Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2016

Our segment net revenues were:


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
	(in millions)
Net revenues:
Latin America ⁽¹⁾	$	868	$	1,233	$	2,528	$	3,730
Asia Pacific ⁽²⁾		1,128		1,101		3,278		3,278
EEMEA ⁽²⁾		543		586		1,738		2,150
Europe ⁽²⁾		2,104		2,173		6,461		7,963
North America		1,753		1,756		5,148		5,151

Net revenues	$	6,396	$	6,849	$	19,153	$	22,272

(1) Net revenues of $315 million for the three months and $834 million for the nine months ended September 30, 2015 from our Venezuelan subsidiaries are included in our condensed consolidated financial statements. Beginning in 2016, we account for our Venezuelan subsidiaries using the cost method of accounting and no longer include net revenues of our Venezuelan subsidiaries within our condensed consolidated financial statements. Refer to Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting: Venezuela, for more information. (2) On July 2, 2015, we contributed our global coffee businesses primarily from our Europe, EEMEA and Asia Pacific segments. Net revenues of our global coffee business were $1,348 million in Europe, $246 million in EEMEA and $33 million in Asia Pacific for the nine months ended September 30, 2015. Refer to Note 2, Divestitures and Acquisitions – JDE Coffee Business Transactions, for more information.

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

Our segment earnings were:


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
	(in millions)
Earnings before income taxes:
Operating income:
Latin America	$	92		$	134		$	191		$	422
Asia Pacific		135			71			378			321
EEMEA		44			52			154			184
Europe		302			298			896			885
North America		274			275			840			817
Unrealized gains / (losses) on hedging activities (mark-to-market impacts)		(12	)		(4	)		(49	)		75
General corporate expenses		(89	)		(95	)		(216	)		(240	)
Amortization of intangibles		(44	)		(45	)		(132	)		(137	)
Gains on JDE coffee business transactions and divestiture		–			7,122			–			7,135
Acquisition-related costs		–			(6	)		–			(8	)

Operating income		702			7,802			2,062			9,454
Interest and other expense, net		(145	)		(114	)		(540	)		(814	)

Earnings before income taxes	$	557		$	7,688		$	1,522		$	8,640

Net Revenues by Consumer Sector

Net revenues by product category were:


	For the Three Months Ended September 30, 2016
	Latin		Asia						North
	America		Pacific		EEMEA		Europe		America		Total
	(in millions)

Biscuits	$	191	$	360	$	125	$	608	$	1,403	$	2,687
Chocolate		185		388		223		1,021		65		1,882
Gum & Candy		247		174		120		163		285		989
Beverages ⁽¹⁾		164		77		31		36		–		308
Cheese & Grocery		81		129		44		276		–		530

Total net revenues	$	868	$	1,128	$	543	$	2,104	$	1,753	$	6,396


	For the Three Months Ended September 30, 2015
	Latin		Asia						North
	America ⁽²⁾		Pacific		EEMEA		Europe ⁽³⁾		America		Total
	(in millions)

Biscuits	$	431	$	356	$	125	$	592	$	1,403	$	2,907
Chocolate		184		370		232		1,074		64		1,924
Gum & Candy		262		171		134		177		289		1,033
Beverages ⁽¹⁾		178		76		45		43		–		342
Cheese & Grocery		178		128		50		287		–		643

Total net revenues	$	1,233	$	1,101	$	586	$	2,173	$	1,756	$	6,849


	For the Nine Months Ended September 30, 2016
	Latin		Asia						North
	America		Pacific		EEMEA		Europe		America		Total
	(in millions)

Biscuits	$	551	$	991	$	379	$	1,848	$	4,162	$	7,931
Chocolate		562		1,088		549		3,124		153		5,476
Gum & Candy		713		538		383		512		833		2,979
Beverages ⁽¹⁾		466		285		229		123		–		1,103
Cheese & Grocery		236		376		198		854		–		1,664

Total net revenues	$	2,528	$	3,278	$	1,738	$	6,461	$	5,148	$	19,153


	For the Nine Months Ended September 30, 2015
	Latin		Asia						North
	America ⁽²⁾		Pacific		EEMEA		Europe ⁽³⁾		America		Total
	(in millions)

Biscuits	$	1,147	$	940	$	396	$	1,828	$	4,161	$	8,472
Chocolate		680		1,074		627		3,204		161		5,746
Gum & Candy		852		550		418		558		829		3,207
Beverages ⁽¹⁾		570		324		502		1,493		–		2,889
Cheese & Grocery		481		390		207		880		–		1,958

Total net revenues	$	3,730	$	3,278	$	2,150	$	7,963	$	5,151	$	22,272

(1)

On July 2, 2015, we contributed our global coffee businesses primarily from our Europe, EEMEA and Asia Pacific segment beverage categories. Net revenues of our global coffee business were $1,348 million in Europe, $246 million in EEMEA and $33 million in Asia Pacific for the nine months ended September 30, 2015. Refer to Note 2, Divestitures and Acquisitions – JDE Coffee Business Transactions, for more information.

(2)

Our Venezuelan subsidiaries net revenues of $209 million in biscuits, $95 million in cheese & grocery, $6 million in beverages and $5 million in gum & candy for the three months and $496 million in biscuits, $231 million in cheese & grocery, $66 million in gum & candy and $41 million in beverages for the nine months ended September 30, 2015 are included in our condensed consolidated financial statements. Beginning in 2016, we account for our Venezuelan subsidiaries using the cost method of accounting and no longer include net revenues of our Venezuelan subsidiaries within our condensed consolidated financial statements. Refer to Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting: Venezuela, for more information.

(3)

During 2016, we realigned some of our products across product categories primarily within our Europe segment and as such, we reclassified the product category net revenues on a basis consistent with the 2016 presentation.