Mondelēz International Reports Q2 2021 Results

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Second Quarter Highlights

  • Net revenues increased +12.4% driven by Organic Net Revenue1 growth of +6.2%, favorable currency and acquisitions

  • Diluted EPS was $0.76, up +100.0%; Adjusted EPS1 was $0.66, up +1.6% on a constant-currency basis

  • Returned $2.4 billion of capital to shareholders in the first half

  • Announced agreement to acquire Chipita, a leading cakes and pastries company in Europe

  • Announcing +11% increase to quarterly dividend

  • Year-to-date cash provided by operating activities was $1.8 billion, an increase of +$0.2 billion versus prior year; year-to-date Free Cash Flow1 was $1.4 billion, an increase of +$0.3 billion

  • Raising Organic Net Revenue growth outlook for full year to 4%+

CHICAGO, July 27, 2021 (GLOBE NEWSWIRE) -- Mondelēz International, Inc. (Nasdaq: MDLZ) today reported its second quarter 2021 results.

"We delivered another strong quarter of performance across all key metrics, including top-line, profitability and cash generation," said Dirk Van de Put, Chairman and Chief Executive Officer. "We continue to see strength across the vast majority of our geographies, categories and brands as we remain intensely focused on consistent execution and reinvestment to further strengthen our position. We are confident that our strategy, long runway of clear growth drivers and advantaged enablers will continue to drive consistent and attractive growth and value generation over the long term.”

Net Revenue

$ in millions

Reported
Net Revenues

Organic Net Revenue Growth

Q2 2021

% Chg
vs PY

Q2 2021

Vol/Mix

Pricing

Quarter 2

Latin America

$

669

30.9

%

33.7

%

18.8 pp

14.9

pp

Asia, Middle East & Africa

1,452

17.4

%

7.0

%

5.1 pp

1.9

Europe

2,474

15.7

%

5.4

%

4.2 pp

1.2

North America

2,047

1.1

%

(0.3)

(0.5)pp

0.2

Mondelēz International

$

6,642

12.4

%

6.2

%

4.0 pp

2.2

pp

Emerging Markets

$

2,293

19.6

%

16.5

%

10.6 pp

5.9

pp

Developed Markets

$

4,349

8.9

%

1.3

%

0.9 pp

0.4

pp

June Year-to-Date

YTD 2021

YTD 2021

Latin America

$

1,338

8.2

%

18.1

%

6.0 pp

12.1

pp

Asia, Middle East & Africa

3,197

16.7

%

9.1

%

6.7 pp

2.4

Europe

5,321

12.7

%

4.3

%

3.2 pp

1.1

North America

4,024

2.7

%

(1.3)

(1.7)pp

0.4

Mondelēz International

$

13,880

10.0

%

5.0

%

2.8 pp

2.2

pp

Emerging Markets

$

4,856

12.0

%

12.8

%

7.3 pp

5.5

pp

Developed Markets

$

9,024

8.9

%

0.8

%

0.3 pp

0.5

pp

Operating Income and Diluted EPS

$ in millions, except per share data

Reported

Adjusted

Q2 2021

vs PY
(Rpt Fx)

Q2 2021

vs PY
(Rpt Fx)

vs PY
(Cst Fx)

Quarter 2

Gross Profit

$

2,631

12.9

%

$

2,649

12.9

%

7.2

%

Gross Profit Margin

39.6

%

0.2

pp

39.9

%

0.2

pp

Operating Income

$

872

22.3

%

$

1,077

14.3

%

7.2

%

Operating Income Margin

13.1

%

1.0

pp

16.2

%

0.3

pp

Net Earnings2

$

1,078

98.2

%

$

940

6.7

%

(0.1)

%

Diluted EPS

$

0.76

100.0

%

$

0.66

8.2

%

1.6

%

June Year-to-Date

YTD 2021

YTD 2021

Gross Profit

$

5,597

17.0

%

$

5,515

10.2

%

6.0

%

Gross Profit Margin

40.3

%

2.4

pp

39.7

%

0.1

pp

Operating Income

$

2,155

37.3

%

$

2,369

15.7

%

10.3

%

Operating Income Margin

15.5

%

3.1

pp

17.1

%

0.9

pp

Net Earnings2

$

2,039

59.3

%

$

2,077

12.9

%

7.0

%

Diluted EPS

$

1.44

61.8

%

$

1.46

14.1

%

8.6

%

Second Quarter Commentary

  • Net revenues increased 12.4 percent driven by Organic Net Revenue growth of 6.2 percent, favorable currency, and incremental sales from the company's acquisitions of Hu, Grenade and Gourmet Food. Volume and pricing drove Organic Net Revenue growth, partially offset by unfavorable mix.

  • Gross profit increased $300 million, while gross profit margin increased 20 basis points to 39.6 percent primarily driven by the increase in Adjusted Gross Profit1 margin. Adjusted Gross Profit increased $168 million at constant currency, while Adjusted Gross Profit margin increased 20 basis points to 39.9 percent due to pricing and manufacturing productivity, partially offset by higher raw material costs and unfavorable product mix.

  • Operating income increased $159 million and operating income margin was 13.1 percent, up 100 basis points primarily due to lower intangible asset impairment charges, lapping prior-year costs associated with the JDE Peet's transaction and higher Adjusted Operating Income1 margin, partially offset by higher restructuring costs and the impact of pension participation changes. Adjusted Operating Income increased $68 million at constant currency, and Adjusted Operating Income margin increased 30 basis points to 16.2 percent primarily driven by lower manufacturing costs, pricing and overhead leverage, partially offset by higher raw material costs, unfavorable product mix and higher advertising and consumer promotion spend.

  • Diluted EPS was $0.76, up 100.0 percent, primarily due to lapping prior-year costs associated with the JDE Peet's transaction, a higher gain this quarter on equity method investment transactions, an increase in Adjusted EPS, lower intangible asset impairment charges and favorable year-over-year mark-to-market impacts from currency and commodity derivatives. These factors were partially offset by the unfavorable impact from enacted tax law changes, higher restructuring costs and the negative impact from pension participation changes.

  • Adjusted EPS was $0.66, up 1.6 percent on a constant-currency basis driven by operating gains and fewer shares outstanding, partially offset by higher taxes primarily due to a lower net benefit from non-recurring discrete tax items.

  • Capital Return: The company returned approximately $900 million to shareholders in cash dividends and share repurchases in the quarter. Today, the company’s Board of Directors declared a quarterly cash dividend of $0.35 per share of Class A common stock, an increase of 11 percent. This dividend is payable on October 14, 2021, to shareholders recorded as of September 30, 2021.

2021 Outlook
Mondelēz International provides its outlook on a non-GAAP basis, as the company cannot predict some elements that are included in reported GAAP results, including the impact of foreign exchange. Refer to the Outlook section in the discussion of non-GAAP financial measures below for more details.

Metric

FY 2021 Outlook

Organic Net Revenue Growth

4%+

Adjusted EPS Growth (at cst FX)

High single-digit

Free Cash Flow

$3B+

The company estimates currency translation would increase 2021 net revenue growth by approximately 2 percent3 with a positive $0.09 impact to Adjusted EPS3. Outlook is provided in the context of greater than usual volatility as a result of COVID-19. The company strategy and long-term algorithm remain unchanged.

Conference Call
Mondelēz International will host a conference call for investors with accompanying slides to review its results at 5 p.m. ET today. A listen-only webcast will be provided at www.mondelezinternational.com. An archive of the webcast will be available on the company’s web site.

About Mondelēz International
Mondelēz International, Inc. (Nasdaq: MDLZ) empowers people to snack right in over 150 countries around the world. With 2020 net revenues of approximately $27 billion, MDLZ is leading the future of snacking with iconic global and local brands such as Oreo, belVita and LU biscuits; Cadbury Dairy Milk, Milka and Toblerone chocolate; Sour Patch Kids candy and Trident gum. Mondelēz International is a proud member of the Standard and Poor’s 500, Nasdaq 100 and Dow Jones Sustainability Index. Visit www.mondelezinternational.com or follow the company on Twitter at www.twitter.com/MDLZ.

End Notes

  1. Organic Net Revenue, Adjusted Gross Profit (and Adjusted Gross Profit margin), Adjusted Operating Income (and Adjusted Operating Income margin), Adjusted EPS, Free Cash Flow and presentation of amounts in constant currency are non-GAAP financial measures. Please see discussion of non-GAAP financial measures at the end of this press release for more information.

  2. Earnings attributable to Mondelēz International.

  3. Currency estimate is based on published rates from XE.com on July 20, 2021.

Additional Definitions
Emerging markets consist of the Latin America region in its entirety; the Asia, Middle East and Africa region excluding Australia, New Zealand and Japan; and the following countries from the Europe region: Russia, Ukraine, Turkey, Kazakhstan, Georgia, Poland, Czech Republic, Slovak Republic, Hungary, Bulgaria, Romania, the Baltics and the East Adriatic countries.

Developed markets include the entire North America region, the Europe region excluding the countries included in the emerging markets definition, and Australia, New Zealand and Japan from the Asia, Middle East and Africa region.

Forward-Looking Statements
This press release contains a number of forward-looking statements. Words, and variations of words, such as “will,” “expect,” “may,” “would,” “could,” “estimate,” “outlook” and similar expressions are intended to identify the company’s forward-looking statements, including, but not limited to, statements about: the impact of and volatility resulting from the COVID-19 pandemic; the company’s strategy and the prospects for the business; growth and value generation over the long term; strategic transactions; the company’s future performance, including its future revenue growth, earnings per share and cash flow; currency and the effect of currency translation on the company’s results of operations; and the company’s outlook, including 2021 Organic Net Revenue growth, Adjusted EPS growth and Free Cash Flow. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the company’s control, and many of these risks and uncertainties are currently amplified by and may continue to be amplified by the COVID-19 pandemic. Important factors that could cause the company’s actual results to differ materially from those indicated in the company’s forward-looking statements include, but are not limited to, uncertainty about the magnitude, duration, geographic reach, impact on the global economy and related current and potential travel restrictions of the COVID-19 pandemic; the current, and uncertain future, impact of the COVID-19 pandemic on the company’s business, growth, reputation, prospects, financial condition, operating results (including components of the company’s financial results), cash flows and liquidity; risks from operating globally including in emerging markets; changes in currency exchange rates, controls and restrictions; volatility of commodity and other input costs; weakness in economic conditions; weakness in consumer spending; pricing actions; tax matters including changes in tax laws and rates, disagreements with taxing authorities and imposition of new taxes; use of information technology and third party service providers; unanticipated disruptions to the company’s business, such as the malware incident, cyberattacks or other security breaches; global or regional health pandemics or epidemics, including COVID-19; competition; protection of the company’s reputation and brand image; changes in consumer preferences and demand and the company’s ability to innovate and differentiate its products; the restructuring program and the company’s other transformation initiatives not yielding the anticipated benefits; changes in the assumptions on which the restructuring program is based; management of the company’s workforce; consolidation of retail customers and competition with retailer and other economy brands; changes in the company’s relationships with customers, suppliers or distributors; legal, regulatory, tax or benefit law changes, claims or actions; the impact of climate change on the company’s supply chain and operations; strategic transactions; significant changes in valuation factors that may adversely affect the company’s impairment testing of goodwill and intangible assets; perceived or actual product quality issues or product recalls; failure to maintain effective internal control over financial reporting; volatility of and access to capital or other markets and the company's liquidity; pension costs; the expected discontinuance of London Interbank Offered Rates and transition to any other interest rate benchmark; and the company’s ability to protect its intellectual property and intangible assets. Please also see the company’s risk factors, as they may be amended from time to time, set forth in its filings with the SEC, including the company’s most recently filed Annual Report on Form 10-K. Mondelēz International disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation.

Schedule 1

Mondelēz International, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

(in millions of U.S. dollars and shares, except per share data)

(Unaudited)

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,

2021

2020

2021

2020

Net revenues

$

6,642

$

5,911

$

13,880

$

12,618

Cost of sales

4,011

3,580

8,283

7,836

Gross profit

2,631

2,331

5,597

4,782

Gross profit margin

39.6%

39.4%

40.3%

37.9%

Selling, general and administrative expenses

1,593

1,453

3,157

2,990

Asset impairment and exit costs

134

115

224

130

Gain on acquisition

-

-

(9

)

-

Amortization of intangible assets

32

50

70

93

Operating income

872

713

2,155

1,569

Operating income margin

13.1%

12.1%

15.5%

12.4%

Benefit plan non-service income

(54

)

(31

)

(98

)

(64

)

Interest and other expense, net

58

85

276

275

Earnings before income taxes

868

659

1,977

1,358

Income tax provision

(398

)

(341

)

(610

)

(489

)

Effective tax rate

45.9%

51.7%

30.9%

36.0%

Gain on equity method investment transactions

502

121

495

192

Equity method investment net earnings

107

106

185

227

Net earnings

1,079

545

2,047

1,288

Noncontrolling interest earnings

(1

)

(1

)

(8

)

(8

)

Net earnings attributable to Mondelēz International

$

1,078

$

544

$

2,039

$

1,280

Per share data:

Basic earnings per share attributable to Mondelēz International

$

0.77

$

0.38

$

1.45

$

0.89

Diluted earnings per share attributable to Mondelēz International

$

0.76

$

0.38

$

1.44

$

0.89

Average shares outstanding:

Basic

1,407

1,431

1,410

1,432

Diluted

1,416

1,439

1,419

1,442


Schedule 2

Mondelēz International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions of U.S. dollars)

(Unaudited)

June 30,

December 31,

2021

2020

ASSETS

Cash and cash equivalents

$

1,938

$

3,619

Trade receivables

2,226

2,297

Other receivables

687

657

Inventories, net

2,925

2,647

Other current assets

878

759

Total current assets

8,654

9,979

Property, plant and equipment, net

8,857

9,026

Operating lease right of use assets

653

638

Goodwill

22,270

21,895

Intangible assets, net

18,691

18,482

Prepaid pension assets

802

672

Deferred income taxes

723

790

Equity method investments

5,586

6,036

Other assets

241

292

TOTAL ASSETS

$

66,477

$

67,810

LIABILITIES

Short-term borrowings

$

64

$

29

Current portion of long-term debt

1,905

2,741

Accounts payable

6,375

6,209

Accrued marketing

1,966

2,130

Accrued employment costs

743

834

Other current liabilities

3,032

3,216

Total current liabilities

14,085

15,159

Long-term debt

17,046

17,276

Long-term operating lease liabilities

489

470

Deferred income taxes

3,436

3,346

Accrued pension costs

1,135

1,257

Accrued postretirement health care costs

346

346

Other liabilities

2,320

2,302

TOTAL LIABILITIES

38,857

40,156

EQUITY

Common Stock

-

-

Additional paid-in capital

32,042

32,070

Retained earnings

29,538

28,402

Accumulated other comprehensive losses

(10,572

)

(10,690

)

Treasury stock

(23,465

)

(22,204

)

Total Mondelēz International Shareholders' Equity

27,543

27,578

Noncontrolling interest

77

76

TOTAL EQUITY

27,620

27,654

TOTAL LIABILITIES AND EQUITY

$

66,477

$

67,810

June 30,

December 31,

2021

2020

Incr/(Decr)

Short-term borrowings

$

64

$

29

$

35

Current portion of long-term debt

1,905

2,741

(836

)

Long-term debt

17,046

17,276

(230

)

Total Debt

19,015

20,046

(1,031

)

Cash and cash equivalents

1,938

3,619

(1,681

)

Net Debt (1)

$

17,077

$

16,427

$

650

(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

Mondelēz International, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions of U.S. dollars)

(Unaudited)

For the Six Months Ended
June 30,

2021

2020

CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES

Net earnings

$

2,047

$

1,288

Adjustments to reconcile net earnings to operating cash flows:

Depreciation and amortization

564

528

Stock-based compensation expense

63

63

Deferred income tax provision/(benefit)

92

(110

)

Asset impairments and accelerated depreciation

152

99

Loss on early extinguishment of debt

110

-

Gain on acquisition

(9

)

-

Gain on equity method investment transactions

(495

)

(192

)

Equity method investment net earnings

(185

)

(227

)

Distributions from equity method investments

94

193

Other non-cash items, net

(5

)

154

Change in assets and liabilities, net of acquisitions:

Receivables, net

42

328

Inventories, net

(289

)

(233

)

Accounts payable

182

75

Other current assets

(190

)

(62

)

Other current liabilities

(231

)

(224

)

Change in pension and postretirement assets and liabilities, net

(150

)

(122

)

Net cash provided by/(used in) operating activities

1,792

1,558

CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES

Capital expenditures

(410

)

(445

)

Acquisitions, net of cash received

(833

)

(1,141

)

Proceeds from divestitures including equity method investments

998

579

Other

25

(30

)

Net cash provided by/(used in) investing activities

(220

)

(1,037

)

CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES

Issuances of commercial paper, maturities greater than 90 days

-

677

Repayments of commercial paper, maturities greater than 90 days

-

(654

)

Net issuances of other short-term borrowings

37

109

Long-term debt proceeds

2,378

2,533

Long-term debt repaid

(3,376

)

(1,430

)

Repurchase of Common Stock

(1,498

)

(720

)

Dividends paid

(896

)

(819

)

Other

127

123

Net cash provided by/(used in) financing activities

(3,228

)

(181

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(25

)

(37

)

Cash, Cash Equivalents and Restricted Cash

(Decrease) / increase

(1,681

)

303

Balance at beginning of period

3,650

1,328

Balance at end of period

$

1,969

$

1,631

Mondelēz International, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Financial Measures
(Unaudited)

The company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). However, management believes that also presenting certain non-GAAP financial measures provides additional information to facilitate the comparison of the company’s historical operating results and trends in its underlying operating results, and provides additional transparency on how the company evaluates its business. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the company’s performance. The company also believes that presenting these measures allows investors to view its performance using the same measures that the company uses in evaluating its financial and business performance and trends.

The company considers quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of its ongoing financial and business performance and trends. The adjustments generally fall within the following categories: acquisition & divestiture activities, gains and losses on intangible asset sales and non-cash impairments, major program restructuring activities, constant currency and related adjustments, major program financing and hedging activities and other major items affecting comparability of operating results. See below for a description of adjustments to the company’s U.S. GAAP financial measures included herein.

Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, the company’s non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies.

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. When these definitions change, the company provides the updated definitions and presents the related non-GAAP historical results on a comparable basis. When items no longer impact the company’s current or future presentation of non-GAAP operating results, the company removes these items from its non-GAAP definitions. In the second quarter of 2021, we added to the non-GAAP definitions the exclusion of initial impacts from enacted tax law changes.

  • “Organic Net Revenue” is defined as net revenues excluding the impacts of acquisitions, divestitures and currency rate fluctuations. The company also evaluates Organic Net Revenue growth from emerging markets and developed markets.

  • “Adjusted Gross Profit” is defined as gross profit excluding the impacts of the Simplify to Grow Program; acquisition integration costs; the operating results of divestitures; and mark-to-market impacts from commodity and forecasted currency transaction derivative contracts. The company also presents “Adjusted Gross Profit margin,” which is subject to the same adjustments as Adjusted Gross Profit. 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 the items listed in the Adjusted Gross Profit definition as well as gains or losses (including non-cash impairment charges) on goodwill and intangible assets; divestiture or acquisition gains or losses and related divestiture, acquisition and integration costs; costs associated with the JDE Peet's transaction; remeasurement of net monetary position; impacts from resolution of tax matters; CEO transition remuneration; initial impacts from enacted tax law changes; and impact from pension participation changes. The company also presents “Adjusted Operating Income margin” and “Adjusted Segment Operating Income margin,” which are subject to the same adjustments as Adjusted Operating Income and Adjusted Segment Operating Income. 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 Mondelēz International from continuing operations excluding the impacts of the items listed in the Adjusted Operating Income definition, as well as losses on debt extinguishment and related expenses; gains or losses on equity method investment transactions; net earnings from divestitures; and gains or losses on interest rate swaps no longer designated as accounting cash flow hedges due to changed financing and hedging plans. Similarly, within Adjusted EPS, the company’s equity method investment net earnings exclude its proportionate share of its investees’ significant operating and non-operating items. The tax impact of each of the items excluded from the company’s GAAP results was computed based on the facts and tax assumptions associated with each item, and such impacts have also been excluded from Adjusted EPS. The company also evaluates growth in the company’s Adjusted EPS on a constant currency basis.

  • “Free Cash Flow” is defined as net cash provided by operating activities less capital expenditures. Free Cash Flow is the company’s primary measure used to monitor its cash flow performance.

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 months and six months ended June 30, 2021 and June 30, 2020. See Items Impacting Comparability of Operating Results below for more information about the items referenced in these definitions that specifically impacted the company’s results.

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, gains and losses on divestitures and acquisition-related costs (which are a component of selling, general and administrative expenses) in all periods presented. The company excludes these items from segment operating income in order to provide better transparency of its segment operating results. Furthermore, the company centrally manages benefit plan non-service income and interest and other expense, net. Accordingly, the company does not present these items by segment because they are excluded from the segment profitability measure that management reviews.

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 identifies these 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 discloses the impact of changes in currency exchange rates on the company’s financial results in order to reflect results on a constant currency basis.

Divestitures, Divestiture-related costs and Gains/(losses) on divestitures
Divestitures include completed sales of businesses (including the partial or full sale of an equity method investment - discussed separately below under the gains and losses on equity method investment transactions section) and exits of major product lines upon completion of a sale or licensing agreement. As the company records its share of KDP and JDE Peet’s ongoing earnings on a one-quarter lag basis, any KDP or JDE Peet’s ownership reductions are reflected as divestitures within the company's non-GAAP results the following quarter.

  • The company's non-GAAP results include the impacts from last-year's partial sales of its equity method investments in KDP and JDE Peet’s as if the sales occurred at the beginning of all periods presented. See the section on gains/losses on equity method transactions below for more information.

Acquisitions, Acquisition-related costs and Acquisition integration costs
On May 26, 2021, the company announced an agreement to acquire Chipita S.A., a leading croissants and baked snacks company in the Central and Eastern European markets. The company expects the acquisition to close in the next nine months after all regulatory and acquisition-related reviews are completed. The company incurred acquisition-related costs of $6 million in the three months and six months ended June 30, 2021.

On April 1, 2021, the company acquired Gourmet Food Holdings Pty Ltd, a leading Australian food company in the premium biscuit and cracker category. The acquisition added incremental net revenues of $27 million and operating income of $3 million in the three and six months ended June 30, 2021. The company also incurred acquisition-related costs of $6 million in the three months and $7 million in the six months ended June 30, 2021.

On March 25, 2021, the company acquired a majority interest in Lion/Gemstone Topco Ltd ("Grenade"), a performance nutrition leader in the United Kingdom. The acquisition of Grenade expands the company's position into the premium nutrition market. The acquisition added incremental net revenues of $23 million and operating income of $2 million in the three and six months ended June 30, 2020. The company also incurred acquisition-related costs of $2 million in the six months ended June 30, 2021.

On January 4, 2021, the company acquired the remaining 93% of equity of Hu Master Holdings, a category leader in premium chocolate in the United States, which provides a strategic complement to the company's snacking portfolio in North America through growth opportunities in chocolate and other categories in the well-being segment. As a result of acquiring the remaining equity interest, the company consolidated the operation and recorded a pre-tax gain of $9 million ($7 million after-tax) related to stepping up the company's previously-held $8 million (7%) investment to fair value. The acquisition added incremental net revenues of $8 million and an operating loss of $7 million in the three months and incremental net revenues of $16 million and an operating loss of $13 million in the six months ended June 30, 2021. The company also incurred acquisition-related costs of $5 million in the three months and $9 million in the six months ended June 30, 2021.

On April 1, 2020, the company acquired a majority interest in Give & Go, a North American leader in fully-finished sweet baked goods and owner of the famous two-bite® brand of brownies and the Create-A-Treat® brand, known for cookie and gingerbread house decorating kits. The acquisition of Give & Go provides access to the in-store bakery channel and expands the company's position in broader snacking. The acquisition added incremental net revenues of $106 million and operating income of $6 million in 2021. The company incurred acquisition-integrations costs of $2 million in the three months and $3 million in the six months ended June 30, 2021. The company also incurred acquisition-related costs of $10 million in the three months and $15 million in the six months ended June 30, 2020.

Simplify to Grow Program
The primary objective of the Simplify to Grow Program is to reduce the company’s operating cost structure in both its supply chain and overhead costs. The program covers severance as well as asset disposals and other manufacturing and procurement-related one-time costs.

Restructuring costs
The company recorded restructuring charges of $100 million in the three months and $188 million in the six months ended June
30, 2021 and $28 million in the three months and $43 million in the six months ended June 30, 2020 within asset impairment and exit costs and benefit plan non-service income. These charges were for severance and related costs, non-cash asset write-downs (including accelerated depreciation and asset impairments) and other adjustments, including any gains on sale of restructuring program assets.

Implementation costs
Implementation costs primarily relate to reorganizing the company’s operations and facilities in connection with its supply chain reinvention program and other identified productivity and cost saving initiatives. The costs include incremental expenses related to the closure of facilities, costs to terminate certain contracts and the simplification of the company’s information systems. The company recorded implementation costs of $33 million in the three months and $67 million in the six months
ended June 30, 2021 and $52 million in the three months and $95 million in the six months ended June 30, 2020.

Intangible asset impairment charges
With the ongoing COVID-19 global pandemic, the company continues to monitor intangible asset impairment risk. Impairment charges are recorded within asset impairment and exit costs.

During the second quarter of 2021, the company recorded a $32 million impairment charge in North America related to a small biscuit brand, primarily due to lower than original expected sales growth.

During the second quarter of 2020, the company identified a decline in demand for certain of its brands, primarily in the gum category, that prompted additional evaluation of its non-amortizable intangible assets. The company concluded that four gum brands, a small biscuit brand and a small candy brand were impaired as a result of lower than expected product growth. The company recorded approximately $90 million of impairment charges with $50 million in Europe, $36 million in North America and $5 million in AMEA.

Mark-to-market impacts from commodity and currency derivative contracts
The company excludes unrealized gains and losses (mark-to-market impacts) from outstanding commodity and forecasted currency transaction derivatives from its non-GAAP earnings measures until such time that the related exposures impact its operating results. The company recorded net unrealized gains on commodity and forecasted currency transaction derivatives of $17 million in the three months and $134 million in the six months ended June 30, 2021 and recorded net unrealized losses of $2 million in the three months and $186 million in the six months ended June 30, 2020.

Remeasurement of net monetary position
During the second quarter of 2018, primarily based on published estimates which indicated that Argentina's three-year cumulative inflation rate exceeded 100%, the company concluded that Argentina became a highly inflationary economy for accounting purposes. As of July 1, 2018, the company began to apply highly inflationary accounting for its Argentinean subsidiaries and changed their functional currency from the Argentinean peso to the U.S. dollar. On July 1, 2018, both monetary and non-monetary assets and liabilities denominated in Argentinian pesos were remeasured into U.S. dollars. As of each subsequent balance sheet date, Argentinean peso denominated monetary assets and liabilities were remeasured into U.S. dollars using the exchange rate as of the balance sheet date, with remeasurement and other transaction gains and losses recorded in net earnings. Within selling, general and administrative expenses, the company recorded remeasurement losses of $3 million in the three months and $8 million in the six months ended June 30, 2021 and $3 million in the three months and $5 million in the six months ended June 30, 2020 related to the revaluation of the Argentinean peso denominated net monetary position over these periods.

Impact from pension participation changes
The impact from pension participation changes represent the charges incurred when employee groups are withdrawn from multiemployer pension plans and other changes in employee group pension plan participation. The company excludes these charges from its non-GAAP results because those amounts do not reflect the company’s ongoing pension obligations.

During the second quarter of 2021, the company made a decision to freeze its Defined Benefit Pension Scheme in the United Kingdom. As a result, the company recognized a curtailment credit of $14 million for the three and six months ended June 30, 2021 recorded within benefit plan non-service income. In addition, the company incurred incentive payment charges and other expenses related to this decision of $44 million in the three months and $45 million in the six months ended June 30, 2021 included in operating income.

On July 11, 2019, the company received an undiscounted withdrawal liability assessment related to the company's complete
withdrawal from the Bakery and Confectionery Union and Industry International Pension Fund totaling $526 million and requiring pro-rata monthly payments over 20 years. The company began making monthly payments during the third quarter of 2019. The company recorded $3 million of accreted interest in the three months and $6 million in the six months ended June 30, 2021 and $3 million in the three months and $6 million in the six months ended June 30, 2020 on the long-term liability within interest and other expense, net. As of June 30, 2021, the remaining discounted withdrawal liability was $368 million, with $14 million recorded in other current liabilities and $354 million recorded in long-term other liabilities.

Loss on debt extinguishment and related expenses
On March 31, 2021, the company completed an early redemption of Euro (€1,200 million) and U.S. dollar ($992 million) denominated notes. The company recorded $137 million of extinguishment loss and debt-related expenses within interest and other expense, net related to $110 million paid in excess of carrying value of the debt and recognizing unamortized discounts and deferred financing in earnings and $27 million foreign currency derivative loss related to the redemption payment at the time of the debt extinguishment.

Loss related to interest rate swaps
Within interest and other expense, net, the company recognized a pre-tax loss related to forward-starting interest rate swaps of $103 million ($79 million after-tax) in the first quarter of 2020 due to the changes in related forecasted debt.

Initial impacts from enacted tax law changes
The company excludes initial impacts from enacted tax law changes from its non-GAAP financial measures as they do not reflect its ongoing tax obligations under the enacted tax law changes. Initial impacts include items such as the remeasurement of deferred tax balances and the transition tax from the 2017 U.S. tax reform. Previously, the company only excluded the initial impacts from more material tax reforms, specifically the impacts of the 2019 Swiss tax reform and 2017 U.S. tax reform. To facilitate comparisons of its underlying operating results, the company has recast all historical non-GAAP earnings measures to exclude the initial impacts from enacted tax law changes.

The company recorded net tax expense from the increase of its deferred tax liabilities resulting from enacted tax legislation (mainly in the United Kingdom) of $95 million in the three months and $99 million in the six months ended June 30, 2021.

Gains and losses on equity method investment transactions
Keurig Dr Pepper Transactions:
On March 4, 2020, the company participated in a secondary offering of KDP shares and sold approximately 6.8 million shares, which reduced its ownership interest by 0.5% of total outstanding shares. The company received $185 million of proceeds and recorded a pre-tax gain of $71 million (or $54 million after-tax) during the three months ended March 31, 2020. On August 3, 2020, the company sold approximately 14.1 million shares of KDP, which reduced its ownership interest by 1.0% of the total outstanding shares. The company received $414 million of proceeds and recorded a pre-tax gain of $181 million (or $139 million after-tax) during the third quarter of 2020. On September 9, 2020, the company sold approximately 12.5 million shares of KDP, which reduced its ownership interest by 0.9% of the total outstanding shares. The company received $363 million of proceeds and recorded a pre-tax gain of $154 million (or $119 million after-tax) during the third quarter of 2020. On November 17, 2020, the company participated in a secondary offering of KDP shares and sold approximately 40.0 million shares, which reduced the company's ownership interest by 2.8% of the total outstanding shares. The company received $1,132 million of proceeds and recorded a pre-tax gain of $459 million (or $350 million after-tax) during the fourth quarter of 2020. The company considers these ownership reductions partial divestitures of its equity method investment in KDP. Therefore, the company has removed the equity method investment net earnings related to this divested portion from its non-GAAP financial results for Adjusted EPS for all historical periods presented to facilitate comparison of results. The company's U.S. GAAP results, which include its equity method investment net earnings from KDP, did not change from what was previously reported.

On June 7, 2021, the company participated in a secondary offering of KDP shares and sold approximately 28 million shares, which reduced its ownership interest by 2% to 6.4% of the total outstanding shares. The company received $997 million of proceeds and recorded a pre-tax gain of $520 million (or $392 million after-tax) during the second quarter of 2021. As the company records its share of KDP ongoing earnings on a one-quarter lag basis, any KDP ownership reductions are reflected as divestitures within non-GAAP results the following quarter. As such, the company will recast divestitures within its non-GAAP results to reflect the second quarter 2021 sales of KDP shares in the third quarter of 2021.

JDE Peet’s Transaction:
In May 2020, JDE Peet’s B.V. (renamed JDE Peet’s N.V. immediately prior to Settlement (as defined below), “JDE Peet’s”) consummated the offering, listing and trading of its ordinary shares on Euronext Amsterdam, a regulated market operated by Euronext Amsterdam N.V. (the “admission”). In connection with this transaction, JDE Peet’s and the selling shareholders, including the company, agreed to sell at a price of €31.50 per ordinary share a total of approximately 82.1 million ordinary shares, including ordinary shares subject to an over-allotment option. The ordinary shares were listed and first traded on May 29, 2020, and payment for, and delivery of, the ordinary shares sold in the offering (excluding ordinary shares subject to the over-allotment option) took place on June 2, 2020 (“Settlement”).

Prior to Settlement, the company exchanged its 26.4% ownership interest in JDE for a 26.5% equity interest in JDE Peet’s. The company did not invest new capital in connection with the transaction and the exchange was accounted for as a change in interest transaction. Upon Settlement, the company sold approximately 9.7 million of its ordinary shares in JDE Peet’s in the offering for gross proceeds of €304 million ($343 million). The company subsequently sold approximately 1.4 million additional shares and received gross proceeds of €46 million ($51 million) upon exercise of the over-allotment option. Following Settlement and the exercise of the over-allotment option, the company held a 22.9% equity interest in JDE Peet’s. During the second quarter of 2020, the company recorded a preliminary gain of $121 million, net of $33 million released from accumulated other comprehensive losses, and incurred $48 million of transaction costs. The company also incurred a $261 million tax expense that is payable in 2020 and 2021. During the third quarter of 2020, the company increased its preliminary gain by $10 million to $131 million. During the fourth quarter of 2020, the company recorded a $7 million loss related to a minor dilution of its ownership percentage and reduced its tax expense by $11 million to $250 million.

In connection with this transaction, during the second quarter of 2020, the company changed its accounting principle to reflect its share of JDE’s historical and JDE Peet’s ongoing earnings on a one-quarter lag basis, although the company continues to record dividends when cash is received. The company determined a lag was preferable as it enables the company to continue to report its quarterly and annual results on a timely basis, while recording its share of JDE Peet’s ongoing results after JDE Peet’s has publicly reported its results. This change in accounting principle was applied retrospectively to all periods. In addition, the company considers the 3.6% ownership reduction a partial divestiture of its equity method investment in JDE Peet's. Therefore, the company has removed the equity method investment net earnings related to this divested portion from its non-GAAP financial results for Adjusted EPS for all historical periods presented to facilitate comparison of results. The company's U.S. GAAP results, which include its equity method investment net earnings from JDE Peet's, did not change from what was previously reported.

Equity method investee items
Within Adjusted EPS, the company’s equity method investment net earnings exclude its proportionate share of its equity method investees’ significant operating and non-operating items, such as acquisition and divestiture-related costs and restructuring program costs.

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.

OUTLOOK
The company’s outlook for 2021 Organic Net Revenue growth, Adjusted EPS growth on a constant currency basis and Free Cash Flow are non-GAAP financial measures that exclude or otherwise adjust for items impacting comparability of financial results such as the impact of changes in currency exchange rates, restructuring activities, acquisitions and divestitures. The company is not able to reconcile its projected Organic Net Revenue growth to its projected reported net revenue growth for the full-year 2021 because the company is unable to predict during this period the impact from potential acquisitions or divestitures, as well as the impact of currency translation due to the unpredictability of future changes in currency exchange rates, which could be material as a significant portion of the company’s operations are outside the U.S. The company is not able to reconcile its projected Adjusted EPS growth on a constant currency basis to its projected reported diluted EPS growth for the full-year 2021 because the company is unable to predict during this period the timing of its restructuring program costs, mark-to-market impacts from commodity and forecasted currency transaction derivative contracts and impacts from potential acquisitions or divestitures as well as the impact of currency translation due to the unpredictability of future changes in currency exchange rates, which could be material as a significant portion of the company’s operations are outside the U.S. The company is not able to reconcile its projected Free Cash Flow to its projected net cash from operating activities for the full-year 2021 because the company is unable to predict during this period the timing and amount of capital expenditures impacting cash flow. Therefore, because of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, the company is unable to provide a reconciliation of these measures without unreasonable effort.


Schedule 4a

Mondelēz International, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Net Revenues

(in millions of U.S. dollars)

(Unaudited)

Latin
America

AMEA

Europe

North
America

Mondelēz
International

For the Three Months Ended June 30, 2021

Reported (GAAP)

$

669

$

1,452

$

2,474

$

2,047

$

6,642

Acquisitions

-

(23

)

(21

)

(8

)

(52

)

Currency

14

(106

)

(199

)

(20

)

(311

)

Organic (Non-GAAP)

$

683

$

1,323

$

2,254

$

2,019

$

6,279

For the Three Months Ended June 30, 2020

Reported (GAAP)

$

511

$

1,237

$

2,138

$

2,025

$

5,911

Divestitures

-

-

-

-

-

Organic (Non-GAAP)

$

511

$

1,237

$

2,138

$

2,025

$

5,911

% Change

Reported (GAAP)

30.9

%

17.4

%

15.7

%

1.1

%

12.4

%

Divestitures

- pp

- pp

- pp

- pp

- pp

Acquisitions

-

(1.8

)

(1.0

)

(0.4

)

(0.9

)

Currency

2.8

(8.6

)

(9.3

)

(1.0

)

(5.3

)

Organic (Non-GAAP)

33.7

%

7.0

%

5.4

%

(0.3

)%

6.2

%

Vol/Mix

18.8 pp

5.1 pp

4.2 pp

(0.5)pp

4.0 pp

Pricing

14.9

1.9

1.2

0.2

2.2

Latin
America

AMEA

Europe

North
America

Mondelēz
International

For the Six Months Ended June 30, 2021

Reported (GAAP)

$

1,338

$

3,197

$

5,321

$

4,024

$

13,880

Acquisitions

-

(23

)

(21

)

(122

)

(166

)

Currency

123

(187

)

(376

)

(31

)

(471

)

Organic (Non-GAAP)

$

1,461

$

2,987

$

4,924

$

3,871

$

13,243

For the Six Months Ended June 30, 2020

Reported (GAAP)

$

1,237

$

2,739

$

4,722

$

3,920

$

12,618

Divestitures

-

-

-

-

-

Organic (Non-GAAP)

$

1,237

$

2,739

$

4,722

$

3,920

$

12,618

% Change

Reported (GAAP)

8.2

%

16.7

%

12.7

%

2.7

%

10.0

%

Divestitures

- pp

- pp

- pp

- pp

- pp

Acquisitions

-

(0.8

)

(0.4

)

(3.2

)

(1.3

)

Currency

9.9

(6.8

)

(8.0

)

(0.8

)

(3.7

)

Organic (Non-GAAP)

18.1

%

9.1

%

4.3

%

(1.3

)%

5.0

%

Vol/Mix

6.0 pp

6.7 pp

3.2 pp

(1.7)pp

2.8 pp

Pricing

12.1

2.4

1.1

0.4

2.2


Schedule 4b

Mondelēz International, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Net Revenues - Markets

(in millions of U.S. dollars)

(Unaudited)

Emerging
Markets

Developed
Markets

Mondelēz
International

For the Three Months Ended June 30, 2021

Reported (GAAP)

$

2,293

$

4,349

$

6,642

Acquisitions

-

(52

)

(52

)

Currency

(60

)

(251

)

(311

)

Organic (Non-GAAP)

$

2,233

$

4,046

$

6,279

For the Three Months Ended June 30, 2020

Reported (GAAP)

$

1,917

$

3,994

$

5,911

Divestitures

-

-

-

Organic (Non-GAAP)

$

1,917

$

3,994

$

5,911

% Change

Reported (GAAP)

19.6

%

8.9

%

12.4

%

Divestitures

- pp

- pp

- pp

Acquisitions

-

(1.3

)

(0.9

)

Currency

(3.1

)

(6.3

)

(5.3

)

Organic (Non-GAAP)

16.5

%

1.3

%

6.2

%

Vol/Mix

10.6 pp

0.9 pp

4.0 pp

Pricing

5.9

0.4

2.2

Emerging
Markets

Developed
Markets

Mondelēz
International

For the Six Months Ended June 30, 2021

Reported (GAAP)

$

4,856

$

9,024

$

13,880

Acquisitions

-

(166

)

(166

)

Currency

34

(505

)

(471

)

Organic (Non-GAAP)

$

4,890

$

8,353

$

13,243

For the Six Months Ended June 30, 2020

Reported (GAAP)

$

4,334

$

8,284

$

12,618

Divestitures

-

-

-

Organic (Non-GAAP)

$

4,334

$

8,284

$

12,618

% Change

Reported (GAAP)

12.0

%

8.9

%

10.0

%

Divestitures

- pp

- pp

- pp

Acquisitions

-

(2.0

)

(1.3

)

Currency

0.8

(6.1

)

(3.7

)

Organic (Non-GAAP)

12.8

%

0.8

%

5.0

%

Vol/Mix

7.3 pp

0.3 pp

2.8 pp

Pricing

5.5

0.5

2.2


Schedule 5a

Mondelēz International, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Gross Profit / Operating Income

(in millions of U.S. dollars)

(Unaudited)

For the Three Months Ended June 30, 2021

Net
Revenues

Gross
Profit

Gross
Profit
Margin

Operating
Income

Operating
Income
Margin

Reported (GAAP)

$

6,642

$

2,631

39.6

%

$

872

13.1

%

Simplify to Grow Program

-

20

132

Intangible asset impairment charges

-

-

32

Mark-to-market (gains)/losses from derivatives

-

(21

)

(20

)

Acquisition integration costs

-

1

2

Acquisition-related costs

-

-

17

Remeasurement of net monetary position

-

-

3

Impact from pension participation changes

-

18

44

Impact from resolution of tax matters

-

-

(5

)

Adjusted (Non-GAAP)

$

6,642

$

2,649

39.9

%

$

1,077

16.2

%

Currency

(134

)

(67

)

Adjusted @ Constant FX (Non-GAAP)

$

2,515

$

1,010

For the Three Months Ended June 30, 2020

Net
Revenues

Gross
Profit

Gross
Profit
Margin

Operating
Income

Operating
Income
Margin

Reported (GAAP)

$

5,911

$

2,331

39.4

%

$

713

12.1

%

Simplify to Grow Program

-

15

76

Intangible asset impairment charges

-

-

90

Mark-to-market (gains)/losses from derivatives

-

1

2

Acquisition integration costs

-

-

2

Acquisition-related costs

-

-

10

Divestiture-related costs

-

(1

)

(2

)

Costs associated with JDE Peet’s transaction

-

-

48

Remeasurement of net monetary position

-

-

3

Rounding

-

1

-

Adjusted (Non-GAAP)

$

5,911

$

2,347

39.7

%

$

942

15.9

%

Gross
Profit

Operating
Income

$ Change - Reported (GAAP)

$

300

$

159

$ Change - Adjusted (Non-GAAP)

302

135

$ Change - Adjusted @ Constant FX (Non-GAAP)

168

68

% Change - Reported (GAAP)

12.9

%

22.3

%

% Change - Adjusted (Non-GAAP)

12.9

%

14.3

%

% Change - Adjusted @ Constant FX (Non-GAAP)

7.2

%

7.2

%


Schedule 5b

Mondelēz International, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Gross Profit / Operating Income

(in millions of U.S. dollars)

(Unaudited)

For the Six Months Ended June 30, 2021

Net
Revenues

Gross
Profit

Gross
Profit
Margin

Operating
Income

Operating
Income
Margin

Reported (GAAP)

$

13,880

$

5,597

40.3

%

$

2,155

15.5

%

Simplify to Grow Program

-

35

254

Intangible asset impairment charges

-

-

32

Mark-to-market (gains)/losses from derivatives

-

(137

)

(138

)

Acquisition integration costs

-

1

3

Acquisition-related costs

-

-

24

Gain on acquisition

-

-

(9

)

Remeasurement of net monetary position

-

-

8

Impact from pension participation changes

-

19

45

Impact from resolution of tax matters

-

-

(5

)

Adjusted (Non-GAAP)

$

13,880

$

5,515

39.7

%

$

2,369

17.1

%

Currency

(210

)

(111

)

Adjusted @ Constant FX (Non-GAAP)

$

5,305

$

2,258

For the Six Months Ended June 30, 2020

Net
Revenues

Gross
Profit

Gross
Profit
Margin

Operating
Income

Operating
Income
Margin

Reported (GAAP)

$

12,618

$

4,782

37.9

%

$

1,569

12.4

%

Simplify to Grow Program

-

34

134

Intangible asset impairment charges

-

-

90

Mark-to-market (gains)/losses from derivatives

-

187

187

Acquisition integration costs

-

-

2

Acquisition-related costs

-

-

15

Divestiture-related costs

-

(1

)

(2

)

Costs associated with JDE Peet’s transaction

-

-

48

Remeasurement of net monetary position

-

-

5

Rounding

-

1

-

Adjusted (Non-GAAP)

$

12,618

$

5,003

39.6

%

$

2,048

16.2

%

Gross
Profit

Operating
Income

$ Change - Reported (GAAP)

$

815

$

586

$ Change - Adjusted (Non-GAAP)

512

321

$ Change - Adjusted @ Constant FX (Non-GAAP)

302

210

% Change - Reported (GAAP)

17.0

%

37.3

%

% Change - Adjusted (Non-GAAP)

10.2

%

15.7

%

% Change - Adjusted @ Constant FX (Non-GAAP)

6.0

%

10.3

%


Schedule 6a

Mondelēz International, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Net Earnings and Tax Rate

(in millions of U.S. dollars and shares, except per share data)

(Unaudited)

For the Three Months Ended June 30, 2021

Operating
Income

Benefit
plan non-service
expense /
(income)

Interest
and other
expense,
net

Earnings
before
income
taxes

Income
taxes
(1)

Effective
tax rate

Gain on equity
method
investment
transactions

Equity
method
investment
net losses /
(earnings)

Non-controlling
interest
earnings

Net Earnings
attributable
to Mondelēz
International

Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP)

$

872

$

(54

)

$

58

$

868

$

398

45.9

%

$

(502

)

$

(107

)

$

1

$

1,078

$

0.76

Simplify to Grow Program

132

(1

)

-

133

35

-

-

-

98

0.07

Intangible asset impairment charges

32

-

-

32

8

-

-

-

24

0.02

Mark-to-market (gains)/losses from derivatives

(20

)

-

(3

)

(17

)

4

-

-

-

(21

)

(0.02

)

Acquisition integration costs

2

-

-

2

1

-

-

-

1

-

Acquisition-related costs

17

-

-

17

3

-

-

-

14

0.01

Remeasurement of net monetary position

3

-

-

3

-

-

-

-

3

-

Impact from pension participation changes

44

14

(3

)

33

7

-

-

-

26

0.02

Impact from resolution of tax matters

(5

)

-

2

(7

)

(1

)

-

-

-

(6

)

-

Initial impacts from enacted tax law changes

-

-

-

-

(95

)

-

-

-

95

0.07

Gain on equity method investment transactions

-

-

-

-

(125

)

502

-

-

(377

)

(0.27

)

Equity method investee items

-

-

-

-

3

-

(8

)

-

5

-

Adjusted (Non-GAAP)

$

1,077

$

(41

)

$

54

$

1,064

$

238

22.4

%

$

-

$

(115

)

$

1

$

940

$

0.66

Currency

(60

)

(0.04

)

Adjusted @ Constant FX (Non-GAAP)

$

880

$

0.62

Diluted Average Shares Outstanding

1,416

For the Three Months Ended June 30, 2020

Operating
Income

Benefit
plan non-service
expense /
(income)

Interest
and other
expense,
net

Earnings
before
income
taxes

Income
taxes
(1)

Effective
tax rate

Gain on
equity
method
investment
transactions

Equity
method
investment
net losses /
(earnings)

Non-controlling
interest
earnings

Net Earnings
attributable to Mondelēz
International

Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP)

$

713

$

(31

)

$

85

$

659

$

341

51.7

%

$

(121

)

$

(106

)

$

1

$

544

$

0.38

Simplify to Grow Program

76

(4

)

-

80

20

-

-

-

60

0.04

Intangible asset impairment charges

90

-

-

90

21

-

-

-

69

0.05

Mark-to-market (gains)/losses from derivatives

2

-

-

2

-

-

-

-

2

-

Acquisition integration costs

2

-

-

2

-

-

-

-

2

-

Acquisition-related costs

10

-

-

10

2

-

-

-

8

0.01

Divestiture-related costs

(2

)

-

-

(2

)

-

-

-

-

(2

)

-

Net earnings from divestitures

-

-

-

-

(1

)

-

16

-

(15

)

(0.01

)

Costs associated with JDE Peet’s transaction

48

-

-

48

(261

)

-

-

-

309

0.21

Remeasurement of net monetary position

3

-

-

3

-

-

-

-

3

-

Impact from pension participation changes

-

-

(3

)

3

-

-

-

-

3

-

Gain on equity method investment transactions

-

-

-

-

-

121

-

-

(121

)

(0.08

)

Equity method investee items

-

-

-

-

4

-

(23

)

-

19

0.01

Adjusted (Non-GAAP)

$

942

$

(35

)

$

82

$

895

$

126

14.1

%

$

-

$

(113

)

$

1

$

881

$

0.61

Diluted Average Shares Outstanding

1,439

(1) Taxes were computed for each of the items excluded from the company’s GAAP results based on the facts and tax assumptions associated with each item.


Schedule 6b

Mondelēz International, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Net Earnings and Tax Rate

(in millions of U.S. dollars and shares, except per share data)

(Unaudited)

For the Six Months Ended June 30, 2021

Operating
Income

Benefit
plan non-
service
expense /
(income)

Interest
and other
expense,
net

Earnings
before
income
taxes

Income
taxes
(1)

Effective
tax rate

Gain on
equity
method
investment
transactions

Equity
method
investment
net losses /
(earnings)

Non-
controlling
interest
earnings

Net Earnings
attributable
to Mondelēz
International

Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP)

$

2,155

$

(98

)

$

276

$

1,977

$

610

30.9

%

$

(495

)

$

(185

)

$

8

$

2,039

$

1.44

Simplify to Grow Program

254

(1

)

-

255

66

-

-

-

189

0.13

Intangible asset impairment charges

32

-

-

32

8

-

-

-

24

0.02

Mark-to-market (gains)/losses from derivatives

(138

)

-

(4

)

(134

)

(18

)

-

-

-

(116

)

(0.08

)

Acquisition integration costs

3

-

-

3

1

-

-

-

2

-

Acquisition-related costs

24

-

-

24

4

-

-

-

20

0.01

Gain on acquisition

(9

)

-

-

(9

)

(2

)

-

-

-

(7

)

-

Remeasurement of net monetary position

8

-

-

8

-

-

-

-

8

-

Impact from pension participation changes

45

14

(6

)

37

8

-

-

-

29

0.02

Impact from resolution of tax matters

(5

)

-

2

(7

)

(1

)

-

-

-

(6

)

-

Loss on debt extinguishment and related expenses

-

-

(137

)

137

34

-

-

-

103

0.07

Initial impacts from enacted tax law changes

-

-

-

-

(99

)

-

-

-

99

0.07

Gain on equity method investment transactions

-

-

-

-

(125

)

495

-

-

(370

)

(0.26

)

Equity method investee items

-

-

-

-

4

-

(67

)

-

63

0.04

Adjusted (Non-GAAP)

$

2,369

$

(85

)

$

131

$

2,323

$

490

21.1

%

$

-

$

(252

)

$

8

$

2,077

$

1.46

Currency

(109

)

(0.07

)

Adjusted @ Constant FX (Non-GAAP)

$

1,968

$

1.39

Diluted Average Shares Outstanding

1,419

For the Six Months Ended June 30, 2020

Operating
Income

Benefit
plan non-service
expense /
(income)

Interest
and other
expense,
net

Earnings
before
income
taxes

Income
taxes
(1)

Effective
tax rate

Gain on
equity
method
investment
transactions

Equity
method
investment
net losses /
(earnings)

Non-
controlling
interest
earnings

Net Earnings
attributable
to Mondelēz
International

Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP)

$

1,569

$

(64

)

$

275

$

1,358

$

489

36.0

%

$

(192

)

$

(227

)

$

8

$

1,280

$

0.89

Simplify to Grow Program

134

(4

)

-

138

33

-

-

-

105

0.07

Intangible asset impairment charges

90

-

-

90

21

-

-

-

69

0.05

Mark-to-market (gains)/losses from derivatives

187

-

1

186

32

-

-

-

154

0.11

Acquisition integration costs

2

-

-

2

-

-

-

-

2

-

Acquisition-related costs

15

-

-

15

3

-

-

-

12

0.01

Divestiture-related costs

(2

)

-

-

(2

)

-

-

-

-

(2

)

-

Net earnings from divestitures

-

-

-

-

(6

)

-

44

-

(38

)

(0.02

)

Costs associated with JDE Peet’s transaction

48

-

-

48

(261

)

-

-

-

309

0.21

Remeasurement of net monetary position

5

-

-

5

-

-

-

-

5

-

Impact from pension participation changes

-

-

(6

)

6

1

-

-

-

5

-

Loss related to interest rate swaps

-

-

(103

)

103

24

-

-

-

79

0.06

Gain on equity method investment transactions

-

-

-

-

(17

)

192

-

-

(175

)

(0.12

)

Equity method investee items

-

-

-

-

5

-

(39

)

-

34

0.02

Adjusted (Non-GAAP)

$

2,048

$

(68

)

$

167

$

1,949

$

324

16.6

%

$

-

$

(222

)

$

8

$

1,839

$

1.28

Diluted Average Shares Outstanding

1,442

(1) Taxes were computed for each of the items excluded from the company’s GAAP results based on the facts and tax assumptions associated with each item.


Schedule 7a

Mondelēz International, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Diluted EPS

(Unaudited)

For the Three Months Ended
June 30,

2021

2020

$ Change

% Change

Diluted EPS attributable to Mondelēz International (GAAP)

$

0.76

$

0.38

$

0.38

100.0

%

Simplify to Grow Program

0.07

0.04

0.03

Intangible asset impairment charges

0.02

0.05

(0.03

)

Mark-to-market (gains)/losses from derivatives

(0.02

)

-

(0.02

)

Acquisition-related costs

0.01

0.01

-

Net earnings from divestitures

-

(0.01

)

0.01

Costs associated with JDE Peet’s transaction

-

0.21

(0.21

)

Impact from pension participation changes

0.02

-

0.02

Initial impacts from enacted tax law changes

0.07

-

0.07

Gain on equity method investment transactions

(0.27

)

(0.08

)

(0.19

)

Equity method investee items

-

0.01

(0.01

)

Adjusted EPS (Non-GAAP)

$

0.66

$

0.61

$

0.05

8.2

%

Impact of favorable currency

(0.04

)

-

(0.04

)

Adjusted EPS @ Constant FX (Non-GAAP)

$

0.62

$

0.61

$

0.01

1.6

%

Adjusted EPS @ Constant FX - Key Drivers

Increase in operations

$

0.04

Change in benefit plan non-service income

-

Change in interest and other expense, net

0.01

Change in equity method investment net earnings

-

Change in income taxes

(0.05

)

Change in shares outstanding

0.01

$

0.01


Schedule 7b

Mondelēz International, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Diluted EPS

(Unaudited)

For the Six Months Ended
June 30,

2021

2020

$ Change

% Change

Diluted EPS attributable to Mondelēz International (GAAP)

$

1.44

$

0.89

$

0.55

61.8

%

Simplify to Grow Program

0.13

0.07

0.06

Intangible asset impairment charges

0.02

0.05

(0.03

)

Mark-to-market (gains)/losses from derivatives

(0.08

)

0.11

(0.19

)

Acquisition-related costs

0.01

0.01

-

Net earnings from divestitures

-

(0.02

)

0.02

Costs associated with JDE Peet’s transaction

-

0.21

(0.21

)

Impact from pension participation changes

0.02

-

0.02

Loss related to interest rate swaps

-

0.06

(0.06

)

Loss on debt extinguishment and related expenses

0.07

-

0.07

Initial impacts from enacted tax law changes

0.07

-

0.07

Gain on equity method investment transactions

(0.26

)

(0.12

)

(0.14

)

Equity method investee items

0.04

0.02

0.02

Adjusted EPS (Non-GAAP)

$

1.46

$

1.28

$

0.18

14.1

%

Impact of favorable currency

(0.07

)

-

(0.07

)

Adjusted EPS @ Constant FX (Non-GAAP)

$

1.39

$

1.28

$

0.11

8.6

%

Adjusted EPS @ Constant FX - Key Drivers

Increase in operations

$

0.11

Change in benefit plan non-service income

0.01

Change in interest and other expense, net

0.02

Change in equity method investment net earnings

0.01

Change in income taxes

(0.06

)

Change in shares outstanding

0.02

$

0.11


Schedule 8a

Mondelēz International, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Segment Data

(in millions of U.S. dollars)

(Unaudited)

For the Three Months Ended June 30, 2021

Latin
America

AMEA

Europe

North
America

Unrealized
G/(L) on
Hedging
Activities

General
Corporate
Expenses

Amortization
of
Intangibles

Other
Items

Mondelēz
International

Net Revenue

Reported (GAAP)

$

669

$

1,452

$

2,474

$

2,047

$

-

$

-

$

-

$

-

$

6,642

Divestitures

-

-

-

-

-

-

-

-

-

Adjusted (Non-GAAP)

$

669

$

1,452

$

2,474

$

2,047

$

-

$

-

$

-

$

-

$

6,642

Operating Income

Reported (GAAP)

$

54

$

213

$

413

$

299

$

20

$

(78

)

$

(32

)

$

(17

)

$

872

Simplify to Grow Program

4

5

10

109

-

4

-

-

132

Intangible asset impairment charges

-

-

-

32

-

-

-

-

32

Mark-to-market (gains)/losses from derivatives

-

-

-

-

(20

)

-

-

-

(20

)

Acquisition integration costs

-

-

-

1

-

1

-

-

2

Acquisition-related costs

-

-

-

-

-

-

-

17

17

Remeasurement of net monetary position

3

-

-

-

-

-

-

-

3

Impact from pension participation changes

-

-

44

-

-

-

-

-

44

Impact from resolution of tax matters

(5

)

-

-

-

-

-

-

-

(5

)

Adjusted (Non-GAAP)

$

56

$

218

$

467

$

441

$

-

$

(73

)

$

(32

)

$

-

$

1,077

Currency

1

(23

)

(45

)

(5

)

-

4

1

-

(67

)

Adjusted @ Constant FX (Non-GAAP)

$

57

$

195

$

422

$

436

$

-

$

(69

)

$

(31

)

$

-

$

1,010

% Change - Reported (GAAP)

1000.0

%

24.6

%

39.1

%

(29.5

)%

n/m

29.7

%

36.0

%

n/m

22.3

%

% Change - Adjusted (Non-GAAP)

366.7

%

19.8

%

27.2

%

(6.2

)%

n/m

(87.2

)%

36.0

%

n/m

14.3

%

% Change - Adjusted @ Constant FX (Non-GAAP)

375.0

%

7.1

%

15.0

%

(7.2

)%

n/m

(76.9

)%

38.0

%

n/m

7.2

%

Operating Income Margin

Reported %

8.1

%

14.7

%

16.7

%

14.6

%

13.1

%

Reported pp change

9.3 pp

0.9 pp

2.8 pp

(6.3)pp

1.0 pp

Adjusted %

8.4

%

15.0

%

18.9

%

21.5

%

16.2

%

Adjusted pp change

6.1 pp

0.3 pp

1.7 pp

(1.7)pp

0.3 pp

For the Three Months Ended June 30, 2020

Latin
America

AMEA

Europe

North
America

Unrealized
G/(L) on
Hedging
Activities

General
Corporate
Expenses

Amortization
of
Intangibles

Other
Items

Mondelēz
International

Net Revenue

Reported (GAAP)

$

511

$

1,237

$

2,138

$

2,025

$

-

$

-

$

-

$

-

$

5,911

Divestitures

-

-

-

-

-

-

-

-

-

Adjusted (Non-GAAP)

$

511

$

1,237

$

2,138

$

2,025

$

-

$

-

$

-

$

-

$

5,911

Operating Income

Reported (GAAP)

$

(6

)

$

171

$

297

$

424

$

(2

)

$

(111

)

$

(50

)

$

(10

)

$

713

Simplify to Grow Program

15

8

20

9

-

24

-

-

76

Intangible asset impairment charges

-

5

50

36

-

(1

)

-

-

90

Mark-to-market (gains)/losses from derivatives

-

-

-

-

2

-

-

-

2

Acquisition integration costs

-

-

-

1

-

1

-

-

2

Acquisition-related costs

-

-

-

-

-

-

-

10

10

Divestiture-related costs

-

(2

)

-

-

-

-

-

-

(2

)

Costs associated with JDE Peet’s transaction

-

-

-

-

-

48

-

-

48

Remeasurement of net monetary position

3

-

-

-

-

-

-

-

3

Adjusted (Non-GAAP)

$

12

$

182

$

367

$

470

$

-

$

(39

)

$

(50

)

$

-

$

942

Operating Income Margin

Reported %

(1.2

)%

13.8

%

13.9

%

20.9

%

12.1

%

Adjusted %

2.3

%

14.7

%

17.2

%

23.2

%

15.9

%


Schedule 8b

Mondelēz International, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures

Segment Data

(in millions of U.S. dollars)

(Unaudited)

For the Six Months Ended June 30, 2021

Latin
America

AMEA

Europe

North
America

Unrealized
G/(L) on
Hedging
Activities

General
Corporate
Expenses

Amortization
of
Intangibles

Other
Items

Mondelēz
International

Net Revenue

Reported (GAAP)

$

1,338

$

3,197

$

5,321

$

4,024

$

-

$

-

$

-

$

-

$

13,880

Divestitures

-

-

-

-

-

-

-

-

-

Adjusted (Non-GAAP)

$

1,338

$

3,197

$

5,321

$

4,024

$

-

$

-

$

-

$

-

$

13,880

Operating Income

Reported (GAAP)

$

130

$

575

$

970

$

569

$

138

$

(142

)

$

(70

)

$

(15

)

$

2,155

Simplify to Grow Program

10

(14

)

26

220

-

12

-

-

254

Intangible asset impairment charges

-

-

-

32

-

-

-

-

32

Mark-to-market (gains)/losses from derivatives

-

-

-

-

(138

)

-

-

-

(138

)

Acquisition integration costs

-

-

-

2

-

1

-

-

3

Acquisition-related costs

-

-

-

-

-

-

-

24

24

Gain on acquisition

-

-

-

-

-

-

-

(9

)

(9

)

Remeasurement of net monetary position

8

-

-

-

-

-

-

-

8

Impact from pension participation changes

-

-

45

-

-

-

-

-

45

Impact from resolution of tax matters

(5

)

-

-

-

-

-

-

-

(5

)

Adjusted (Non-GAAP)

$

143

$

561

$

1,041

$

823

$

-

$

(129

)

$

(70

)

$

-

$

2,369

Currency

14

(43

)

(88

)

(7

)

-

10

3

-

(111

)

Adjusted @ Constant FX (Non-GAAP)

$

157

$

518

$

953

$

816

$

-

$

(119

)

$

(67

)

$