8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 16, 2018

 

 

MONDELĒZ INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Virginia   1-16483   52-2284372

(State or other jurisdiction

of incorporation)

  (Commission File Number)  

(I.R.S. Employer

Identification No.)

Three Parkway North, Deerfield, Illinois 60015

(Address of principal executive offices, including zip code)

(847) 943-4000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

    Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

 

 


Item 7.01. Regulation FD Disclosure.

Change to our Historical Financial Results in connection with Keurig Green Mountain, Inc.’s Merger with Dr Pepper Snapple Group, Inc.

Mondelēz International, Inc. and subsidiaries (collectively, “we,” “our” or “Mondelēz International”) are furnishing this current report to provide supplemental financial information related to the retrospective impact on our financial statements due to a change in accounting principle following the July 9, 2018 closing of the merger of Keurig Green Mountain, Inc. (“Keurig”) with Dr Pepper Snapple Group, Inc. (“DPSG”).

As previously disclosed in our Form 10-Q for the period ended June 30, 2018, Keurig closed on its definitive merger agreement with DPSG on July 9, 2018 and formed Keurig Dr Pepper Inc. (“KDP”), a publicly traded company. Following the close of the merger, our ownership in KDP was 13.8%. As was the case in our ownership interest in Keurig, we will have significant influence with respect to KDP, and we will continue to account for our investment in KDP under the equity method, resulting in recognizing our share of KDP earnings within our earnings and our share of KDP dividends within our cash flows. In connection with this transaction, we changed our accounting principle to reflect our share of Keurig’s historical and KDP’s ongoing earnings on a one-quarter lag basis while we continue to record dividends when cash is received. We determined a lag was preferable as it enables us to continue to report our quarterly and annual results on a timely basis and to record our share in KDP’s ongoing results once KDP has publicly reported its results. This change in accounting principle was applied retrospectively to all periods.

This change in accounting principle has resulted in revisions of our historical financial results for reported equity method investment net earnings, net earnings and earnings per share (“EPS”) as well as for our non-GAAP financial results for Adjusted EPS. The changes described above will have no impact on our previously reported consolidated net revenues, gross profit or operating income, nor on our non-GAAP financial results for Organic Net Revenue, Adjusted Gross Profit and Adjusted Operating Income, for any period. These changes also do not amend or modify any disclosure contained in, or reflect events occurring subsequent to the filing of, our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. See the chart below and Exhibit 99.1 for the revised unaudited GAAP and non-GAAP financial information for the first half of 2018, all quarters of 2018 and 2017 and for the years ended December 31, 2017 and 2016.

 

Mondelēz International, Inc. and Subsidiaries

Revised Amounts Reflecting Change in Accounting Principle

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

(Unaudited)

 
       2016          2017        2016      2017      2018  
     FY      FY        Q1          Q2          Q3          Q4          Q1          Q2          Q3          Q4          Q1          Q2    

Revised (GAAP)

                                   

Equity method investment net earnings

     $262        $344        $77        $89        $42        $54        $90        $67        $92        $95        $232        $87  

Provision for income taxes

     $114        $666        $45        $113        $34        $(78)        $154        $84        $272        $156        $337        $15  

Net earnings attributable to Mondelēz International

     $1,635        $2,828        $550        $456        $565        $64        $654        $498        $981        $695        $1,046        $318  

Diluted earnings per share attributable to Mondelēz International

     $1.04        $1.85        $0.35        $0.29        $0.36        $0.04        $0.42        $0.32        $0.64        $0.46        $0.70        $0.21  

Revised Adjusted (Non-GAAP)

                                   

Equity method investment net earnings

     $310        $407        $72        $79        $90        $69        $115        $83        $93        $116        $119        $94  

Provision for income taxes

     $620        $862        $140        $179        $108        $193        $204        $156        $252        $250        $222        $210  

Net earnings attributable to Mondelēz International

     $2,891        $3,269        $775        $654        $809        $653        $825        $740        $858        $846        $943        $819  

Diluted earnings per share attributable to Mondelēz International

     $1.84        $2.14        $0.49        $0.41        $0.51        $0.42        $0.53        $0.48        $0.56        $0.56        $0.63        $0.55  

See Schedule 2 of Exhibit 99.1 to this Current Report for reconciliations of the differences between these revised adjusted (non-GAAP) financial measures and their most directly comparable revised (GAAP) financial measures. Equity method investment net earnings and Provision for income taxes are components used to calculate Net earnings and Diluted earnings per share attributable to Mondelēz International.

Non-GAAP Financial Measures

We use non-GAAP financial information and believe it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results, and provide additional insight and transparency on how we evaluate our business. We use non-GAAP financial measures to budget, make operating and strategic decisions and evaluate our performance. We have detailed below the non-GAAP adjustments that we make in our non-GAAP definitions affected by this change in accounting principle. 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. We believe the non-GAAP measures should always be considered along with the related U.S. GAAP financial measures.

 

2


The definitions of our non-GAAP financial measures did not change as a result of this change in accounting principle. For all periods presented in this Form 8-K, our non-GAAP financial measure Adjusted EPS is defined below and can also be found within our historically reported Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q for periods presented. As new events or circumstances arise, this definition could change over time. When definitions change, we provide the updated definitions and present the related non-GAAP historical results on a comparable basis (1).

Adjusted EPS – defined as diluted EPS attributable to Mondelēz International from continuing operations excluding the impacts of the 2014-2018 Restructuring Program (2); gains or losses (including non-cash impairment charges) on goodwill and intangible assets; net earnings from divestitures (3); divestiture (3) or acquisition gains or losses and related divestiture (3), acquisition and integration costs (3); mark-to-market impacts from commodity and forecasted currency transaction derivative contracts (4); impact from resolution of tax matters (5); CEO transition remuneration (6); impact from pension participation changes (7); incremental expenses related to the 2017 malware incident; losses on debt extinguishment and related expenses; gains or losses on interest rate swaps no longer designated as accounting cash flow hedges due to changed financing and hedging plans; gain on equity method investment transactions; and U.S. tax reform discrete impacts (8). Similarly, within Adjusted EPS, our equity method investment net earnings exclude our proportionate share of our investees’ unusual or infrequent items (9). We believe that Adjusted EPS provides improved comparability of underlying operating results. We also evaluate growth in our Adjusted EPS on a constant currency basis (10).

 

  (1)

When items no longer impact our current or future presentation of non-GAAP operating results, we remove these items from our non-GAAP definitions. During the second quarter of 2018, we added to the non-GAAP definitions the exclusion of the impact from pension participation changes - see footnote (7) below.

 

  (2)

Non-GAAP adjustments related to the 2014-2018 Restructuring Program reflect costs incurred that relate to the objectives of our program to transform our supply chain network and organizational structure. Costs that do not meet the program objectives are not reflected in the non-GAAP adjustments.

 

  (3)

Divestitures include completed sales of businesses and exits of major product lines upon completion of a sale or licensing agreement. Refer to Note 2, Divestitures and Acquisitions, in our Annual Report on Form 10-K for the year ended December 31, 2017 for more information on divestitures and acquisitions impacting the comparability of our results.

 

  (4)

During the third quarter of 2016, we began to exclude unrealized gains and losses (mark-to-market impacts) from outstanding commodity and forecasted currency transaction derivatives from our non-GAAP earnings measures until such time that the related exposures impact our operating results. Since we purchase commodity and forecasted currency contracts to mitigate price volatility primarily for inventory requirements in future periods, we made this adjustment to remove the volatility of these future inventory purchases on current operating results to facilitate comparisons of our underlying operating performance across periods. We also discontinued designating commodity and forecasted currency transaction derivatives for hedge accounting treatment. To facilitate comparisons of our underlying operating results, we have recast all historical non-GAAP earnings measures to exclude the mark-to-market impacts.

 

  (5)

Refer to Note 12, Commitments and Contingencies – Tax Matters, in our Annual Report on Form 10-K for the year ended December 31, 2017 for additional information.

 

  (6)

On November 20, 2017, Dirk Van de Put succeeded Irene Rosenfeld as CEO of Mondelēz International in advance of her retirement at the end of March 2018. In order to incent Mr. Van de Put to join us, we provided him compensation with a total combined target value of $42.5 million to make him whole for incentive awards he forfeited or grants that were not made to him when he left his former employer. The compensation we granted took the form of cash, deferred stock units, performance share units and stock options. In connection with Irene Rosenfeld’s retirement, we made her outstanding grants of performance share units for the 2016-2018 and 2017-2019 performance cycles eligible for continued vesting and approved a $0.5 million salary for her service as Chairman from January through March 2018. We refer to these elements of Mr. Van de Put’s and Ms. Rosenfeld’s compensation arrangements together as “CEO transition remuneration.” We are excluding amounts we expense as CEO transition remuneration from our 2017 and future non-GAAP results because those amounts are not part of our regular compensation program and are incremental to amounts we would have incurred as ongoing CEO compensation. As a result, in 2017, we excluded amounts expensed for the cash payment to Mr. Van de Put and partial vesting of his equity grants. In 2018, we excluded amounts paid for Ms. Rosenfeld’s service as Chairman and partial vesting of Mr. Van de Put’s and Ms. Rosenfeld’s equity grants.

 

  (7)

The impact from pension participation changes represents the charges incurred when employee groups are withdrawn from multiemployer pension plans and other changes in employee group pension plan participation. We exclude these charges from our non–GAAP results because those amounts do not reflect our ongoing pension obligations. See Note 10, Benefit Plans, in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018 for more information on the multiemployer pension plan partial withdrawal.

 

3


  (8)

On December 22, 2017, the United States enacted tax reform legislation that included a broad range of business tax provisions. As further detailed in Note 14, Income Taxes, in our Annual Report on Form 10-K for the year ended December 31, 2017, our accounting for the new legislation is not complete and we have made reasonable estimates for some tax provisions. We exclude the discrete U.S. tax reform impacts from our Adjusted EPS as they do not reflect our ongoing tax obligations under U.S. tax reform.

  (9)

We have excluded our proportionate share of our equity method investees’ unusual or infrequent items such as acquisition and divestiture related costs, restructuring program costs and discrete U.S. tax reform impacts, in order to provide investors with a comparable view of our performance across periods. Although we have shareholder rights and board representation commensurate with our ownership interests in our equity method investees and review the underlying operating results and unusual or infrequent items with them each reporting period, we do not have direct control over their operations or resulting revenue and expenses. Our use of equity method investment net earnings on an adjusted basis is not intended to imply that we have any such control. Our GAAP “diluted EPS attributable to Mondelēz International from continuing operations” includes all of the investees’ unusual and infrequent items.

  (10)

Constant currency operating results are calculated by dividing or multiplying, as appropriate, the current-period local currency operating results by the currency exchange rates used to translate the 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.

We believe that the presentation of these non-GAAP financial measures, when considered together with our U.S. GAAP financial measures and the reconciliations to the corresponding U.S. GAAP financial measures, helps provide a more complete understanding of the factors and trends affecting our business than could be obtained absent these disclosures. Because non-GAAP financial measures vary among companies, the non-GAAP financial measures presented in this report may not be comparable to similarly titled measures used by other companies. Our use of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for any U.S. GAAP financial measure. A limitation of the non-GAAP financial measures is they do not include all items of income and expense that affect us and have an impact on our U.S. GAAP reported results. The best way to address this limitation is by evaluating our non-GAAP financial measures in combination with our U.S. GAAP reported results and carefully evaluating the reconciliations of U.S. GAAP reported figures to the non-GAAP financial measures.

Financial Schedules

Exhibit 99.1 to this Form 8-K contains financial schedules that provide the reconciliations for our revised reported equity method investment net earnings, net earnings and EPS and our non-GAAP financial results for Adjusted EPS after this change in accounting principle for the first half of 2018, all quarters of 2018 and 2017 and for the years ended December 31, 2017, 2016 and 2015.

Item 9.01. Financial Statements and Exhibits.

(d) The following exhibit is being furnished with this Current Report on Form 8-K.

 

               99.1 Financial schedules – Unaudited GAAP and Non-GAAP Financial Information.

 

4


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

MONDELĒZ INTERNATIONAL, INC.
By:  /s/ Luca Zaramella                                

Name: Luca Zaramella

Title: Executive Vice President and

           Chief Financial Officer

Date: October 16, 2018

 

5

EX-99.1

Exhibit 99.1

U.S. GAAP to Non-GAAP Reconciliations

In addition to reporting our U.S. GAAP operating results, we have historically reported non-GAAP financial information. Refer also to our Quarterly Reports on Form 10-Q and our Annual Report on Form 10-K for the periods presented for additional information on our GAAP to non-GAAP adjustments.

Schedule 1.1

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 Six Months Ended June 30, 2018
     As
  Reported  
    Remove  
current
period
Keurig
results
  Add
prior
period
Keurig
  results  
   Net
change
  in taxes  
  As
  Revised  

Net revenues

     $   12,877              $   12,877  

Cost of sales

     7,488              7,488  
  

 

 

 

        

 

 

 

Gross profit

     5,389              5,389  

Gross profit margin

     41.8%              41.8%  

Selling, general and administrative expenses

     3,431              3,431  

Asset impairment and exit costs

     165              165  

Amortization of intangibles

     88              88  
  

 

 

 

        

 

 

 

Operating income

     1,705              1,705  

Operating income margin

     13.2%              13.2%  

Benefit plan non-service income

     (28            (28

Interest and other expense, net

     328              328  
  

 

 

 

        

 

 

 

Earnings before income taxes

     1,405              1,405  

Provision for income taxes

     (321          $ (31     (352

Effective tax rate

     22.8%              25.1%  

Equity method investment net earnings

     185       $ (36     $ 170          319  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Net earnings

     1,269       (36     170        (31     1,372  

Noncontrolling interest earnings

     (8            (8
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Net earnings attributable to Mondelēz International

     $ 1,261       $ (36     $ 170        $ (31     $ 1,364  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Per share data:

           

Basic earnings per share attributable to Mondelēz International

     $ 0.85              $ 0.92  
  

 

 

 

        

 

 

 

Diluted earnings per share attributable to Mondelēz International

     $ 0.84              $ 0.91  
  

 

 

 

        

 

 

 

Average shares outstanding:

           

Basic

     1,482              1,482  

Diluted

     1,496              1,496  

 

6


Schedule 1.2

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, 2018
     As
  Reported  
    Remove  
current
period
Keurig
results
  Add
prior
  period  
Keurig
results
   Net
change
  in taxes  
  As
  Revised  

Net revenues

     $   6,112              $ 6,112  

Cost of sales

     3,572              3,572  
  

 

 

 

        

 

 

 

Gross profit

     2,540              2,540  

Gross profit margin

     41.6%              41.6%  

Selling, general and administrative expenses

     1,904              1,904  

Asset impairment and exit costs

     111              111  

Amortization of intangibles

     44              44  
  

 

 

 

        

 

 

 

Operating income

     481              481  

Operating income margin

     7.9%              7.9%  

Benefit plan non-service income

     (15            (15

Interest and other expense, net

     248              248  
  

 

 

 

        

 

 

 

Earnings before income taxes

     248              248  

Provision for income taxes

     (14          $ (1     (15

Effective tax rate

     5.6%              6.0%  

Equity method investment net earnings

     91       $ (20     $ 16          87  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Net earnings

     325       (20     16        (1     320  

Noncontrolling interest earnings

     (2            (2
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Net earnings attributable to Mondelēz International

     $ 323       $ (20     $ 16        $ (1     $ 318  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Per share data:

           

Basic earnings per share attributable to Mondelēz International

     $ 0.22              $ 0.22  
  

 

 

 

        

 

 

 

Diluted earnings per share attributable to Mondelēz International

     $ 0.22              $ 0.21  
  

 

 

 

        

 

 

 

Average shares outstanding:

           

Basic

     1,475              1,475  

Diluted

     1,488              1,488  

 

7


Schedule 1.3

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 March 31, 2018
     As
  Reported  
    Remove  
current
period
Keurig
results
  Add
prior
  period  
Keurig
results
   Net
change
  in taxes  
  As
  Revised  

Net revenues

     $   6,765              $ 6,765  

Cost of sales

     3,916              3,916  
  

 

 

 

        

 

 

 

Gross profit

     2,849              2,849  

Gross profit margin

     42.1%              42.1%  

Selling, general and administrative expenses

     1,527              1,527  

Asset impairment and exit costs

     54              54  

Amortization of intangibles

     44              44  
  

 

 

 

        

 

 

 

Operating income

     1,224              1,224  

Operating income margin

     18.1%              18.1%  

Benefit plan non-service income

     (13            (13

Interest and other expense, net

     80              80  
  

 

 

 

        

 

 

 

Earnings before income taxes

     1,157              1,157  

Provision for income taxes

     (307          $ (30     (337

Effective tax rate

     26.5%              29.1%  

Equity method investment net earnings

     94       $ (16     $ 154          232  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Net earnings

     944       (16     154        (30     1,052  

Noncontrolling interest earnings

     (6            (6
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Net earnings attributable to Mondelēz International

     $ 938       $ (16     $ 154        $ (30     $ 1,046  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Per share data:

           

Basic earnings per share attributable to Mondelēz International

     $ 0.63              $ 0.70  
  

 

 

 

        

 

 

 

Diluted earnings per share attributable to Mondelēz International

     $ 0.62              $ 0.70  
  

 

 

 

        

 

 

 

Average shares outstanding:

           

Basic

     1,489              1,489  

Diluted

     1,505              1,505  

 

8


Schedule 1.4

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 Twelve Months Ended December 31, 2017
     As
  Reported  
    Remove  
current
period
Keurig
results
  Add
prior
period
  Keurig  
results
   Net
change
  in taxes  
   As
  Revised  

Net revenues

     $   25,896               $ 25,896  

Cost of sales

     15,862               15,862  
  

 

 

 

         

 

 

 

Gross profit

     10,034               10,034  

Gross profit margin

     38.7%               38.7%  

Selling, general and administrative expenses

     5,938               5,938  

Asset impairment and exit costs

     642               642  

(Gain)/loss on divestitures

     (186             (186

Amortization of intangibles

     178               178  
  

 

 

 

         

 

 

 

Operating income

     3,462               3,462  

Operating income margin

     13.4%               13.4%  

Benefit plan non-service income

     (44             (44

Interest and other expense, net

     382               382  
  

 

 

 

         

 

 

 

Earnings before income taxes

     3,124               3,124  

Provision for income taxes

     (688          $ 22        (666

Effective tax rate

     22.0%               21.3%  

Gain on equity method investment transactions

     40               40  

Equity method investment net earnings

     460       $ (208     $ 92           344  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings

     2,936       (208     92        22        2,842  

Noncontrolling interest earnings

     (14             (14
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings attributable to Mondelēz International

     $ 2,922       $ (208     $ 92        $ 22        $ 2,828  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Per share data:

            

Basic earnings per share attributable to Mondelēz International

     $ 1.93               $ 1.87  
  

 

 

 

         

 

 

 

Diluted earnings per share attributable to Mondelēz International

     $ 1.91               $ 1.85  
  

 

 

 

         

 

 

 

Average shares outstanding:

            

Basic

     1,513               1,513  

Diluted

     1,531               1,531  

 

9


Schedule 1.5

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 December 31, 2017
     As
  Reported  
    Remove  
current
period
Keurig
results
  Add
prior
period
  Keurig  
results
   Net
change
  in taxes  
   As
  Revised  

Net revenues

     $   6,966               $ 6,966  

Cost of sales

     4,313               4,313  
  

 

 

 

         

 

 

 

Gross profit

     2,653               2,653  

Gross profit margin

     38.1%               38.1%  

Selling, general and administrative expenses

     1,662               1,662  

Asset impairment and exit costs

     118               118  

(Gain)/loss on divestitures

     (2             (2

Amortization of intangibles

     45               45  
  

 

 

 

         

 

 

 

Operating income

     830               830  

Operating income margin

     11.9%               11.9%  

Benefit plan non-service income

     (14             (14

Interest and other expense, net

     120               120  
  

 

 

 

         

 

 

 

Earnings before income taxes

     724               724  

Provision for income taxes

     (178        $ 22        (156

Effective tax rate

     24.6%               21.5%  

Gain on equity method investment transactions

     40               40  

Equity method investment net earnings

     224       $ (154     $ 25           95  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings

     810       (154     25        22        703  

Noncontrolling interest earnings

     (8             (8
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings attributable to Mondelēz International

     $ 802       $ (154     $ 25        $ 22        $ 695  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Per share data:

            

Basic earnings per share attributable to Mondelēz International

     $ 0.54               $ 0.46  
  

 

 

 

         

 

 

 

Diluted earnings per share attributable to Mondelēz International

     $ 0.53               $ 0.46  
  

 

 

 

         

 

 

 

Average shares outstanding:

            

Basic

     1,497               1,497  

Diluted

     1,513               1,513  

 

10


Schedule 1.6

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 September 30, 2017
     As
  Reported  
    Remove  
current
period
Keurig
results
  Add
prior
period
  Keurig  
results
   Net
change
  in taxes  
   As
  Revised  

Net revenues

     $   6,530               $ 6,530  

Cost of sales

     3,981               3,981  
  

 

 

 

         

 

 

 

Gross profit

     2,549               2,549  

Gross profit margin

     39.0%               39.0%  

Selling, general and administrative expenses

     1,338               1,338  

Asset impairment and exit costs

     182               182  

(Gain)/loss on divestitures

     (187             (187

Amortization of intangibles

     45               45  
  

 

 

 

         

 

 

 

Operating income

     1,171               1,171  

Operating income margin

     17.9%               17.9%  

Benefit plan non-service income

     (10             (10

Interest and other expense, net

     19               19  
  

 

 

 

         

 

 

 

Earnings before income taxes

     1,162               1,162  

Provision for income taxes

     (272          $ -        (272

Effective tax rate

     23.4%               23.4%  

Equity method investment net earnings

     103       $ (25     $ 14           92  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings

     993       (25     14        -        982  

Noncontrolling interest earnings

     (1             (1
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings attributable to Mondelēz International

     $ 992       $ (25     $ 14        $         -        $ 981  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Per share data:

            

Basic earnings per share attributable to Mondelēz International

     $ 0.66               $ 0.65  
  

 

 

 

         

 

 

 

Diluted earnings per share attributable to Mondelēz International

     $ 0.65               $ 0.64  
  

 

 

 

         

 

 

 

Average shares outstanding:

            

Basic

     1,507               1,507  

Diluted

     1,524               1,524  

 

11


Schedule 1.7

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, 2017
     As
  Reported  
    Remove  
current
period
Keurig
results
  Add
prior
  period  
Keurig
results
   Net
change
  in taxes  
   As
  Revised  

Net revenues

     $   5,986               $   5,986  

Cost of sales

     3,672               3,672  
  

 

 

 

         

 

 

 

Gross profit

     2,314               2,314  

Gross profit margin

     38.7%               38.7%  

Selling, general and administrative expenses

     1,455               1,455  

Asset impairment and exit costs

     176               176  

(Gain)/loss on divestitures

     3               3  

Amortization of intangibles

     44               44  
  

 

 

 

         

 

 

 

Operating income

     636               636  

Operating income margin

     10.6%               10.6%  

Benefit plan non-service income

     (5             (5

Interest and other expense, net

     124               124  
  

 

 

 

         

 

 

 

Earnings before income taxes

     517               517  

Provision for income taxes

     (84          $ -        (84

Effective tax rate

     16.2%               16.2%  

Equity method investment net earnings

     67       $ (15     $ 15           67  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings

     500       (15     15        -        500  

Noncontrolling interest earnings

     (2             (2
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings attributable to Mondelēz International

     $ 498       $ (15     $ 15        $         -        $ 498  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Per share data:

            

Basic earnings per share attributable to Mondelēz International

     $ 0.33               $ 0.33  
  

 

 

 

         

 

 

 

Diluted earnings per share attributable to Mondelēz International

     $ 0.32               $ 0.32  
  

 

 

 

         

 

 

 

Average shares outstanding:

            

Basic

     1,519               1,519  

Diluted

     1,539               1,539  

 

12


Schedule 1.8

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 March 31, 2017
     As
  Reported  
    Remove  
current
period
Keurig
results
  Add
prior
  period  
Keurig
results
   Net
change
  in taxes  
   As
  Revised  

Net revenues

     $   6,414               $   6,414  

Cost of sales

     3,896               3,896  
  

 

 

 

         

 

 

 

Gross profit

     2,518               2,518  

Gross profit margin

     39.3%               39.3%  

Selling, general and administrative expenses

     1,483               1,483  

Asset impairment and exit costs

     166               166  

Amortization of intangibles

     44               44  
  

 

 

 

         

 

 

 

Operating income

     825               825  

Operating income margin

     12.9%               12.9%  

Benefit plan non-service income

     (15             (15

Interest and other expense, net

     119               119  
  

 

 

 

         

 

 

 

Earnings before income taxes

     721               721  

Provision for income taxes

     (154          $ -        (154

Effective tax rate

     21.4%               21.4%  

Equity method investment net earnings

     66       $ (14     $ 38           90  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings

     633       (14     38        -        657  

Noncontrolling interest earnings

     (3             (3
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings attributable to Mondelēz International

     $ 630       $ (14     $ 38        $         -        $ 654  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Per share data:

            

Basic earnings per share attributable to Mondelēz International

     $ 0.41               $ 0.43  
  

 

 

 

         

 

 

 

Diluted earnings per share attributable to Mondelēz International

     $ 0.41               $ 0.42  
  

 

 

 

         

 

 

 

Average shares outstanding:

            

Basic

     1,529               1,529  

Diluted

     1,550               1,550  

 

13


Schedule 1.9

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 Twelve Months Ended December 31, 2016
     As
  Reported  
    Remove  
current
period
Keurig
results
  Add
prior
  period  
Keurig
results
   Net
change
  in taxes  
   As
  Revised  

Net revenues

     $   25,923               $  25,923  

Cost of sales

     15,819               15,819  
  

 

 

 

         

 

 

 

Gross profit

     10,104               10,104  

Gross profit margin

     39.0%               39.0%  

Selling, general and administrative expenses

     6,546               6,546  

Asset impairment and exit costs

     837               837  

(Gain)/loss on divestitures

     (9             (9

Amortization of intangibles

     176               176  
  

 

 

 

         

 

 

 

Operating income

     2,554               2,554  

Operating income margin

     9.9%               9.9%  

Benefit plan non-service income

     (15             (15

Interest and other expense, net

     1,115               1,115  
  

 

 

 

         

 

 

 

Earnings before income taxes

     1,454               1,454  

Provision for income taxes

     (129          $ 15        (114

Effective tax rate

     8.9%               7.8%  

Gain on equity method investment transactions

     43               43  

Equity method investment net earnings

     301       $ (77     $ 38           262  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings

     1,669       (77     38        15        1,645  

Noncontrolling interest earnings

     (10             (10
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Net earnings attributable to Mondelēz International

     $ 1,659       $ (77     $ 38        $ 15        $ 1,635  
  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

  

 

 

 

Per share data:

            

Basic earnings per share attributable to Mondelēz International

     $ 1.07               $ 1.05  
  

 

 

 

         

 

 

 

Diluted earnings per share attributable to Mondelēz International

     $ 1.05               $ 1.04  
  

 

 

 

         

 

 

 

Average shares outstanding:

            

Basic

     1,556               1,556  

Diluted

     1,573               1,573  

 

14


Schedule 2.1

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, 2018
    Operating
Income
  Benefit
plan non-
service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 1,705       $ (28     $ 328       $ 1,405       $ 352       25.1%       $ (319     $ 8       $ 1,364       $ 0.91  

2014-2018 Restructuring Program costs

    293       (3     -       296       77         -       -       219       0.15  

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

    (294     -       -       (294     (39       -       -       (255     (0.17

Acquisition integration costs

    3       -       -       3       -         -       -       3       -  

Acquisition-related costs

    13       -       -       13       3         -       -       10       0.01  

Divestiture-related costs

    (3     -       -       (3     (2       -       -       (1     -  

Impact of pension participation changes

    408       -       -       408       103         -       -       305       0.20  

Impacts from resolution of tax matters

    11       -       (4     15       15         -       -       -       -  

CEO transition remuneration

    14       -       -       14       3         -       -       11       0.01  

(Gain)/loss related to interest rate swaps

    -       -       9       (9     (2       -       -       (7     (0.01

Loss on debt extinguishment and related expenses

    -       -       (140     140       35         -       -       105       0.07  

U.S. tax reform discrete net tax (benefit)/expense

    -       -       -       -       (87       -       -       87       0.06  

Equity method investee acquisition-related and other adjustments

    -       -       -       -       (26       106       -       (80     (0.05

Rounding

    1       -       -       1       -         -       -       1       -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $   2,151       $   (31     $   193       $   1,989       $   432         21.7%       $   (213     $   8       $   1,762       $   1.18  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

   

Currency

                    (83     (0.06
                 

 

 

 

 

 

 

 

Adjusted @ Constant FX (Non-GAAP) - As Revised

                    $ 1,679       $ 1.12  
                 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                        1,496  
    For the Six Months Ended June 30, 2017
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 1,461       $ (20     $ 243       $ 1,238       $ 238       19.2%       $ (157     $ 5       $ 1,152       $ 0.75  

2014-2018 Restructuring Program costs

    410       (12     -       422       106         -       -       316       0.21  

Intangible asset impairment charges

    38       -       -       38       14         -       -       24       0.02  

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

    97       -       -       97       3         -       -       94       0.06  

Malware incident incremental expenses

    7       -       -       7       2         -       -       5       -  

Acquisition integration costs

    1       -       -       1       -         -       -       1       -  

Divestiture-related costs

    23       -       (5     28       5         -       -       23       0.01  

Net earnings from divestitures

    (55     -       -       (55     (15       4       -       (44     (0.03

(Gain)/loss on divestitures

    3       -       -       3       (4       -       -       7       -  

Impacts from resolution of tax matters

    (46     -       12       (58     -         -       -       (58     (0.04

Loss on debt extinguishment and related expenses

    -       -       (11     11       4         -       -       7       0.01  

Equity method investee acquisition-related and other adjustments

    -       -       -       -       7         (45     -       38       0.02  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $ 1,939       $ (32     $ 239       $ 1,732       $ 360       20.8%       $ (198     $ 5       $ 1,565       $ 1.01  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                      1,544  

 

(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.

 

15


Schedule 2.2

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, 2018
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 481       $ (15     $ 248       $ 248       $ 15       6.0%       $ (87     $ 2       $ 318       $ 0.21  

2014-2018 Restructuring Program costs

    179       (3     -       182       47         -       -       135       0.09  

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

    (88     -       -       (88     (14       -       -       (74     (0.05

Acquisition integration costs

    2       -       -       2       -         -       -       2       -  

Acquisition-related costs

    13       -       -       13       3         -       -       10       0.01  

Impact of pension participation changes

    408       -       -       408       103         -       -       305       0.20  

Impacts from resolution of tax matters

    11       -       (4     15       15         -       -       -       -  

CEO transition remuneration

    10       -       -       10       2         -       -       8       0.01  

(Gain)/loss related to interest rate swaps

    -       -       (5     5       1         -       -       4       -  

Loss on debt extinguishment and related expenses

    -       -       (140     140       35         -       -       105       0.07  

U.S. tax reform discrete net tax (benefit)/expense

    -       -       -       -       2         -       -       (2     -  

Equity method investee acquisition-related and other adjustments

    -       -       -       -       1         (7     -       6       0.01  

Rounding

    2       -       -       2       -         -       -       2       -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $   1,018       $   (18     $   99       $   937       $   210         22.4%       $   (94     $   2       $   819       $   0.55  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

   

Currency

                    (11     (0.01
                 

 

 

 

 

 

 

 

Adjusted @ Constant FX (Non-GAAP) - As Revised

                    $ 808       $ 0.54  
                 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                        1,488  
    For the Three Months Ended June 30, 2017
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 636       $ (5     $ 124       $ 517       $ 84       16.2%       $ (67     $ 2       $ 498       $ 0.32  

2014-2018 Restructuring Program costs

    199       (12     -       211       58         -       -       153       0.10  

Intangible asset impairment charges

    38       -       -       38       14         -       -       24       0.02  

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

    46       -       -       46       -         -       -       46       0.03  

Malware incident incremental expenses

    7       -       -       7       2         -       -       5       -  

Divestiture-related costs

    4       -       (5     9       2         -       -       7       -  

Net earnings from divestitures

    (28     -       -       (28     (8       2       -       (22     (0.01

(Gain)/loss on divestitures

    3       -       -       3       (4       -       -       7       -  

Loss on debt extinguishment and related expenses

    -       -       (11     11       4         -       -       7       0.01  

Equity method investee acquisition-related and other adjustments

    -       -       -       -       4         (18     -       14       0.01  

Rounding

    1       -       -       1       -         -       -       1       -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $ 906       $ (17     $ 108       $ 815       $ 156       19.1%       $ (83     $ 2       $ 740       $ 0.48  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                      1,539  

 

(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.

 

16


Schedule 2.3

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 March 31, 2018
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 1,224       $ (13     $ 80       $ 1,157       $ 337       29.1%       $ (232     $ 6       $ 1,046       $ 0.70  

2014-2018 Restructuring Program costs

    114       -       -       114       30         -       -       84       0.06  

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

    (206     -       -       (206     (25       -       -       (181     (0.12

Acquisition integration costs

    1       -       -       1       -         -       -       1       -  

Divestiture-related costs

    (3     -       -       (3     (2       -       -       (1     -  

CEO transition remuneration

    4       -       -       4       1         -       -       3       -  

(Gain)/loss related to interest rate swaps

    -       -       14       (14     (3       -       -       (11     (0.01

U.S. tax reform discrete net tax (benefit)/expense

    -       -       -       -       (89       -       -       89       0.06  

Equity method investee acquisition-related and other adjustments

    -       -       -       -       (27       113       -       (86     (0.06

Rounding

    (1     -       -       (1     -         -       -       (1     -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $ 1,133       $ (13     $ 94       $   1,052       $ 222       21.1%       $ (119     $ 6       $ 943       $ 0.63  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

   

Currency

                    (72     (0.05
                 

 

 

 

 

 

 

 

Adjusted @ Constant FX (Non-GAAP) - As Revised

                    $ 871       $ 0.58  
                 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                        1,505  
    For the Three Months Ended March 31, 2017
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 825       $ (15     $ 119       $ 721       $ 154       21.4%       $ (90     $ 3       $ 654       $ 0.42  

2014-2018 Restructuring Program costs

    211       -       -       211       48         -       -       163       0.10  

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

    51       -       -       51       3         -       -       48       0.03  

Acquisition integration costs

    1       -       -       1       -         -       -       1       -  

Divestiture-related costs

    19       -       -       19       3         -       -       16       0.01  

Net earnings from divestitures

    (27     -       -       (27     (7       2       -       (22     (0.01

Impacts from resolution of tax matters

    (46     -       12       (58     -         -       -       (58     (0.04

Equity method investee acquisition-related and other adjustments

    -       -       -       -       3         (27     -       24       0.02  

Rounding

    (1     -       -       (1     -         -       -       (1     -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $   1,033       $   (15     $   131       $   917       $   204         22.2%       $   (115     $   3       $   825       $   0.53  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                        1,550  

 

(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.

 

17


Schedule 2.4

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 Twelve Months Ended December 31, 2017
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Gain on
Equity
Method
Investment
Transactions
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 3,462       $ (44     $ 382       $ 3,124       $ 666       21.3%       $ (344     $ (40     $ 14       $ 2,828       $ 1.85  

2014-2018 Restructuring Program costs

    777       (15     -       792       190         -       -       -       602       0.39  

Intangible asset impairment charges

    109       -       -       109       30         -       -       -       79       0.05  

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

    96       -       -       96       6         -       -       -       90       0.06  

Malware incident incremental expenses

    84       -       -       84       27         -       -       -       57       0.04  

Acquisition integration costs

    3       -       -       3       -         -       -       -       3       -  

Divestiture-related costs

    31       -       (3     34       (8       -       -       -       42       0.02  

Net earnings from divestitures

    (61     -       -       (61     (15       6       -       -       (52     (0.03

(Gain)/loss on divestitures

    (186     -       -       (186     (7       -       -       -       (179     (0.11

Impacts from resolution of tax matters

    (209     -       72       (281     (75       -       -       -       (206     (0.13

CEO transition remuneration

    14       -       -       14       5         -       -       -       9       0.01  

Loss on debt extinguishment and related expenses

    -       -       (11     11       4         -       -       -       7       -  

U.S. tax reform discrete net tax (benefit)/expense

    -       -       -       -       44         -       -       -       (44     (0.03

Gain on equity method investment transactions

    -       -       -       -       (15       -       40       -       (25     (0.02

Equity method investee acquisition-related and other adjustments

    -       -       -       -       10         (69     -       -       59       0.04  

Rounding

    (1     -       -       (1     -         -       -       -       (1     -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $   4,119       $ (59     $ 440       $ 3,738       $ 862       23.1%       $ (407     $ -       $ 14       $ 3,269       $ 2.14  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

   

Currency

                      (15     (0.01
                   

 

 

 

 

 

 

 

Adjusted @ Constant FX (Non-GAAP) - As Revised

                      $ 3,254       $ 2.13  
                   

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                        1,531  
    For the Twelve Months Ended December 31, 2016
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Gain on
Equity
Method
Investment
Transactions
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 2,554       $ (15     $ 1,115       $ 1,454       $ 114       7.8%       $ (262     $ (43     $ 10       $ 1,635       $ 1.04  

2014-2018 Restructuring Program costs

    1,072       (14     -       1,086       288         -       -       -       798       0.51  

Intangible asset impairment charges

    137       -       -       137       37         -       -       -       100       0.06  

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

    94       -       -       94       11         -       -       -       83       0.05  

Acquisition integration costs

    7       -       -       7       -         -       -       -       7       0.01  

Acquisition-related costs

    1       -       -       1       -         -       -       -       1       -  

Divestiture-related costs

    86       -       -       86       15         -       -       -       71       0.05  

Net earnings from divestitures

    (153     -       -       (153     (40       12       -       -       (125     (0.08

(Gain)/loss on divestitures

    (9     -       -       (9     -         -       -       -       (9     -  

(Income)/costs associated with the JDE coffee business transactions

    (2     -       -       (2     (3       -       -       -       1       -  

(Gain)/loss on sale of intangible assets

    (15     -       -       (15     (3       -       -       -       (12     (0.01

(Gain)/loss related to interest rate swaps

    -       -       (97     97       36         -       -       -       61       0.04  

Loss on debt extinguishment and related expenses

    -       -       (427     427       163         -       -       -       264       0.17  

Gain on equity method investment transactions

    -       -       -       -       (2       -       43       -       (41     (0.03

Equity method investee acquisition-related and other adjustments

    -       -       -       -       3         (60     -       -       57       0.03  

Rounding

    1       -       -       1       1         -       -       -       -       -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $   3,773       $ (29     $ 591       $   3,211       $   620       19.3%       $ (310     $ -       $ 10       $ 2,891       $ 1.84  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                        1,573  

 

(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.

 

18


Schedule 2.5

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 December 31, 2017
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Gain on
Equity
Method
Investment
Transactions
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 830       $ (14     $ 120       $ 724       $ 156       21.5%       $ (95     $ (40     $ 8       $ 695       $ 0.46  

2014-2018 Restructuring Program costs

    192       (3     -       195       35         -       -       -       160       0.11  

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

    27       -       -       27       6         -       -       -       21       0.01  

Malware incident incremental expenses

    30       -       -       30       10         -       -       -       20       0.01  

Acquisition integration costs

    1       -       -       1       -         -       -       -       1       -  

Divestiture-related costs

    9       -       -       9       5         -       -       -       4       -  

Net earnings from divestitures

    (1     -       -       (1     -         -       -       -       (1     -  

(Gain)/loss on divestitures

    (2     -       -       (2     5         -       -       -       (7     -  

Impacts from resolution of tax matters

    (8     -       -       (8     (3       -       -       -       (5     -  

CEO transition remuneration

    14       -       -       14       5         -       -       -       9       0.01  

U.S. tax reform discrete net tax (benefit)/expense

    -       -       -       -       44         -       -       -       (44     (0.03

Gain on equity method investment transactions

    -       -       -       -       (15       -       40       -       (25     (0.02

Equity method investee acquisition-related and other adjustments

    -       -       -       -       2         (21     -       -       19       0.01  

Rounding

    (1     -       -       (1     -         -       -       -       (1     -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $ 1,091       $ (17     $ 120       $ 988       $   250       25.3%       $ (116     $ -       $ 8       $ 846       $ 0.56  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

   

Currency

                      (55     (0.04
                   

 

 

 

 

 

 

 

Adjusted @ Constant FX (Non-GAAP) - As Revised

                      $ 791       $ 0.52  
                   

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                        1,513  
    For the Three Months Ended December 31, 2016
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Gain on
Equity
Method
Investment
Transactions
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 505       $ (2     $ 575       $ (68     $ (78     114.7%       $ (54     $ -       $ -       $ 64       $ 0.04  

2014-2018 Restructuring Program costs

    319       (1     -       320       89         -       -       -       231       0.15  

Intangible asset impairment charges

    107       -       -       107       28         -       -       -       79       0.05  

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

    45       -       -       45       5         -       -       -       40       0.03  

Acquisition integration costs

    1       -       -       1       -         -       -       -       1       -  

Acquisition-related costs

    1       -       -       1       -         -       -       -       1       -  

Divestiture-related costs

    2       -       -       2       (4       -       -       -       6       -  

Net earnings from divestitures

    (48     -       -       (48     (12       2       -       -       (38     (0.03

(Gain)/loss on divestitures

    (9     -       -       (9     -         -       -       -       (9     -  

(Gain)/loss on sale of intangible assets

    (2     -       -       (2     (1       -       -       -       (1     -  

(Gain)/loss related to interest rate swaps

    -       -       -       -       1         -       -       -       (1     -  

Loss on debt extinguishment and related expenses

    -       -       (427     427       163         -       -       -       264       0.17  

Equity method investee acquisition-related and other adjustments

    -       -       -       -       1         (17     -       -       16       0.01  

Rounding

    1       -       -       1       1         -       -       -       -       -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $ 922       $ (3     $ 148       $ 777       $   193       24.8%       $ (69     $ -       $ -       $ 653       $ 0.42  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                        1,559  

 

(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.

 

19


Schedule 2.6

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 September 30, 2017
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 1,171       $ (10     $ 19       $ 1,162       $ 272       23.4%       $ (92     $ 1       $ 981       $ 0.64  

2014-2018 Restructuring Program costs

    175       -       -       175       49         -       -       126       0.08  

Intangible asset impairment charges

    71       -       -       71       16         -       -       55       0.04  

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

    (28     -       -       (28     (3       -       -       (25     (0.02

Malware incident incremental expenses

    47       -       -       47       15         -       -       32       0.02  

Acquisition integration costs

    1       -       -       1       -         -       -       1       -  

Divestiture-related costs

    -       -       2       (2     (18       -       -       16       0.01  

Net earnings from divestitures

    (5     -       -       (5     -         2       -       (7     -  

(Gain)/loss on divestitures

    (187     -       -       (187     (8       -       -       (179     (0.12

Impacts from resolution of tax matters

    (155     -       60       (215     (72       -       -       (143     (0.09

Equity method investee acquisition-related and other adjustments

    -       -       -       -       1         (3     -       2       -  

Rounding

    (1     -       -       (1     -         -       -       (1     -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $ 1,089       $ (10     $   81       $   1,018       $ 252       24.8%       $ (93     $ 1       $ 858       $ 0.56  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

   

Currency

                    (12     -  
                 

 

 

 

 

 

 

 

Adjusted @ Constant FX (Non-GAAP) - As Revised

                    $ 846       $ 0.56  
                 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                      1,524  
    For the Three Months Ended September 30, 2016
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 698       $ (4     $ 145       $ 557       $ 34       6.1%       $ (42     $ -       $ 565       $ 0.36  

2014-2018 Restructuring Program costs

    297       (4     -       301       82         -       -       219       0.14  

Intangible asset impairment charges

    4       -       -       4       -         -       -       4       -  

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

    12       -       -       12       4         -       -       8       -  

Net earnings from divestitures

    (39     -       -       (39     (12       4       -       (31     (0.02

(Income)/costs associated with the JDE coffee business transactions

    (2     -       -       (2     (1       -       -       (1     -  

(Gain)/loss on sale of intangible assets

    (7     -       -       (7     (1       -       -       (6     -  

Equity method investee acquisition-related and other adjustments

    -       -       -       -       2         (52     -       50       0.03  

Rounding

    1       -       -       1       -         -       -       1       -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $ 964       $ (8     $ 145       $ 827       $   108       13.1%       $ (90     $ -       $ 809       $ 0.51  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                      1,576  

 

(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.

 

20


Schedule 2.7

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, 2017
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 636       $ (5     $ 124       $ 517       $ 84       16.2%       $ (67     $ 2       $ 498       $ 0.32  

2014-2018 Restructuring Program costs

    199       (12     -       211       58         -       -       153       0.10  

Intangible asset impairment charges

    38       -       -       38       14         -       -       24       0.02  

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

    46       -       -       46       -         -       -       46       0.03  

Malware incident incremental expenses

    7       -       -       7       2         -       -       5       -  

Divestiture-related costs

    4       -       (5     9       2         -       -       7       -  

Net earnings from divestitures

    (28     -       -       (28     (8       2       -       (22     (0.01

(Gain)/loss on divestitures

    3       -       -       3       (4       -       -       7       -  

Loss on debt extinguishment and related expenses

    -       -       (11     11       4         -       -       7       0.01  

Equity method investee acquisition-related and other adjustments

    -       -       -       -       4         (18     -       14       0.01  

Rounding

    1       -       -       1       -         -       -       1       -  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $ 906       $ (17     $ 108       $ 815       $   156       19.1%       $ (83     $ 2       $ 740       $ 0.48  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

   

Currency

                    41       0.03  
                 

 

 

 

 

 

 

 

Adjusted @ Constant FX (Non-GAAP) - As Revised

                    $ 781       $ 0.51  
                 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                      1,539  
    For the Three Months Ended June 30, 2016
    Operating
Income
  Benefit
plan non-

service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 637       $ (1     $ 151       $ 487       $ 113       23.2%       $ (89     $ 7       $ 456       $ 0.29  

2014-2018 Restructuring Program costs

    219       (9     -       228       58         -       -       170       0.11  

Intangible asset impairment charges

    12       -       -       12       3         -       -       9       -  

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

    (17     -       -       (17     (8       -       -       (9     -  

Acquisition integration costs

    3       -       -       3       -         -       -       3       -  

Divestiture-related costs

    84       -       -       84       20         -       -       64       0.04  

Net earnings from divestitures

    (31     -       -       (31     (7       3       -       (27     (0.02

(Income)/costs associated with the JDE coffee business transactions

    1       -       -       1       1         -       -       -       -  

(Gain)/loss on sale of intangible assets

    (6     -       -       (6     (1       -       -       (5     -  

Equity method investee acquisition-related and other adjustments

    -       -       -       -       -         7       -       (7     (0.01
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (Non-GAAP) - As Revised

    $ 902       $ (10     $ 151       $ 761       $ 179       23.5%       $ (79     $ 7       $ 654       $ 0.41  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Average Shares Outstanding

                      1,576  

 

(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.

 

21


Schedule 2.8

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 March 31, 2017
    Operating
Income
  Benefit
plan non-
service
expense /
(income)
  Interest
and other
expense,
net
  Earnings
before
income
taxes
  Income
taxes (1)
  Effective
tax rate
  Equity
Method
Investment
Net Losses /
(Earnings)
  Gain on
Equity
Method
Investment
Transactions
  Non-
controlling
interest
  Net Earnings
attributable
to Mondelēz
International
  Diluted EPS
attributable
to Mondelēz
International

Reported (GAAP) - As Revised

    $ 825       $ (15     $ 119       $ 721       $ 154       21.4%       $ (90     $ -       $ 3       $ 654       $ 0.42  

2014-2018 Restructuring Program costs

    211       -       -       211       48         -       -       -       163       0.10  

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

    51       -       -       51       3         -       -       -       48       0.03  

Acquisition integration costs

    1       -       -       1       -         -       -       -       1       -  

Divestiture-related costs

    19       -       -       19       3         -       -       -       16       0.01  

Net earnings from divestitures

    (27     -       -       (27     (7       2       -       -       (22     (0.01

Impacts from resolution of tax matters

    (46     -       12       (58     -         -       -       -       (58     (0.04

Equity method investee acquisition-related and other adjustments

    -       -       -       -       3         (27     -       -       24       0.02  

Rounding

    (1     -       -       (1     -         -       -       -       (1     -