UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 7.01. | Regulation FD Disclosure. |
Mondelēz International, Inc. and subsidiaries (collectively, “we,” “our” or “Mondelēz International”) are furnishing this current report to provide supplemental non-GAAP financial information related to the retrospective impact of (1) our sale of Keurig Dr Pepper Inc. (“KDP”) shares on August 2, 2021, and (2) our sale of MaxFoods Pty Ltd (“MaxFoods”), an Australian packaged seafood business on November 1, 2021.
Due to our reporting of KDP’s results on a one-quarter lag basis, the impact of the sale of the KDP shares will affect our non-GAAP financial results beginning with our fourth quarter ended December 31, 2021. Consistent with our definitions of our non-GAAP financial measures, we will reflect the partial sale of our equity method investment in KDP as well as the sale of MaxFoods as divestitures. These changes will result in the recasting of our historical non-GAAP financial results and 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.
Change to our Historical Non-GAAP Financial Results in Connection with our Sale of KDP Shares
As previously disclosed in our Quarterly Report on Form 10-Q for the three months ended September 30, 2021, we sold approximately 14.7 million shares of KDP on August 2, 2021, which reduced our ownership interest by 1.0% to 5.3% of the total outstanding shares. We received $500 million of proceeds and recorded a pre-tax gain of $248 million (or $189 million after tax) during the third quarter of 2021.
We consider the 1.0% ownership reduction resulting from this sale of shares a partial sale of our equity method investment in KDP. Consistent with our definitions of our non-GAAP financial measures, we consider this sale to be a divestiture. Due to our reporting of KDP’s results on a one-quarter lag basis, the impact of the sale of these shares will affect our non-GAAP financial results beginning with the fourth quarter ended December 31, 2021. Therefore, we will remove the equity method investment net earnings results related to this partial sale of our equity method investment in KDP from our non-GAAP financial results for Adjusted EPS for all historical periods presented. Our U.S. GAAP results, which include our historical equity method investment net earnings from KDP, will not change from what was previously reported.
Change to our Historical Non-GAAP Financial Results in Connection with our Sale of MaxFoods
On November 1, 2021, we completed the sale of MaxFoods, an Australian packaged foods business that we had recently acquired as part of our April 1, 2021 acquisition of Gourmet Foods Holdings Pty Ltd. As a result of this divestiture, consistent with the definitions of our non-GAAP financial measures, we will remove the results of this operation from our non-GAAP financial results for Adjusted Gross Profit, Adjusted Operating Income and Adjusted EPS for the second and third quarters of 2021 only, as these are the only quarters’ results impacted by this divestiture. Our non-GAAP financial measure for Organic Net Revenue for these periods will not change, as the net revenue from this business was previously included as net revenue from acquisitions which is already excluded from our Organic Net Revenue financial measure. Our U.S. GAAP results, which include the results of the divested operation through the divestiture closing date noted above, will not change from what was previously reported.
Recast Amounts Reflecting Changes in Historical Non-GAAP Results
See the summary chart below and Exhibit 99.1 for the unaudited GAAP and recast non-GAAP financial information for the first three quarters of 2021, all quarters of 2020 and 2019, the first nine months of 2021 and the years ended December 31, 2020 and 2019. This supplemental disclosure does not amend any disclosure contained in any of our prior SEC filings.
Mondelēz International, Inc. and Subsidiaries
Recast Amounts Reflecting Change Due to Divestiture
(in millions of U.S. dollars, except per share data)
(Unaudited)
| 2019 FY |
2020 FY |
2021 Sep YTD |
2019 | 2020 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | ||||||||||||||||||||||||||||||||||||||||||||||
| Reported (GAAP) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross Profit |
$ | 10,337 | $ | 10,446 | $ | 8,421 | $ | 2,593 | $ | 2,469 | $ | 2,516 | $ | 2,759 | $ | 2,451 | $ | 2,331 | $ | 2,792 | $ | 2,872 | $ | 2,966 | $ | 2,631 | $ | 2,824 | ||||||||||||||||||||||||||||
| Operating Income |
3,843 | 3,853 | 3,449 | 1,036 | 1,025 | 876 | 906 | 856 | 713 | 1,135 | 1,149 | 1,283 | 872 | 1,294 | ||||||||||||||||||||||||||||||||||||||||||
| Equity method investment net earnings |
501 | 421 | 290 | 166 | 109 | 114 | 112 | 121 | 106 | 84 | 110 | 78 | 107 | 105 | ||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes |
2 | 1,224 | 952 | 189 | 216 | (633 | ) | 230 | 148 | 341 | 391 | 344 | 212 | 398 | 342 | |||||||||||||||||||||||||||||||||||||||||
| Net earnings attributable to Mondelēz International |
3,929 | 3,555 | 3,297 | 967 | 803 | 1,426 | 733 | 736 | 544 | 1,119 | 1,156 | 961 | 1,078 | 1,258 | ||||||||||||||||||||||||||||||||||||||||||
| Diluted earnings per share attributable to Mondelēz International |
$ | 2.69 | $ | 2.47 | $ | 2.33 | $ | 0.66 | $ | 0.55 | $ | 0.98 | $ | 0.50 | $ | 0.51 | $ | 0.38 | $ | 0.78 | $ | 0.80 | $ | 0.68 | $ | 0.76 | $ | 0.89 | ||||||||||||||||||||||||||||
| Adjusted (Non-GAAP) - As Recast |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross Profit |
$ | 10,333 | $ | 10,521 | $ | 8,261 | $ | 2,591 | $ | 2,452 | $ | 2,525 | $ | 2,765 | $ | 2,656 | $ | 2,347 | $ | 2,659 | $ | 2,859 | $ | 2,866 | $ | 2,648 | $ | 2,747 | ||||||||||||||||||||||||||||
| Operating Income |
4,264 | 4,401 | 3,600 | 1,090 | 1,008 | 1,065 | 1,101 | 1,106 | 942 | 1,165 | 1,188 | 1,292 | 1,075 | 1,233 | ||||||||||||||||||||||||||||||||||||||||||
| Equity method investment net earnings |
354 | 384 | 318 | 96 | 84 | 86 | 88 | 96 | 101 | 90 | 97 | 121 | 102 | 95 | ||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes |
839 | 878 | 760 | 198 | 201 | 163 | 277 | 194 | 125 | 279 | 280 | 250 | 233 | 277 | ||||||||||||||||||||||||||||||||||||||||||
| Net earnings attributable to Mondelēz International |
3,492 | 3,694 | 3,054 | 919 | 806 | 908 | 859 | 949 | 870 | 922 | 953 | 1,123 | 930 | 1,001 | ||||||||||||||||||||||||||||||||||||||||||
| Diluted earnings per share attributable to Mondelēz International |
$ | 2.40 | $ | 2.56 | $ | 2.16 | $ | 0.63 | $ | 0.55 | $ | 0.62 | $ | 0.59 | $ | 0.66 | $ | 0.60 | $ | 0.64 | $ | 0.66 | $ | 0.79 | $ | 0.66 | $ | 0.71 | ||||||||||||||||||||||||||||
Numbers in bold represent our non-GAAP financial measures that were recast due to the items noted above. See GAAP to non-GAAP reconciliation schedules provided in Exhibit 99.1.
Financial Schedules
Exhibit 99.1 to this Form 8-K contains financial schedules that provide the reconciliations for our recast non-GAAP financial results for Adjusted Gross Profit and Adjusted Operating Income, due to the sale of MaxFoods, for the second quarter, third quarter and first nine months of 2021, and for Adjusted EPS, due to the partial sale of our equity method investment in KDP and the sale of Max Foods, for the first three quarters of 2021, all quarters of 2020 and 2019, the first nine months of 2021 and the years ended December 31, 2020 and 2019.
| • | Schedule 1 provides reconciliations of the differences between reported Gross Profit and Operating Income (GAAP) and the recast Adjusted Gross Profit and Adjusted Operating Income (non-GAAP) measures. |
| • | Schedule 2 provides reconciliations of the differences between the reported Operating Income (GAAP) and the recast Adjusted Operating Income (non-GAAP) by reportable segment. |
| • | Schedule 3 provides reconciliations of the differences between the reported (GAAP) financial measures for Operating Income to Net Earnings Attributable to Mondelēz International and the recast Adjusted (non-GAAP) financial measures for these items. 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. |
| • | Schedule 4 provides reconciliations between the reported Diluted EPS attributable to Mondelēz International (GAAP) and the recast Adjusted EPS (non-GAAP) for comparative periods. |
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. For additional information regarding our non-GAAP financial measures, see Exhibit 99.2.
| Item 9.01. | Financial Statements and Exhibits. |
(d) The following exhibits are being furnished with this Current Report on Form 8-K.
| 99.1 | Financial schedules – Unaudited GAAP and Non-GAAP Financial Information. | |
| 99.2 | Non-GAAP Financial Measures – Additional Information. | |
| 104 | The cover page from Mondelēz International, Inc.’s Current Report on Form 8-K, formatted in Inline XBRL (included as Exhibit 101). | |
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: January 11, 2022