10-KPeriod: FY2006

Mondelez International, Inc. Annual Report, Year Ended Dec 31, 2006

Filed March 1, 2007For Securities:MDLZ

Summary

Mondelez International, Inc. (formerly Kraft Foods Inc.) filed its 2006 10-K report on February 28, 2007. The report details the company's operations for the fiscal year ended December 31, 2006. A significant event discussed is the impending spin-off of Kraft Foods Inc. from its parent company, Altria Group, Inc., which was planned for March 30, 2007. This separation aimed to establish Kraft as an independent, publicly traded entity. The company reported robust net revenues and discussed its segment performance across North America and International markets, highlighting strengths in segments like "North America Cheese & Foodservice" and "North America Convenient Meals." The report also detailed ongoing restructuring efforts initiated in 2004, which aimed to improve cost structure and operational efficiency, involving facility closures and workforce reductions. Commodity costs, particularly for energy and coffee, were noted as rising challenges, impacting profitability.

Financial Highlights

29 data points
Beta

Revenue

$33.02B

35.8% Gross Margin

Net Income

$3.06B

9.3% Net Margin

EPS (Diluted)

$1.84

Cash & Equivalents

$239.00M

Free Cash Flow

$2.55B

Financial Statements
Beta
Revenue$33.02B
Cost of Revenue$21.19B
Gross Profit$11.83B
SG&A Expenses$7.03B
Operating Income$4.16B
Net Income$3.06B
EPS (Basic)$1.84
EPS (Diluted)$1.84

Key Highlights

  • 1Impending spin-off from Altria Group, Inc. planned for March 30, 2007, to create an independent Kraft Foods Inc.
  • 2Net revenues for the fiscal year ended December 31, 2006, were $34.4 billion, a slight increase from the previous year.
  • 3Operating income was $4.5 billion, impacted by restructuring charges and asset impairments.
  • 4The company incurred significant restructuring charges of $673 million in 2006 as part of a multi-year program aimed at cost reduction and efficiency improvements.
  • 5Acquisition of United Biscuits' Spanish and Portuguese operations and Nabisco trademarks in Europe for approximately $1.1 billion.
  • 6Divestiture of several non-core businesses, including rice and pet snacks brands, contributing to portfolio optimization.
  • 7Increased commodity costs, notably for energy and coffee, presenting a challenge to margins, partially offset by price increases and cost savings.

Frequently Asked Questions

The planned spin-off, expected in March 2007, will establish Kraft Foods Inc. as an independent entity. This allows investors to evaluate the company's performance and strategy on a standalone basis, free from the influence and reporting structures of its former parent, Altria Group, Inc.

Key financial drivers included a slight increase in net revenues to $34.4 billion and operating income of $4.5 billion. Operationally, the company pursued a significant restructuring program, acquired parts of United Biscuits, and divested non-core assets. Rising commodity costs, especially for coffee and energy, were a notable challenge impacting profitability.

Kraft Foods addressed rising commodity costs, particularly for energy and coffee, through a combination of strategies. These included implementing price increases on certain products, focusing on cost savings through its restructuring program, and utilizing hedging techniques to mitigate some of the impact of price fluctuations on key raw materials.

The company pursues a disciplined approach to acquisitions and divestitures as part of its growth strategy. In 2006, this included the acquisition of United Biscuits' European operations and the divestiture of several brands like rice and pet snacks, aiming to strengthen its portfolio and focus on core, high-potential businesses.