What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-02 compared with 2021-07-27 · 399 added, 368 removed, 735 unchanged (51% of the section changed)

16 unchanged sentences

however, our gum and candy, world travel retail and foodservice businesses as well as parts of our traditional trade business in parts of emerging markets continued to be negatively affected by the ongoing pandemic.

During the first half of 2021, many of the trends we saw in late 2020 were still in place.

We continued to see increased demand for most of our snack category products in both our emerging and developed markets relative to 2020;

During the first nine months of 2021, we continued to see increased demand for most of our snack category products in both our emerging and developed markets relative to 2020;

however, revenue from parts of our business were not yet back to pre-pandemic levels.

In the second quarter of 2021, net revenue growth was 12.4% and Organic Net Revenue growth was 6.2%, compared to the second quarter of 2020 when the most significant negative impacts from the COVID-19 pandemic adversely affected parts of our business, particularly with more traditional trade and gum and candy sales as well as our foodservice and world travel retail businesses.

While in the second quarter of 2021, we experienced double-digit revenue growth in gum and candy as well as significant growth in other areas such as foodservice and world travel retail, revenues in these businesses were not fully recovered to pre-pandemic levels.

In the third quarter of 2021, net revenue growth was 7.8% and Organic Net Revenue growth was 5.5%, compared to the third quarter of 2020 when we began to recover from some of the most significant negative impacts from the COVID-19 pandemic that adversely affected parts of our business.

In the third quarter of 2021, while we experienced double-digit revenue growth in gum as well as significant growth in other areas such as foodservice and world travel retail, revenues in these businesses were not fully recovered to pre-pandemic levels.

Our outlook for future snacks revenue growth remains strong, but as the pandemic continues, we anticipate some volatility in revenues until snacks consumption stabilizes to a more normal growth level and recent international supply chain issues and labor and transportation constraints subside.

In addition to tracking new developments, we continue to monitor ongoing impacts from the pandemic.

To date, disruptions we experienced in operations due to the pandemic have been temporary and not material to our consolidated results.

Most disruptions we experienced in operations due to the pandemic have been temporary and not material to our consolidated results.

In the third quarter of 2021, we experienced higher operating costs, including higher overall raw material, transportation, labor and fuel costs that we anticipate will continue into 2022.

We discuss these and other ongoing impacts of COVID-19 below.

3 unchanged sentences

In many locations, our employees have worked remotely whenever possible.

For employees who were unable to work remotely, we adopted a number of heightened protocols, consistent with those

prescribed by the World Health Organization, related to social distancing (including staggering lunchtimes and shifts where possible and restricting in-person gatherings and non-essential travel) and enhanced hygiene and workplace sanitation.

For employees who were unable to work remotely, we adopted a number of heightened protocols, consistent with those prescribed by the World Health Organization, related to social distancing (including staggering lunchtimes and shifts where possible and restricting in-person gatherings and non-essential travel) and enhanced hygiene and workplace sanitation.

We have worked with governments and healthcare providers to help provide access to vaccines for our frontline and office employees when and where possible at a local level.

At a local level, we also provided additional flexibility and support to employees in our manufacturing facilities, distribution and logistics operations and sales organization.

2 unchanged sentences

and other locations to meet additional marketplace demand and promote uninterrupted functioning of our manufacturing, distribution and sales network.

Labor markets, particularly in the U.S., U.K.

as well as in other countries, have been tightening.

While in the third quarter of 2021 we did not experience a significant increase in turnover relative to companies in other industries or within our industry, we recognize the significant demand for talent and are actively working to continue to safeguard, engage, attract and retain our employees.

• We have donated over $30 million to assist those impacted by COVID-19 and to support local and global organizations responding to food instability and providing emergency relief.

2 unchanged sentences

One of our main objectives during the pandemic has been to maintain the availability of our products to meet the needs of our consumers.

In response to increased demand, we increased production and, to date, we have not experienced material disruptions in our supply chain or operations:

• We leveraged learnings from our timely response to the initial outbreak in China, and we put in place procedures across our supply chain to help mitigate the risk that our manufacturing sites experience material closures or disruptions.

We have worked with governments and healthcare providers to help provide access to vaccines for our frontline and office employees when and where possible at a local level.

• We have not experienced material disruptions in our workforce;

however, mandatory or voluntary stay-at-home restrictions have resulted in increased levels of absenteeism.

In response to increased demand, we increased production and until recently, we had not experienced significant disruptions in our supply chain or operations.

During the third quarter of 2021, we experienced more supply chain disruptions and higher operating costs as noted below:

• At the onset of the pandemic in early 2020, we put in place procedures across our supply chain to help mitigate the risk that our manufacturing sites experience material closures or disruptions.

Those procedures have been largely successful as we have not experienced material closures or disruptions.

However, we have begun to see an increase in broader supply, transportation and labor disruptions resulting in generally higher operating costs in our business.

• During the third quarter of 2021, we experienced labor disruptions primarily in our North America region, including a strike that affected six of our U.S.

manufacturing and sales distribution facilities for several weeks.

We worked with our employees and union representatives to resolve the strike and enter into a new collective bargaining agreement at these facilities.

We also experienced labor-related disruptions in our network of third-party logistics and external manufacturing and we anticipate some of the labor shortage-related issues may continue into 2022.

Throughout the pandemic, mandatory or voluntary stay-at-home restrictions in many countries where we operate resulted in increased levels of absenteeism, but generally there have not been material disruptions in our workforce or to the delivery of our snacks, food and beverages to consumers.

As a result of incremental pandemic-related expenditures and labor disruptions, we incurred and expect to incur higher labor costs, particularly as the pandemic continues.

• We continue to source raw ingredients, packaging, energy and transportation and deliver our products to our customers.

Transportation and commodity costs have continued to increase.

Although we monitor these costs and our exposure to commodity prices and hedge against input price increases, we cannot fully hedge against all cost increases and changes in costs, and our hedging strategies may not protect us from increases in specific raw material costs.

We anticipate continued transportation, commodity and other cost volatility as the pandemic continues.

• While to date, the temporary disruptions in operations we experienced were not material to our consolidated results, the ongoing COVID-19 outbreak may still disrupt our global supply chain, operations and routes to market or those of our suppliers, their suppliers, or our co-manufacturers or distributors.

These disruptions or our failure to effectively respond to them could increase product or distribution costs, prices and potentially affect the availability of our products.

• In 2020, a generally stronger U.S.

dollar relative to other currencies in which we operate negatively affected our net revenue and net earnings reported in U.S.

In the first six months of 2021, other currencies, such as the euro, British pound sterling and Australian dollar, strengthened relative to the U.S.

dollar, which had a favorable effect on net revenues and net earnings.

• During the second quarter of 2020 especially, we incurred higher operating costs primarily for labor, customer service and logistics, security, personal protective equipment and cleaning.

In the second half of 2020 and first half of 2021, our spending in these areas was significantly less but still above pre-COVID levels.

Most other aspects of our global supply chain and operations did not change materially to date.

While we have not had material disruptions, we do not know whether or how our supply chain or operations may be negatively affected if the pandemic persists for an extended period or worsens.

Costs for resources, particularly commodity and transportation costs, have continued to increase.

External factors, including the pandemic, adverse weather conditions, supply chain disruptions, and transportation and labor shortages, have impacted and may continue to impact our operating costs.

We also may not be able to adjust pricing timely or fully, and this may negatively affect our revenue, margins or earnings.

We anticipate some of the supply, transportation and labor constraints and higher cost trends we experienced in the third quarter of 2021 will continue in the fourth quarter and into 2022.

• The ongoing COVID-19 pandemic and related economic effects may disrupt our global supply chain, operations and routes to market or those of our suppliers, their suppliers, our co-manufacturers, distributors or other business partners.

These disruptions or our failure to effectively respond to them could further increase product or distribution costs and prices and continue to negatively affect operations and results.

• During the pandemic, we have incurred higher operating costs primarily for labor, customer service and logistics, security, personal protective equipment and cleaning.

While we have not had long-term severe supply chain disruptions, we do not know whether or how our supply chain or operations may be negatively affected as the pandemic continues.

It is possible that disruptions could increase during the fourth quarter of 2021 as demand for goods, transportation and labor increases.

We intend to continue to execute on our strategic operating plans as the situation evolves.

3 unchanged sentences

• During both 2020 and 2019, we generated $4.0 billion of cash from operations, or approximately $3 billion each year after deducting capital expenditures.

• Within cash provided by other investing activities, in 2021, we received approximately $1 billion of cash proceeds from the sale of KDP shares.

We received $185 million of cash proceeds from our participation in the KDP secondary offering during the first quarter of 2020 and $1.9 billion from subsequent KDP share sales over the third and fourth quarters of 2020.

During the second quarter of 2020, we received €350 million ($394 million) from our participation in the JDE Peet's public share offerings.

(Refer to our Annual

Report on Form 10-K for the year ended December 31, 2020 and Note 6, Equity Method Investments , for additional information).

• As of June 30, 2021, we had $1.9 billion, and as of December 31, 2020, we had $3.6 billion, of cash and cash equivalents on hand.

Based on our current available cash and access to financing markets, we do not anticipate any issue funding our next long-term debt maturities of approximately $1.5 billion in October 2021, approximately $0.3 billion in December 2021 and approximately $1.2 billion in July 2022.

• We also have access to short-term and long-term financing markets and actively utilized these markets in 2020 and the first half of 2021.

In the first nine months of 2021, we generated $2.7 billion of cash from operations, or approximately $2.1 billion after deducting capital expenditures.

• In 2021, within cash provided by other investing activities, we received approximately $1.5 billion of cash proceeds from the sale of KDP shares.

During 2020, we received $185 million of cash proceeds from our participation in the KDP secondary offering during the first quarter of 2020 and $1.9 billion from subsequent KDP share sales over the third and fourth quarters of 2020.

During the second quarter of 2020, we also received €350 million ($394 million) from our participation in the JDE Peet's public share offerings.

(Refer to our Annual Report on Form 10-K for the year ended December 31, 2020 and Note 6, Equity Method Investments , for additional information).

• As of September 30, 2021, we had $3.4 billion, and as of December 31, 2020, we had $3.6 billion, of cash and cash equivalents on hand.

We expect to pay approximately €1.7 billion ($2.0 billion) in cash for our upcoming acquisition of Chipita, which we expect will close in the first half of 2022.

Based on our current available cash and access to financing markets, we do not anticipate any issue funding the Chipita acquisition or other obligations, including our next long-term debt maturities of approximately $0.3 billion in December 2021, $1.2 billion in July 2022 and $0.5 billion in September 2022.

• We also have access to short-term and long-term financing markets and actively utilized these markets in 2020 and 2021.

We continue to utilize the commercial paper markets in the United States and Europe for flexible, low-cost, short-term financing.

We issued additional long-term debt several times since the beginning of 2020 due to favorable market conditions and opportunities to shift a portion of our funding mix from short-term to long-term debt at a low cost.

We have issued additional long-term debt several times since the beginning of 2020 due to favorable market conditions and opportunities to shift a portion of our funding mix from short-term to long-term debt at a low cost.

We renewed one of our credit facilities during the first quarter of 2021 and now have $7.0 billion of undrawn credit facilities as well as other forms of short-term and long-term financing options available.

As of June 30, 2021, we were, and we expect to continue to be, in compliance with our debt covenants (refer to the Liquidity and Capital Resources section and Note 8, Debt and Borrowing Arrangements ).

• In connection with various legislatively authorized 2020 tax payment deferral mechanisms available for income tax, indirect tax (such as value-added tax) and payroll tax in a number of jurisdictions, we were able to defer certain of these tax payments in 2020, which provided a cash benefit that reverses when the payments come due.

Some of these payments were made in the first half of 2021;

the remainder will come due in the second half of 2021 and in 2022.

The benefits associated with the deferral of these tax payments were not material to our financial statements.

• After suspending our share repurchase program in March 2020 as a precautionary measure following the onset of the pandemic, we resumed the program in the fourth quarter of 2020.

As of September 30, 2021, we were, and we expect to continue to be, in compliance with our debt covenants (refer to the Liquidity and Capital Resources section and Note 8, Debt and Borrowing Arrangements ).

Our Financial Position

1 unchanged sentence

We reviewed our receivables, inventory, right-of-use lease assets, long-lived assets, equity method and other long-term investments, deferred tax assets, goodwill and intangible assets.

• In connection with the ongoing pandemic, we identified a decline in demand for certain of our brands, primarily in the gum category, that prompted additional evaluation of our indefinite-life intangible assets.

• During the third quarter of 2021, we completed our annual impairment testing of goodwill and intangible assets and noted no impairments.

Over the course of the ongoing pandemic, we have identified declines in demand for certain of our brands, primarily in the gum category, that prompted additional evaluation of our indefinite-life intangible assets.

During the second quarter of 2021, we concluded that one small biscuit brand was impaired and we recorded a $32 million impairment charge.

2 unchanged sentences

If brand earnings expectations 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.

Refer to Note 5, Goodwill and Intangible Assets , for additional details on our intangible asset impairment evaluation.

Refer to Note 5, Goodwill and Intangible Assets , for additional details on our goodwill and intangible asset impairment evaluation.

• Restructuring and implementation activities continued to be in line with our Simplify to Grow Program strategic objectives.

2 unchanged sentences

• We also continue to maintain oversight over our core process controls through our centralized shared service model, with key controls operating as designed.

Some of the initial impacts of the pandemic on our business moderated in the second half of 2020 and first half of 2021.

While we have seen some improvements in business and economic conditions across many markets in which we do business, additional adverse impacts could arise that we cannot currently anticipate.

At this point in the pandemic, while we have seen some improvements in business and economic conditions across many markets in which we do business, additional adverse impacts could arise such as those noted above and some that we cannot currently anticipate.

Barring material business disruptions or other negative developments, we expect to continue to meet the demand of consumers for our snacks, food and beverage products.

Also, different markets and parts of our business may also recover from the COVID-19 outbreak at different rates depending on many factors including vaccination levels or new COVID-19 variants and related outbreaks.

As we continue to proactively manage our business in response to the evolving impacts of the pandemic, we will continue to communicate with and support our employees and customers;

Our outlook for future snacks revenue growth remains strong, but as the pandemic continues, we anticipate some volatility in revenues until snacks consumption stabilizes to a more normal growth level and current international supply chain and related issues subside.

Also, different markets and parts of our business may also recover from the COVID-19 pandemic at different rates depending on many factors including vaccination levels or new COVID-19 variants and related outbreaks.

As we continue to proactively manage our business in response to the evolving impacts of the pandemic, we will continue to prioritize and support our employees and customers;

monitor and take steps to further safeguard our supply chain, operations, technology and assets;

3 unchanged sentences

KDP and JDE Peet's Equity Method Investment Transactions

On June 7, 2021, we participated in a secondary offering of KDP shares and sold approximately 28 million shares, which reduced our ownership interest to 6.4% of the total outstanding shares.

On June 7, 2021, we participated in a secondary offering of KDP shares and sold approximately 28 million shares, which reduced our ownership interest to 6.4%.

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.

On August 2, 2021, we sold approximately 14.7 million KDP shares, which reduced our ownership interest to 5.3%.

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.

The cash taxes associated with the KDP share sales are expected to be paid in 2021.

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% to 13.1% of the total outstanding shares.

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% to 13.1%.

We received $185 million of proceeds and recorded a pre-tax gain of $71 million (or $54 million after-tax) during the first quarter of 2020.

Subsequently, on August 3, 2020, we sold approximately 14.1 million shares and on September 9, 2020, we sold approximately 12.5 million shares, which in the aggregate reduced our KDP ownership interest to 11.2% of total outstanding shares.

During the third quarter of 2020, we received $777 million of proceeds and recorded pre-tax gains of $335 million (or $258 million after-tax).

3 unchanged sentences

During the second quarter of 2020, in connection with the JDE Peet's offering of its ordinary shares, we exchanged our 26.4% ownership interest in JDE for a 26.5% equity interest in JDE Peet’s.

On May 29, 2020, we participated in the JDE Peet's offering and, with the subsequent exercise of the over-allotment option, we sold a total of approximately 11.1 million shares during the second quarter of 2020, retaining a 22.9% ownership interest in JDE Peet's.

We received €350 million ($394 million) of total proceeds from the sales of JDE Peet's shares and we recorded a preliminary pre-tax gain of $121 million during the second quarter of 2020.

We also incurred a $261 million tax expense that is payable in 2020 and 2021.

We also incurred a $261 million tax expense.

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

During the fourth quarter of 2020, we reduced our tax expense by $11 million to $250 million.

Consistent with our accounting for KDP and in connection with JDE Peet's becoming a public company, during the second quarter of 2020, we changed our accounting principle to reflect our share of JDE historical results and JDE Peet's ongoing results 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 of JDE Peet's ongoing results once JDE Peet's has publicly reported its results.

This change was applied retrospectively to all periods presented.

During the fourth quarter of 2020, we reduced our tax expense by $11 million to $250 million and the associated cash tax will be paid by the end of 2021.

Refer to our Annual Report on Form 10-K for the year ended December 31, 2020 (Note 7, Equity Method Investments , and Note 16, Income Taxes ) and Note 6, Equity Method Investments , within this report for additional information.

Summary of Results

• Net revenues increased 12.4% to $6.6 billion in the second quarter of 2021 and increased 10.0% to $13.9 billion in the first six months of 2021 as compared to the same period in the prior year.

Our net revenue growth in the second quarter and first six months of 2021 reflects a year-over-year partial recovery from the most significant impacts of the pandemic to date.

In developed markets, increased food purchases for in-home consumption continued to drive net revenue growth, though revenue declined in some markets as they lapped the prior-year periods' strong volume growth resulting from increased consumer demand last year due to the pandemic.

In our emerging markets, the initial negative impacts from the pandemic that we experienced in the prior-year periods began to subside in many markets, though some markets were still challenged.

In addition, our out-of-home consumption businesses, which experienced significant negative impacts from the pandemic in the prior-year periods, began to recover, particularly gum and candy and our foodservice and world travel retail businesses.

Net revenue increased in the second quarter of 2021 and the first six months of 2021, driven by the significant impact of favorable currency translation, favorable volume/mix, higher net pricing and incremental net revenues from our acquisitions.

• Net revenues increased 7.8% to $7.2 billion in the third quarter of 2021 and increased 9.2% to $21.1 billion in the first nine months of 2021 as compared to the same period in the prior year.

Our net revenue growth in the third quarter and first nine months of 2021 continued to reflect increased demand for most of our snack category products in both our emerging and developed markets relative to 2020, though some markets are not yet back to pre-pandemic levels.

In developed markets, increased food purchases for in-home consumption continued to drive net revenue growth, though some markets declined as they lapped the prior-year period's strong volume growth resulting from increased consumer demand due to the pandemic.

In emerging markets, we lapped the negative initial impacts we experienced from the pandemic last year, with strong revenue growth in the third quarter of 2021 across most of our key markets, though some markets were still challenged.

In addition, our out-of-home consumption businesses, which experienced significant negative impacts from the pandemic in the prior-year periods, continued to recover, particularly our gum and candy, foodservice and world travel retail businesses.

– Net revenue increased in the third quarter of 2021 driven by higher net pricing, favorable volume/mix, favorable foreign currency translation and incremental net revenues from our acquisitions.

– Net revenue increased in the first nine months of 2021 driven by favorable currency translation, favorable volume/mix, higher net pricing and incremental net revenues from our acquisitions.

Refer to our Discussion and Analysis of Historical Results below for additional information.

• Organic Net Revenue, a non-GAAP financial measure, increased 6.2% to $6.3 billion in the second quarter of 2021 and increased 5.0% to $13.2 billion in the first six months of 2021 as compared to same period in the prior year.

Organic Net Revenue increased in the second quarter of 2021 and the first six months of 2021 due to favorable volume/mix and higher net pricing.

• Organic Net Revenue, a non-GAAP financial measure, increased 5.5% to $7.0 billion in the third quarter of 2021 and increased 5.1% to $20.3 billion in the first nine months of 2021 as compared to same period in the prior year.

Organic Net Revenue increased in the third quarter of 2021 due to higher net pricing and favorable volume/mix.

Organic net revenue increased in the first nine months of 2021 due to favorable volume/mix and higher net pricing.

Refer to our Discussion and Analysis of Historical Results below for additional information.

1 unchanged sentence

We use Organic Net Revenue as it provides improved year-over-year comparability of our underlying operating results (see the definition of Organic Net Revenue and our reconciliation with net revenues within Non-GAAP Financial Measures appearing later in this section).

• Diluted EPS attributable to Mondelēz International increased 100.0% to $0.76 in the second quarter of 2021 and increased 61.8% to $1.44 in the first six months of 2021 as compared to the same period in the prior year.

– Diluted EPS increased in the second quarter of 2021, primarily driven by lapping prior-year costs associated with the JDE Peet's transaction, a higher gain this quarter on equity method investment transactions, an increase in Adjusted EPS, lower intangible asset impairment charges and favorable year-over-year mark-to-market impacts from currency and commodity derivatives.

These factors were partially offset by unfavorable initial impacts from enacted tax law changes, higher Simplify to Grow program costs and the negative impact from pension participation changes.

– Diluted EPS increased during the first six months of 2021, primarily driven by lapping prior-year costs associated with the JDE Peet's transaction, favorable year-over-year mark-to-market impacts from currency and commodity derivatives, an increase in Adjusted EPS, a higher gain on equity method investment transactions, lapping the prior-year loss on interest rate swaps and lower intangible asset impairment charges.

These factors were partially offset by a loss on debt extinguishment and related expenses as we refinanced to lower-cost long-term debt in the first quarter of 2021, unfavorable initial impacts from enacted tax law changes, higher Simplify to Grow program costs and the negative impact from pension participation changes.

• Adjusted EPS, a non-GAAP financial measure, increased 8.2% to $0.66 in the second quarter of 2021 and increased 14.1% to $1.46 in the first six months of 2021 as compared to the same period in the prior year.

On a constant currency basis, Adjusted EPS increased 1.6% to $0.62 in the second quarter of 2021 and increased 8.6% to $1.39 in the first six months of 2021 as compared to the same periods in the prior year.

– Adjusted EPS increased in the second quarter of 2021, driven by operating activities, favorable currency translation, fewer shares outstanding and lower interest expense, partially offset by higher taxes primarily due to a lower net benefit from non-recurring discrete tax items.

– Adjusted EPS increased in the first six months of 2021, driven by operating activities, favorable currency translation, lower interest expense, fewer shares outstanding, higher equity method investment earnings and higher benefit plan non-service income, partially offset by higher taxes due to changes in our mix of earnings and a lower net benefit from non-recurring discrete tax items.

• Diluted EPS attributable to Mondelēz International increased 14.1% to $0.89 in the third quarter of 2021 and increased 40.4% to $2.33 in the first nine months of 2021 as compared to the same period in the prior year.

– Diluted EPS increased in the third quarter of 2021, primarily driven by an increase in Adjusted EPS, a net benefit from acquisition integration costs and contingent consideration adjustments, lapping prior-year intangible asset impairment charges, lower equity method investee items and lapping prior-year initial impacts from enacted tax law changes.

These factors were partially offset by a lower gain on equity method investment transactions and lapping prior-year net earnings from divestitures.

– Diluted EPS increased during the first nine months of 2021, primarily driven by an increase in Adjusted EPS, lapping prior-year costs associated with the JDE Peet's transaction, favorable year-over-year mark-to-market impacts from currency and commodity derivatives, a higher gain on equity method investment transactions, lower intangible asset impairment charges, lapping the prior-year loss on interest rate swaps, and a net benefit from acquisition integration costs and contingent consideration adjustments.

These factors were partially offset by a loss on debt extinguishment and related expenses as we refinanced to lower-cost long-term debt in the first quarter of 2021, higher Simplify to Grow program costs, unfavorable initial impacts from enacted tax law changes and lapping higher prior-year net earnings from divestitures.

• Adjusted EPS, a non-GAAP financial measure, increased 10.9% to $0.71 in the third quarter of 2021 and increased 13.6% to $2.17 in the first nine months of 2021 as compared to the same period in the prior year.

On a constant currency basis, Adjusted EPS increased 9.4% to $0.70 in the third quarter of 2021 and increased 8.9% to $2.08 in the first nine months of 2021 as compared to the same periods in the prior year.

– Adjusted EPS increased in the third quarter of 2021 driven by operating activities, fewer shares outstanding, lower taxes and favorable currency translation.

– Adjusted EPS increased in the first nine months of 2021 driven by operating activities, favorable currency translation, fewer shares outstanding, lower interest expense and higher equity method investment earnings, partially offset by higher taxes primarily due to a lower net benefit from non-recurring discrete tax items.

Adjusted EPS and Adjusted EPS on a constant currency basis are non-GAAP financial measures.

12 unchanged sentences

• Market conditions.

Snack categories grew in the first half of 2021 due to increased consumer demand for snacks purchases during the COVID-19 pandemic.

As further discussed below, including in Commodity Trends, and in Item 3, Quantitative and Qualitative Disclosures about Market Risk , we continue to monitor volatility in global consumer, commodity, currency and capital markets that may continue until the COVID-19 pandemic is largely resolved.

We expect input cost volatility and a higher aggregate cost environment to continue for the remainder of 2021 and while the pandemic and related recovery continue.

Snack categories grew in the first nine months of 2021 due to ongoing increased consumer demand for snacks purchases during the COVID-19 pandemic.

As further discussed below, including in Commodity Trends , and in Item 3, Quantitative and Qualitative Disclosures about Market Risk , we continue to monitor volatility in global consumer, commodity, transportation, labor, currency and capital markets that may continue until the COVID-19 pandemic or related issues are largely resolved.

We expect input cost volatility and a higher aggregate cost environment to continue for the remainder of 2021 and into 2022 as we manage through the pandemic, the related recovery, labor shortages, inflation, supply chain disruptions (availability of raw materials, packaging, transportation and energy, among others) as well as adverse weather factors.

As described above, we continue to monitor and respond to the COVID-19 pandemic.

While its impact is not yet fully known, it has had a material negative effect on the global and local economies and could have a material negative effect on our business and results in the future, particularly if there are significant adverse changes to consumer demand or significant disruptions to the supply, production or distribution of our products or the credit or financial stability of our customers and other business partners.

While we have seen some improvements in overall economic conditions and the business climate in many markets where we sell and operate, new COVID-19 variants and spikes in infections continue across a number of markets.

If an unexpected significant economic or credit deterioration occurs, it could impair credit availability and our ability to raise capital when needed.

While its impact is not yet fully known, it has had a material negative effect on the global and local economies and could have a material negative effect on our business and results in the future, particularly if there are significant adverse changes to consumer demand or significant ongoing disruptions to the supply, production or distribution of our products or the credit or financial stability of our customers and other business partners.

While we have seen some improvements in overall economic conditions and the business climate in many markets where we sell and operate, COVID-19 variants and spikes in infections continue across a number of markets.

If a significant economic or credit deterioration occurs, it could impair credit availability and our ability to raise capital when needed.

A significant disruption in the financial markets may also have a negative effect on our derivative counterparties and could impair our banking or other business partners, on whom we rely for access to capital and as counterparties for a number of our derivative contracts.

As we continue to manage operations during the pandemic, we may continue to incur increased labor, customer service, commodity, transportation and other costs.

We could see shifts in consumer demand and product mix that could have a negative impact on results.

As discussed in Recent Developments and Significant Items Affecting Comparability , we are working to mitigate negative impacts to our business from the COVID-19 pandemic, but we may not be able to fully predict or respond to all impacts on a timely basis to prevent adverse impacts to our results.

Any of these and other developments could materially harm our business, results of operations and financial condition.

We will continue to prioritize the safety of our employees and consumers.

As we continue to manage operations during the pandemic, we may continue to incur increased labor, customer service, commodity, transportation and other costs.

As consumer demand for our products evolves, we could see continued shifts in product mix that could have a negative impact on results.

As discussed in Recent Developments and Significant Items Affecting Comparability , we are working to mitigate any negative impacts to our business from the COVID-19 outbreak, but we may not be able to fully predict or respond to all impacts on a timely basis to prevent adverse impacts to our results.

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

5 unchanged sentences

Our supply chain in this market relies on imports of raw and packaging materials as well as finished goods.

To date, we have not experienced significant delays at U.K.-E.U.

border crossings.

To comply with the new requirements, we increased resources in customer service and logistics, in our factories, and on our customs support teams.

We adapted our processes and systems for the new and increased number of customs transactions.

We continue to closely monitor and manage our inventory levels of imported raw materials, packaging and finished goods in the U.K.

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.

We continue to closely

monitor and manage our inventory levels of imported raw materials, packaging and finished goods in the U.K.

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

• Chipita Acquisition.

We expect our acquisition of Chipita S.A.

to close in the first half of 2022 and to pay approximately €1.7 billion ($2.0 billion) in cash for the business.

Refer to Note 2, Acquisitions and Divestitures , and Liquidity and Capital Resources for additional details.

We continue to monitor existing and potential future tax reform.

During 2019, we recorded the impact of Swiss tax reform and we will continue to monitor for any additional interpretative guidance that could result in changes to the amounts we have recorded.

In the United States, while the 2017 U.S.

tax reform reduced the U.S.

corporate tax rate and included some beneficial provisions, other provisions have, and will continue to have, an adverse effect on our results.

Refer to our Annual Report on Form 10-K for the year ended December 31, 2020 for more information on Swiss and U.S.

Refer to our Annual Report on Form 10-K for the year ended December 31, 2020 for more information on impacts from the 2019 Swiss tax reform and 2017 U.S.

• Argentina .

As further discussed in Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting, we continue to apply highly inflationary accounting for our Argentinean subsidiaries.

During the six months ended June 30, 2021, we recorded a remeasurement loss of $8 million within selling, general and administrative expenses related to the revaluation of our Argentinean peso denominated net monetary position.

During the nine months ended September 30, 2021, we recorded a remeasurement loss of $10 million within selling, general and administrative expenses related to the revaluation of our Argentinean peso denominated net monetary position.

The mix of monetary assets and liabilities and the exchange rate to convert Argentinean pesos to U.S.

6 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

See Note 2021 2020 2021 2020

7 unchanged sentences

Note 9 134 148 268 (38)

Acquisitions:

Acquisition integration costs (2) (2) (3) (2)

Acquisitions and divestiture-related costs:

Acquisition integration costs and

contingent consideration adjustments 57 — 54 (2)

Acquisition-related costs — — (24) (15)

17 unchanged sentences

(1) Includes impacts recorded in operating income and interest expense and other, net.

Mark-to-market gains/(losses) above also include our equity method investment-related derivative contract mark-to-market gains/(losses) (refer to Note 9, Financial Instruments) that are recorded in the gain on equity method investment transactions on our condensed consolidated statement of earnings.

(2) Gain on equity method investment transactions is recorded outside pre-tax operating results on the condensed consolidated statement of earnings.

See footnote (1) as mark-to-market gains/(losses) on our equity method-investment-related derivative contracts are presented in the table above within mark-to-market gains/(losses) from derivatives.

(3) Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peet's and KDP equity method investees, including acquisition and divestiture-related costs and restructuring program costs.

Consolidated Results of Operations

Three Months Ended June 30:

Three Months Ended September 30:

For the Three Months Ended

September 30,

2021 2020 $ change % change

8 unchanged sentences

0.89 0.78 0.11 14.1 %

Net Revenues – Net revenues increased $731 million (12.4%) to $6,642 million in the second quarter of 2021, and Organic Net Revenue (1) increased $368 million (6.2%) to $6,279 million.

Net Revenues – Net revenues increased $517 million (7.8%) to $7,182 million in the third quarter of 2021, and Organic Net Revenue (1) increased $366 million (5.5%) to $7,031 million.

Developed markets net revenue increased 5.1% and developed markets Organic Net Revenue increased 2.0% (1) .

7 unchanged sentences

Total change in Organic Net Revenue (1)

Favorable volume/mix 4.0 pp

Higher net pricing 3.1 pp

Favorable volume/mix 2.4 pp

(1) Please see the Non-GAAP Financial Measures section at the end of this item.

Net revenue increase of 7.8% was driven by our underlying Organic Net Revenue growth of 5.5%, favorable currency and the impact of acquisitions.

Overall, our net revenues continued to be affected by the COVID-19 pandemic.

In emerging markets, the negative initial impacts we experienced from COVID-19 began to subside, resulting in strong revenue growth across most of our key markets, though some markets were still challenged.

In addition, our sales of our gum and candy products grew as out-of-home consumption began to recover, as did our world travel business as the sharp reduction in global travel due to the pandemic began to subside.

Incremental net revenues from acquisitions and favorable currency translation also added to revenue growth in the quarter.

Organic Net Revenue growth was driven by favorable volume/mix and higher net pricing.

Favorable volume/mix in Latin America, Europe and AMEA, driven by strong volume gains, was partially offset by unfavorable volume/mix in North America.

Higher net pricing in all regions was due to the benefit of carryover pricing from 2020 as well as the effects of input cost-driven pricing actions taken during the first six months of 2021.

Overall, we continued to see increased demand for our snack category products, though parts of our business are not yet back to pre-pandemic levels.

In emerging markets, we lapped the negative initial impacts we experienced from the pandemic last year, with strong revenue growth this quarter across most of our key markets, though some markets were still challenged.

In addition, our sales of our gum and candy products grew as out-of-home consumption continued to recover, as did our world travel business as global travel improved though still below pre-pandemic levels.

Favorable currency translation and incremental net revenues from acquisitions also added to revenue growth in the quarter.

Organic Net Revenue growth was driven by higher net pricing and favorable volume/mix.

Higher net pricing in all regions was due to the benefit of carryover pricing from 2020 as well as the effects of input cost-driven pricing actions taken during the first nine months of 2021.

Favorable volume/mix in Europe, Latin America, and AMEA, driven by strong volume gains, was partially offset by unfavorable volume/mix in North America.

Favorable currency impacts increased net revenues by $89 million, due primarily to the strength of several currencies relative to the U.S.

dollar, including the euro, British pound sterling, Australian dollar, Chinese yuan, Canadian dollar, Mexican peso and South African rand, partially offset by the strength of the U.S.

dollar relative to several currencies, including the Argentinean peso, Turkish lira and Russian ruble.

dollar, including the British pound sterling, Chinese yuan, Mexican peso, South African rand, Canadian dollar, Brazilian real, euro and Australian dollar, partially offset by the strength of the U.S.

dollar relative to several currencies, including the Argentinean peso and Turkish lira.

The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $31 million (constant currency basis), the March 25, 2021 acquisition of Grenade added incremental net revenues of $20 million (constant currency basis) and the January 4, 2021 acquisition of Hu Master Holdings added incremental net revenues of $11 million.

Refer to Note 2, Acquisitions and Divestitures, for additional information.

Operating Income – Operating income increased $159 million (22.3%) to $872 million in the second quarter of 2021.

Operating Income – Operating income increased $159 million (14.0%) to $1,294 million in the third quarter of 2021.

Adjusted Operating Income (1) increased $71 million (6.1%) to $1,236 million and Adjusted Operating Income on a constant currency basis (1) increased $52 million (4.5%) to $1,217 million due to the following:

1 unchanged sentence

(in millions)

Operating Income for the Three Months Ended June 30, 2020

Operating Income for the Three Months Ended September 30, 2020

Simplify to Grow Program (2)

Intangible asset impairment charges (3)

Mark-to-market losses from derivatives (4)

Acquisition integration costs (5)

Acquisition-related costs (5)

Mark-to-market gains from derivatives (4)

Divestiture-related costs (5)

Costs associated with JDE Peet's transaction (6)

Remeasurement of net monetary position (6)

Other/rounding

Adjusted Operating Income (1) for the

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Higher net pricing

8 unchanged sentences

Adjusted Operating Income (1) for the

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Simplify to Grow Program (2)

Intangible asset impairment charges (3)

Mark-to-market gains from derivatives (4)

Acquisition integration costs (5)

Acquisition-related costs (5)

Acquisition integration costs and contingent consideration adjustments (5)

Remeasurement of net monetary position (6)

Impact from pension participation changes (7)

Impact from resolution of tax matters (9)

Operating Income for the Three Months Ended June 30, 2021

Operating Income for the Three Months Ended September 30, 2021

$ 1,294 14.0 %

(1) Refer to the Non-GAAP Financial Measures section at the end of this item.

1 unchanged sentence

(3) Refer to Note 5, Goodwill and Intangible Assets , for more information.

(4) Refer to Note 9, Financial Instruments , Note 16, Segment Reporting , and Non-GAAP Financial Measures section at the end of this item for more information on the unrealized gains/losses on commodity and forecasted currency transaction derivatives.

(4) Refer to Note 9, Financial Instruments , Note 16, Segment Reporting , and the Non-GAAP Financial Measures section at the end of this item for more information on the unrealized gains/losses on commodity and forecasted currency transaction derivatives.

(5) Refer to Note 2, Acquisitions and Divestitures , for more information on the April 1, 2021 acquisition of Gourmet Food Holdings Pty Ltd, the March 25, 2021 acquisition of a majority interest in Grenade, the January 4, 2021 acquisition of the remaining 93% of equity in Hu Master Holdings and the April 1, 2020 acquisition of a significant majority interest in Give & Go.

Refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for more information on the May 28, 2019 divestiture of most of our cheese business in the Middle East and Africa.

(6) Refer to Note 6, Equity Method Investments, for more information on the JDE Peet's transaction.

(6) Refer to Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting , for information on our application of highly inflationary accounting for Argentina.

(7) Refer to Note 10, Benefit Plans , for more information.

(9) Refer to Note 12, Commitments and Contingencies , for more information.

During the second quarter of 2021, we realized higher net pricing and favorable volume/mix, which was partially offset by increased input costs.

Higher net pricing, which included the carryover impact of pricing actions taken in 2020 as well as the effects of input cost-driven pricing actions taken during the first six months of 2021, was reflected across all regions.

During the third quarter of 2021, we realized higher net pricing and favorable volume/mix, which was partially offset by increased input costs.

Higher net pricing, which included the carryover impact of pricing actions taken in 2020 as well as the effects of input cost-driven pricing actions taken during the first nine months of 2021, was reflected across all regions.

Favorable volume/mix was driven by Europe, Latin America and AMEA, partially offset by unfavorable volume/mix in North America.

Overall volume/mix benefited from volume gains as we lapped the significant negative impacts of the pandemic in many of our key markets, while in North America, we lapped high volume growth in the prior-year quarter from increased consumer demand due to the pandemic.

Overall volume/mix benefited from increased demand for most of our snack category products as we continue to recover from the impacts of the pandemic, though some markets were challenged particularly North America, where we lapped high volume growth in the prior-year quarter due to the pandemic.

The increase in input costs was driven by higher raw material costs, partially offset by lower manufacturing costs driven by productivity and lower incremental COVID-19 related costs.

Higher raw material costs were in part due to increased currency exchange transaction costs on imported materials, as well as higher packaging, oils, sugar, cocoa, energy, nuts, grains and other ingredients costs, partially offset by lower dairy costs.

Total selling, general and administrative expenses increased $140 million from the second quarter of 2020, due to a number of factors noted in the table above, including in part, an unfavorable currency impact related to expenses, the impact from pension participation changes, incremental expenses from acquisitions and higher acquisition-related costs, which were partially offset by lapping prior-year costs associated with the JDE Peet's transaction, lower implementation costs incurred for the Simplify to Grow Program and the favorable impact from the resolution of a tax matter.

Excluding these factors, selling, general and administrative expenses increased $101 million from the second quarter of 2020.

The increase was driven primarily by higher advertising and consumer promotion costs and higher overhead costs.

Higher raw material costs were in part due to increased currency exchange transaction costs on imported materials, as well as higher oils, packaging, cocoa, sugar, dairy, grains and other ingredients costs.

Total selling, general and administrative expenses decreased $48 million from the third quarter of 2020, due to a number of factors noted in the table above, including in part, a net benefit from acquisition integration costs and contingent consideration adjustments, lower implementation costs incurred for the Simplify to Grow Program and lapping prior-year divestiture-related costs, which were partially offset by an unfavorable currency impact related to expenses and the impact of acquisitions.

Excluding these factors, selling, general and administrative expenses increased $22 million from the third quarter of 2020.

The increase was driven primarily by higher advertising and consumer promotion costs, partially offset by lower overhead costs.

Favorable currency changes increased operating income by $19 million due primarily to the strength of several currencies relative to the U.S.

dollar, including the euro, British pound sterling, Australian dollar, Chinese yuan and Canadian dollar, partially offset by the strength of the U.S.

dollar relative to several currencies, including the Argentinean peso, Turkish lira and Swiss franc.

Operating income margin increased from 12.1% in the second quarter of 2020 to 13.1% in the second quarter of 2021.

The increase was driven primarily by lower intangible asset impairment charges, lapping prior-year costs associated with the JDE Peet's transaction, a favorable year-over-year change in mark-to-market gains/(losses) from currency and commodity hedging activities and higher Adjusted Operating Income margin, partially offset by higher Simplify to Grow program costs and the impact of pension participation changes.

Adjusted Operating Income margin increased from 15.9% for the second quarter of 2020 to 16.2% for the second quarter of 2021.

The increase was driven primarily by lower manufacturing costs, higher net pricing and overhead leverage, partially offset by higher raw material costs, unfavorable product mix and higher advertising and consumer promotion costs.

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $1,078 million increased by $534 million (98.2%) in the second quarter of 2021.

Diluted EPS attributable to Mondelēz International was $0.76 in the second quarter of 2021, up $0.38 (100.0%) from the second quarter of 2020.

Adjusted EPS (1) was $0.66 in the second quarter of 2021, up $0.05 (8.2%) from the second quarter of 2020.

Adjusted EPS on a constant currency basis (1) was $0.62 in the second quarter of 2021, up $0.01 (1.6%) from the second quarter of 2020.

dollar, including the British pound sterling, Chinese yuan, South African rand, Canadian dollar, Mexican peso, Australian dollar, Brazilian real and euro, partially offset by the strength of the U.S.

dollar relative to several currencies, including the Argentinean peso and Turkish lira.

Operating income margin increased from 17.0% in the third quarter of 2020 to 18.0% in the third quarter of 2021.

The increase was driven primarily by a net benefit from acquisition integration costs and contingent consideration adjustments, lapping prior-year intangible asset impairment charges and lapping prior-year divestiture-related costs, partially offset by an unfavorable year-over-year change in mark-to-market gains/(losses) from currency and commodity hedging activities and lower Adjusted Operating Income margin.

Adjusted Operating Income margin decreased from 17.5% for the third quarter of 2020 to 17.2% for the third quarter of 2021.

The decrease was driven primarily by higher raw material costs, unfavorable product mix and higher advertising and consumer promotion costs, partially offset by higher net pricing, lower overhead costs, lower manufacturing costs and lower amortization of intangible assets.

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $1,258 million increased by $139 million (12.4%) in the third quarter of 2021.

Diluted EPS attributable to Mondelēz International was $0.89 in the third quarter of 2021, up $0.11 (14.1%) from the third quarter of 2020.

Adjusted EPS (1) was $0.71 in the third quarter of 2021, up $0.07 (10.9%) from the third quarter of 2020.

Adjusted EPS on a constant currency basis (1) was $0.70 in the third quarter of 2021, up $0.06 (9.4%) from the third quarter of 2020.

Diluted EPS Attributable to Mondelēz International for the

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Simplify to Grow Program (2)

Intangible asset impairment charges (2)

Acquisition-related costs (2)

Mark-to-market gains from derivatives (2)

Net earnings from divestitures (3)

Costs associated with JDE Peet's transaction (2)

Gain on equity method investment transaction (4)

Initial impacts from enacted tax law changes (4)

Gain on equity method investment transactions (5)

Equity method investee items (6)

Adjusted EPS (1) for the Three Months Ended June 30, 2020

Adjusted EPS (1) for the Three Months Ended September 30, 2020

Increase in operations 0.02

Changes in interest and other expense, net (6)

Impact from acquisition (2)

Changes in income taxes (4)

Changes in shares outstanding (7)

Adjusted EPS (constant currency) (1) for the Three Months Ended June 30, 2021

Adjusted EPS (constant currency) (1) for the Three Months Ended September 30, 2021

Favorable currency translation 0.01

Adjusted EPS (1) for the Three Months Ended June 30, 2021

Adjusted EPS (1) for the Three Months Ended September 30, 2021

Simplify to Grow Program (2)

Intangible asset impairment charges (2)

Mark-to-market gains from derivatives (2)

Acquisition-related costs (2)

Impact from pension participation changes (2)

Initial impacts from enacted tax law changes (7)

Acquisition integration costs and contingent consideration adjustments (2)

Gain on equity method investment transactions (5)

Diluted EPS Attributable to Mondelēz International for the

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

(1) Refer to the Non-GAAP Financial Measures section appearing later in this section.

(2) See the Operating Income table above and the related footnotes for more information.

(3) Includes the impact from last-year's partial sales of our equity method investments in KDP and JDE Peet’s as if the sales occurred at the beginning of all periods presented.

The second quarter 2021 sales of KDP shares will be reflected on a lag basis in the third quarter of 2021.

(3) Includes the impact from 2020 partial sales of our equity method investments in KDP and JDE Peet’s and the second quarter 2021 sale of KDP shares as if the sales occurred at the beginning of all periods presented.

The third quarter 2021 sale of KDP shares will be reflected on a lag basis in the fourth quarter of 2021.

(4) Refer to Note 14, Income Taxes , for more information on the items affecting income taxes.

(5) Refer to Note 6, Equity Method Investments , for more information on the gain on equity method investment transactions.

(6) Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peet's and KDP equity method investees, such as acquisition and divestiture-related costs and restructuring program costs.

(6) Excludes the currency impact on interest expense related to non-U.S.

dollar-denominated debt, which is included in currency translation.

(7) Refer to Note 14, Income Taxes , for more information on the items affecting income taxes.

(7) Refer to Note 11, Stock Plans , for more information on our equity compensation programs and share repurchase program and Note 15, Earnings per Share , for earnings per share weighted-average share information.

Six Months Ended June 30:

For the Six Months Ended

Nine Months Ended September 30:

For the Nine Months Ended

September 30,

2021 2020 $ change % change

6 unchanged sentences

Mondelēz International 2.33 1.66 0.67 40.4 %

Net Revenues – Net revenues increased $1,262 million (10.0%) to $13,880 million in the first six months of 2021, and Organic Net Revenue (1) increased $625 million (5.0%) to $13,243 million.

Net Revenues – Net revenues increased $1,779 million (9.2%) to $21,062 million in the first nine months of 2021, and Organic Net Revenue (1) increased $991 million (5.1%) to $20,274 million.

Developed markets net revenue increased 7.6% and developed markets Organic Net Revenue increased 1.2%.

11 unchanged sentences

Net revenue increase of 9.2% was driven by our underlying Organic Net Revenue growth of 5.1%, favorable currency and the impact of acquisitions.

Overall net revenues were higher in developed markets, as demand for our products grew in certain markets as increased food purchases for in-home consumption continued, though some markets declined as they lapped the prior-year period's strong volume growth resulting from increased consumer demand last year due to the pandemic.

In addition, our sales of our gum and candy products improved as out-of-home consumption began to recover, as did our world travel business as the sharp reduction in global travel due to the pandemic began to subside.

Incremental net revenues from acquisitions and favorable currency translation also added to revenue growth in the quarter.

Overall, we continued to see increased demand for our snack category products, though parts of our business are not yet back to pre-pandemic levels.

In emerging markets, we lapped the negative initial impacts we experienced from the pandemic last year, with strong revenue growth this year across most of our key markets, though some markets were still challenged.

Favorable currency translation and incremental net revenues from acquisitions also added to revenue growth in the first nine months of 2021.

Organic Net Revenue growth was driven by favorable volume/mix and higher net pricing.

Favorable volume/mix in AMEA, Europe and Latin America, driven by strong volume gains, was partially offset by unfavorable volume/mix in North America.

Net pricing was up, which includes the benefit of carryover pricing from 2020 as well as the effects of input cost-driven pricing actions taken during the first six months of 2021.

Net pricing was up, which includes the benefit of carryover pricing from 2020 as well as the effects of input cost-driven pricing actions taken during the first nine months of 2021.

Higher net pricing was reflected in all regions.

Favorable currency impacts increased net revenues by $560 million, due primarily to the strength of several currencies relative to the U.S.

dollar, including the euro, British pound sterling, Australian dollar, Chinese yuan, Canadian dollar, South African rand, Swedish Krona and Mexican peso, partially offset by the strength of the U.S.

dollar relative to several currencies, including the Argentinean peso, Brazilian real, Russian ruble and Turkish lira.

dollar, including the euro, British pound sterling, Australian dollar, Chinese yuan, Canadian dollar, South African rand, Mexican peso and Swedish krona, partially offset by the strength of the U.S.

dollar relative to several currencies, including the Argentinean peso, Brazilian real, Turkish lira and Russian ruble.

The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $54 million (constant currency basis), the March 25, 2021 acquisition of Grenade added incremental net revenues of $41 million (constant currency basis), the January 4, 2021 acquisition of Hu Master Holdings added incremental net revenues of $27 million and the April 1, 2020 acquisition of Give & Go added incremental net revenues of $106 million.

Refer to Note 2, Acquisitions and Divestitures , for additional information.

Operating Income – Operating income increased $586 million (37.3%) to $2,155 million in the first six months of 2021.

Operating Income – Operating income increased $745 million (27.6%) to $3,449 million in the first nine months of 2021.

Adjusted Operating Income (1) increased $392 million (12.2%) to $3,605 million and Adjusted Operating Income on a constant currency basis (1) increased $262 million (8.2%) to $3,475 million due to the following:

1 unchanged sentence

(in millions)

Operating Income for the Six Months Ended June 30, 2020 $ 1,569

Operating Income for the Nine Months Ended September 30, 2020 $ 2,704

Simplify to Grow Program (2)

6 unchanged sentences

Remeasurement of net monetary position (7)

Other/rounding

Adjusted Operating Income (1) for the

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Higher net pricing

8 unchanged sentences

Adjusted Operating Income (1) for the

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Simplify to Grow Program (2)

1 unchanged sentence

Mark-to-market gains from derivatives (4)

Acquisition integration costs (5)

Acquisition integration costs and contingent consideration adjustments (5)

Acquisition-related costs (5)

3 unchanged sentences

Impact from resolution of tax matters (9)

Operating Income for the Six Months Ended June 30, 2021 $ 2,155 37.3 %

Operating Income for the Nine Months Ended September 30, 2021 $ 3,449 27.6 %

(1) Refer to the Non-GAAP Financial Measures section at the end of this item.

1 unchanged sentence

(3) Refer to Note 5, Goodwill and Intangible Assets , for more information.

4 unchanged sentences

(9) Refer to Note 12, Commitments and Contingencies , for more information.

During the first six months of 2021, we realized higher net pricing and favorable volume/mix, which was partially offset by increased input costs.

During the first nine months of 2021, we realized higher net pricing and favorable volume/mix, which was partially offset by increased input costs.

Favorable volume/mix was driven by Europe, AMEA and Latin America, partially offset by unfavorable volume/mix in North America.

1 unchanged sentence

The increase in input costs was driven by higher raw material costs, partially offset by lower manufacturing costs driven by productivity and lower incremental COVID-19 related costs.

Higher raw material costs were in part due to increased currency exchange transaction costs on imported materials, as well as higher packaging, sugar, cocoa, oils, grains, nuts and other ingredients costs, partially offset by lower dairy costs.

Total selling, general and administrative expenses increased $167 million from the first six months of 2020, due to a number of factors noted in the table above, including in part, an unfavorable currency impact related to expenses, incremental expenses from acquisitions, the impact from pension participation changes and higher acquisition-related costs, which were partially offset by lapping prior-year costs associated with the JDE Peet's transaction, lower implementation costs incurred for the Simplify to Grow Program and the favorable impact from the resolution of a tax matter.

Excluding these factors, selling, general and administrative expenses increased $82 million from the first six months of 2020.

The increase was driven primarily by higher advertising and consumer promotion costs.

Higher raw material costs were in part due to increased currency exchange transaction costs on imported materials, as well as higher oils, packaging, cocoa, sugar, grains, nuts and other ingredients costs, partially offset by lower dairy costs.

Total selling, general and administrative expenses increased $119 million from the first nine months of 2020, due to a number of factors noted in the table above, including in part, an unfavorable currency impact related to expenses, incremental expenses from acquisitions, the impact from pension participation changes and higher acquisition-related costs, which were partially offset by a net benefit from acquisition integration costs and contingent consideration adjustments, lower implementation costs incurred for the Simplify to Grow Program, lapping prior-year costs associated with the JDE Peet's transaction and the favorable impact from the resolution of a tax matter.

Excluding these factors, selling, general and administrative expenses increased $104 million from the first nine months of 2020.

The increase was driven primarily by higher advertising and consumer promotion costs, partially offset by lower overhead costs.

Favorable currency changes increased operating income by $130 million due primarily to the strength of several currencies relative to the U.S.

dollar, including the euro, British pound sterling, Australian dollar, Chinese yuan and Canadian dollar, partially offset by the strength of the U.S.

dollar relative to several currencies, including the Brazilian real, Russian ruble, Argentinean peso, Swiss franc and Turkish lira.

Operating income margin increased from 12.4% in the first six months of 2020 to 15.5% in the first six months of 2021.

The increase was driven primarily by a favorable year-over-year change in mark-to-market gains/(losses) from currency and commodity hedging activities, higher Adjusted Operating Income margin, lower intangible asset impairment charges and lapping prior-year costs associated with the JDE Peet's transaction, partially offset by higher Simplify to Grow program costs and the impact of pension participation changes.

Adjusted Operating Income margin increased from 16.2% for the first six months of 2020 to 17.1% for the first six months of 2021.

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $2,039 million increased by $759 million (59.3%) in the first six months of 2021.

Diluted EPS attributable to Mondelēz International was $1.44 in the first six months of 2021, up $0.55 (61.8%) from the first six months of 2020.

Adjusted EPS (1) was $1.46 in the first six months of 2021, up $0.18 (14.1%) from the first six months of 2020.

Adjusted EPS on a constant currency basis (1) was $1.39 in the first six months of 2021, up $0.11 (8.6%) from the first six months of 2020.

dollar, including the euro, British pound sterling, Australian dollar, Chinese yuan, Canadian dollar and South African rand, partially offset by the strength of the U.S.

dollar relative to several currencies, including the Argentinean peso, Brazilian real, Russian ruble, Turkish lira and Swiss franc.

Operating income margin increased from 14.0% in the first nine months of 2020 to 16.4% in the first nine months of 2021.

The increase was driven primarily by a favorable year-over-year change in mark-to-market gains/(losses) from currency and commodity hedging activities, lower intangible asset impairment charges, higher Adjusted Operating Income margin, a net benefit from acquisition integration costs and contingent consideration adjustments and lapping prior-year costs associated with the JDE Peet's transaction, partially offset by higher Simplify to Grow program costs, the impact of pension participation changes and higher acquisition-related costs.

Adjusted Operating Income margin increased from 16.7% for the first nine months of 2020 to 17.1% for the first nine months of 2021.

The increase was driven primarily by higher net pricing, lower manufacturing costs, lower overhead costs and lower amortization of intangible assets, partially offset by higher raw material costs, unfavorable product mix and higher advertising and consumer promotion costs.

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $3,297 million increased by $898 million (37.4%) in the first nine months of 2021.

Diluted EPS attributable to Mondelēz International was $2.33 in the first nine months of 2021, up $0.67 (40.4%) from the first nine months of 2020.

Adjusted EPS (1) was $2.17 in the first nine months of 2021, up $0.26 (13.6%) from the first nine months of 2020.

Adjusted EPS on a constant currency basis (1) was $2.08 in the first nine months of 2021, up $0.17 (8.9%) from the first nine months of 2020.

Diluted EPS Attributable to Mondelēz International for the

Six Months Ended June 30, 2020 $ 0.89

Nine Months Ended September 30, 2020 $ 1.66

Simplify to Grow Program (2)

4 unchanged sentences

Costs associated with JDE Peet's transaction (2)

Impact from pension participation changes (2)

Loss related to interest rate swaps (4)

Initial impacts from enacted tax law changes (5)

Gain on equity method investment transactions (6)

Equity method investee items (7)

Adjusted EPS (1) for the Six Months Ended June 30, 2020

Adjusted EPS (1) for the Nine Months Ended September 30, 2020

Increase in operations

Increase in equity method investment net earnings 0.02

Changes in benefit plan non-service income

Changes in interest and other expense, net (8)

1 unchanged sentence

Changes in shares outstanding (9)

Adjusted EPS (constant currency) (1) for the Six Months Ended June 30, 2021

Adjusted EPS (constant currency) (1) for the Nine Months Ended September 30, 2021

Favorable currency translation 0.09

Adjusted EPS (1) for the Six Months Ended June 30, 2021

Adjusted EPS (1) for the Nine Months Ended September 30, 2021

Simplify to Grow Program (2)

1 unchanged sentence

Mark-to-market gains from derivatives (2)

Acquisition integration costs and contingent consideration adjustments (2)

Acquisition-related costs (2)

Net earnings from divestiture (2) (3)

Remeasurement of net monetary position (2)

Impact from pension participation changes (2)

4 unchanged sentences

Diluted EPS Attributable to Mondelēz International for the

Six Months Ended June 30, 2021 $ 1.44

Nine Months Ended September 30, 2021 $ 2.33

(1) Refer to the Non-GAAP Financial Measures section appearing later in this section.

1 unchanged sentence

Within earnings per share, taxes related to the JDE Peet's transaction are included in costs associated with the JDE Peet's transaction.

(3) Includes the impact from last-year's partial sales of our equity method investments in KDP and JDE Peet’s as if the sales occurred at the beginning of all periods presented.

The second quarter 2021 sales of KDP shares will be reflected on a lag basis in the third quarter of 2021.

The third quarter 2021 sale of KDP shares will be reflected on a lag basis in the fourth quarter of 2021.

(4) Refer to Note 9, Financial Instruments , for information on our interest swaps that we no longer designate as cash flow hedges.

(5) Refer to Note 14, Income Taxes , for more information on the items affecting income taxes.

(6) Refer to Note 6, Equity Method Investments , for more information on the gain on equity method investment transactions.

2 unchanged sentences

dollar-denominated debt, which is included in currency translation.

(8) Refer to Note 14, Income Taxes , for more information on the items affecting income taxes.

(9) Refer to Note 11, Stock Plans , for more information on our equity compensation programs and share repurchase program and Note 15, Earnings per Share , for earnings per share weighted-average share information.

11 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

24 unchanged sentences

For the Three Months Ended

September 30,

2021 2020 $ change % change

2 unchanged sentences

Segment operating income 91 77 14 18.2 %

For the Six Months Ended

For the Nine Months Ended

September 30,

2021 2020 $ change % change

2 unchanged sentences

Segment operating income 221 149 72 48.3 %

(1) Due to a negative value in the prior-year quarter, the percentage change is not meaningful.

We note the favorable increase in segment operating income.

Three Months Ended June 30:

Net revenues increased $158 million (30.9%), due to favorable volume/mix (18.8 pp) and higher net pricing (14.9 pp), partially offset by unfavorable currency (2.8 pp).

Favorable volume/mix reflected strong volume growth as the region lapped a weak prior-year quarter impacted by pandemic-related lockdowns.

Favorable volume/mix was driven by gains in chocolate, gum, biscuits and candy, partially offset by declines in cheese & grocery and refreshment beverages.

Three Months Ended September 30:

Net revenues increased $141 million (23.1%), due to higher net pricing (15.1 pp) and favorable volume/mix (10.8 pp), partially offset by unfavorable currency (2.8 pp).

Higher net pricing was reflected across all categories, driven primarily by Argentina, Brazil and Mexico.

Favorable volume/mix reflected strong volume growth as the region lapped a weak prior-year quarter impacted by pandemic-related lockdowns.

Favorable volume/mix was driven by gains in chocolate, biscuits, gum and candy, partially offset by declines in refreshment beverages and cheese & grocery.

Unfavorable currency impacts were due primarily to the strength of the U.S.

1 unchanged sentence

dollar, primarily the Mexican peso and Brazilian real.

Segment operating income increased $60 million, primarily due to higher net pricing, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), favorable volume/mix, lower costs incurred for the Simplify to Grow Program and the favorable impact from the resolution of a tax matter.

These favorable items were partially offset by higher raw material costs and higher advertising and consumer promotion costs.

Six Months Ended June 30:

Segment operating income increased $14 million (18.2%), primarily due to higher net pricing, favorable volume/mix and lower manufacturing costs (productivity and lower incremental COVID-19 related costs) and lower costs incurred for the Simplify to Grow Program.

These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs, higher other selling, general and administrative expenses and unfavorable currency.

Nine Months Ended September 30:

Net revenues increased $242 million (13.1%), due to higher net pricing (13.1 pp) and favorable volume/mix (7.6 pp), partially offset by unfavorable currency (7.6 pp).

1 unchanged sentence

Favorable volume/mix reflected strong volume growth as the region lapped a weak prior-year period impacted by pandemic-related lockdowns.

Favorable volume/mix was driven by gains in chocolate, biscuits and gum, partially offset by declines in cheese & grocery, refreshment beverages and candy.

Favorable volume/mix was driven by gains in chocolate, biscuits, gum and candy, partially offset by declines in refreshment beverages and cheese & grocery.

Unfavorable currency impacts were due primarily to the strength of the U.S.

1 unchanged sentence

dollar, primarily the Mexican peso.

Segment operating income increased $58 million (80.6%), primarily due to higher net pricing, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), lower costs incurred for the Simplify to Grow Program, lower other selling, general and administrative expenses, the favorable impact from the resolution of a tax matter and favorable volume/mix.

Segment operating income increased $72 million (48.3%), primarily due to higher net pricing, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), favorable volume/mix, lower costs incurred for the Simplify to Grow Program and the favorable impact from the resolution of a tax matter.

These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs and unfavorable currency.

For the Three Months Ended

September 30,

2021 2020 $ change % change

2 unchanged sentences

Segment operating income 267 210 57 27.1 %

For the Six Months Ended

For the Nine Months Ended

September 30,

2021 2020 $ change % change

2 unchanged sentences

Segment operating income 842 615 227 36.9 %

Three Months Ended June 30:

Net revenues increased $215 million (17.4%), due to favorable currency (8.6 pp), favorable volume/mix (5.1 pp), higher net pricing (1.9 pp) and the impact of an acquisition (1.8 pp).

Three Months Ended September 30:

Net revenues increased $159 million (10.8%), due to favorable volume/mix (3.9 pp), favorable currency (3.0 pp), the impact of an acquisition (2.1 pp) and higher net pricing (1.8 pp).

Favorable volume/mix reflected overall volume gains from increased demand for most of our snack category products as we continue to recover from the impacts of the pandemic, though some markets were still challenged.

Favorable volume/mix was driven by gains in chocolate, gum and candy, partially offset by declines in cheese & grocery, biscuits and refreshment beverages.

Favorable currency impacts were due to the strength of most currencies relative to the U.S.

dollar, including the Australian dollar, Chinese yuan and South African rand.

Favorable volume/mix reflected overall volume gains as the negative impacts from the pandemic that we experienced in the prior-year quarter subsided across most of the region, though some markets were still challenged.

Favorable volume/mix was driven by gains in chocolate, gum, candy and biscuits, partially offset by declines in cheese & grocery and refreshment beverages.

Higher net pricing was reflected across all categories except cheese & grocery.

The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $23 million (constant currency basis) in the second quarter of 2021.

Segment operating income increased $42 million (24.6%), primarily due to lower manufacturing costs (productivity and lower incremental COVID-19 related costs), higher net pricing, favorable currency, favorable volume/mix and lapping prior-year intangible asset impairment charges.

These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs and higher other selling, general and administrative expenses.

Six Months Ended June 30:

Net revenues increased $458 million (16.7%), due to favorable currency (6.8 pp), favorable volume/mix (6.7 pp), higher net pricing (2.4 pp) and the impact of an acquisition (0.8 pp).

dollar, including the Chinese yuan, South African rand and Australian dollar.

The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $31 million (constant currency basis) in the third quarter of 2021.

Higher net pricing was reflected across all categories except cheese & grocery and candy.

Segment operating income increased $57 million (27.1%), primarily due to lower manufacturing costs driven by productivity, higher net pricing, lower costs incurred for the Simplify to Grow Program, favorable currency, favorable volume/mix, lapping prior-year divestiture-related costs and the impact of an acquisition.

These favorable items were partially offset by higher raw material costs and higher advertising and consumer promotion costs.

Nine Months Ended September 30:

Net revenues increased $617 million (14.7%), due to favorable volume/mix (5.7 pp), favorable currency (5.5 pp), higher net pricing (2.2 pp) and the impact of an acquisition (1.3 pp).

Favorable volume/mix reflected net overall volume gains as the negative impacts from the pandemic that we experienced in the prior-year period subsided across most of the region, though some markets were still challenged.

Favorable volume/mix was driven by gains in chocolate, gum, biscuits and candy, partially offset by declines in cheese & grocery and refreshment beverages.

Favorable currency impacts were due to the strength of most currencies relative to the U.S.

dollar, including the Australian dollar, Chinese yuan, South African rand, New Zealand dollar and Philippine peso.

Favorable volume/mix reflected overall volume gains as the negative impacts from the pandemic that we experienced in the prior-year period subsided across most of the region, though some markets were still challenged.

Favorable volume/mix was driven by gains in chocolate, biscuits, gum and candy, partially offset by declines in refreshment beverages and cheese & grocery.

Higher net pricing was reflected across all categories.

The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $23 million (constant currency basis) in the first six months of 2021.

Segment operating income increased $170 million (42.0%), primarily due to higher net pricing, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), favorable volume/mix, favorable currency, lower costs incurred for the Simplify to Grow Program and lapping prior-year intangible asset impairment charges.

These favorable items were partially offset by higher advertising and consumer promotion costs, higher raw material costs and higher other selling, general and administrative expenses.

Higher net pricing was reflected across all categories except cheese & grocery.

The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $54 million (constant currency basis) in the first nine months of 2021.

Segment operating income increased $227 million (36.9%), primarily due to lower manufacturing costs (productivity and lower incremental COVID-19 related costs), higher net pricing, favorable volume/mix, favorable currency, lower costs incurred for the Simplify to Grow Program, the impact of an acquisition and lapping prior-year intangible asset impairment charges.

These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs and higher other selling, general and administrative expenses.

For the Three Months Ended

September 30,

2021 2020 $ change % change

2 unchanged sentences

Segment operating income 508 432 76 17.6 %

For the Six Months Ended

For the Nine Months Ended

September 30,

2021 2020 $ change % change

2 unchanged sentences

Segment operating income 1,478 1,201 277 23.1 %

Three Months Ended June 30:

Net revenues increased $336 million (15.7%), due to favorable currency (9.3 pp), favorable volume/mix (4.2 pp), higher net pricing (1.2 pp) and the impact of an acquisition (1.0 pp).

Three Months Ended September 30:

Net revenues increased $188 million (7.4%), due to favorable volume/mix (3.1 pp), favorable currency (2.0 pp), higher net pricing (1.5 pp) and the impact of an acquisition (0.8 pp).

Favorable volume/mix was driven by strong volume growth as we experienced increased demand for most of our snack category products and our world travel business continued to recover as global travel improved though still below pre-pandemic levels.

Favorable volume/mix was driven by gains in chocolate, biscuits and cheese & grocery, partially offset by declines in gum, candy and refreshment beverages.

Favorable currency impacts reflected the strength of most currencies in the region relative to the U.S.

dollar, including the euro, British pound sterling, Swedish krona, Norwegian krone and Polish zloty, partially offset by the strength of the U.S.

dollar relative to a few currencies, including the Turkish lira and Russian ruble.

Favorable volume/mix was driven by strong volume growth as increased food purchases for in-home consumption continued and out-of-home consumption began to recover, as did our world travel business as the sharp reduction in global travel due to the pandemic began to subside.

Favorable volume/mix was driven by gains in biscuits, gum, candy, chocolate and cheese & grocery, partially offset by declines in refreshment beverages.

Higher net pricing was driven by chocolate, gum and candy, partially offset by lower net pricing in cheese & grocery, biscuits and refreshment beverages.

The March 25, 2021 acquisition of Grenade added incremental net revenues of $21 million (constant currency basis) in the second quarter of 2021.

Segment operating income increased $116 million (39.1%), primarily due to lapping prior-year intangible asset impairment charges, favorable currency, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), favorable volume/mix, higher net pricing and lower Simplify to Grow Program costs.

These favorable items were partially offset by the impact of pension participation changes, higher raw materials and higher advertising and consumer promotion costs.

Six Months Ended June 30:

dollar, including the British pound sterling, euro, Norwegian krone, Russian ruble and Swedish krona, partially offset by the strength of the U.S.

dollar relative to a few currencies, including the Turkish lira and Polish zloty.

Higher net pricing was reflected across all categories except cheese & grocery.

The March 25, 2021 acquisition of Grenade added incremental net revenues of $20 million (constant currency basis) in the third quarter of 2021.

Segment operating income increased $76 million (17.6%), primarily due to lower Simplify to Grow Program costs, higher net pricing, favorable volume/mix, lower other selling, general and administrative expenses, favorable currency and lower manufacturing costs (productivity and lower incremental COVID-19 related costs).

These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs and acquisition integration costs incurred in the quarter.

Nine Months Ended September 30:

Net revenues increased $787 million (10.9%), due to favorable currency (5.9 pp), favorable volume/mix (3.2 pp), higher net pricing (1.2 pp) and the impact of an acquisition (0.6 pp).

Favorable currency impacts reflected the strength of most currencies in the region relative to the U.S.

dollar, including the euro, British pound sterling, Swedish krona, Norwegian krone and Polish zloty, partially offset by the strength of the U.S.

dollar relative to a few currencies, including the Russian ruble and Turkish lira.

Favorable volume/mix reflected strong volume growth as increased food purchases for in-home consumption continued and out-of-home consumption began to recover, as did our world travel business as the sharp reduction in global travel due to the pandemic began to subside.

Favorable volume/mix was driven by gains in biscuits, chocolate, cheese & grocery, and refreshment beverages, partially offset by declines in gum and candy.

Higher net pricing was driven by chocolate, candy, gum and refreshment beverages, partially offset by higher net pricing in cheese & grocery and biscuits.

The March 25, 2021 acquisition of Grenade added incremental net revenues of $21 million (constant currency basis) in the first six months of 2021.

Segment operating income increased $201 million (26.1%), primarily due to favorable currency, favorable volume/mix, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), higher net pricing, lapping prior-year intangible asset impairment charges and lower Simplify to Grow Program costs.

These favorable items were partially offset by higher raw material costs, the impact of pension participation changes and higher advertising and consumer promotion costs.

dollar, including the euro, British pound sterling, Swedish krona, Norwegian krone, Czech koruna and Polish zloty, partially offset by the strength of the U.S.

dollar relative to a few currencies, including the Turkish lira and Russian ruble.

Favorable volume/mix was driven by gains in chocolate, biscuits, cheese & grocery, and refreshment beverages, partially offset by declines in gum and candy.

Higher net pricing was reflected across all categories except cheese & grocery.

The March 25, 2021 acquisition of Grenade added incremental net revenues of $41 million (constant currency basis) in the first nine months of 2021.

Segment operating income increased $277 million (23.1%), primarily due to favorable volume/mix, favorable currency, higher net pricing, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), lower Simplify to Grow Program costs, lapping prior-year intangible asset impairment charges and lower other selling, general and administrative expenses.

These favorable items were partially offset by higher raw material costs, the impact of pension participation changes, higher advertising and consumer promotion costs and acquisition integration costs incurred in the first nine months of 2021.

North America

For the Three Months Ended

September 30,

2021 2020 $ change % change

2 unchanged sentences

Segment operating income 363 387 (24) (6.2) %

For the Six Months Ended

For the Nine Months Ended

September 30,

2021 2020 $ change % change

2 unchanged sentences

Segment operating income 932 1,192 (260) (21.8) %

Three Months Ended June 30:

Net revenues increased $22 million (1.1%), due to favorable currency (1.0 pp), the impact of an acquisition (0.4 pp), and higher net pricing (0.2 pp), partially offset by unfavorable volume/mix (0.5 pp).

Three Months Ended September 30:

Net revenues increased $29 million (1.4%), due to higher net pricing (2.4 pp), the impact of an acquisition (0.6 pp) and favorable currency (0.5 pp), partially offset by unfavorable volume/mix (2.1 pp).

Higher net pricing was reflected across all categories.

The January 4, 2021 acquisition of Hu Master Holdings added incremental net revenues of $11 million in the third quarter of 2021.

Favorable currency impact was due to the strength of the Canadian dollar relative to the U.S.

The January 4, 2021 acquisition of Hu Master Holdings added incremental net revenues of $8 million in the second quarter of 2021.

Higher net pricing was driven by chocolate, candy and gum, partially offset by lower net pricing in biscuits.

Unfavorable volume mix reflected volume declines as the region lapped a very strong prior-year quarter that reflected significantly increased food purchases for in-home consumption due to the pandemic.

Unfavorable volume/mix was driven by a decline in biscuits, partially offset by gains in gum, candy and chocolate.

Segment operating income decreased $125 million (29.5%), primarily due to higher Simplify to Grow Program costs, unfavorable volume/mix, higher raw material costs, higher advertising and consumer promotion costs and the impact of an acquisition.

These unfavorable items were partially offset by lower other selling, general and administrative expenses, lower manufacturing costs (primarily lower incremental COVID-19 related costs), favorable currency, higher net pricing and lower intangible asset impairment charges.

Six Months Ended June 30:

Net revenues increased $104 million (2.7%), due to the impact of acquisitions (3.2 pp), favorable currency (0.8 pp), and higher net pricing (0.4 pp), partially offset by unfavorable volume/mix (1.7 pp).

The April 1, 2020 acquisition of Give & Go added incremental net revenues of $106 million and the January 4, 2021 acquisition of Hu Master Holdings added incremental net revenues of $16 million in the first six months of 2021.

Unfavorable volume/mix was driven by a decline in biscuits, candy and chocolate, partially offset by a gain in gum.

Segment operating income decreased $24 million (6.2%), primarily due to higher Simplify to Grow Program costs, higher raw material costs and unfavorable volume/mix.

These unfavorable items were partially offset by a net benefit from acquisition integration costs and contingent consideration adjustments, higher net pricing, lapping prior-year intangible asset impairment charges, lower manufacturing costs (primarily lower incremental COVID-19 related costs), lower advertising and consumer promotion costs and lower other selling, general and administrative expenses.

Nine Months Ended September 30:

Net revenues increased $133 million (2.2%), due to the impact of acquisitions (2.2 pp), higher net pricing (1.1 pp) and favorable currency (0.7 pp), partially offset by unfavorable volume/mix (1.8 pp).

Higher net pricing was driven by biscuits, chocolate and gum, partially offset by lower net pricing in candy.

Favorable currency impact was due to the strength of the Canadian dollar relative to the U.S.

Higher net pricing was driven by biscuits and chocolate, partially offset by lower net pricing in candy and gum.

Unfavorable volume mix reflected volume declines as the region lapped a very strong prior-year period that reflected significantly increased food purchases for in-home consumption due to the pandemic.

Unfavorable volume/mix was driven by declines in biscuits, candy, gum and chocolate.

Segment operating income decreased $236 million (29.3%), primarily due to higher Simplify to Grow Program costs, unfavorable volume/mix, higher advertising and consumer promotion costs and higher raw material costs.

These unfavorable items were partially offset by lower other selling, general and administrative expenses, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), higher net pricing, favorable currency, lower intangible asset impairment charges and the impact of acquisitions.

Segment operating income decreased $260 million (21.8%), primarily due to higher Simplify to Grow Program costs, unfavorable volume/mix, higher raw material costs and higher advertising and consumer promotion costs.

These unfavorable items were partially offset by higher net pricing, a net benefit from acquisition integration costs and contingent consideration adjustments, lower other selling, general and administrative expenses, lower intangible asset impairment charges, lower manufacturing costs (lower incremental COVID-19 related costs and productivity), favorable currency and the impact of acquisitions.

Liquidity and Capital Resources

We believe that cash from operations, our revolving credit facilities, short-term borrowings and our authorized long-term financing will continue to provide sufficient liquidity for our working capital needs, planned capital expenditures, payments of our contractual, tax and benefit plan obligations and payments for acquisitions, share repurchases and quarterly dividends.

In light of the ongoing uncertainty related to the COVID-19 outbreak, however, an economic or credit crisis could occur and impair credit availability and our ability to raise capital when needed.

We believe that cash from operations, our revolving credit facilities, short-term borrowings and long-term debt will continue to provide sufficient liquidity for our working capital needs, planned capital expenditures, payments of our contractual, tax and benefit plan obligations and payments for acquisitions, share repurchases and quarterly dividends.

In light of the ongoing uncertainty related to the COVID-19 pandemic, however, an economic or credit crisis could occur and impair credit availability and our ability to raise capital when needed.

A disruption in the financial markets could also impair our banking and other business partners, on whom we rely for access to capital and as counterparties for a number of our derivative contracts.

2 unchanged sentences

We also use intercompany loans with our international subsidiaries to improve financial flexibility.

In addition, our publicly-traded investments in KDP and JDEP had a fair value of $7.3 billion as of June 30, 2021 and are available as a source of additional liquidity.

In 2020, we sold portions of our stakes in these businesses worth $2.5 billion in total, and in the first half of 2021, we sold an additional $1.0 billion worth of KDP shares.

In connection with various legislatively authorized tax payment deferral mechanisms available for income tax, indirect tax (such as value-added tax) and payroll tax in a number of jurisdictions, we were able to defer certain of these tax payments in 2020, which provided a cash benefit that reverses when the cash tax payments become due.

Some of these payments were made during the first half of 2021;

the remainder will come due in the second half of 2021 and in 2022.

The benefits associated with the deferral of these tax payments were not material to our financial statements.

In addition, our publicly-traded investments in KDP and JDEP had a fair value of $6.0 billion as of September 30, 2021 and are available as a source of additional liquidity.

In 2020, we sold portions of our stakes in these businesses worth $2.5 billion in total, and in the first nine months of 2021, we sold an additional $1.5 billion worth of KDP shares.

Overall, at this time, we do not expect any negative effects to our funding sources that would have a material effect on our liquidity;

1 unchanged sentence

Net Cash Provided by Operating Activities:

Net cash provided by operating activities was $1,792 million in the first six months of 2021 and $1,558 million in the first six months of 2020.

Net cash provided by operating activities was $2,720 million in the first nine months of 2021 and $2,315 million in the first nine months of 2020.

The increase in net cash provided by operating activities was due primarily to higher earnings and lower working capital requirements, partially offset by higher tax payments and lower dividends received from our equity method investments.

Net Cash Used in Investing Activities:

Net cash used in investing activities was $220 million in the first six months of 2021 and $1,037 million in the first six months of 2020.

The decrease in net cash used in investing activities was due primarily to higher cash proceeds from the sale of shares in our equity method investments (refer to Note 6, Equity Method Investments ) as well as lower cash expenditures for acquisitions (refer to Note 2, Acquisitions and Divestitures ).

Net Cash Provided by/(Used in) Investing Activities:

Net cash provided by investing activities was $106 million in the first nine months of 2021 and net cash used in investing activities was $357 million in the first nine months of 2020.

The change was due primarily to lower cash expenditures for acquisitions (refer to Note 2, Acquisitions and Divestitures ) and higher cash proceeds from the sale of shares in our equity method investments (refer to Note 6, Equity Method Investments ).

We continue to make capital expenditures primarily to modernize manufacturing facilities and support new product and productivity initiatives.

2 unchanged sentences

Net Cash Used in Financing Activities:

Net cash used in financing activities was $3,228 million in the first six months of 2021 and $181 million in the first six months of 2020.

The increase in cash used in financing activities was primarily due to higher amounts of net long-term debt repayments in the first six months of 2021, higher share repurchases and higher dividends paid.

Net cash used in financing activities was $2,971 million in the first nine months of 2021 and $495 million in the first nine months of 2020.

The increase in cash used in financing activities was primarily due to higher amounts of net long-term debt repayments, higher share repurchases and higher dividends paid in the first nine months of 2021 than in the same prior-year period.

Chipita Acquisition

We expect our acquisition of Chipita S.A.

to close in the first half of 2022 and to pay approximately €1.7 billion ($2.0 billion) in cash for the business, which we have raised through issuing long-term debt primarily in the third quarter of 2021.

Refer to Note 2, Acquisitions and Divestitures , and Note 8, Debt and Borrowing Arrangements , for additional details.

From time to time we refinance long-term and short-term debt.

Refer to Note 8, Debt and Borrowing Arrangements , for details of our debt activity during the first six months of 2021.

Refer to Note 8, Debt and Borrowing Arrangements , for details of our debt activity during the first nine months of 2021.

The nature and amount of our long-term and short-term debt and the proportionate amount of each varies as a result of current and expected business requirements, market conditions and other factors.

4 unchanged sentences

(“MIHN”), has outstanding debt.

The operations held by MIHN generated approximately 72.7% (or $10.1 billion) of the $13.9 billion of consolidated net revenue in the six months ended June 30, 2021.

The operations held by MIHN represented approximately 80.8% (or $22.3 billion) of the $27.6 billion of net assets as of June 30, 2021 and 76.2% (or $21.1 billion) of the $27.7 billion of net assets as of December 31, 2020.

The operations held by MIHN generated approximately 73.0% (or $15.4 billion) of the $21.1 billion of consolidated net revenue in the nine months ended September 30, 2021.

The operations held by MIHN represented approximately

81.3% (or $22.6 billion) of the $27.8 billion of net assets as of September 30, 2021 and 76.2% (or $21.1 billion) of the $27.7 billion of net assets as of December 31, 2020.

During December 2020, our Board of Directors approved a new $6.0 billion long-term financing authority to replace the prior $8.0 billion authority.

As of June 30, 2021, we had $3.6 billion of long-term financing authority remaining.

As of September 30, 2021, we had approximately $40.0 million of long-term financing authority remaining.

In the next 12 months, we expect to repay approximately $2.0 billion of maturing long-term debt:

$1.5 billion in October 2021, $0.3 billion in December 2021 and $1.2 billion in July 2022.

$0.3 billion in December 2021, $1.2 billion in July 2022 and $0.5 billion in September 2022.

We expect to fund these repayments with cash on hand, as well as short-term and long-term debt.

Our total debt was $19.0 billion at June 30, 2021 and $20.0 billion at December 31, 2020.

Our debt-to-capitalization ratio was 0.41 at June 30, 2021 and 0.42 at December 31, 2020.

At June 30, 2021, the weighted-average term of our outstanding long-term debt was 8.6 years.

Our average daily commercial paper borrowings outstanding were $0.6 billion in the first six months of 2021 and $3.6 billion in the first six months of 2020.

We had commercial paper outstanding totaling $13 million as of June 30, 2021 and no commercial paper borrowings outstanding at December 31, 2020.

Our total debt was $20.0 billion at September 30, 2021 and $20.0 billion at December 31, 2020.

Our debt-to-capitalization ratio was 0.42 at September 30, 2021 and 0.42 at December 31, 2020.

At September 30, 2021, the weighted-average term of our outstanding long-term debt was 9.6 years.

Our average daily commercial paper borrowings outstanding were $0.5 billion in the first nine months of 2021 and $3.0 billion in the first nine months of 2020.

We had commercial paper outstanding totaling $184 million as of September 30, 2021 and no commercial paper borrowings outstanding at December 31, 2020.

We expect to continue to use cash or commercial paper to finance various short-term financing needs.

We continue to comply with our debt covenants.

Through September 30, 2021, we continue to comply with our debt covenants.

Refer to Note 8, Debt and Borrowing Arrangements .

1 unchanged sentence

We regularly monitor worldwide supply, commodity cost and currency trends so we can cost-effectively secure ingredients, packaging and fuel required for production.

During the first six months of 2021, the primary drivers of the increase in our aggregate commodity costs were higher currency exchange transaction costs on imported materials, as well as increased costs for packaging, sugar, cocoa, oils, grains, nuts and other ingredients costs, partially offset by lower costs for dairy.

A number of external factors such as the current COVID-19 global pandemic, weather conditions, commodity market conditions, currency fluctuations and the effects of governmental agricultural or other programs affect the cost and availability of raw materials and agricultural materials used in our products.

During the first nine months of 2021, the primary drivers of the increase in our aggregate commodity costs were higher currency exchange transaction costs on imported materials, as well as increased costs for oils, packaging, cocoa, sugar, grains, nuts and other ingredients costs.

A number of external factors such as the current COVID-19 global pandemic, climate and weather conditions, commodity, transportation and labor market conditions, currency fluctuations and the effects of governmental agricultural or other programs affect the cost and availability of raw materials and agricultural materials used in our products.

We address higher commodity costs and currency impacts primarily through hedging, higher pricing and manufacturing and overhead cost control.

2 unchanged sentences

Due to competitive or market conditions, planned trade or promotional incentives, fluctuations in currency exchange rates or other factors, our pricing actions may also lag commodity cost changes temporarily.

We expect price volatility and a higher aggregate cost environment to continue in the remainder of 2021.

While the costs of our principal raw materials fluctuate, we believe there will continue to be an adequate supply of the raw materials we use and that they will generally remain available from numerous sources.

As a result of international supply chain, transportation and labor market disruptions and generally higher commodity, transportation and labor costs in the third quarter of 2021, we expect price volatility and a higher aggregate cost environment to continue in the remainder of 2021 and into 2022.

While the costs of our principal raw materials fluctuate, we believe there will continue to be an adequate supply of the raw materials we use and that they will generally remain available.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

3 unchanged sentences

Stock Plans and Share Repurchases:

See Note 11, Stock Plans , to our condensed consolidated financial statements and Part II, Item 2, Unregistered Sales of Equity and Use of Proceeds , for more information on our stock plans, grant activity and share repurchase program for the six months ended June 30, 2021.

As of June 30, 2021, our Board of Directors has authorized share repurchases up to $23.7 billion through December 31, 2023.

Under this program, we have repurchased approximately $19.5 billion of shares through June 30, 2021 ($1.5 billion in the first six months of 2021, $1.4 billion in 2020, $1.5 billion in 2019, $2.0 billion in 2018, $2.2 billion in 2017, $2.6 billion in 2016, $3.6 billion in 2015, $1.9 billion in 2014 and $2.7 billion in 2013), at a weighted-average cost of $41.51 per share.

The number of shares that we ultimately repurchase under our share repurchase program may vary depending on numerous factors, including share price and other market conditions, our ongoing capital allocation planning, levels of cash and debt balances, other demands for cash, such as acquisition activity, general economic or business

conditions and Board and management discretion.

See Note 11, Stock Plans , to our condensed consolidated financial statements and Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds , for more information on our stock plans, grant activity and share repurchase program for the nine months ended September 30, 2021.

As of September 30, 2021, our Board of Directors has authorized share repurchases up to $23.7 billion through December 31, 2023.

Under this program, we have repurchased approximately $19.7 billion of shares through

September 30, 2021 ($1.8 billion in the first nine months of 2021, $1.4 billion in 2020, $1.5 billion in 2019, $2.0 billion in 2018, $2.2 billion in 2017, $2.6 billion in 2016, $3.6 billion in 2015, $1.9 billion in 2014 and $2.7 billion in 2013), at a weighted-average cost of $41.74 per share.

Additionally, our share repurchase activity during any particular period may fluctuate.

We may accelerate, suspend, delay or discontinue our share repurchase program at any time, without notice.

We paid dividends of $896 million in the first six months of 2021 and $819 million in the first six months of 2020.

The second quarter 2021 dividend of $0.315 per share, declared on May 19, 2021 for shareholders of record as of June 30, 2021, was paid on July 14, 2021.

On July 27, 2021, the Finance Committee, with authorization delegated from our Board of Directors, declared a quarterly cash dividend of $0.35 per share of Class A Common Stock, an increase of 11 percent.

This dividend is payable on October 14, 2021, to shareholders of record as of September 30, 2021.

We paid dividends of $1,337 million in the first nine months of 2021 and $1,227 million in the first nine months of 2020.

The third quarter 2021 dividend of $0.35 per share, declared on July 27, 2021 for shareholders of record as of September 30, 2021, was paid on October 14, 2021.

The declaration of dividends is subject to the discretion of our Board of Directors and depends on various factors, including our net earnings, financial condition, cash requirements, future prospects and other factors that our Board of Directors deems relevant to its analysis and decision making.

20 unchanged sentences

our strategy to accelerate consumer-centric growth, drive operational excellence and create a winning growth culture;

volatility in global consumer, commodity, currency and capital markets;

volatility in global consumer, commodity, transportation, labor, currency and capital markets;

price volatility, inflation and pricing actions;

the cost environment and measures to address increased costs;

the cost environment, including higher operating, raw material, transportation, labor and fuel costs, factors affecting costs and measures we are taking to address increased costs;

supply, transportation and labor constraints;

snack consumption and our ability to meet demand for our products;

our tax rate, tax positions, tax proceedings and the impact of U.S.

and Swiss tax reform on our results;

our tax rate, tax positions, tax proceedings and the impact of potential U.S.

and other tax reform on our results;

the U.K.'s separation from the E.U.

and its impact on our business and results, including in connection with disagreements on trade terms, delays affecting our supply chain or distribution, or disruptions to sales or collections;

and its impact on our business and results, including in connection with disagreements on trade terms, delays affecting our supply chain or distribution, disruptions to sales or collections, or further increases in inflationary cost pressures;

the costs of, timing of expenditures under and completion of our restructuring program;

commodity prices and supply;

our investments including in JDE Peet's and KDP;

strategic transactions;

commodity prices, supply and availability;

our investments including in JDE Peet's and KDP and our ownership interest in those investments;

strategic transactions, including the Chipita acquisition;

political, business and economic conditions and volatility;

6 unchanged sentences

our accounting estimates and judgments and the impact of new accounting pronouncements;

pension expenses, contributions and

pension expenses, contributions and assumptions;

our liquidity, funding sources and uses of funding, including debt issuances and our use of commercial paper;

4 unchanged sentences

capital expenditures and funding;

funding of debt maturities;

funding of debt maturities and other obligations;

share repurchases;

3 unchanged sentences

and our contractual and other obligations.

These forward-looking statements involve risks and uncertainties, many of which are beyond our control, and many of these risks and uncertainties are currently amplified by and may continue to be amplified by the COVID-19 pandemic.

Important factors that could cause our actual results to differ materially from those described in our forward-looking statements include, but are not limited to, uncertainty about the magnitude, duration, geographic reach, impact on the global economy and related current and potential travel restrictions of the COVID-19 pandemic;

the current, and uncertain future, impact of the COVID-19 pandemic on our business, growth, reputation, prospects, financial condition, operating results (including components of our financial results), cash flows and liquidity;

Important factors that could cause our actual results to differ materially from those described in our forward-looking statements include, but are not limited to, uncertainty about the effectiveness of efforts by health officials and governments to control the spread of COVID-19 and inoculate and treat populations impacted by COVID-19;

uncertainty about the reimposition or lessening of restrictions imposed by governments intended to mitigate the spread of COVID-19 and the magnitude, duration, geographic reach and impact on the global economy of COVID-19;

the ongoing, and uncertain future, impact of the COVID-19 pandemic on our business, growth, reputation, prospects, financial condition, operating results (including components of our financial results), cash flows and liquidity;

risks from operating globally including in emerging markets;

47 unchanged sentences

gains or losses (including non-cash impairment charges) on goodwill and intangible assets;

divestiture (2) or acquisition gains or losses and related divestiture (2) , acquisition and integration costs (2) ;

divestiture (2) or acquisition gains or losses, divestiture-related costs (2) , acquisition-related costs, and acquisition integration costs and contingent consideration adjustments (2) ;

the operating results of divestitures (2) ;

remeasurement of net monetary position (5) ;

mark-to-market impacts from commodity and forecasted currency transaction derivative contracts (6) ;

mark-to-market impacts from commodity, forecasted currency and equity method investment transaction derivative contracts (6) ;

impact from resolution of tax matters (7) ;

12 unchanged sentences

(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.

In the second quarter of 2021, we added to the non-GAAP definitions the exclusion of initial impacts from enacted tax law changes.

Refer to footnote (10) below.

In the second quarter of 2021, we added to the non-GAAP definitions the exclusion of initial impacts from enacted tax law changes (refer to footnote (10) below).

In the third quarter of 2021, we also added the exclusion of contingent consideration adjustments (refer to footnote (2) below) and the mark-to-market impacts from equity method investment transaction derivative contracts (refer to footnote (6) below).

(2) Divestitures include completed sales of businesses (including the partial or full sale of an equity method investment) and exits of major product lines upon completion of a sale or licensing agreement.

As we record our share of KDP and JDE Peet’s ongoing earnings on a one-quarter lag basis, any KDP or JDE Peet’s ownership reductions are reflected as divestitures within our non-GAAP results the following quarter.

During the third quarter of 2021, we began to exclude the impact of certain adjustments made to our acquisition contingent consideration liabilities that were recorded at the date of acquisition.

We made this adjustment to better facilitate comparisons of our underlying operating performance across periods.

See Note 2, Acquisitions and Divestitures , and Note 6, Equity Method Investments , for information on acquisitions and divestitures impacting the comparability of our results.

4 unchanged sentences

(5) During the third quarter of 2018, as we began to apply highly inflationary accounting for Argentina (refer to Note 1, Basis of Presentation ), we excluded the remeasurement gains or losses related to remeasuring net monetary assets or liabilities in Argentina during the period to be consistent with our prior accounting for these remeasurement gains/losses for Venezuela when it was subject to highly inflationary accounting prior to deconsolidation in 2015.

(6) We 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 transaction 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.

(7) Refer to Note 12, Commitments and Contingencies – Tax Matters, and Note 14, Commitments and Contingencies – Tax Matters , in our Annual Report on Form 10-K for the year ended December 31, 2020.

(6) We exclude unrealized gains and losses (mark-to-market impacts) from outstanding commodity and forecasted currency and equity method investment transaction derivative contracts from our non-GAAP earnings measures.

The mark-to-market impacts of commodity and forecasted currency transaction derivatives are excluded until such time that the related exposures impact our operating results.

Since we purchase commodity and forecasted currency transaction contracts to mitigate price volatility primarily

for inventory requirements in future periods, we make 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 exclude equity method investment transaction derivative contract settlements as they represent protection of value for future divestitures.

(7) Refer to Note 12, Commitments and Contingencies – Tax Matters , in this report, and Note 14, Commitments and Contingencies – Tax Matters , in our Annual Report on Form 10-K for the year ended December 31, 2020.

(8) 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.

5 unchanged sentences

Van de Put’s and Ms.

compensation arrangements together as “CEO transition remuneration.” We are excluding amounts we expense as CEO transition remuneration from our 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.

Rosenfeld’s compensation arrangements together as “CEO transition remuneration.” We are excluding amounts we expense as CEO transition remuneration from our 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.

36 unchanged sentences

We also evaluate our Organic Net Revenue growth from emerging markets and developed markets, and these underlying measures are also reconciled to U.S.

For the Three Months Ended June 30, 2021 For the Three Months Ended June 30, 2020

For the Three Months Ended September 30, 2021 For the Three Months Ended September 30, 2020

Markets Developed

3 unchanged sentences

(in millions) (in millions)

Net Revenue $ 2,293 $ 4,349 $ 6,642 $ 1,917 $ 3,994 $ 5,911

Net Revenues $ 2,584 $ 4,598 $ 7,182 $ 2,289 $ 4,376 $ 6,665

Impact of currency (16) (73) (89) — — —

Impact of acquisition — (52) (52) — — —

Impact of acquisitions — (62) (62) — — —

Organic Net Revenue $ 2,568 $ 4,463 $ 7,031 $ 2,289 $ 4,376 $ 6,665

For the Six Months Ended June 30, 2021 For the Six Months Ended June 30, 2020

For the Nine Months Ended September 30, 2021 For the Nine Months Ended September 30, 2020

Markets Developed

3 unchanged sentences

(in millions) (in millions)

Net Revenue $ 4,856 $ 9,024 $ 13,880 $ 4,334 $ 8,284 $ 12,618

Net Revenues $ 7,440 $ 13,622 $ 21,062 $ 6,623 $ 12,660 $ 19,283

Impact of currency 18 (578) (560) — — —

4 unchanged sentences

GAAP financial measure) were to exclude Simplify to Grow Program;

intangible asset impairment charges, mark-to-market impacts from commodity and forecasted currency transaction derivative contracts;

acquisition integration costs;

intangible asset impairment charges;

mark-to-market impacts from commodity, forecasted currency and equity method investment transaction derivative contracts;

acquisition integration costs and contingent consideration adjustments;

acquisition-related costs;

divestiture-related costs, gain on an acquisition;

costs associated with JDE Peet's transaction;

divestiture-related costs;

gain on an acquisition;

the remeasurement of net monetary position;

impact from pension participation changes and impact from resolution of tax matters.

impact from pension participation changes:

costs associated with JDE Peet's transaction;

and impact from resolution of tax matters.

We also evaluate Adjusted Operating Income on a constant currency basis.

1 unchanged sentence

For the Three Months Ended

September 30,

2021 2020 $ Change % Change

3 unchanged sentences

Intangible asset impairment charges (2)

Mark-to-market (gains)/losses from derivatives (3)

Acquisition integration costs (4)

Acquisition-related costs (4)

Mark-to-market gains from derivatives (3)

(132) (145) 13

Acquisition integration costs and

contingent consideration adjustments (4)

Divestiture-related costs (4)

Costs associated with JDE Peet's transaction (5)

Remeasurement of net monetary position (5)

Impact from pension participation changes (6)

Impact from resolution of tax matters (8)

Other/rounding

Adjusted Operating Income $ 1,236 $ 1,165 $ 71 6.1 %

1 unchanged sentence

Adjusted Operating Income (constant currency) $ 1,217 $ 1,165 $ 52 4.5 %

For the Six Months Ended

For the Nine Months Ended

September 30,

2021 2020 $ Change % Change

5 unchanged sentences

(270) 42 (312)

Acquisition integration costs (4)

Acquisition integration costs and

contingent consideration adjustments (4)

Acquisition-related costs (4)

1 unchanged sentence

Gain on acquisition (4)

Costs associated with JDE Peet's transaction (5)

Remeasurement of net monetary position (5)

Impact from pension participation changes (6)

Costs associated with JDE Peet's transaction (7)

Impact from resolution of tax matters (8)

Other/rounding

Adjusted Operating Income $ 3,605 $ 3,213 $ 392 12.2 %

3 unchanged sentences

(2) Refer to Note 5, Goodwill and Intangible Assets , for more information.

(3) Refer to Note 9, Financial Instruments , Note 16, Segment Reporting , and Non-GAAP Financial Measures section for more information on the unrealized gains/losses on commodity and forecasted currency transaction derivatives.

(3) Refer to Note 9, Financial Instruments , Note 16, Segment Reporting , and the Non-GAAP Financial Measures section for more information on the unrealized gains/losses on commodity, forecasted currency and equity method investment transaction derivatives.

(4) Refer to Note 2, Acquisitions and Divestitures , for more information on the April 1, 2021 acquisition of Gourmet Food Holdings Pty Ltd, the March 25, 2021 acquisition of a majority interest in Grenade, the January 4, 2021 acquisition of the remaining 93% of equity in Hu Master Holdings and the April 1, 2020 acquisition of a significant majority interest in Give & Go.

(5) Refer to Note 6, Equity Method Investments, for more information on the JDE Peet's transaction.

Refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for more information on the May 28, 2019 divestiture of most of our cheese business in the Middle East and Africa.

(5) Refer to Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting , for information on our application of highly inflationary accounting for Argentina.

(6) Refer to Note 10, Benefit Plans , for more information.

(7) Refer to Note 6, Equity Method Investments, for more information on the JDE Peet's transaction.

(8) Refer to Note 12, Commitments and Contingencies , for more information.

9 unchanged sentences

For the Three Months Ended

September 30,

2021 2020 $ Change % Change

1 unchanged sentence

Simplify to Grow Program (2)

0.07 0.04 0.03

Intangible asset impairment charges (2)

— 0.03 (0.03)

Mark-to-market (gains)/losses from derivatives (2)

Mark-to-market gains from derivatives (2)

(0.08) (0.08) —

Acquisition-related costs (2)

Net earnings from divestitures (3)

Acquisition integration costs and

contingent consideration adjustments (2)

(0.03) — (0.03)

Costs associated with JDE Peet's transaction (2)

Net earnings from divestitures (3)

— (0.01) 0.01

Impact from pension participation changes (2)

Initial impacts from enacted tax law changes (4)

— 0.02 (0.02)

Gain on equity method investment transactions (5)

5 unchanged sentences

Adjusted EPS (constant currency) $ 0.70 $ 0.64 $ 0.06 9.4 %

For the Six Months Ended

For the Nine Months Ended

September 30,

2021 2020 $ Change % Change

6 unchanged sentences

(0.16) 0.03 (0.19)

Acquisition integration costs and

contingent consideration adjustments (2)

(0.03) — (0.03)

Acquisition-related costs (2)

3 unchanged sentences

— 0.21 (0.21)

Remeasurement of net monetary position (2)

Impact from pension participation changes (2)

0.02 0.01 0.01

Loss related to interest rate swaps (7)

2 unchanged sentences

Initial impacts from enacted tax law changes (4)

0.07 0.02 0.05

Gain on equity method investment transactions (5)

6 unchanged sentences

(1) The tax expense/(benefit) of each of the pre-tax items excluded from our GAAP results was computed based on the facts and tax assumptions associated with each item, and such impacts have also been excluded from Adjusted EPS.

• For the three months ended June 30, 2021, taxes for the:

Simplify to Grow Program were $(35) million, intangible asset impairment charges were $(8) million, mark-to-market gains from derivatives were $(4) million, acquisition-related costs were $(3) million, impact from pension participation changes were $(7) million, impact from enacted tax changes were $95 million, gain on equity method transactions were $125 million and equity method investee items were $(3) million.

• For the three months ended June 30, 2020, taxes for the:

Simplify to Grow Program were $(20) million, intangible asset impairment charges were $(21) million, acquisition-related costs were $(2) million, net earnings from divestitures were $1 million, costs associated with the JDE Peet's transaction were $261 million and equity method investee items were $(4) million.

• For the six months ended June 30, 2021, taxes for the:

Simplify to Grow Program were $(66) million, intangible asset impairment charges were $(8) million, mark-to-market gains from derivatives were $18 million, acquisition-related costs were $(4) million, impact from pension participation changes were $(8) million, loss on debt extinguishment were $(34) million, impact from enacted tax changes were $99 million, gain on equity method investment transactions were $125 million and equity method investee items were $(4) million.

• For the six months ended June 30, 2020, taxes for the:

Simplify to Grow Program were $(33) million, intangible asset impairment charges were $(21) million, mark-to-market losses from derivatives were $(32) million, acquisition-related costs were $(3) million, net earnings from divestitures were $6 million, costs associated with the JDE Peet's transaction were $261 million, loss related to interest rate swaps were $(24) million, gain on equity method investment transactions were $17 million and equity method investee items were $(5) million.

• For the three months ended September 30, 2021, taxes for the:

Simplify to Grow Program were $(32) million, mark-to-market gains from derivatives were $24 million, acquisition integration costs and contingent consideration adjustments were $15 million and gain on equity method transactions were $59 million.

• For the three months ended September 30, 2020, taxes for the:

Simplify to Grow Program were $(22) million, intangible asset impairment charges were $(12) million, mark-to-market gains from derivatives were $27 million, net earnings from divestitures were $8 million, initial impacts from enacted tax law changes were $30 million, gain on equity method investment transactions were $77 million and equity method investee items were $(1) million.

• For the nine months ended September 30, 2021, taxes for the:

Simplify to Grow Program were $(98) million, intangible asset impairment charges were $(8) million, mark-to-market gains from derivatives were $42 million, acquisition-related costs were $(4) million, acquisition integration costs and contingent consideration adjustments were $14 million, net earnings from divestitures were $4 million, remeasurement of net monetary position were zero, impact from pension participation changes were $(8) million, loss on debt extinguishment were $(34) million, initial impacts from enacted tax law changes were $95 million, gain on equity method investment transactions were $184 million and equity method investee items were $(4) million.

• For the nine months ended September 30, 2020, taxes for the:

Simplify to Grow Program were $(55) million, intangible asset impairment charges were $(33) million, mark-to-market losses from derivatives were $(5) million, acquisition-related costs were zero, net earnings from divestiture were $17 million, costs associated with the JDE Peet's transaction were $261 million, impact from pension participation changes were $(2) million, loss related to interest rate swaps were $(24) million, initial impacts from enacted tax law changes were $30 million, gain on equity method investment transactions were $94 million and equity method investee items were $(5) million.

(2) See the Adjusted Operating Income table above and the related footnotes for more information.

(3) Includes the impact from last-year's partial sales of our equity method investments in KDP and JDE Peet’s as if the sales occurred at the beginning of all periods presented.

The second quarter 2021 sales of KDP shares will be reflected on a lag basis in the third quarter of 2021.

(4) Refer to Note 14, Income Taxes , and Non-GAAP Financial Measures section for more information on the impact.

The third quarter 2021 sale of KDP shares will be reflected on a lag basis in the fourth quarter of 2021.

(4) Refer to Note 14, Income Taxes , and the Non-GAAP Financial Measures section for more information on the impact.

(5) Refer to Note 6, Equity Method Investments, for more information on the gains and losses on equity method investment transactions.

3 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 2. Management’s Discussion and Analysis