What changed in this filing

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Item 1. Financial Statements

2021-11-02 compared with 2021-07-27 · 250 added, 183 removed, 943 unchanged (31% of the section changed)

6 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

28 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

17 unchanged sentences

dollars, except share data)

2021 December 31, 2020

September 30, 2021 December 31, 2020

Cash and cash equivalents $ 3,401 $ 3,619

Trade receivables (net of allowances of $ 41 at June 30, 2021

Trade receivables (net of allowances of $ 39 at September 30, 2021

and $ 42 at December 31, 2020)

Other receivables (net of allowances of $ 53 at June 30, 2021

Other receivables (net of allowances of $ 53 at September 30, 2021

and $ 42 at December 31, 2020)

27 unchanged sentences

Common Stock, no par value ( 5,000,000,000 shares authorized and

1,996,537,778 shares issued at June 30, 2021 and December 31, 2020)

1,996,537,778 shares issued at September 30, 2021 and December 31, 2020)

Additional paid-in capital 32,066 32,070

1 unchanged sentence

Accumulated other comprehensive losses ( 10,904 ) ( 10,690 )

Treasury stock, at cost ( 597,038,419 shares at June 30, 2021 and

Treasury stock, at cost ( 601,655,289 shares at September 30, 2021 and

577,363,557 shares at December 31, 2020)

18 unchanged sentences

Interest Total

Three Months Ended June 30, 2021

Balances at April 1, 2021 $ — $ 32,009 $ 28,903 $ ( 10,746 ) $ ( 23,091 ) $ 74 $ 27,149

Three Months Ended September 30, 2021

Balances at July 1, 2021 $ — $ 32,042 $ 29,538 $ ( 10,572 ) $ ( 23,465 ) $ 77 $ 27,620

Comprehensive earnings/(losses):

12 unchanged sentences

— — 1 — — ( 20 ) ( 19 )

Balances at June 30, 2021 $ — $ 32,042 $ 29,538 $ ( 10,572 ) $ ( 23,465 ) $ 77 $ 27,620

Six Months Ended June 30, 2021

Balances at September 30, 2021 $ — $ 32,066 $ 30,305 $ ( 10,904 ) $ ( 23,769 ) $ 56 $ 27,754

Nine Months Ended September 30, 2021

Balances at January 1, 2021 $ — $ 32,070 $ 28,402 $ ( 10,690 ) $ ( 22,204 ) $ 76 $ 27,654

13 unchanged sentences

— — 5 — — ( 20 ) ( 15 )

Balances at June 30, 2021 $ — $ 32,042 $ 29,538 $ ( 10,572 ) $ ( 23,465 ) $ 77 $ 27,620

Three Months Ended June 30, 2020

Balances at April 1, 2020 $ — $ 31,990 $ 26,906 $ ( 11,502 ) $ ( 21,652 ) $ 78 $ 25,820

Balances at September 30, 2021 $ — $ 32,066 $ 30,305 $ ( 10,904 ) $ ( 23,769 ) $ 56 $ 27,754

Three Months Ended September 30, 2020

Balances at July 1, 2020 $ — $ 32,022 $ 27,040 $ ( 11,419 ) $ ( 21,625 ) $ 79 $ 26,097

Comprehensive earnings/(losses):

11 unchanged sentences

— — 2 — — ( 5 ) ( 3 )

Balances at June 30, 2020 $ — $ 32,022 $ 27,040 $ ( 11,419 ) $ ( 21,625 ) $ 79 $ 26,097

Six Months Ended June 30, 2020

Balances at September 30, 2020 $ — $ 32,054 $ 27,702 $ ( 11,255 ) $ ( 21,558 ) $ 85 $ 27,028

Nine Months Ended September 30, 2020

Balances at January 1, 2020 $ — $ 32,019 $ 26,615 $ ( 10,254 ) $ ( 21,139 ) $ 76 $ 27,317

13 unchanged sentences

— — 5 — — ( 9 ) ( 4 )

Balances at June 30, 2020 $ — $ 32,022 $ 27,040 $ ( 11,419 ) $ ( 21,625 ) $ 79 $ 26,097

Balances at September 30, 2020 $ — $ 32,054 $ 27,702 $ ( 11,255 ) $ ( 21,558 ) $ 85 $ 27,028

See accompanying notes to the condensed consolidated financial statements.

3 unchanged sentences

(in millions of U.S.

For the Six Months Ended

For the Nine Months Ended

September 30,

CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES

11 unchanged sentences

Other non-cash items, net ( 52 ) 225

Change in assets and liabilities, net of acquisitions:

Change in current assets and current liabilities, net of acquisitions:

Receivables, net ( 417 ) ( 259 )

9 unchanged sentences

Proceeds from divestitures including equity method investments 1,498 1,357

Other 25 ( 30 )

Net cash used in investing activities ( 220 ) ( 1,037 )

Net cash provided by/(used in) investing activities 106 ( 357 )

CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES

43 unchanged sentences

dollars using the exchange rate as of the balance sheet date, with remeasurement and other transaction gains and losses recorded in net earnings.

As of June 30, 2021, our Argentinean operations had less than $ 1 million of Argentinean peso denominated net monetary assets.

Our Argentinean operations contributed $ 96 million, or 1.4 % of consolidated net revenues in the three months and $ 185 million, or 1.3 % of consolidated net revenues in the six months ended June 30, 2021.

Within selling, general and administrative expenses, we recorded a remeasurement loss of $ 3 million during the three months and $ 8 million during the six months ended June 30, 2021 as well as a remeasurement loss of $ 3 million during the three months and $ 5 million during the six months ended June 30, 2020 related to the revaluation of the Argentinean peso denominated net monetary position over these periods.

As of September 30, 2021, our Argentinean operations had $ 1 million of Argentinean peso denominated net monetary liabilities.

Our Argentinean operations contributed $ 111 million, or 1.5 % of consolidated net revenues in the three months and $ 296 million, or 1.4 % of consolidated net revenues in the nine months ended September 30, 2021.

Within selling, general and administrative expenses, we recorded a remeasurement loss of $ 2 million during the three months and $ 10 million during the nine months ended September 30, 2021 as well as a remeasurement loss of $ 2 million during the three months and $ 7 million during the nine months ended September 30, 2020 related to the revaluation of the Argentinean peso denominated net monetary position over these periods.

Following the separation of the United Kingdom from the European Union ("Brexit") in 2020, a new trade arrangement was reached between the U.K.

8 unchanged sentences

We have made investments in resources, systems and processes to meet the new

ongoing requirements and we have not experienced material disruptions from the transition in 2021 to date.

ongoing requirements and we work to mitigate disruptions to our local supply chain and distribution, including those related to the recent transportation labor shortage in the U.K., to reduce the impact on our input and distribution costs.

Despite our efforts to control costs, we have seen inflationary cost pressures rise in our U.K.

business this year, as we have also experienced in other markets.

If the U.K.’s separation from, or new trade arrangements with, the E.U.

negatively impact the U.K.

economy or result in disagreements on trade terms, delays affecting our supply chain or distribution, or disruptions to sales or collections, the impact to our results of operations, financial condition and cash flows could be material.

In the six months ended June 30, 2021, we generated 9.1 % of our consolidated net revenues in the U.K.

economy or result in disagreements on trade terms, delays affecting our supply chain or distribution, disruptions to sales or collections, or further increases in inflationary cost pressures, the impact to our results of operations, financial condition and cash flows could be material.

In the nine months ended September 30, 2021, we generated 9.1 % of our consolidated net revenues in the U.K.

Other Countries.

5 unchanged sentences

Cash and cash equivalents include demand deposits with banks and all highly liquid investments with original maturities of three months or less.

We also have restricted cash that is recorded within other current assets of $ 31 million as of June 30, 2021 and $ 31 million as of December 31, 2020.

Total cash, cash equivalents and restricted cash was $ 1,969 million as of June 30, 2021 and $ 3,650 million as of December 31, 2020.

We also have restricted cash that is recorded within other current assets of $ 7 million as of September 30, 2021 and $ 31 million as of December 31, 2020.

Total cash, cash equivalents and restricted cash was $ 3,408 million as of September 30, 2021 and $ 3,650 million as of December 31, 2020.

Allowances for Credit Losses:

9 unchanged sentences

Currency 3 1 1

Balance at June 30, 2021 $ ( 41 ) $ ( 53 ) $ ( 12 )

Balance at September 30, 2021 $ ( 39 ) $ ( 53 ) $ ( 9 )

Transfers of Financial Assets:

4 unchanged sentences

We may then continue to collect the receivables sold, acting solely as a collecting agent on behalf of the banks.

The outstanding principal amount of receivables under these arrangements amounted to $ 719 million as of June 30, 2021 and $ 760 million as of December 31, 2020.

The outstanding principal amount of receivables under these arrangements amounted to $ 819 million as of September 30, 2021 and $ 760 million as of December 31, 2020.

The incremental cost of factoring receivables under this arrangement was not material for all periods presented.

1 unchanged sentence

Non-Cash Lease Transactions:

We recorded $ 115 million in operating lease and $ 44 million in finance lease right-of-use assets obtained in exchange for lease obligations during the six months ended June 30, 2021 and $ 122 million in operating lease and $ 68 million in finance lease right-of-use assets obtained in exchange for lease obligations during the six months ended June 30, 2020.

We recorded $ 159 million in operating lease and $ 59 million in finance lease right-of-use assets obtained in exchange for lease obligations during the nine months ended September 30, 2021 and $ 187 million in operating lease and $ 129 million in finance lease right-of-use assets obtained in exchange for lease obligations during the nine months ended September 30, 2020.

New Accounting Pronouncements:

5 unchanged sentences

On May 26, 2021, we announced an agreement to acquire Chipita S.A., a leading croissants and baked snacks company in the Central and Eastern European markets.

We expect the acquisition to close in the next nine months after all regulatory and acquisition-related reviews are completed.

We expect the acquisition to close in the first half of 2022 after all regulatory and acquisition-related reviews are completed.

We expect purchase consideration of approximately € 1.7 billion ($ 2.0 billion).

During the second quarter of 2021, we incurred $ 6 million of acquisition-related costs.

We incurred acquisition-related costs of $ 6 million in the nine months ended September 30, 2021.

We incurred acquisition integration costs of $ 6 million in the three and nine months ended September 30, 2021, as these expenses were incurred in preparation of the acquisition closing in the first half of 2022.

On April 1, 2021, we acquired Gourmet Food Holdings Pty Ltd ("Gourmet Food"), a leading Australian food company in the premium biscuit and cracker category, for closing cash consideration of approximately $ 450 million Australian dollars ($ 343 million), net of cash received.

We are working to complete the valuation and have recorded a preliminary purchase price allocation of $ 41 million to indefinite-lived intangible assets, $ 80 million to definite-lived intangible assets, $ 176 million to goodwill, $ 19 million to property, plant and equipment, $ 18 million to inventory, $ 25 million to accounts receivable, $ 5 million to operating right of use assets, $ 3 million to other current assets, $ 19 million to current liabilities and $ 5 million to long-term operating lease liabilities.

During the three months ended June 30, 2021, the acquisition added incremental net revenues of $ 27 million and operating income of $ 3 million.

We incurred acquisition-related costs of $ 6 million during the three months and $ 7 million during the six months ended June 30, 2021.

The acquisition added incremental net revenues of $ 32 million in the three months and $ 59 million in the nine months ended September 30, 2021, and operating income of $ 4 million in the three months and $ 7 million in the nine months ended September 30, 2021.

We incurred acquisition-related costs of $ 7 million in the nine months ended September 30, 2021.

On March 25, 2021, we acquired a majority interest in Lion/Gemstone Topco Ltd ("Grenade"), a performance nutrition leader in the United Kingdom, for closing cash consideration of £ 188 million ($ 261 million), net of cash received.

1 unchanged sentence

We are working to complete the valuation and have recorded a preliminary purchase price allocation of $ 82 million to indefinite-lived intangible assets, $ 28 million to definite-lived intangible assets, $ 181 million to goodwill, $ 1 million to property, plant and equipment, $ 11 million to inventory, $ 18 million to accounts receivable, $ 25 million to current liabilities, $ 20 million to deferred tax liabilities and $ 15 million to long-term other liabilities.

During the three months ended June 30, 2021, the acquisition added incremental net revenues of $ 23 million and operating income of $ 2 million.

We incurred $ 2 million of acquisition-related costs during the six months ended June 30, 2021.

The acquisition added incremental net revenues of $ 22 million in the three months and $ 45 million in the nine months ended September 30, 2021, and operating income of $ 2 million in the three months and $ 4 million in the nine months ended September 30, 2021.

We incurred acquisition-related costs of $ 2 million in the nine months ended September 30, 2021.

On January 4, 2021, we acquired the remaining 93 % of equity of Hu Master Holdings ("Hu"), a category leader in premium chocolate in the United States, which provides a strategic complement to our snacking portfolio in North America through growth opportunities in chocolate and other categories in the well-being category.

The initial cash consideration paid was $ 229 million, net of cash received, and the Company may be required to pay additional cash consideration.

The initial cash consideration paid was $ 229 million, net of cash received, and the Company may be required to pay additional contingent consideration.

The estimated fair value of the contingent consideration obligation at the acquisition date was $ 132 million and was determined using a Monte Carlo simulation based on forecasted future results.

We are unable to provide a range of amounts that could be paid as contingent consideration as it is based primarily on revenue and gross margin of the business for the twelve months ended December 31, 2022 and there is not a minimum or maximum payout.

During the third quarter, based on latest estimates, we recorded a $ 70 million reduction to the liability as recent economic and market conditions related to COVID-19 and supply chain challenges in the U.S.

have impacted the pace of growth.

This reduction was recorded in selling, general and administrative expenses.

As a result of acquiring the remaining equity interest, we consolidated the operations prospectively from the date of acquisition and recorded a pre-tax gain of $ 9 million ($ 7 million after-tax) related to stepping up our previously-held $ 8 million ( 7 %) investment to fair value.

We are working to complete the valuation and have recorded a preliminary purchase price allocation of $ 123 million to indefinite-lived intangible assets, $ 51 million to definite-lived intangible assets, $ 202 million to goodwill, $ 1 million to property, plant and equipment, $ 2 million to inventory, $ 4 million to accounts receivable, $ 5 million to current liabilities and $ 132 million to long-term other liabilities.

The acquisition added incremental net revenues of $ 8 million in the three months and $ 16 million in the six months ended June 30, 2021, and an operating loss of $ 7 million in the three months and $ 13 million in the six months ended June 30, 2021.

We incurred acquisition-related costs of $ 5 million during the three months and $ 9 million during the six months ended June 30, 2021.

We are working to complete the valuation and have recorded a preliminary purchase price allocation of $ 123

million to indefinite-lived intangible assets, $ 51 million to definite-lived intangible assets, $ 202 million to goodwill, $ 1 million to property, plant and equipment, $ 2 million to inventory, $ 4 million to accounts receivable, $ 5 million to current liabilities and $ 132 million to long-term other liabilities.

The acquisition added incremental net revenues of $ 11 million in the three months and $ 27 million in the nine months ended September 30, 2021, and operating income (inclusive of the adjustment to the contingent consideration liability) of $ 63 million in the three months and $ 50 million in the nine months ended September 30, 2021.

We incurred acquisition-related costs of $ 9 million in the nine months ended September 30, 2021.

On April 1, 2020, we 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.

25 unchanged sentences

Through the one-year anniversary of the acquisition, Give & Go added incremental net revenues of $ 106 million and operating income of $ 6 million in 2021.

We incurred $ 10 million of acquisition-related costs during the three months and $ 15 million during the six months ended June 30, 2020.

We incurred acquisition-related costs of $ 15 million in the nine months ended September 30, 2020.

We incurred acquisition integration costs of $ 3 million in the nine months ended September 30, 2021.

Inventories consisted of the following:

As of June 30,

2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

(in millions)

5 unchanged sentences

Property, plant and equipment consisted of the following:

As of June 30,

2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

(in millions)

6 unchanged sentences

Property, plant and equipment, net $ 8,668 $ 9,026

For the six months ended June 30, 2021, capital expenditures of $ 410 million excluded $ 236 million of accrued capital expenditures remaining unpaid at June 30, 2021 and included payment for $ 275 million of capital expenditures that were accrued and unpaid at December 31, 2020.

For the six months ended June 30, 2020, capital expenditures of $ 445 million excluded $ 195 million of accrued capital expenditures remaining unpaid at June 30, 2020 and included payment for $ 334 million of capital expenditures that were accrued and unpaid at December 31, 2019.

For the nine months ended September 30, 2021, capital expenditures of $ 639 million excluded $ 237 million of accrued capital expenditures remaining unpaid at September 30, 2021 and included payment for $ 275 million of capital expenditures that were accrued and unpaid at December 31, 2020.

For the nine months ended September 30, 2020, capital expenditures of $ 630 million excluded $ 203 million of accrued capital expenditures remaining unpaid at September 30, 2020 and included payment for $ 334 million of capital expenditures that were accrued and unpaid at December 31, 2019.

In connection with our restructuring program, we recorded non-cash property, plant and equipment write-downs (including accelerated depreciation and asset impairments) and losses/(gains) on disposal in the condensed consolidated statements of earnings within asset impairment and exit costs and within the segment results as follows (refer to Note 7, Restructuring Program ).

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

7 unchanged sentences

Goodwill by segment was:

As of June 30,

2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

(in millions)

5 unchanged sentences

Intangible assets consisted of the following:

As of June 30,

2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

(in millions)

7 unchanged sentences

Definite-life intangible assets consist primarily of brands, customer-related intangibles, process technology, licenses and non-compete agreements.

Amortization expense for intangible assets was $ 32 million for the three months and $ 70 million for the six months ended June 30, 2021 and $ 50 million for the three months and $ 93 million for the six months ended June 30, 2020.

For the next five years, we currently estimate annual amortization expense of approximately $ 135 million in 2021, approximately $ 130 million in 2022-2024 and approximately $ 105 million in 2025 (reflecting June 30, 2021 exchange rates).

Amortization expense for intangible assets was $ 32 million for the three months and $ 102 million for the nine months ended September 30, 2021 and $ 50 million for the three months and $ 143 million for the nine months ended September 30, 2020.

Changes in goodwill and intangible assets consisted of:

6 unchanged sentences

Asset impairments — ( 32 )

Balance at June 30, 2021 $ 22,270 $ 20,674

Balance at September 30, 2021 $ 22,029 $ 20,397

Changes to goodwill and intangibles were:

• Acquisitions - In connection with our acquisitions of Gourmet Food, Grenade and the remaining interest in Hu during the first six months of 2021, we recorded preliminary purchase price allocations totaling $ 559 million of goodwill and $ 405 million of intangible assets.

• Acquisitions - In connection with our acquisitions of Gourmet Food, Grenade and the remaining interest in Hu during the first nine months of 2021, we recorded preliminary purchase price allocations totaling $ 559 million of goodwill and $ 405 million of intangible assets.

See Note 2, Acquisitions and Divestitures , for additional information.

• Asset impairments - As further described below, during the second quarter of 2021, we recorded $ 32 million of intangible asset impairments resulting primarily from lower than expected sales growth for one brand across our North America segment.

Each quarter, we evaluate our goodwill and intangible asset impairment risk through an assessment of potential triggering events.

In light of the ongoing COVID-19 global pandemic, we considered qualitative and quantitative information in our assessment over goodwill and indefinite-life intangible assets.

• During the first six months of 2021 and 2020, we concluded no goodwill impairment indicators were present that would require additional goodwill impairment evaluation and that our goodwill as of June 30, 2021 and June 30, 2020 were fairly stated.

• With the ongoing COVID-19 global pandemic, we continue to monitor intangible asset impairment risk.

During the second quarters of 2021 and 2020, we identified declines in demand for certain of our brands, that prompted additional evaluation of our indefinite-life intangible assets.

We estimated the fair value of the brands using several acceptable valuation methods, including relief of royalty, excess earnings and excess margin models.

Those models required us to make assumptions related to the future sales and earnings growth rates for the brands, as well as royalty rates and discount rates.

We made our best estimate of those assumptions using the information available;

however, given the uncertainty of the global economic environment and the impact of COVID-19, those estimates could be significantly different than future performance.

In certain instances, the estimated fair value of the brand was below the carrying value, which

resulted in impairment charges.

Primarily due to lower than original expected sales growth, during the second quarter of 2021, we recorded a $ 32 million impairment charge in North America related to a small biscuit brand, and during the second quarter of 2020, we recorded $ 90 million of impairment charges related to four gum brands, a small biscuit brand and a small candy brand, with $ 50 million recorded in Europe, $ 36 million in North America and $ 4 million in AMEA.

The impairment charges were calculated as the excess of the carrying value over the estimated fair value of the intangible assets on a global basis and were recorded within asset impairment and exit costs.

We will continue to monitor the potential for asset impairment risk over coming quarters.

In 2020, we recorded a total of $ 144 million of intangible asset impairment charges related to eight brands.

The ongoing impact of the COVID-19 pandemic resulted in declines in the sales and earnings for certain brands, particularly our gum brands.

During our annual impairment testing as of July 1, 2020, we identified nine brands, including the eight impaired brands, that each had a fair value in excess of book value of 10% or less.

The aggregate book value of the nine brands was $ 721 million as of June 30, 2021.

We evaluate our goodwill and intangible asset impairment risk quarterly using qualitative analysis.

In light of the ongoing COVID-19 global pandemic, we performed further quantitative analysis over indefinite-life intangible assets and recorded approximately $ 32 million of intangible asset charges in the second quarter of 2021 and $ 90 million in the second quarter of 2020.

During the third quarter of 2021, we performed our annual impairment assessment test for goodwill and indefinite-life intangible assets as of July 1, 2021.

Our 2021 annual testing of goodwill resulted in no impairments as each reporting unit had sufficient fair value in excess of its carrying value.

As part of our goodwill quantitative annual impairment testing, we compare a reporting unit's estimated fair value with its carrying value.

If the carrying value of a reporting unit's net assets exceeds its fair value, we would record an impairment based on the difference between the carrying value and fair value of the reporting unit.

We estimate a reporting unit's fair value using a discounted cash flow method that incorporates planned growth rates, market-based discount rates and estimates of residual value.

This year, for our Europe and North America reporting units, we used a market based, weighted-average cost of capital of 6.4 % to discount the projected cash flows of those operations.

For our Latin America and AMEA reporting units, we used a risk-rated discount rate of 9.4 %.

Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding our future plans and industry and economic conditions based on available information.

Given the uncertainty of the global economic environment and the continued impact of COVID-19, those estimates could be significantly different than future performance.

While all reporting units passed our annual impairment testing, if planned business performance expectations are not met or specific valuation factors outside of our control, such as discount rates, change significantly, then the estimated fair values of a reporting unit or reporting units might decline and lead to a goodwill impairment in the future.

During our 2021 annual testing of indefinite-life intangible assets, there were no impairments noted.

We identified eight brands that each had a fair value in excess of book value of 10% or less.

The aggregate book value of the eight brands was $ 1,156 million as of September 30, 2021.

During our annual testing, we use several accepted valuation methods, including relief of royalty, excess earnings and excess margin, that utilize estimates of future sales, earnings growth rates, royalty rates and discount rates in determining a brand's global fair value.

We continue to monitor our brand performance, particularly in light of the significant uncertainty due to the COVID-19 pandemic and related impacts to our business.

If the brand earnings expectations, including the timing of the expected recovery from the COVID-19 pandemic impacts, are not met or specific valuation factors outside of our control, such as discount rates, change significantly, then a brand or brands could become impaired in the future.

If a brand's earnings expectations, including the timing of the expected recovery from the COVID-19 pandemic impacts, are not met or specific valuation factors outside of our control, such as discount rates, change significantly, then a brand or brands could become impaired in the future.

During our prior-year testing, we recorded approximately $ 54 million of impairment charges in the third quarter of 2020 related to three gum and chocolate bran ds.

In 2020, the ongoing impact of the pandemic resulted in greater declines in the sales and earnings for certain brands, particularly our gum brands.

We incorporated the latest results, projections and expected recovery for these brands in our annual 2020 impairment testing.

Equity Method Investments

7 unchanged sentences

Our ownership interests may change over time due to investee stock-based compensation arrangements, share issuances or other equity-related transactions.

As of June 30, 2021, we owned 22.8 %, 6.4 %, 50.0 % and 49.0 %, respectively, of these companies' outstanding shares.

Our investments accounted for under the equity method of accounting totaled $ 5,586 million as of June 30, 2021 and $ 6,036 million as of December 31, 2020.

We recorded equity earnings of $ 107 million and cash dividends of $ 20 million in the second quarter of 2021 and equity earnings of $ 106 million and cash dividends of $ 28 million in the second quarter of 2020.

We recorded equity earnings of $ 185 million and cash dividends of $ 94 million in the first six months of 2021 and equity earnings of $ 227 million and cash dividends of $ 193 million in the first six months of 2020 .

Based on the quoted closing prices as of June 30, 2021, the combined fair value of our publicly-traded investments in JDEP and KDP wa s $ 7.3 billion , and for each investment, its fair value exceeded its carrying value.

As of September 30, 2021, we owned 22.8 %, 5.3 %, 50.0 % and 49.0 %, respectively, of these companies' outstanding shares.

Our investments accounted for under the equity method of accounting totaled $ 5,269 million as of September 30, 2021 and $ 6,036 million as of December 31, 2020.

We recorded equity earnings of $ 105 million and cash dividends of $ 64 million in the third quarter of 2021 and equity earnings of $ 84 million and cash dividends of $ 27 million in the

third quarter of 2020.

We recorded equity earnings of $ 290 million and cash dividends of $ 158 million in the first nine months of 2021 and equity earnings of $ 311 million and cash dividends of $ 220 million in the first nine months of 2020 .

Based on the quoted closing prices as of September 30, 2021, the combined fair value of our publicly-traded investments in JDEP and KDP wa s $ 6.0 billion , and for each investment, its fair value exceeded its carrying value.

Keurig Dr Pepper Transactions:

On August 2, 2021, we sold approximately 14.7 million shares of KDP, which reduced our ownership interest by 1 % 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.

As we continue to have significant influence, we continue to account for our investment in KDP under the equity method, resulting in recognizing our share of their earnings within our earnings and our share of their dividends within our cash flows.

We continue to have board representation with one director on the KDP Board of Directors and we retained certain additional governance rights.

On June 7, 2021, we participated in a secondary offering of KDP shares and sold approximately 28 million shares, which reduced our ownership interest by 2 % of the total outstanding shares.

We 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 we will continue to have significant influence, we will continue to account for our investment in KDP under the equity method, resulting in recognizing our share of their earnings within our earnings and our share of their dividends within our cash flows.

We will continue to have board representation with one director on the KDP Board of Directors and we retained certain additional governance rights.

On September 9, 2020, we sold approximately 12.5 million shares of KDP, which reduced our ownership interest by 0.9 % of the total outstanding shares.

We 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 August 3, 2020, we sold approximately 14.1 million shares of KDP, which reduced our ownership interest by 1.0 % of the total outstanding shares.

We 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 March 4, 2020, we participated in a secondary offering of KDP shares and sold approximately 6.8 million shares, which reduced our ownership interest by 0.5 % of the total outstanding shares.

14 unchanged sentences

During the second quarter of 2020, we recorded a preliminary gain of $ 121 million, net of $ 33 million released from accumulated other comprehensive losses, and $ 48 million of transaction costs.

As was the case in our ownership interest in JDE, we have significant influence with respect to JDE Peet’s, and we will continue to account for our investment in JDE Peet’s under the equity method, resulting in recognizing our share of JDE Peet’s earnings within our earnings and our share of JDE Peet’s dividends within our cash flows.

During the third quarter of 2020, we increased our preliminary gain by $ 10 million to $ 131 million.

On September 20, 2021, we issued € 300 million exchangeable bonds, which are redeemable at maturity at their principal amount in cash or, at our option, through the delivery of an equivalent number of JDE Peet’s ordinary shares based on an initial exchange price of € 35.40 and, as the case may be, an additional amount in cash.

If all bonds were redeemed in exchange for JDE Peet's shares, this would represent approximately 8.5 million shares or

approximately 7 % of our equity interest in JDE Peet's.

Refer to Note 8, Debt and Borrowing Arrangements, for further details on this transaction.

As was the case in our ownership interest in JDE, we have significant influence with respect to JDE Peet’s, and we continue to account for our investment in JDE Peet’s under the equity method, resulting in recognizing our share of JDE Peet’s earnings within our earnings and our share of JDE Peet’s dividends within our cash flows.

In the second quarter of 2020, in connection with this transaction, we changed our accounting principle to reflect our share of JDE’s historical and JDE Peet’s ongoing earnings on a one-quarter lag basis, although we continue to record dividends when cash is received.

5 unchanged sentences

On September 6, 2018, our Board of Directors approved an extension of the restructuring program through 2022, an increase of $ 1.3 billion in the program charges and an increase of $ 700 million in capital expenditures.

On October 21, 2021, our Board of Directors approved an extension of the restructuring program through 2023.

The total $ 7.7 billion program now consists of $ 5.4 billion of program charges ($ 4.1 billion of cash costs and $ 1.3 billion of non-cash costs) and total capital expenditures of $ 2.3 billion to be incurred over the life of the program.

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Restructuring Costs :

The Simplify to Grow Program liability activity for the six months ended June 30, 2021 was:

The Simplify to Grow Program liability activity for the nine months ended September 30, 2021 was:

Write-downs Total

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Currency ( 10 ) — ( 10 )

Liability balance, June 30, 2021 $ 307 $ — $ 307

• We recorded restructuring charges of $ 100 million in the second quarter of 2021 and $ 28 million in the second quarter of 2020 and $ 188 million in the first six months of 2021 and $ 43 million in the first six months of 2020 within asset impairment and exit costs and benefit plan non-service income.

• We spent $ 30 million in the second quarter of 2021 and $ 32 million in the second quarter of 2020 and $ 64 million in the first six months of 2021 and $ 69 million in the first six months of 2020 in cash severance and related costs.

• We also recognized non-cash asset write-downs (including accelerated depreciation and asset impairments).

including any gains on sale of restructuring program assets, non-cash pension settlement losses (refer to Note 10, Benefit Plans ) and other adjustments, which totaled $ 76 million in the second quarter of 2021 and $ 11 million in the second quarter of 2020 and $ 116 million in the first six months of 2021 and $ 14 million in the first six months of 2020.

• At June 30, 2021, $ 258 million of our net restructuring liability was recorded within other current liabilities and $ 49 million was recorded within other long-term liabilities.

Liability balance, September 30, 2021 $ 245 $ — $ 245

• We recorded restructuring charges of $ 62 million in the third quarter of 2021 and $ 68 million in the third quarter of 2020 and $ 250 million in the first nine months of 2021 and $ 111 million in the first nine months of 2020 within asset impairment and exit costs and benefit plan non-service income.

• We spent $ 65 million in the third quarter of 2021 and $ 44 million in the third quarter of 2020 and $ 129 million in the first nine months of 2021 and $ 113 million in the first nine months of 2020 in cash severance and related costs.

• We also recognized non-cash asset write-downs (including accelerated depreciation and asset impairments), including any gains on sale of restructuring program assets, non-cash pension settlement losses and other adjustments, which totaled $ 54 million in the third quarter of 2021 and a gain of $ 13 million in the third quarter of 2020 and $ 170 million in the first nine months of 2021 and $ 1 million in the first nine months of 2020.

• At September 30, 2021, $ 198 million of our net restructuring liability was recorded within other current liabilities and $ 47 million was recorded within other long-term liabilities.

Implementation Costs:

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The costs include incremental expenses related to the closure of facilities, costs to terminate certain contracts and the simplification of our information systems.

Within our continuing results of operations, we recorded implementation costs of $ 33 million in the second quarter of 2021 and $ 52 million in the second quarter of 2020 and $ 67 million in the first six months of 2021 and $ 95 million in the first six months of 2020.

Within our continuing results of operations, we recorded implementation costs of $ 65 million in the third quarter of 2021 and $ 46 million in the third quarter of 2020 and $ 132 million in the first nine months of 2021 and $ 141 million in the first nine months of 2020.

We recorded these costs within cost of sales and general corporate expense within selling, general and administrative expenses.

Restructuring and Implementation Costs:

During the three and six months ended June 30, 2021 and June 30, 2020, and since inception of the Simplify to Grow Program, we recorded the following restructuring and implementation costs within segment operating income and earnings before income taxes:

During the three and nine months ended September 30, 2021 and September 30, 2020, and since inception of the Simplify to Grow Program, we recorded the following restructuring and implementation costs within segment operating income and earnings before income taxes:

America AMEA Europe North

1 unchanged sentence

(in millions)

For the Three Months Ended June 30, 2021

For the Three Months Ended September 30, 2021

Restructuring Costs $ 1 $ 1 $ 2 $ 57 $ 1 $ 62

1 unchanged sentence

Total $ 1 $ 3 $ 8 $ 108 $ 7 $ 127

For the Three Months Ended June 30, 2020

For the Three Months Ended September 30, 2020

Restructuring Costs $ 1 $ 21 $ 40 $ 3 $ 3 $ 68

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Total $ 5 $ 27 $ 55 $ 18 $ 9 $ 114

For the Six Months Ended June 30, 2021

For the Nine Months Ended September 30, 2021

Restructuring Costs $ 4 $ ( 18 ) $ 7 $ 250 $ 7 $ 250

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Total $ 11 $ ( 11 ) $ 34 $ 328 $ 20 $ 382

For the Six Months Ended June 30, 2020

For the Nine Months Ended September 30, 2020

Restructuring Costs $ 19 $ 25 $ 52 $ 3 $ 12 $ 111

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Our short-term borrowings and related weighted-average interest rates consisted of:

As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

Outstanding Weighted-

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Total short-term borrowings $ 234 $ 29

Our uncommitted credit lines and committed credit lines available as of June 30, 2021 and December 31, 2020 include:

As of June 30, 2021 As of December 31, 2020

Our uncommitted credit lines and committed credit lines available as of September 30, 2021 and December 31, 2020 include:

As of September 30, 2021 As of December 31, 2020

Facility Amount Borrowed Amount Facility Amount Borrowed Amount

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The revolving credit agreement includes a covenant that we maintain a minimum shareholders' equity of at least $ 24.6 billion, excluding accumulated other comprehensive earnings/(losses), the cumulative effects of any changes in accounting principles and earnings/(losses) recognized in connection with the ongoing application of any mark-to-market accounting for pensions and other retirement plans.

At June 30, 2021, we complied with this covenant as our shareholders' equity, as defined by the covenant, was $ 38.1 billion.

At September 30, 2021, we complied with this covenant as our shareholders' equity, as defined by the covenant, was $ 38.6 billion.

The revolving credit facility also contains customary representations, covenants and events of default.

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Long-Term Debt:

On March 31, 2021, we completed an early redemption of Euro and U.S.

During the nine months ended September 30, 2021, we completed early redemptions of euro and U.S.

dollar denominated notes for the following amounts (in millions):

Interest Rate Maturity Date Amount Redeemed USD Equivalent

1.000 % March 2022 € 500 $ 587

1.625 % January 2023 € 700 $ 821

2.125 % April 2023 $ 500 $ 500

4.000 % February 2024 $ 492 $ 492

Interest Rate Redemption Date Maturity Date Amount Redeemed USD Equivalent

2.000 % September 2021 October 2021 $ 1,500 $ 1,500

3M LIBOR + 0.700 %

September 2021 October 2022 $ 500 $ 500

3M LIBOR + 0.800 %

September 2021 October 2024 $ 500 $ 500

1.000 % March 2021 March 2022 € 500 $ 587

1.625 % March 2021 January 2023 € 700 $ 821

2.125 % March 2021 April 2023 $ 500 $ 500

4.000 % March 2021 February 2024 $ 492 $ 492

We 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.

The cash payments related to the redemption were classified as cash outflows from financing activities in the consolidated statement of cash flows.

During the six months ended June 30, 2021, we repaid the following notes or term loans (in millions):

During the nine months ended September 30, 2021, we repaid the following note (in millions):

Interest Rate Maturity Date Amount USD Equivalent

2.375 % January 2021 € 679 $ 827

During the six months ended June 30, 2021, we issued the following notes (in millions):

During the nine months ended September 30, 2021, we issued the following notes (in millions):

Issuance Date Interest Rate Maturity Date Gross Proceeds (1)

Gross Proceeds USD Equivalent

September 2021 (2)

0.750 % September 2024 $ 500 $ 500

September 2021 (2)

1.250 % September 2026 $ 350 $ 350

September 2021 (2)(3)

0.000 % September 2024 € 300 $ 352

September 2021 (2)(4)

0.250 % September 2029 € 650 $ 769

September 2021 (2)(4)

0.625 % September 2032 € 650 $ 769

September 2021 (2)(4)

1.250 % September 2041 € 700 $ 828

March 2021 0.250 % March 2028 € 750 $ 896

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(1) Represents gross proceeds from the issuance of notes excluding debt issuance costs, discounts and premiums.

(2) Issued by Mondelez International Holdings Netherlands B.V.

("MIHN"), a wholly owned Dutch subsidiary of Mondelez International, Inc.

(3) Issuance of exchangeable bonds that were issued at 102 % of their principal amount and are redeemable for cash or existing ordinary shares of JDE Peet's at our option (see Note 6, Equity Method Investments ).

Bondholders have an option to redeem bonds before maturity subject to exchange periods.

We have identified our option to settle in either cash or existing ordinary shares of JDE Peet's as an embedded derivative that is bifurcated and accounted for separately from the bond.

See Note 9, Financial Instruments .

(4) Issuance of green bonds where we have committed to allocate an amount equal to the € 1.97 billion total net proceeds from the offering over time to eligible projects that align with our sustainability priorities in the areas of building a thriving ingredient supply chain and reducing our environmental impact.

Fair Value of Our Debt:

The fair value of our short-term borrowings at June 30, 2021 and December 31, 2020 reflects current market interest rates and approximates the amounts we have recorded on our consolidated balance sheets.

The fair value of our short-term borrowings at September 30, 2021 and December 31, 2020 reflects current market interest rates and approximates the amounts we have recorded on our consolidated balance sheets.

The fair value of our long-term debt was determined using quoted prices in active markets (Level 1 valuation data) for the publicly traded debt obligations.

As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

(in millions)

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For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

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Interest expense, debt $ 87 $ 104 $ 275 $ 322

Loss on debt extinguishment and related

expenses — — 137

Loss on debt extinguishment and

related expenses — — 137

Loss related to interest rate swaps — — — 103

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Interest and other expense, net $ 82 $ 89 $ 358 $ 364

Other income includes amounts excluded from hedge effectiveness related to our net investment hedge derivative contracts that totaled $ 19 million and $ 40 million in the three and six months ended June 30, 2021 and $ 31 million and $ 64 million for the three and six months ended June 30, 2020.

Other income includes amounts excluded from hedge effectiveness related to our net investment hedge derivative contracts that totaled $ 19 million and $ 58 million in the three and nine months ended September 30, 2021 and $ 28 million and $ 92 million for the three and nine months ended September 30, 2020.

Financial Instruments

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Derivative instruments were recorded at fair value in the condensed consolidated balance sheets as follows:

As of June 30, 2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

Derivatives Liability

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Commodity contracts 452 164 205 128

Equity method investment contracts (2)

$ 560 $ 218 $ 339 $ 247

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dollar denominated debt acting as net investment hedges are also disclosed in the Derivative Volume table and the Hedges of Net Investments in International Operations section appearing later in this footnote.

(2) Equity method investment contracts consist of the bifurcated embedded derivative option that was a component of the September 20, 2021 € 300 million exchangeable bonds issuance.

Refer to Note 8, Debt and Borrowing Arrangements .

Derivatives designated as accounting hedges include cash flow and net investment hedge derivative contracts.

Our currency exchange and commodity derivative contracts are economic hedges that are not designated as accounting hedges.

Our currency exchange, commodity derivative and equity method investment contracts are economic hedges that are not designated as accounting hedges.

We record derivative assets and liabilities on a gross basis on our condensed consolidated balance sheets.

The fair value of our asset derivatives is recorded within other current assets and the fair value of our liability derivatives is recorded within other current liabilities.

The fair value of our asset derivatives is recorded within other current assets and other assets and the fair value of our liability derivatives is recorded within other current liabilities and other liabilities.

The fair values (asset/(liability)) of our derivative instruments were determined using:

As of June 30, 2021

As of September 30, 2021

Fair Value of Net

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Net investment hedge contracts 74 — 74 —

Equity method investment contracts ( 3 ) — ( 3 ) —

Total derivatives $ 396 $ 171 $ 225 $ —

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commodity forwards and options;

net investment hedge contracts;

and interest rate swaps.

1 unchanged sentence

Commodity derivatives are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied by the notional amount or based on pricing models that rely on market observable inputs such as commodity prices.

Our bifurcated exchange options are valued, as derivative instrument liabilities, using the Black-Scholes option pricing model.

This model requires assumptions related to the market price of the underlying note and associated credit spread combined with the share of price, expected dividend yield, and expected volatility of the JDE Peet’s shares over the life of the option.

Our calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the observable market interest rate curve.

7 unchanged sentences

Notional Amount

As of June 30,

2021 As of December 31, 2020

As of September 30, 2021 As of December 31, 2020

(in millions)

14 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

1 unchanged sentence

Accumulated (loss)/gain at beginning of period $ ( 142 ) $ ( 154 ) $ ( 161 ) $ ( 213 )

Transfer of realized losses/(gains) in fair value to earnings 4 7 9 88

Transfer of realized losses/(gains) in fair value

to earnings ( 52 ) 65 ( 139 ) 153

Unrealized (loss)/gain in fair value 45 ( 69 ) 151 ( 98 )

Accumulated (loss)/gain at end of period $ ( 149 ) $ ( 158 ) $ ( 149 ) $ ( 158 )

After-tax gains/(losses) reclassified from accumulated other comprehensive earnings/(losses) into net earnings were:

After-tax gains/(losses) reclassified from accumulated other comprehensive earnings/(losses) to net earnings were:

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

1 unchanged sentence

Interest rate contracts $ 52 $ ( 65 ) $ 139 $ ( 153 )

Within interest and other expense, net, due to changes in forecasted debt, we recognized losses related to forward-starting interest rate swaps of $ 79 million ($ 103 million pre-tax) in the first quarter of 2020 and in the six months ended June 30, 2020.

After-tax gains/(losses) recognized in other comprehensive earnings/(losses) were:

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

(in millions)

Currency exchange contracts – forecasted transactions $ 7 $ ( 1 ) $ 6 $ ( 1 )

Currency exchange contracts –

forecasted transactions $ ( 6 ) $ — $ — $ ( 1 )

Interest rate contracts 51 ( 69 ) 151 ( 97 )

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Cash Flow Hedge Coverage:

As of June 30, 2021, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 3 years and 3 months.

As of September 30, 2021, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 4 years and 11 months.

Hedges of Net Investments in International Operations:

2 unchanged sentences

operations against movements in exchange rates.

The aggregate notional value as of June 30, 2021 was $ 4.6 billion.

The aggregate notional value as of September 30, 2021 was $ 3.9 billion.

The impacts of the net investment hedge derivative contracts on other comprehensive earnings and net earnings were as follows:

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

5 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

7 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

7 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

June 30, Location of Gain/(Loss) Recognized in Earnings

September 30, For the Nine Months Ended

September 30, Location of Gain/(Loss) Recognized in Earnings

2021 2020 2021 2020

9 unchanged sentences

Commodity contracts 151 136 362 ( 47 ) Cost of sales

Equity method investment

contracts 2 — 2 — Gain on equity method investment transactions

Total $ 176 $ 176 $ 470 $ ( 75 )

5 unchanged sentences

For the Three Months Ended

June 30, For the Three Months Ended

September 30, For the Three Months Ended

September 30,

2021 2020 2021 2020

5 unchanged sentences

Net loss from experience differences 4 5 32 29

Prior service benefit — — ( 1 ) ( 1 )

Prior service cost/(benefit) — 1 ( 2 ) ( 2 )

Curtailment credit (1)

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Plans Non-U.S.

For the Six Months Ended

June 30, For the Six Months Ended

For the Nine Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

5 unchanged sentences

Net loss from experience differences 13 13 98 86

Prior service benefit — — ( 3 ) ( 3 )

Prior service cost/(benefit) — 1 ( 5 ) ( 5 )

Curtailment credit (1)

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Net periodic pension cost/(benefit) $ 8 $ 13 $ ( 46 ) $ ( 13 )

(1) During the third quarter of 2021, we terminated our Defined Benefit Pension Scheme in Nigeria.

During the second quarter of 2021, we made a decision to freeze our Defined Benefit Pension Scheme in the United Kingdom.

As a result, we recognized a curtailment credit of $( 14 million) for the three and six months ended June 30, 2021 recorded within benefit plan non-service income.

We also incurred incentive payment charges and other expenses related to this decision of $ 44 million for the three months ended June 30, 2021 and $ 45 million for the six months ended June 30, 2021 included in operating income.

(2) In connection with our Simplify to Grow Program, settlement losses and other expenses were $ 1 million for the three and six months ended June 30, 2021 and $ 4 million for the three and six months ended June 30, 2020.

These losses were recorded within benefit plan non-service income.

As a result, we recognized curtailment credits of $( 3 million) for the three months and $( 17 million) for the nine months ended September 30, 2021 recorded within benefit plan non-service income.

In connection with the United Kingdom plan freeze, we also incurred incentive payment charges and other expenses of $ 2 million for the three months and $ 47 million for the nine months ended September 30, 2021 included in operating income.

Employer Contributions:

During the six months ended June 30, 2021, we contributed $ 4 million to our U.S.

During the nine months ended September 30, 2021, we contributed $ 7 million to our U.S.

pension plans and $ 173 million to our non-U.S.

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Discretionary contributions are made to the extent that they are tax deductible and do not generate an excise tax liability.

As of June 30, 2021, over the remainder of 2021, we plan to make further contributions of approximately $ 4 million to our U.S.

As of September 30, 2021, over the remainder of 2021, we plan to make further contributions of approximately $ 1 million to our U.S.

plans and approximately $ 55 million to our non-U.S.

3 unchanged sentences

We began making monthly payments during the third quarter of 2019.

In connection with the discounted long-term liability, we recorded accreted interest of $ 3 million and $ 6 million in the three and six months ended June 30, 2021 and $ 3 million and $ 6 million in the three and six months ended June 30, 2020 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.

In connection with the discounted long-term liability, we recorded accreted interest of $ 2 million and $ 8 million in the three and nine months ended September 30, 2021 and $ 3 million and $ 9 million in the three and nine months ended September 30, 2020 within interest and other expense, net.

As of September 30, 2021, the remaining discounted withdrawal liability was $ 364 million, with $ 14 million recorded in other current liabilities and $ 350 million recorded in long-term other liabilities.

Postretirement Benefit Plans

1 unchanged sentence

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

9 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

17 unchanged sentences

Options canceled ( 461,521 ) 48.89

Balance at June 30, 2021 25,623,172 41.98 5 years $ 524 million

(1) Cash received from options exercised was $ 73 million in the three months and $ 140 million in the six months ended June 30, 2021.

The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $ 7 million in the three months and $ 14 million in the six months ended June 30, 2021.

Balance at September 30, 2021 24,977,126 42.06 5 years $ 405 million

(1) Cash received from options exercised was $ 21 million in the three months and $ 161 million in the nine months ended September 30, 2021.

The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $ 2 million in the three months and $ 16 million in the nine months ended September 30, 2021.

Performance Share Units and Other Stock-Based Awards:

13 unchanged sentences

Forfeited ( 304,382 ) 57.32

Balance at June 30, 2021 4,922,845 56.84

Balance at September 30, 2021 4,818,065 56.85

(1) Includes performance share units and deferred stock units.

(2) The actual tax benefit/(expense) realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled less than $ 1 million in the three months and $ 6 million in the six months ended June 30, 2021.

(3) The grant date fair value of performance share units is determined based on the Monte Carlo simulation model for the market-based total shareholder return component and the closing market price of the Company’s stock on the grant date for performance-based components.

7 unchanged sentences

Prior to January 1, 2021, we had repurchased approximately $ 18.0 billion of Common Stock pursuant to this authorization.

During the six months ended June 30, 2021, we repurchased approximately 25.0 million shares of Common Stock at an average cost of $ 57.89 per share, or an aggregate cost of approximately $ 1.5 billion, all of which was paid during the period.

During the nine months ended September 30, 2021, we repurchased approximately 31 million shares of Common Stock at an average cost of $ 58.72 per share, or an aggregate cost of approximately $ 1.8 billion, all of which was paid during the period.

All share repurchases were funded through available cash and commercial paper issuances.

As of June 30, 2021, we have approximately $ 4.3 billion in remaining share repurchase capacity.

As of September 30, 2021, we have approximately $ 4.0 billion in remaining share repurchase capacity.

Commitments and Contingencies

27 unchanged sentences

In June 2015, these suits were consolidated in the District Court.

On January 3, 2020, the District Court granted

plantiffs' request to certify a class.

On January 3, 2020, the District Court granted plaintiffs' request to certify a class.

It is not possible to predict the outcome of these matters;

8 unchanged sentences

As part of these transactions, we guarantee that third parties will make contractual payments or achieve performance measures.

At June 30, 2021, we had no material third-party guarantees recorded on our condensed consolidated balance sheet.

At September 30, 2021, we had no material third-party guarantees recorded on our condensed consolidated balance sheet.

We are a party to various tax matter proceedings incidental to our business.

2 unchanged sentences

The following table summarizes the changes in accumulated balances of each component of accumulated other comprehensive earnings/(losses) attributable to Mondelēz International.

Amounts reclassified from accumulated other comprehensive earnings/(losses) to net earnings (net of tax) were net losses of $ 25 million in the second quarter of 2021 and $ 62 million in the second quarter of 2020 and $ 59 million in the first six months of 2021 and $ 166 million in the first six months of 2020.

Amounts reclassified from accumulated other comprehensive earnings/(losses) to net earnings (net of tax) were net losses of $( 26 ) million in the third quarter of 2021 and $ 86 million in the third quarter of 2020 and $( 63 ) million in the first nine months of 2021 and $ 252 million in the first nine months of 2020.

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

29 unchanged sentences

Interest rate contracts (1)(4)

( 52 ) 66 ( 137 ) 179

Tax expense/(benefit) on reclassifications (3)

14 unchanged sentences

(4) These reclassified gains or losses are recorded within interest and other expense, net.

As of the second quarter of 2021, our estimated annual effective tax rate, which excludes discrete tax impacts, was 23.7 %.

As of the third quarter of 2021, our estimated annual effective tax rate, which excludes discrete tax impacts, was 23.0 %.

This rate reflected the impact of unfavorable foreign provisions under U.S.

1 unchanged sentence

jurisdictions.

Our 2021 second quarter effective tax rate of 45.9 % was unusually high due to a $ 128 million tax expense incurred in connection with the KDP share sale that occurred during the second quarter (the related gain is reported separately in our statement of earnings and thus not included in earnings before income taxes).

Excluding this impact, our second quarter effective tax rate was 31.1 %, reflecting a discrete net tax expense of $ 81 million.

The discrete net tax expense primarily consisted of a $ 95 million net tax expense from the increase of our deferred tax liabilities resulting from tax legislation enacted during the second quarter (mainly in the United Kingdom), partially offset by a $ 11 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions.

Our effective tax rate for the six months ended June 30, 2021 of 30.9 % was also unusually high due to the $ 128 million net tax expense incurred in connection with the KDP share sale.

Excluding this impact, our effective tax rate for the six months ended June 30, 2021 was 24.5 %, which was unfavorably impacted by discrete net tax expense of $ 15 million, primarily driven by $ 99 million net tax expense from the increase of our deferred tax liabilities resulting from enacted tax legislation (mainly in the United Kingdom) partially offset by a $ 43 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions and a $ 27 million benefit from a U.S.

Our 2021 third quarter effective tax rate of 27.4 % was high due to a $ 59 million tax expense incurred in connection with the KDP share sale that occurred during the third quarter (the related gain is reported separately in our statement of earnings and thus not included in earnings before income taxes).

Excluding this impact, our third quarter effective tax rate was 22.7 %, including a discrete net tax expense of $ 11 million primarily driven by the change in liabilities for uncertain tax positions in several jurisdictions.

Our effective tax rate for the nine months ended September 30, 2021 of 29.5 % was also high due to the $ 187 million net tax expense incurred in connection with the KDP share sales during the second and third quarters.

Excluding this impact, our effective tax rate for the nine months ended September 30, 2021 was 23.7 %, which was unfavorably impacted by discrete net tax expense of $ 26 million, primarily driven by $ 95 million net tax expense from the increase of our deferred tax liabilities resulting from enacted tax legislation (mainly in the United Kingdom) partially offset by a $ 45 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions and a $ 27 million benefit from a U.S.

amended tax return filed to reflect new guidance from the U.S.

Treasury Department.

As of the second quarter of 2020, our estimated annual effective tax rate, which excluded discrete tax impacts, was 27.5 %.

As of the third quarter of 2020, our estimated annual effective tax rate, which excluded discrete tax impacts, was 27.3 %.

This rate reflected the impact of unfavorable foreign provisions under U.S.

1 unchanged sentence

jurisdictions.

Our 2020 second quarter effective tax rate of 51.7 % was unusually high due to a $ 261 million tax expense incurred in connection with the JDE Peet's transaction (the related gains are reported separately in our statement of earnings and thus not included in earnings before income taxes).

Excluding this impact, our second quarter effective tax rate was 12.1 % reflecting a discrete net tax benefit of $ 72 million.

The discrete net tax benefit primarily consisted of a $ 70 million net benefit from the release of a valuation allowance in China as we now expect to utilize prior-year carryforward tax benefits to offset future taxable income.

Our effective tax rate for the six months ended June 30, 2020 of 36.0 % was also unusually high due to the $ 261 million net tax expense incurred in connection with the JDE Peet's transaction.

Excluding this impact, our effective tax rate for the six months ended June 30, 2020 was 16.8 %, which was favorably impacted by discrete net tax benefits of $ 100 million, primarily driven by the $ 70 million net benefit from the release of the China valuation allowance and a $ 24 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions.

Our 2020 third quarter effective tax rate of 36.1 % was high due to a $ 77 million tax expense incurred in connection with two KDP share sales that occurred during the third quarter (the related gains are reported separately in our statement of earnings and thus not included in earnings before income taxes).

Excluding this impact, our third quarter effective tax rate was 29.0 %, reflecting a discrete net tax expense of $ 22 million.

The discrete net tax expense primarily consisted of a $ 30 million net expense from the increase of our U.K.

deferred tax liabilities resulting from tax legislation enacted during the third quarter that increased the corporate income tax rate in the United Kingdom, partially offset by a $ 7 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions.

Our effective tax rate for the nine months ended September 30, 2020 of 36.0 % was also high due to the $ 355 million net tax expense incurred in connection with the JDE Peet's transaction and three KDP share sales ( one in the first quarter and two in the third quarter) that occurred during 2020.

Excluding these impacts, our effective tax rate for the nine months ended September 30, 2020 was 21.5 %, which was favorably impacted by discrete net tax benefits of $ 96 million, primarily driven by the $ 70 million net benefit from the release of the China valuation allowance and a $ 31 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions.

Earnings per Share

1 unchanged sentence

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

13 unchanged sentences

We exclude antidilutive Mondelēz International stock options from our calculation of weighted-average shares for diluted EPS.

We excluded antidilutive stock options and performance share units of 3.4 million in the second quarter of 2021 and 5.6 million in the second quarter of 2020 and 3.6 million in the first six months of 2021 and 4.8 million in the first six months of 2020.

We excluded antidilutive stock options and performance share units of 2.7 million in the third quarter of 2021 and 2.8 million in the third quarter of 2020 and 3.0 million in the first nine months of 2021 and 3.6 million in the first nine months of 2020.

Segment Reporting

14 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2021 2020 2021 2020

25 unchanged sentences

Net revenues by product category were:

For the Three Months Ended June 30, 2021

For the Three Months Ended September 30, 2021

America AMEA Europe North

7 unchanged sentences

Total net revenues $ 751 $ 1,629 $ 2,714 $ 2,088 $ 7,182

For the Three Months Ended June 30, 2020

For the Three Months Ended September 30, 2020

America AMEA Europe North

7 unchanged sentences

Total net revenues $ 610 $ 1,470 $ 2,526 $ 2,059 $ 6,665

For the Six Months Ended June 30, 2021

For the Nine Months Ended September 30, 2021

America AMEA Europe North

7 unchanged sentences

Total net revenues $ 2,089 $ 4,826 $ 8,035 $ 6,112 $ 21,062

For the Six Months Ended June 30, 2020

For the Nine Months Ended September 30, 2020

America AMEA Europe North

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements