Mondelz International

CAGNY Conference
February 17, 2015

Irene Rosenfeld
Chairman and CEO

Forward-looking statements
This presentation contains a number of forward-looking statements. Words, and variations of words, such as will, expect,
would, plan, likely, estimate, believe, hope, anticipate, look to, drive, positioned, target, commitment, objective,
outlook 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 growth, earnings per share, margins,
interest expense, taxes and cash flow; category growth; growth in emerging markets; focusing our portfolio; consumer demand
and consumption; cost-reduction actions; productivity and productivity savings and improvement; supply chain and overhead
costs; our transformation agenda; innovation; our investments and the results of those investments; our operating model; currency
and the effect of foreign exchange translation on our results of operations; the costs of, cost savings generated by, timing of
expenditures under and completion of our restructuring program; the cash proceeds and ownership interest to be received in and
timeframe for completing the coffee transactions; acquisitions; achievement of our strategic objectives; capital expenditures;
share repurchases; dividends; shareholder value and returns to shareholders; and our Outlook, including 2015 Organic Net
Revenue growth, Adjusted Operating Income margin, Adjusted EPS and Free Cash Flow. 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, changes in currency exchange rates, continued volatility of commodity and other
input costs, pricing actions, weakness in economic conditions, weakness in consumer spending, unanticipated disruptions to our
business, competition, the restructuring program and our other transformation initiatives not yielding the anticipated benefits,
changes in the assumptions on which the restructuring program is based, failing to successfully complete the coffee transactions
or other acquisitions on the anticipated time frames 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 SEC, including our most recently filed Annual Report on Form 10-K.
Mondelz International disclaims and does not undertake any obligation to update or revise any forward-looking statement in this
presentation, except as required by applicable law or regulation.
.
3

Well-positioned to deliver strong shareholder returns

Leveraging our unique assets

Delivering on cost-reduction
initiatives
Generating strong cash flow

A global snacks powerhouse

Cheese
&
Grocery

Global Market Share Ranking

9%

Beverages
16%

#1
Snacks
75%

Biscuits

Chocolate

#1

Gum

Candy

#2

#1

$34B in net revenues in 2014

5

 with leading brands in each snacks category

 and an advantaged global footprint

Emerging markets
Organic Net Revenue
+7% in 2014
Developed
Markets
62%

Emerging
Markets
38%

Significant white space

opportunities

$34B in net revenues in 2014

7

Why we like snacks

$1.2 trillion global snacking market1
Well-aligned with consumer trends
High margin
Expandable consumption
Grows with GDP in emerging
markets
1. Source: Euromonitor

Global snack category growth well-above

other food categories
Category

2011

2012

2013

2014

Biscuits

7.3%

7.4%

5.5%

5.1%

Chocolate

5.9%

6.0%

5.3%

3.7%

Gum

2.0%

0.1%

0.7%

0.4%

Candy

6.4%

6.2%

4.5%

2.9%

Total Snacks

6.1%

5.9%

4.7%

3.9%

Powdered Beverages

9.7%

11.5%

10.6%

13.1%

Coffee

12.3%

7.2%

(1.9)%

0.5%

6.8%

6.1%

3.8%

3.6%

Total Global Category Growth1

1. Total Global Category Growth includes biscuits, chocolate, gum, candy, coffee, powdered beverages and cream cheese categories in key markets. Global Category Growth based on available
Nielsen Global Data through December 2014 for measured channels in key markets where the company competes. The company has adjusted the 2014 Global Category Growth calculation to reflect
current rather than average 2013 currency rates for the hyperinflationary markets of Venezuela and Argentina in order to better represent underlying category growth for the Total Portfolio. Absent the
adjustment in the calculation, 2014 Global Category Growth would have been 4.7% for Total Snacks and 4.3% for the Total Portfolio.

Long-term strategies and targets unchanged

Long-Term Targets

Focus portfolio on snacks

Reduce supply chain and
overhead costs

Invest in advantaged
brands, innovation
platforms and routes to
market

Organic Net Revenue Growth:

At or Above Category Growth

Adjusted Operating Income

Growth: High Single Digit

Adjusted EPS Growth:

Double Digit
10

In 2014, delivered strong earnings growth, margin

expansion and cash flow
Organic
Net Revenue
Growth1

Adjusted
OI Margin1

+2.4%

Adjusted
EPS
Growth1,2

12.9%
+80 bps

+23.4%

2013-2014
Free Cash Flow
excluding items1

Return of
Capital to
Shareholders

+30% vs. target

$2.9 billion

1. See GAAP to Non-GAAP reconciliation at the end of this presentation.

2. Constant currency.

11

Long-term strategy drives 2015 transformation agenda

focus
our
portfolio

Complete coffee JV
transactions
Integrate bolt-on
acquisitions
Improve revenue mix

reduce
costs

Deliver strong net productivity

Move Power Brands to
advantaged assets

Drive down overheads

via ZBB

invest
for
growth

Invest in Power Brands,

innovation platforms and RTM
Leverage operating model to
drive speed and scale

12

Creating the worlds leading pure-play coffee company

focus
our
portfolio

Jacobs Douwe Egberts

$3.8B in 2014 Net Revenue

$3.4B in 2013 Net Revenue

~$7B Net Revenue

1. As provided by D.E Master Blenders 1753

13

focus
our
portfolio

84% of revenue from snacks after JV formed

Based on 2014 Revenue
Cheese &
Grocery

9%

Beverages

16%

Snacks

75%

10%
6%

84%

Optimizes capital allocation to core

snacks
JV structure enables MDLZ to participate
in future coffee growth

4B expected cash proceeds

Reported

Excluding
Coffee
14

focus
our
portfolio

Kinh Do strengthens portfolio in Vietnam

Advantaged Portfolio: Biscuits
and mooncakes leader
Local Scale: ~$175MM in sales
Growing Market: 90MM people,
50%+ under 30 years old
Distribution Platform: Network
covers 130,000 outlets

15

Capture rapid growth of free-from, better-for-you

snacks with Enjoy Life

focus
our
portfolio

U.S. allergen-free segment

growing 30%+1
~$40MM in revenue with good
expansion potential

To be operated on a stand-alone
basis

1. Based on AC Nielsen data

16

focus
our
portfolio

Strategic decisions to improve revenue mix in 2015

Discontinue
low-margin,
customerspecific
product lines

Exit
low-margin
products from
spin-off

Ongoing
SKU
simplification

~1 pp headwind to Organic Net Revenue growth in 2015

17

Invest
for
Growth

Power Brands and innovation platforms driving growth

Power Brands
Grow ~2x company rate
Other
Brands
38%

Power
Brands
62%

Carry significantly higher

margins

~80% of A&C support

Accounts for nearly all
incremental A&C spending
in 2015

$34B in net revenues in 2014

18

Invest
for
Growth

Driving growth by expanding innovation platforms

~13% of net revenues from innovation

Created new biscuit occasion

Sold in 54 countries
Organic Net Revenue CAGR
+35% since 2011
$650MM
Platform

Drove category expansion and

growth of core tablets
Sold in 54 countries
Offered under multiple brands
$200MM
Platform

19

Invest
for
Growth

Expanding Marvellous Creations platform globally

2012

$40MM
Revenue

2013

2014

2015
& beyond
$500MM
Platform
by 2018

20

Investing in routes to market, especially traditional

trade

Invest
for
Growth

MDLZ Coverage of Traditional Trade Outlets

2015E

Increase
15E vs. 13

% Outlets
Covered 15E

Increase
15E vs. 13

347,000

+37,000

36%

+3 pp

1,250,000

+233,000

16%

+2 pp

507,000

+24,000

23%

+1 pp

21

Leverage operating model to drive focus,

scale and speed

Invest
for
Growth

Consistent region-based, category-led operating model

Improves ability to accelerate growth platforms and best practices
Simplifies and standardizes processes to drive speed/reduce costs

Chief Growth Officer at center of new operating model

22

Long-term strategies and targets unchanged

Long-Term Targets

Focus portfolio on snacks

Reduce supply chain and
overhead costs

Invest in advantaged
brands, innovation
platforms and routes to
market

Organic Net Revenue Growth:

At or Above Category Growth

Adjusted Operating Income

Growth: High Single Digit

Adjusted EPS Growth:

Double Digit
23

Daniel Myers
EVP Integrated Supply Chain

reduce
costs

Supply Chain Reinvention on track

Priorities
Step change leadership talent
& capabilities
Transform global manufacturing
platforms
Redesign the supply chain
network

Drive productivity programs to

fuel growth
Improve cash management

Three Year
Financial Goals
$3B Gross Productivity
Cost Savings
(~$1B/per year; ~4.5% of COGS)

$1.5B Net Productivity

Cost Savings

(~$0.5B/per year; ~2.3% of COGS)

$1B Cash Flow

25

reduce
costs

Acquisitions drove supply chain complexity

1990

2000

2010

Significant number of SKUs, formats and formulas

Fragmented supplier base
Sub-scale plants with low efficiency assets
26

reduce
costs

Step changed leadership talent & capabilities

Upgraded talent in 45%
of critical roles
Changed 75% of senior
leadership team

27

reduce
costs

Global platform transformation process

Document
best
practices

Develop
modular
design

Develop
breakthrough
processes

Leverage
low-cost
suppliers

Pilot new
integrated
design

Qualify
and
roll out
globally

28

reduce
costs

Lines of the Future driving savings

Development process results in reduced engineering, installation
and start-up costs
Drives conversion cost savings through increased throughput,
less waste and lower headcount per line

30%+ cost savings

2x output of current
North American assets

20%+ cost savings

Flexibility to produce wide
range of package sizes

20%+ cost savings

Significantly reduced
manufacturing time

29

Redesigning supply chain to deliver world-class

efficiency
2012
New Brownfield &
Greenfield Sites
Power Brands on
Advantaged
Assets

~15%

Advantaged Lines
Installed
Net Revenue
per Plant

~$200MM

2013 2015E

reduce
costs

2016E 2018E

11

~25%

~70% by 18

40+

35

~$230MM

> $300MM by 18

30

reduce
costs

Salinas, Mexico biscuit facility now on-stream

Support growth volume in
the Americas
Repatriate co-man volume
2 LOF on-line Q414;
2 additional lines in Q115

31

reduce
costs

Invested $1.5B in network transformation since 2012

North America
(includes Salinas)

1 greenfield
12 lines

Europe1
3 brownfields
15 lines

Latin
America
1 brownfield
5 lines

EEMEA

2 brownfields
1 greenfield
4 lines

Asia Pacific
2 brownfields
1 greenfield
7 lines

1. Excludes Coffee and Cheese & Grocery

32

reduce
costs

Changing our network around the world

33

reduce
costs

Changing our network around the world

34

reduce
costs

Changing our network around the world

35

reduce
costs

Changing our network around the world

36

reduce
costs

Changing our network around the world

37

reduce
costs

Changing our network around the world

38

reduce
costs

Changing our network around the world

39

reduce
costs

Changing our network around the world

40

reduce
costs

Stepping up productivity delivery

Integrated
Lean Six Sigma

Procurement
Transformation

Simplicity

41

Integrated Lean Six Sigma delivers best-in-class

reliability and efficiency

reduce
costs

2014 Key Achievements

43 sites
$300MM+ productivity

Integrated
Lean Six Sigma

75% reduction in safety incidents

12,000+ colleagues trained

Key Future Objectives

Expand to 50 more sites
$750MM+ productivity by 2018

42

reduce
costs

Procurement transformation driving savings

2014 Key Achievements
Spend towers in place
4%+ gross productivity delivered

Procurement
Transformation

Key Future Objectives

Target 5% gross productivity
Leverage scale

Drive sustainable savings

43

reduce
costs

Applying simplicity initiatives across categories

2014 Key Achievements
Streamlining EU Biscuits
On-track for 60% reduction in complexity by 2016

Simplicity

Key Future Objectives

Apply learnings to EU Chocolate
Creates high-scale platform
Target 10%+ total cost reduction

44

reduce
costs

Delivering world-class productivity levels

Net Productivity as Percentage of COGS
2.8%

2.8%+

2014

2015E-2018E

2.5%
1.8%
1.1%

2011

2012

2013

45

Focusing on cash management to fund future

investments in capital and growth
Receivables

Inventory

reduce
costs

Payables

Terms compliance

Raw and pack

Sales phasing

Finished goods

Payment terms
rationalization

Term negotiations

Infrastructure

Frequency extension

Processes & technology

Supply chain financing

Target $1 billion in incremental cash over three years

46

reduce
costs

On track to generate $1B incremental cash

Cash Conversion Cycle (in days)
Based on balances as of year-end

Generated ~$600MM incremental

cash in 2014
Reduced CCC 23 days in 2 years

33

Further working capital opportunity

20

10

2012

2013

2014

47

reduce
costs

Successfully executing on SCR initiative

Talent & Capabilities
Upgraded talent and core
leadership

Manufacturing Platforms

Network Redesign

Qualified biscuit, chocolate and

gum Lines of the Future

Opened Salinas, Mexico

greenfield facility in Q414

Installing lines to drive conversion

cost savings

Greenfield and brownfield sites

under construction

Productivity

Cash Management

Delivered 2.8% net productivity

in 2014

Generated incremental
$600 million of cash in 2014

Targeting 2.8%+ net productivity

with strong project pipeline

Further working capital opportunity

48

Brian Gladden
EVP and Chief Financial Officer

Significantly reducing overhead costs

reduce
costs

Overheads as % of Net Revenue

Identify and capture sustainable cost

reductions with zero-based approach (ZBB)
Three key initiatives:
Indirect Costs
People Costs & Org Model
Shared Services

Savings driving margin improvement

and fueling growth investments
2013

2016E

50

reduce
costs

Early success with ZBB approach to indirect costs

1. Information Systems
2. Travel
3. Facilities
4. Contractors & Consultants
5. Perquisites
6. Company Vehicles
7. Events & Sponsorships
8. Recruitment & Development
9. Legal Services
10. Financial Services
11. Outsourced Business Support
12. Sales Support
13. Marketing Support

Benchmarking best-in-class spending levels / policies

All categories over benchmark spending levels
New policies introduced during 2014
Bottoms-up budgets locked for 2015

Executive ownership for each cost package

~50% of overhead savings opportunity

51

reduce
costs

Adopted new policies for indirect spending

Opportunity

Travel

Information
Systems

Contractors &
Consultants

Target
Savings

Select Drivers

~45%

Reduce travel consumption by ~35%

Implement industry standard travel policies
Globally negotiate provider contracts

~35%

Reduce application portfolio by ~50%

Rationalize and virtualize IT infrastructure
Consolidate voice, data service & application vendors

~25%

Centralize pre-approval to curb consumption of services

Eliminate/minimize temporary services
Lever global scale for recurring third-party providers

52

reduce
costs

Streamlining how we work

Organization
Eliminate redundancies by adopting
region-based, category-led model
Key driver +300bps OI margin in Europe
Implemented in NA in 2014

Greater centralization of certain

functions (e.g., Procurement)

Shared Services
Simplify and standardize processes
Focus on scalable, transactional
processes in Finance, HR, Receivables
and Payables
Leverage outsourced partner and
captive models

~50% of overhead savings opportunity

53

2014-2018 Restructuring Program enables

$1.5B of expected incremental savings
Costs

Benefits
$1.5B

$2B capex included in

total short-term target of
~5% of revenue

Overheads

$3.5B total P&L cost

$2.5B cash
$1B non-cash

reduce
costs

~25%

Indirect
Costs

~25%

People Costs
& Org Model

~50%

Supply
Chain

Drives margin
expansion

Provides fuel for

growth

2018 Exit Run-Rate

54

reduce
costs

Targeting 15%-16% Adjusted OI margin in 2016

Adjusted Operating Income Margin
15%-16%

~14%

Beyond 2016,
opportunity to drive
continued margin
expansion and
fund growth

12.9%1
12.1%1

2013

2014

2015E

1. See GAAP to Non-GAAP reconciliation at the end of this presentation.

2016E
55

2015 Outlook Income Statement

Target
Organic Net Revenue Growth
Estimated FX Impact on Net Revenue Growth1

Adjusted Operating Income Margin

2%+
~(11)pp

~14%

Interest Expense

~$825MM

Effective Tax Rate

High Teens

Adjusted Earnings Per Share Growth (constant FX)

Estimated FX Impact on EPS1

1. Based on January 30, 2015 spot rates.

Double-Digit %
~$(0.30)

56

Strong cash flow generation

Free Cash Flow
FY 13

FY 14

FY 15E

Net Cash Provided by Operating Activities

1
excluding items and Restructuring Program

$4.1

$4.3

$4.0

Capital Expenditures (including Restructuring)

(1.6)

(1.6)

(1.8)

2012-14 and 2014-18 Restructuring Programs

(0.2)

(0.2)

(1.0)

$2.3

$2.5

$1.2

($ in billions)

Free Cash Flow excluding items

1. See GAAP to Non-GAAP reconciliation at the end of this presentation.

Includes
~$0.5B
FX headwind

57

Disciplined capital deployment based on returns

Reinvest to Drive
Top-Tier Growth

M&A

Return Capital
to Shareholders
Debt
Reduction

Brand support and route-to-market expansion

Supply Chain Reinvention
Overhead reductions
Focus on chocolate, biscuits, gum and candy categories
Predominantly in emerging markets
$7.7B share repurchase authorization through 2016
($3.1B remaining; $1B$2B per year)
Modest dividend, increasing over time; 30% minimum payout ratio

Maintain investment grade rating with access to tier 2 CP

Preserve balance sheet flexibility

58

Long-term strategies and targets unchanged

Long-Term Targets

Focus portfolio on snacks

Reduce supply chain and
overhead costs

Invest in advantaged
brands, innovation
platforms and routes to
market

Organic Net Revenue Growth:

At or Above Category Growth

Adjusted Operating Income

Growth: High Single Digit

Adjusted EPS Growth:

Double Digit
59

60

DEFINITIONS OF THE COMPANYS NON-GAAP FINANCIAL MEASURES

The companys 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 impact 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 20122014 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 companys 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 20142018 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 companys Adjusted Operating Income and Adjusted Segment Operating Income on a
constant currency basis.
Adjusted EPS is defined as diluted EPS attributable to Mondelz 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 in Venezuela, the net benefit from the
Cadbury 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 companys Adjusted EPS on a constant currency
basis.
Free Cash Flow excluding items is defined as Free Cash Flow (net cash provided by operating activities less capital expenditures) excluding taxes
paid on the Starbucks arbitration award and cash payments associated with accrued interest and other related fees due to the companys completion
of a $1.6 billion cash tender offer on February 6, 2014 and a $3.4 billion cash tender offer on December 18, 2013 for some of its outstanding highcoupon long-term debt.

GAAP to Non-GAAP Reconciliation

Net Revenues to Organic Net Revenues
(in millions of U.S. dollars) (Unaudited)

Mondelz
International
For the Twelve Months Ended December 31, 2014
Reported (GAAP)
Divestitures
Acquisitions
Currency
Organic (Non-GAAP)
For the Twelve Months Ended December 31, 2013
Reported (GAAP)
Divestitures
Accounting calendar change
Organic (Non-GAAP)
% Change
Reported (GAAP)
Divestitures
Acquisitions
Accounting calendar change
Currency
Organic (Non-GAAP)

34,244
(14)
1,806
36,036

35,299
(70)
(38)
35,191

(3.0)%
0.2 pp
0.1
5.1
2.4 %

GAAP to Non-GAAP Reconciliation

Operating Income To Adjusted Operating Income
(in millions of U.S. dollars) (Unaudited)

For the Twelve Months Ended

December 31, 2014
Operating
Net
Operating
Income
Revenues
Income
margin
Reported (GAAP)

34,244

Integration Program and other acquisition integration costs

Spin-Off Costs
2012-2014 Restructuring Program

3,242

9.5%

For the Twelve Months Ended

December 31, 2013
Operating
Net
Operating
Income
Revenues
Income
margin
$

35,299

3,971

(4)

35

62

459

330

Acquisition-related costs

Net Benefit from Indemnification Resolution

(336)

Remeasurement of net monetary assets in Venezuela

167

54

Gains on acquisition and divestitures, net

(30)

Divestitures

2014-2018 Restructuring Program

381

Costs associated with the JDE coffee transactions

77

Intangible asset impairment

Adjusted (Non-GAAP)

34,244

(70)

57
$

4,416

(6)

12.9%

35,229

11.2%

220

4,267

12.1%

63

GAAP to Non-GAAP Reconciliation

Diluted EPS to Adjusted EPS
(Unaudited)
For the Twelve Months
Ended December 31,
Diluted EPS
2013 Diluted EPS Attributable to Mondelz International (GAAP)

Discontinued Operations

0.90

2013 Diluted EPS Attributable to Mondelz International from

Continuing Operations

1.29

Integration Program and other acquisition integration costs

0.10

Spin-Off Costs

0.02

2012-2014 Restructuring Program costs

0.14

Net benefit from indemnification resolution

(0.20)

Loss on debt extinguishment and related expenses

0.22

Residual tax impact associated with starbucks arbitration resolution

(0.02)

Remeasurement of net monetary assets in Venezuela

0.03

Gains on acquisition and divestitures, net

(0.04)

2013 Adjusted EPS (Non-GAAP)

1.54

Increase in operations

0.25

Gain on sale of property in 2013

(0.03)

VAT related benefits

0.04

Unrealized gains/(losses) on hedging activities

(0.07)

Lower interest and other expense, net

0.08

Changes in shares outstanding

0.08

Changes in income taxes

0.01

2014 Adjusted EPS (Constant Currency) (Non-GAAP)

1.90

Unfavorable foreign currency - translation

23.4%

(0.14)

2014 Adjusted EPS (Non-GAAP)

1.76

Spin-Off Costs

(0.01)

2012-2014 Restructuring Program costs

(0.21)

Remeasurement of net monetary assets in Venezuela

(0.09)

Loss on debt extinguishment and related expenses

(0.18)

Intangible asset impairment charges

(0.02)

2014-2018 Restructuring Program costs

(0.16)

Income / (costs) associated with the JDE coffee transactions

2014 Diluted EPS Attributable to Mondelz International (GAAP)

% Growth

2.19

14.3%

0.19
$

1.28

(41.6)%

GAAP to Non-GAAP Reconciliation

Net Cash Provided by Operating Activities
to Free Cash Flow excluding items
(in millions of U.S. dollars) (Unaudited)
For the year ended
December 31,
2013
2014
Net Cash Provided by Operating Activities (GAAP)

Capital Expenditures

(1,622)

Free Cash Flow (Non-GAAP)

Items
Cash impact of the resolution of the Starbucks arbitration (1)
Cash payments for accrued interest and other related fees associated with debt tendered as of December 18, 2013
Cash payments for accrued interest and other related fees associated with debt tendered as of February 6, 2014 (3)
Free Cash Flow excluding items (Non-GAAP)

6,410

4,788

$ 3,562
(1,642)
$ 1,920

(2,616)
81
-

(2)

2,253

498
47
$ 2,465

(1)

During the fourth quarter of 2013, the dispute with Starbucks Coffee Company was resolved. The amount for 2013 noted above reflects the cash
received from Starbucks of $2,764 million net of $148 million attorney's fees paid. The amount noted above for 2014 reflects the taxes paid associated
with the net cash received and additional attorney's fees paid in 2014.

(2)

On December 18, 2013, the company completed a $3.4 billion cash tender offer for some of its outstanding high coupon long-term debt. The amount
above reflects the cash payments associated with accrued interest and other related fees.

(3)

On February 6, 2014, the company completed a $1.6 billion cash tender offer for some of its outstanding high coupon long-term debt. The amount
above reflects the cash payments associated with accrued interest and other related fees.

GAAP to Non-GAAP Reconciliation

Net Cash Provided by Operating Activities
(in millions of U.S. dollars) (Unaudited)
For the year ended
December 31,
2013
2014
Net Cash Provided by Operating Activities (GAAP)
Items
Cash impact of the resolution of the Starbucks arbitration (1)
Cash payments for accrued interest and other related fees associated with debt tendered as of December 18, 2013
Cash payments for accrued interest and other related fees associated with debt tendered as of February 6, 2014 (3)

6,410

(2,616)
81
-

(2)

Restructuring Programs
Cash payments for the 2012-2014 and 2014-2018 Restructuring Programs related to expenses

$ 3,562

498
47

221

191

4,096

$ 4,298

Net Cash Provided by Operating Activities excluding items and Restructuring Programs (Non-GAAP)
$

(1)

During the fourth quarter of 2013, the dispute with Starbucks Coffee Company was resolved. The amount for 2013 noted above reflects the cash received from
Starbucks of $2,764 million net of $148 million attorney's fees paid. The taxes associated with net cash received was paid in 2014.

(2)

On December 18, 2013, the company completed a $3.4 billion cash tender offer for some of its outstanding high coupon long-term debt. The amount above reflects the
cash payments associated with accrued interest and other related fees.

(3)

On February 6, 2014, the company completed a $1.6 billion cash tender offer for some of its outstanding high coupon long-term debt. The amount above reflects the
cash payments associated with accrued interest and other related fees.

66