|||||||||||
Net Revenue |
||||||||||||||||||||
Reported (GAAP) |
|
|
$ 948 |
|
|
$ - |
$ - |
$ - |
$ - |
$ 8,472 |
||||||||||
Divestitures |
- |
- |
- |
(3) |
(9) |
- |
- |
- |
- |
(12) |
||||||||||
Adjusted (Non-GAAP) |
|
|
$ 948 |
|
|
$ - |
$ - |
$ - |
$ - |
$ 8,460 |
||||||||||
Operating Income |
||||||||||||||||||||
Reported (GAAP) |
$ 171 |
$ 81 |
$ 109 |
$ 403 |
$ 279 |
$ 12 |
$ (74) |
$ (55) |
|
$ 1,262 |
||||||||||
Integration Program and other acquisition integration costs |
- |
10 |
5 |
21 |
- |
- |
- |
- |
- |
36 |
||||||||||
Spin-Off Costs |
- |
- |
- |
- |
- |
- |
9 |
- |
- |
9 |
||||||||||
2012-2014 Restructuring Program |
9 |
- |
3 |
28 |
22 |
- |
1 |
- |
- |
63 |
||||||||||
Benefit from indemnification resolution |
- |
- |
- |
- |
- |
- |
- |
- |
(336) |
(336) |
||||||||||
Divestitures |
- |
- |
- |
(1) |
(2) |
- |
1 |
- |
- |
(2) |
||||||||||
Adjusted (Non-GAAP) |
$ 180 |
$ 91 |
$ 117 |
$ 451 |
$ 299 |
$ 12 |
$ (63) |
$ (55) |
$ - |
$ 1,032 |
||||||||||
Currency |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
||||||||||
Adjusted @ Constant FX (Non-GAAP) |
$ 180 |
$ 91 |
$ 117 |
$ 451 |
$ 299 |
$ 12 |
$ (63) |
$ (55) |
$ - |
$ 1,032 |
||||||||||
Operating Income Margin |
||||||||||||||||||||
Reported % |
13.1 % |
7.1 % |
11.5 % |
12.2 % |
15.6 % |
14.9 % |
||||||||||||||
Adjusted % |
13.8 % |
8.0 % |
12.3 % |
13.7 % |
16.8 % |
12.2 % |
Schedule 8b |
||||||||||||||||||||
|
||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures |
||||||||||||||||||||
Segment Data |
||||||||||||||||||||
(in millions of U.S. dollars) (Unaudited) |
||||||||||||||||||||
For the Nine Months Ended |
||||||||||||||||||||
|
|
EEMEA |
|
|
Unrealized G/(L) on Hedging Activities |
General Corporate Expenses |
Amortization of Intangibles |
Other Items |
|
|||||||||||
Net Revenue |
||||||||||||||||||||
Reported (GAAP) |
|
|
|
|
|
$ - |
$ - |
$ - |
$ - |
$ 25,414 |
||||||||||
Divestitures |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
||||||||||
Adjusted (Non-GAAP) |
|
|
|
|
|
$ - |
$ - |
$ - |
$ - |
$ 25,414 |
||||||||||
Operating Income |
||||||||||||||||||||
Reported (GAAP) |
$ 304 |
$ 364 |
$ 303 |
$ 1,294 |
$ 744 |
$ (8) |
$ (191) |
$ (157) |
$ - |
$ 2,653 |
||||||||||
Integration Program and other acquisition integration costs |
- |
- |
3 |
(5) |
- |
- |
(1) |
- |
- |
(3) |
||||||||||
Spin-Off Costs |
- |
- |
- |
- |
- |
- |
23 |
- |
- |
23 |
||||||||||
2012-2014 Restructuring Program |
8 |
29 |
28 |
170 |
90 |
- |
- |
- |
- |
325 |
||||||||||
Remeasurement of net monetary assets in |
161 |
- |
- |
- |
- |
- |
- |
- |
- |
161 |
||||||||||
2014-2018 Restructuring Program |
34 |
4 |
3 |
14 |
1 |
- |
21 |
- |
- |
77 |
||||||||||
Costs associated with the JDE coffee transactions |
- |
- |
- |
15 |
- |
- |
- |
- |
- |
15 |
||||||||||
Adjusted (Non-GAAP) |
$ 507 |
$ 397 |
$ 337 |
$ 1,488 |
$ 835 |
$ (8) |
$ (148) |
$ (157) |
$ - |
$ 3,251 |
||||||||||
Currency |
134 |
13 |
33 |
(50) |
4 |
- |
4 |
- |
- |
138 |
||||||||||
Adjusted @ Constant FX (Non-GAAP) |
$ 641 |
$ 410 |
$ 370 |
$ 1,438 |
$ 839 |
$ (8) |
$ (144) |
$ (157) |
$ - |
$ 3,389 |
||||||||||
% Change - Reported (GAAP) |
(28.5)% |
(8.8)% |
7.4 % |
9.8 % |
15.7 % |
n/m |
12.8 % |
4.3 % |
n/m |
(10.4)% |
||||||||||
% Change - Adjusted (Non-GAAP) |
2.2 % |
(5.7)% |
1.5 % |
15.6 % |
17.8 % |
n/m |
18.7 % |
4.3 % |
n/m |
10.1 % |
||||||||||
% Change - Adjusted @ Constant FX (Non-GAAP) |
29.2 % |
(2.6)% |
11.4 % |
11.7 % |
18.3 % |
n/m |
20.3 % |
4.3 % |
n/m |
14.7 % |
||||||||||
Operating Income Margin |
||||||||||||||||||||
Reported % |
7.8 % |
10.5 % |
11.1 % |
12.7 % |
14.4 % |
10.4 % |
||||||||||||||
Reported pp change |
(2.7)pp |
(0.2)pp |
1.2 pp |
1.0 pp |
1.9 pp |
(1.1)pp |
||||||||||||||
Adjusted % |
13.0 % |
11.5 % |
12.3 % |
14.7 % |
16.2 % |
12.8 % |
||||||||||||||
Adjusted pp change |
0.7 pp |
0.3 pp |
0.6 pp |
1.9 pp |
2.3 pp |
1.3 pp |
||||||||||||||
For the Nine Months Ended |
||||||||||||||||||||
|
|
EEMEA |
|
|
Unrealized G/(L) on Hedging Activities |
General Corporate Expenses |
Amortization of Intangibles |
Other Items |
|
|||||||||||
Net Revenue |
||||||||||||||||||||
Reported (GAAP) |
|
|
|
|
|
$ - |
$ - |
$ - |
$ - |
$ 25,811 |
||||||||||
Divestitures |
- |
- |
(20) |
(9) |
(31) |
- |
- |
- |
- |
(60) |
||||||||||
Adjusted (Non-GAAP) |
|
|
|
|
|
$ - |
$ - |
$ - |
$ - |
$ 25,751 |
||||||||||
Operating Income |
||||||||||||||||||||
Reported (GAAP) |
$ 425 |
$ 399 |
$ 282 |
$ 1,178 |
$ 643 |
$ 55 |
$ (219) |
$ (164) |
|
$ 2,961 |
||||||||||
Integration Program and other acquisition integration costs |
8 |
22 |
36 |
42 |
1 |
- |
1 |
- |
- |
110 |
||||||||||
Spin-Off Costs |
- |
- |
- |
- |
- |
- |
33 |
- |
- |
33 |
||||||||||
2012-2014 Restructuring Program |
9 |
- |
7 |
69 |
75 |
- |
2 |
- |
- |
162 |
||||||||||
Acquisition-related costs |
- |
- |
- |
- |
- |
- |
- |
- |
2 |
2 |
||||||||||
Benefit from indemnification resolution |
- |
- |
- |
- |
- |
- |
- |
- |
(336) |
(336) |
||||||||||
Remeasurement of net monetary assets in |
54 |
- |
- |
- |
- |
- |
- |
- |
- |
54 |
||||||||||
Gains on acquisition and divestitures, net |
- |
- |
- |
- |
- |
- |
- |
- |
(28) |
(28) |
||||||||||
Divestitures |
- |
- |
7 |
(2) |
(10) |
- |
1 |
- |
- |
(4) |
||||||||||
Adjusted (Non-GAAP) |
$ 496 |
$ 421 |
$ 332 |
$ 1,287 |
$ 709 |
$ 55 |
$ (182) |
$ (164) |
$ - |
$ 2,954 |
||||||||||
Currency |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
||||||||||
Adjusted @ Constant FX (Non-GAAP) |
$ 496 |
$ 421 |
$ 332 |
$ 1,287 |
$ 709 |
$ 55 |
$ (182) |
$ (164) |
$ - |
$ 2,954 |
||||||||||
Operating Income Margin |
||||||||||||||||||||
Reported % |
10.5 % |
10.7 % |
9.9 % |
11.7 % |
12.5 % |
11.5 % |
||||||||||||||
Adjusted % |
12.3 % |
11.2 % |
11.7 % |
12.8 % |
13.9 % |
11.5 % |
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