Mondelez International, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Description of the Company We make and sell primarily snacks, including biscuits (cookies, crackers and salted snacks), chocolate, gum & candy as well as various cheese & grocery and powdered beverage products. We have operations in approximately 80 countries and sell our products in over 150 countries. We aim to be the global leader in snacking. Our strategy is to drive long-term growth by focusing on three strategic priorities: accelerating consumer-centric growth, driving operational excellence and creating a winning growth culture. We believe the successful implementation of our strategic priorities and leveraging of our strong foundation of iconic global and local brands, an attractive global footprint, our market leadership in developed and emerging markets, our deep innovation, marketing and distribution capabilities, and our efficiency and sustainability efforts, will drive top- and bottom-line growth, enabling us to continue to create long-term value for our shareholders. Recent Developments and Significant Items Affecting Comparability COVID-19 As the COVID-19 global pandemic continues, our main priority continues to be the safety of our employees and helping maintain the global food supply. Together with our employees, customers, suppliers and other partners, we are working to emerge from the pandemic stronger. During 2020, we experienced a significant increase in demand and revenue growth in certain markets as consumers increased their food purchases for in-home consumption. Results were particularly strong in modern trade (such as large grocery supermarkets and retail chains), digital commerce and especially for categories such as biscuits. However, other parts of our business were negatively affected by mandated lockdowns and other related restrictions. This was especially so during the second quarter of 2020 for some of our emerging markets due to store closures, particularly in our Latin America region as well as parts of our AMEA region that have a greater concentration of traditional trade (such as small family-run stores), our world travel retail (such as international duty-free stores), and our foodservice businesses as well as in categories like gum and candy, which are more traditionally purchased and consumed out of home. The negative impacts experienced in the second quarter of 2020 began to subside in the second half of 2020, as demand grew in both developed and emerging markets and a number of our key markets returned to higher growth; 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 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 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. 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. 30 Table of Contents Our Employees, Customers and Communities We have taken a number of actions to promote the health and safety of our employees, customers and consumers, which is our first priority: • We implemented enhanced protocols to provide a safe and sanitary working environment for our employees. 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. 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. As our office-based employees begin to return to the workplace over coming months, we will follow enhanced safety protocols related to shared workspaces while also encouraging continued flexible and virtual work arrangements wherever possible. • We have hired frontline employees in the U.S. 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. Our Supply Chain and Operations We operate in the food and beverages industry and are part of the global food supply chain. 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 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. 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. 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 materials or other 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. 31 Table of Contents • 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. Disruptions, higher operating costs or uncertainties like those noted above could result in delays or modifications to our plans and initiatives. Our Liquidity We believe the steps we have taken to enhance our capital structure and liquidity, prior to and during the pandemic, strengthened our ability to operate during the pandemic: • During both 2020 and 2019, we generated $4.0 billion of cash from operations, or approximately $3 billion each year after deducting capital expenditures. 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 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 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 • We continue to evaluate the realizability of our assets and indicators of potential impairment. 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. • 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. During the second and third quarters of 2020, we concluded that eight brands were impaired and we recorded $144 million of impairment charges in 2020, including $90 million in the second quarter of 2020 and $54 million in the third quarter of 2020. While we did not identify impairment triggers for other brands, there continues to be significant uncertainty due to the pandemic. 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 goodwill and intangible asset impairment evaluation. • Restructuring and implementation activities continued to be in line with our Simplify to Grow Program strategic objectives. • Our equity investments in JDE Peet's and KDP give us additional financial flexibility. • We continue to monitor the quality of our assets and our overall financial position. • We also continue to maintain oversight over our core process controls through our centralized shared service model, with key controls operating as designed. 32 Table of Contents 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. 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; protect our liquidity and financial position; work toward our strategic priorities and monitor our financial performance. We seek to position the Company to withstand the current uncertainties related to this pandemic and to emerge stronger. KDP and JDE Peet's Equity Method Investment Transactions KDP 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%. 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%. 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). On November 17, 2020, we also sold approximately 40.0 million shares, which reduced our ownership interest by 2.8% to 8.4%. We received $1,132 million of proceeds and recorded a pretax gain of $459 million (or $350 million after tax) during the fourth quarter of 2020. The cash taxes associated with the KDP share sales were paid in 2020. JDE Peet's 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. 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. 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 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. 33 Table of Contents Summary of Results • 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 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. Organic Net Revenue is on a constant currency basis and excludes revenue from acquisitions and divestitures. 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 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. 34 Table of Contents Adjusted EPS and Adjusted EPS on a constant currency basis are non-GAAP financial measures. We use these measures as they provide improved year-over-year comparability of our underlying results (see the definition of Adjusted EPS and our reconciliation with diluted EPS within Non-GAAP Financial Measures appearing later in this section). Financial Outlook We seek to achieve profitable, long-term growth and manage our business to attain this goal using our key operating metrics: Organic Net Revenue, Adjusted Operating Income and Adjusted EPS. We use these non-GAAP financial metrics and related computations, particularly growth in profit dollars, to evaluate and manage our business and to plan and make near- and long-term operating and strategic decisions. As such, we believe these metrics are useful to investors as they provide supplemental information in addition to our U.S. Generally Accepted Accounting Principles ("U.S. GAAP") financial results. We believe it is useful to provide investors with the same financial information that we use internally to make comparisons of our historical operating results, identify trends in our underlying operating results and evaluate our business. We believe our non-GAAP financial measures should always be considered in relation to our GAAP results. We have provided reconciliations between our GAAP and non-GAAP financial measures in Non-GAAP Financial Measures , which appears later in this section. In addition to monitoring our key operating metrics, we monitor developments and trends that could impact our revenue and profitability objectives, similar to those we highlighted in our most recently filed Annual Report on Form 10-K for the year ended December 31, 2020 and discussed in the footnotes to our financial statements. • Market conditions. 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. • COVID-19 . 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 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. • Brexit . Following the separation of the United Kingdom from the European Union in 2020, a new trade arrangement was reached between the U.K. and E.U. that began on January 1, 2021. The main trade provisions include the continuation of no tariffs or quotas on trade between the U.K. and E.U. subject to prescribed trade terms, including but not limited to meeting product and labeling standards for both the U.K. and E.U. Cross-border trade between the U.K. and E.U. is also subject to new customs regulations, documentation and reviews. Our supply chain in this market relies on imports of raw and packaging materials as well as finished goods. 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 35 Table of Contents 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, 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. • Taxes . We continue to monitor existing and potential future tax reform. 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. tax reform. • 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 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. dollars could change over time, so it is difficult to predict the overall impact of the Argentina highly inflationary accounting on future net earnings. 36 Table of Contents Discussion and Analysis of Historical Results Items Affecting Comparability of Financial Results The following table includes significant income or (expense) items that affected the comparability of our results of operations and our effective tax rates. Please refer to the notes to the condensed consolidated financial statements indicated below for more information. Refer also to the Consolidated Results of Operations – Net Earnings and Earnings per Share Attributable to Mondelēz International table for the after-tax per share impacts of these items. For the Three Months Ended September 30, For the Nine Months Ended September 30, See Note 2021 2020 2021 2020 (in millions, except percentages) Simplify to Grow Program Note 7 Restructuring charges $ (62) $ (68) $ (250) $ (111) Implementation charges (65) (46) (132) (141) Intangible asset impairment charges Note 5 — (54) (32) (144) Mark-to-market gains/(losses) from derivatives (1) Note 9 134 148 268 (38) Acquisitions and divestiture-related costs: Note 2 Acquisition integration costs and contingent consideration adjustments 57 — 54 (2) Acquisition-related costs — — (24) (15) Gain on acquisition — — 9 — Divestiture-related costs — (6) — (4) Costs associated with JDE Peet's transaction Note 6 — — — (48) Remeasurement of net monetary position Note 1 (2) (2) (10) (7) Impact from pension participation changes (1) Note 10 (1) (3) (38) (9) Impact from resolution of tax matters (1) Note 12 — — 7 — Loss related to interest rate swaps Note 8 & 9 — — — (103) Loss on debt extinguishment Note 8 — — (137) — Initial impacts from enacted tax law changes Note 14 4 (30) (95) (30) Gain on equity method investment transactions (2) Note 6 248 345 743 537 Equity method investee items (3) 4 (35) (60) (69) Effective tax rate Note 14 27.4 % 36.1 % 29.5 % 36.0 % (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. 37 Table of Contents Consolidated Results of Operations Three Months Ended September 30: For the Three Months Ended September 30, 2021 2020 $ change % change (in millions, except per share data) Net revenues $ 7,182 $ 6,665 $ 517 7.8 % Operating income 1,294 1,135 159 14.0 % Net earnings attributable to Mondelēz International 1,258 1,119 139 12.4 % Diluted earnings per share attributable to Mondelēz International 0.89 0.78 0.11 14.1 % 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) . Emerging markets net revenues increased 12.9% and emerging markets Organic Net Revenue increased 12.2% (1) . The underlying changes in net revenues and Organic Net Revenue are detailed below: 2021 Change in net revenues (by percentage point) Total change in net revenues 7.8 % Add back the following items affecting comparability: Favorable currency (1.4) pp Impact of acquisitions (0.9) pp Total change in Organic Net Revenue (1) 5.5 % 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, 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 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 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 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. 38 Table of Contents 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: Operating Income % Change (in millions) Operating Income for the Three Months Ended September 30, 2020 $ 1,135 Simplify to Grow Program (2) 114 Intangible asset impairment charges (3) 54 Mark-to-market gains from derivatives (4) (145) Divestiture-related costs (5) 6 Remeasurement of net monetary position (6) 2 Other/rounding (1) Adjusted Operating Income (1) for the Three Months Ended September 30, 2020 $ 1,165 Higher net pricing 207 Higher input costs (179) Favorable volume/mix 15 Higher selling, general and administrative expenses (22) Lower amortization of intangible assets 22 Impact from acquisitions (5) 8 Other 1 Total change in Adjusted Operating Income (constant currency) (1) 52 4.5 % Favorable currency translation 19 Total change in Adjusted Operating Income (1) 71 6.1 % Adjusted Operating Income (1) for the Three Months Ended September 30, 2021 $ 1,236 Simplify to Grow Program (2) (127) Mark-to-market gains from derivatives (4) 132 Acquisition integration costs and contingent consideration adjustments (5) 57 Remeasurement of net monetary position (6) (2) Impact from pension participation changes (7) (2) 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. (2) Refer to Note 7, Restructuring Program, for more information. (3) Refer to Note 5, Goodwill and Intangible Assets , for more information. (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 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. 39 Table of Contents 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 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 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 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. 40 Table of Contents 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 Diluted EPS Attributable to Mondelēz International for the Three Months Ended September 30, 2020 $ 0.78 Simplify to Grow Program (2) 0.06 Intangible asset impairment charges (2) 0.03 Mark-to-market gains from derivatives (2) (0.08) Net earnings from divestitures (3) (0.01) Initial impacts from enacted tax law changes (4) 0.02 Gain on equity method investment transactions (5) (0.19) Equity method investee items (6) 0.03 Adjusted EPS (1) for the Three Months Ended September 30, 2020 $ 0.64 Increase in operations 0.02 Impact from acquisition (2) 0.01 Changes in income taxes (4) 0.01 Changes in shares outstanding (7) 0.02 Adjusted EPS (constant currency) (1) for the Three Months Ended September 30, 2021 $ 0.70 Favorable currency translation 0.01 Adjusted EPS (1) for the Three Months Ended September 30, 2021 $ 0.71 Simplify to Grow Program (2) (0.06) Mark-to-market gains from derivatives (2) 0.08 Acquisition integration costs and contingent consideration adjustments (2) 0.03 Gain on equity method investment transactions (5) 0.13 Diluted EPS Attributable to Mondelēz International for the Three Months Ended September 30, 2021 $ 0.89 (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 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. (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. 41 Table of Contents Nine Months Ended September 30: For the Nine Months Ended September 30, 2021 2020 $ change % change (in millions, except per share data) Net revenues $ 21,062 $ 19,283 $ 1,779 9.2 % Operating income 3,449 2,704 745 27.6 % Net earnings attributable to Mondelēz International 3,297 2,399 898 37.4 % Diluted earnings per share attributable to Mondelēz International 2.33 1.66 0.67 40.4 % 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%. Emerging markets net revenues increased 12.3% and emerging markets Organic Net Revenue increased 12.6% (1) . The underlying changes in net revenues and Organic Net Revenue are detailed below: 2021 Change in net revenues (by percentage point) Total change in net revenues 9.2 % Add back the following items affecting comparability: Favorable currency (2.9) pp Impact of acquisitions (1.2) pp Total change in Organic Net Revenue (1) 5.1 % Favorable volume/mix 2.6 pp Higher net pricing 2.5 pp (1) Please see the Non-GAAP Financial Measures section at the end of this item. 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, 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 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 this year 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 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 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, 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. 42 Table of Contents 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: Operating Income % Change (in millions) Operating Income for the Nine Months Ended September 30, 2020 $ 2,704 Simplify to Grow Program (2) 248 Intangible asset impairment charges (3) 144 Mark-to-market losses from derivatives (4) 42 Acquisition integration costs (5) 2 Acquisition-related costs (5) 15 Divestiture-related costs (5) 4 Costs associated with JDE Peet's transaction (6) 48 Remeasurement of net monetary position (7) 7 Other/rounding (1) Adjusted Operating Income (1) for the Nine Months Ended September 30, 2020 $ 3,213 Higher net pricing 488 Higher input costs (249) Favorable volume/mix 67 Higher selling, general and administrative expenses (104) Lower amortization of intangible assets 58 Impact from acquisitions (5) 5 Other (3) Total change in Adjusted Operating Income (constant currency) (1) 262 8.2 % Favorable currency translation 130 Total change in Adjusted Operating Income (1) 392 12.2 % Adjusted Operating Income (1) for the Nine Months Ended September 30, 2021 $ 3,605 Simplify to Grow Program (2) (381) Intangible asset impairment charges (3) (32) Mark-to-market gains from derivatives (4) 270 Acquisition integration costs and contingent consideration adjustments (5) 54 Acquisition-related costs (5) (24) Gain on acquisition (5) 9 Remeasurement of net monetary position (7) (10) Impact from pension participation changes (8) (47) Impact from resolution of tax matters (9) 5 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. (2) Refer to Note 7, Restructuring Program, for more information. (3) Refer to Note 5, Goodwill and Intangible Assets , for more information. (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. (7) Refer to Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting , for information on our application of highly inflationary accounting for Argentina. 43 Table of Contents (8) Refer to Note 10, Benefit Plans , for more information. (9) Refer to Note 12, Commitments and Contingencies , for more information. During the first nine months 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 in all regions. Favorable volume/mix was driven by Europe, AMEA and Latin America, 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 period from increased consumer demand 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 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, 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. 44 Table of Contents 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 Diluted EPS Attributable to Mondelēz International for the Nine Months Ended September 30, 2020 $ 1.66 Simplify to Grow Program (2) 0.14 Intangible asset impairment charges (2) 0.08 Mark-to-market losses from derivatives (2) 0.03 Acquisition-related costs (2) 0.01 Net earnings from divestiture (2) (3) (0.04) Costs associated with JDE Peet's transaction (2) 0.21 Impact from pension participation changes (2) 0.01 Loss related to interest rate swaps (4) 0.05 Initial impacts from enacted tax law changes (5) 0.02 Gain on equity method investment transactions (6) (0.31) Equity method investee items (7) 0.05 Adjusted EPS (1) for the Nine Months Ended September 30, 2020 $ 1.91 Increase in operations 0.14 Increase in equity method investment net earnings 0.02 Changes in interest and other expense, net (8) 0.02 Changes in income taxes (5) (0.05) Changes in shares outstanding (9) 0.04 Adjusted EPS (constant currency) (1) for the Nine Months Ended September 30, 2021 $ 2.08 Favorable currency translation 0.09 Adjusted EPS (1) for the Nine Months Ended September 30, 2021 $ 2.17 Simplify to Grow Program (2) (0.20) Intangible asset impairment charges (2) (0.02) Mark-to-market gains from derivatives (2) 0.16 Acquisition integration costs and contingent consideration adjustments (2) 0.03 Acquisition-related costs (2) (0.01) Net earnings from divestiture (2) (3) 0.01 Remeasurement of net monetary position (2) (0.01) Impact from pension participation changes (2) (0.02) Loss on debt extinguishment (10) (0.07) Initial impacts from enacted tax law changes (5) (0.07) Gain on equity method investment transactions (6) 0.40 Equity method investee items (7) (0.04) Diluted EPS Attributable to Mondelēz International for the Nine Months Ended September 30, 2021 $ 2.33 (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. 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 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 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. 45 Table of Contents (6) Refer to Note 6, Equity Method Investments , for more information on the gain on equity method investment transactions. (7) 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. (8) Excludes the currency impact on interest expense related to non-U.S. dollar-denominated debt, which is included in currency translation. (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. (10) Refer to Note 8, Debt and Borrowing Arrangements , for more information on the loss on debt extinguishment and related expenses. 46 Table of Contents Results of Operations by Reportable Segment Our operations and management structure are organized into four operating segments: • Latin America • AMEA • Europe • North America We manage our operations by region to leverage regional operating scale, manage different and changing business environments more effectively and pursue growth opportunities as they arise across our key markets. Our regional management teams have responsibility for the business, product categories and financial results in the regions. We use segment operating income to evaluate segment performance and allocate resources. We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends. See Note 16, Segment Reporting, for additional information on our segments and Items Affecting Comparability of Financial Results earlier in this section for items affecting our segment operating results. Our segment net revenues and earnings were: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 (in millions) Net revenues: Latin America $ 751 $ 610 $ 2,089 $ 1,847 AMEA 1,629 1,470 4,826 4,209 Europe 2,714 2,526 8,035 7,248 North America 2,088 2,059 6,112 5,979 Net revenues $ 7,182 $ 6,665 $ 21,062 $ 19,283 Earnings before income taxes: Operating income: Latin America $ 91 $ 77 $ 221 $ 149 AMEA 267 210 842 615 Europe 508 432 1,478 1,201 North America 363 387 932 1,192 Unrealized gains/(losses) on hedging activities (mark-to-market impacts) 132 145 270 (42) General corporate expenses (35) (66) (177) (253) Amortization of intangible assets (32) (50) (102) (143) Gain on acquisition — — 9 — Acquisition-related costs — — (24) (15) Operating income 1,294 1,135 3,449 2,704 Benefit plan non-service income 37 38 135 102 Interest and other expense, net (82) (89) (358) (364) Earnings before income taxes $ 1,249 $ 1,084 $ 3,226 $ 2,442 47 Table of Contents Latin America For the Three Months Ended September 30, 2021 2020 $ change % change (in millions) Net revenues $ 751 $ 610 $ 141 23.1 % Segment operating income 91 77 14 18.2 % For the Nine Months Ended September 30, 2021 2020 $ change % change (in millions) Net revenues $ 2,089 $ 1,847 $ 242 13.1 % Segment operating income 221 149 72 48.3 % 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. dollar relative to several currencies in the region, primarily the Argentinean peso, partially offset by the strength of several currencies relative to the U.S. dollar, primarily the Mexican peso and Brazilian real. 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). 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 period 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. dollar relative to several currencies in the region including the Argentinian peso and Brazilian real, partially offset by the strength of several currencies relative to the U.S. dollar, primarily the Mexican peso. 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. 48 Table of Contents AMEA For the Three Months Ended September 30, 2021 2020 $ change % change (in millions) Net revenues $ 1,629 $ 1,470 $ 159 10.8 % Segment operating income 267 210 57 27.1 % For the Nine Months Ended September 30, 2021 2020 $ change % change (in millions) Net revenues $ 4,826 $ 4,209 $ 617 14.7 % Segment operating income 842 615 227 36.9 % 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 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. 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. 49 Table of Contents Europe For the Three Months Ended September 30, 2021 2020 $ change % change (in millions) Net revenues $ 2,714 $ 2,526 $ 188 7.4 % Segment operating income 508 432 76 17.6 % For the Nine Months Ended September 30, 2021 2020 $ change % change (in millions) Net revenues $ 8,035 $ 7,248 $ 787 10.9 % Segment operating income 1,478 1,201 277 23.1 % 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 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, 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 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, 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. 50 Table of Contents North America For the Three Months Ended September 30, 2021 2020 $ change % change (in millions) Net revenues $ 2,088 $ 2,059 $ 29 1.4 % Segment operating income 363 387 (24) (6.2) % For the Nine Months Ended September 30, 2021 2020 $ change % change (in millions) Net revenues $ 6,112 $ 5,979 $ 133 2.2 % Segment operating income 932 1,192 (260) (21.8) % 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. dollar. 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, 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). 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 $27 million in the first nine months of 2021. 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. dollar. 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 $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. 51 Table of Contents Liquidity and Capital Resources 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. Any of these and other developments could materially harm our access to capital or financial condition. We carry $7.0 billion of undrawn credit facilities, continue to utilize our commercial paper program and international credit lines, and we secured and continue to evaluate long-term debt issuances to meet our short- and longer-term funding requirements. 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 $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; however, if a serious economic or credit market crisis were to occur, it could have a material adverse effect on our liquidity, results of operations and financial condition. Net Cash Provided by Operating Activities: 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 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. We expect 2021 capital expenditures to be approximately $1.0 billion, including capital expenditures in connection with our Simplify to Grow Program. We expect to continue to fund these expenditures with cash from operations. Net Cash Used in Financing Activities: 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. Debt: 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 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. Due to seasonality, in the first and second quarters of the year, our working capital requirements grow, increasing the need for short-term financing. The second half of the year typically generates higher cash flows. As such, we may issue commercial paper or secure other forms of financing throughout the year to meet short-term working capital needs. One of our subsidiaries, Mondelez International Holdings Netherlands B.V. (“MIHN”), has outstanding debt. 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 52 Table of Contents 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 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: $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 $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. Through September 30, 2021, we continue to comply with our debt covenants. Refer to Note 8, Debt and Borrowing Arrangements . Commodity Trends 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 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. We use hedging techniques to limit the impact of fluctuations in the cost of our principal raw materials; however, we may not be able to fully hedge against commodity cost changes, such as dairy, where there is a limited ability to hedge, and our hedging strategies may not protect us from increases in specific raw material costs. 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. 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 See Note 8, Debt and Borrowing Arrangements , for information on debt transactions during 2021. There were no other material developments or changes to our off-balance sheet arrangements and aggregate contractual obligations disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020. Equity and Dividends 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 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 53 Table of Contents 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. 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. 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. Dividends: 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. We anticipate that the 2021 distributions will be characterized as dividends under U.S. federal income tax rules. The final determination will be made on an IRS Form 1099–DIV issued in early 2022. Significant Accounting Estimates We prepare our condensed consolidated financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. Our significant accounting policies are described in Note 1 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020. Our significant accounting estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2020. See Note 1, Basis of Presentation , for a discussion of the impact of new accounting standards. New Accounting Guidance: See Note 1, Basis of Presentation , for a discussion of new accounting standards. Contingencies: See Note 12, Commitments and Contingencies , and Part II, Item 1. Legal Proceedings, for a discussion of contingencies. Forward-Looking Statements This report contains a number of forward-looking statements. Words, and variations of words, such as “will,” “may,” “expect,” “would,” “could,” “might,” “intend,” “plan,” “believe,” “likely,” “estimate,” “anticipate,” “objective,” “predict,” “project,” “seek,” “aim,” “potential,” “outlook” and similar expressions are intended to identify our forward-looking statements, including but not limited to statements about: the impact of the COVID-19 pandemic on our business including consumer demand, costs, product mix, the availability of our products, our strategic initiatives, our and our partners’ global supply chains, operations, technology, assets and routes to market, and our financial performance; our future performance, including our future revenue and earnings growth; our strategy to accelerate consumer-centric growth, drive operational excellence and create a winning growth culture; volatility in global consumer, commodity, transportation, labor, currency and capital markets; price volatility, inflation and pricing actions; 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 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, 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, supply and availability; our investments including in JDE Peet's and KDP and our ownership interest in those investments; 54 Table of Contents strategic transactions, including the Chipita acquisition; innovation; political, business and economic conditions and volatility; currency exchange rates, controls and restrictions, volatility in foreign currencies and the effect of currency translation on our results of operations; the application of highly inflationary accounting for our Argentinean subsidiaries and the potential for and impacts from currency devaluation in other countries; the outcome and effects on us of legal proceedings and government investigations; the estimated value of goodwill and intangible assets; amortization expense for intangible assets; impairment of goodwill and intangible assets and our projections of operating results and other factors that may affect our impairment testing; our accounting estimates and judgments and the impact of new accounting pronouncements; pension expenses, contributions and assumptions; our liquidity, funding sources and uses of funding, including debt issuances and our use of commercial paper; our capital structure and liquidity, credit availability and our ability to raise capital, and the impact of market disruptions on us, our counterparties and our business partners; the planned phase out of London Interbank Offered Rates; our risk management program, including the use of financial instruments and the impacts and effectiveness of our hedging activities; working capital; capital expenditures and funding; funding of debt maturities and other obligations; share repurchases; dividends; long-term value for our shareholders; the characterization of 2021 distributions as dividends; compliance with our debt covenants; 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, including the spread of new variants of COVID-19. 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; changes in currency exchange rates, controls and restrictions; volatility of commodity and other input costs; weakness in economic conditions; weakness in consumer spending; pricing actions; tax matters including changes in tax laws and rates, disagreements with taxing authorities and imposition of new taxes; use of information technology and third party service providers; unanticipated disruptions to our business, such as the malware incident, cyberattacks or other security breaches; global or regional health pandemics or epidemics, including COVID-19; competition; protection of our reputation and brand image; changes in consumer preferences and demand and our ability to innovate and differentiate our products; the restructuring program and our other transformation initiatives not yielding the anticipated benefits; changes in the assumptions on which the restructuring program is based; management of our workforce; consolidation of retail customers and competition with retailer and other economy brands; changes in our relationships with customers, suppliers or distributors; legal, regulatory, tax or benefit law changes, claims or actions; the impact of climate change on our supply chain and operations; strategic transactions; significant changes in valuation factors that may adversely affect our impairment testing of goodwill and intangible assets; perceived or actual product quality issues or product recalls; failure to maintain effective internal control over financial reporting; volatility of and access to capital or other markets and our liquidity; pension costs; the expected discontinuance of London Interbank Offered Rates and transition to any other interest rate benchmark; and our ability to protect our intellectual property and intangible assets. We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this report except as required by applicable law or regulation. Non-GAAP Financial Measures We use non-GAAP financial information and believe it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results and provide additional insight and transparency on how we evaluate our business. We use non-GAAP financial measures to budget, make operating and strategic decisions and evaluate our performance. We have detailed the non-GAAP adjustments that we make in our non-GAAP definitions below. The adjustments generally fall within the following categories: acquisition & divestiture activities, gains and losses on intangible asset sales and non-cash impairments, major program restructuring activities, constant currency and related adjustments, major program financing and hedging activities and other major items affecting comparability of operating results. We believe the non-GAAP measures should always be considered along with the related U.S. GAAP financial measures. We have provided the reconciliations between the GAAP and non-GAAP financial measures below, and we also discuss our underlying GAAP results throughout our Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-Q. 55 Table of Contents Our primary non-GAAP financial measures are listed below and reflect how we evaluate our current and prior-year operating results. As new events or circumstances arise, these definitions could change. When our definitions change, we provide the updated definitions and present the related non-GAAP historical results on a comparable basis (1) . • “Organic Net Revenue” is defined as net revenues excluding the impacts of acquisitions, divestitures (2) and currency rate fluctuations (3) . We also evaluate Organic Net Revenue growth from emerging markets and developed markets. • Our emerging markets include our Latin America region in its entirety; the AMEA region, excluding Australia, New Zealand and Japan; and the following countries from the Europe region: Russia, Ukraine, Turkey, Kazakhstan, Georgia, Poland, Czech Republic, Slovak Republic, Hungary, Bulgaria, Romania, the Baltics and the East Adriatic countries. • Our developed markets include the entire North America region, the Europe region excluding the countries included in the emerging markets definition, and Australia, New Zealand and Japan from the AMEA region. • “Adjusted Operating Income” is defined as operating income excluding the impacts of the Simplify to Grow Program (4) ; gains or losses (including non-cash impairment charges) on goodwill and intangible assets; 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, forecasted currency and equity method investment transaction derivative contracts (6) ; impact from resolution of tax matters (7) ; CEO transition remuneration (8) ; impact from pension participation changes (9) ; initial impacts from enacted tax law changes (10) ; and costs associated with the JDE Peet's transaction. We also present “Adjusted Operating Income margin,” which is subject to the same adjustments as Adjusted Operating Income. We also evaluate growth in our Adjusted Operating Income on a constant currency basis (3) . • “Adjusted EPS” is defined as diluted EPS attributable to Mondelēz International from continuing operations excluding the impacts of the items listed in the Adjusted Operating Income definition as well as losses on debt extinguishment and related expenses; gains or losses on equity method investment transactions; net earnings from divestitures (2) ; and gains or losses on interest rate swaps no longer designated as accounting cash flow hedges due to changed financing and hedging plans. Similarly, within Adjusted EPS, our equity method investment net earnings exclude our proportionate share of our investees’ significant operating and non-operating items (11) . We also evaluate growth in our Adjusted EPS on a constant currency basis (3) . (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 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. (3) Constant currency operating results are calculated by dividing or multiplying, as appropriate, the current-period local currency operating results by the currency exchange rates used to translate the financial statements in the comparable prior-year period to determine what the current-period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year period. (4) Non-GAAP adjustments related to the Simplify to Grow Program reflect costs incurred that relate to the objectives of our program to transform our supply chain network and organizational structure. Costs that do not meet the program objectives are not reflected in the non-GAAP adjustments. (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 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 56 Table of Contents 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. In order to incent Mr. Van de Put to join us, we provided him compensation with a total combined target value of $42.5 million to make him whole for incentive awards he forfeited or grants that were not made to him when he left his former employer. The compensation we granted took the form of cash, deferred stock units, performance share units and stock options. In connection with Irene Rosenfeld’s retirement, we made her outstanding grants of performance share units for the 2016-2018 and 2017-2019 performance cycles eligible for continued vesting and approved a $0.5 million salary for her service as Chairman from January through March 2018. We refer to these elements of Mr. Van de Put’s and Ms. Rosenfeld’s compensation arrangements together as “CEO transition remuneration.” We are excluding amounts we expense as CEO transition remuneration from our non-GAAP results because those amounts are not part of our regular compensation program and are incremental to amounts we would have incurred as ongoing CEO compensation. As a result, in 2017, we excluded amounts expensed for the cash payment to Mr. Van de Put and partial vesting of his equity grants. In 2018, we excluded amounts paid for Ms. Rosenfeld’s service as Chairman and partial vesting of Mr. Van de Put’s and Ms. Rosenfeld’s equity grants. In 2019, we excluded amounts related to the partial vesting of Mr. Van de Put’s equity grants. During the first quarter of 2020, Mr. Van de Put's equity grants became fully vested. (9) The impact from pension participation changes represents the charges incurred when employee groups are withdrawn from multiemployer pension plans and other changes in employee group pension plan participation. We exclude these charges from our non-GAAP results because those amounts do not reflect our ongoing pension obligations. See Note 10, Benefit Plans , for more information on the multiemployer pension plan withdrawal. (10) We have excluded the initial impacts from enacted tax law changes. Initial impacts include items such as the remeasurement of deferred tax balances and the transition tax from the 2017 U.S. tax reform. Previously, we only excluded the initial impacts from more material tax reforms, specifically the impacts of the 2019 Swiss tax reform and 2017 U.S. tax reform. We exclude initial impacts from enacted tax law changes from our Adjusted EPS as they do not reflect our ongoing tax obligations under the enacted tax law changes. Refer to our Annual Report on Form 10-K for the year ended December 31, 2020 for more information on the impact of Swiss and U.S. tax reform. (11) We have excluded our proportionate share of our equity method investees’ significant operating and non-operating items such as acquisition and divestiture related costs, restructuring program costs and initial impacts from enacted tax law changes, in order to provide investors with a comparable view of our performance across periods. Although we have shareholder rights and board representation commensurate with our ownership interests in our equity method investees and review the underlying operating results and significant operating and non-operating items each reporting period, we do not have direct control over their operations or resulting revenue and expenses. Our use of equity method investment net earnings on an adjusted basis is not intended to imply that we have any such control. Our GAAP “diluted EPS attributable to Mondelēz International from continuing operations” includes all of the investees’ significant operating and non-operating items. We believe that the presentation of these non-GAAP financial measures, when considered together with our U.S. GAAP financial measures and the reconciliations to the corresponding U.S. GAAP financial measures, provides you with a more complete understanding of the factors and trends affecting our business than could be obtained absent these disclosures. Because non-GAAP financial measures vary among companies, the non-GAAP financial measures presented in this report may not be comparable to similarly titled measures used by other companies. Our use of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for any U.S. GAAP financial measures. A limitation of these non-GAAP financial measures is they exclude items detailed below that have an impact on our U.S. GAAP reported results. The best way this limitation can be addressed is by evaluating our non-GAAP financial measures in combination with our U.S. GAAP reported results and carefully evaluating the following tables that reconcile U.S. GAAP reported figures to the non-GAAP financial measures in this Form 10-Q. 57 Table of Contents Organic Net Revenue: Applying the definition of “Organic Net Revenue,” the adjustments made to “net revenues” (the most comparable U.S. GAAP financial measure) were to exclude the impact of currency and acquisitions. We believe that Organic Net Revenue reflects the underlying growth from the ongoing activities of our business and provides improved comparability of results. We also evaluate our Organic Net Revenue growth from emerging markets and developed markets, and these underlying measures are also reconciled to U.S. GAAP below. For the Three Months Ended September 30, 2021 For the Three Months Ended September 30, 2020 Emerging Markets Developed Markets Total Emerging Markets Developed Markets Total (in millions) (in millions) Net Revenues $ 2,584 $ 4,598 $ 7,182 $ 2,289 $ 4,376 $ 6,665 Impact of currency (16) (73) (89) — — — Impact of acquisitions — (62) (62) — — — Organic Net Revenue $ 2,568 $ 4,463 $ 7,031 $ 2,289 $ 4,376 $ 6,665 For the Nine Months Ended September 30, 2021 For the Nine Months Ended September 30, 2020 Emerging Markets Developed Markets Total Emerging Markets Developed Markets Total (in millions) (in millions) Net Revenues $ 7,440 $ 13,622 $ 21,062 $ 6,623 $ 12,660 $ 19,283 Impact of currency 18 (578) (560) — — — Impact of acquisitions — (228) (228) — — — Organic Net Revenue $ 7,458 $ 12,816 $ 20,274 $ 6,623 $ 12,660 $ 19,283 58 Table of Contents Adjusted Operating Income: Applying the definition of “Adjusted Operating Income,” the adjustments made to “operating income” (the most comparable U.S. GAAP financial measure) were to exclude Simplify to Grow Program; 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; the remeasurement of net monetary position; 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. We believe these measures provide improved comparability of underlying operating results. For the Three Months Ended September 30, 2021 2020 $ Change % Change (in millions) Operating Income $ 1,294 $ 1,135 $ 159 14.0 % Simplify to Grow Program (1) 127 114 13 Intangible asset impairment charges (2) — 54 (54) Mark-to-market gains from derivatives (3) (132) (145) 13 Acquisition integration costs and contingent consideration adjustments (4) (57) — (57) Divestiture-related costs (4) — 6 (6) Remeasurement of net monetary position (5) 2 2 — Impact from pension participation changes (6) 2 — 2 Other/rounding — (1) 1 Adjusted Operating Income $ 1,236 $ 1,165 $ 71 6.1 % Favorable currency translation (19) — (19) Adjusted Operating Income (constant currency) $ 1,217 $ 1,165 $ 52 4.5 % For the Nine Months Ended September 30, 2021 2020 $ Change % Change (in millions) Operating Income $ 3,449 $ 2,704 $ 745 27.6 % Simplify to Grow Program (1) 381 248 133 Intangible asset impairment charges (2) 32 144 (112) Mark-to-market (gains)/losses from derivatives (3) (270) 42 (312) Acquisition integration costs and contingent consideration adjustments (4) (54) 2 (56) Acquisition-related costs (4) 24 15 9 Divestiture-related costs (4) — 4 (4) Gain on acquisition (4) (9) — (9) Remeasurement of net monetary position (5) 10 7 3 Impact from pension participation changes (6) 47 — 47 Costs associated with JDE Peet's transaction (7) — 48 (48) Impact from resolution of tax matters (8) (5) — (5) Other/rounding — (1) 1 Adjusted Operating Income $ 3,605 $ 3,213 $ 392 12.2 % Favorable currency translation (130) — (130) Adjusted Operating Income (constant currency) $ 3,475 $ 3,213 $ 262 8.2 % 59 Table of Contents (1) Refer to Note 7, Restructuring Program, for more information. (2) Refer to Note 5, Goodwill and Intangible Assets , for more information. (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. 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. Adjusted EPS: Applying the definition of “Adjusted EPS,” (1) the adjustments made to “diluted EPS attributable to Mondelēz International” (the most comparable U.S. GAAP financial measure) were to exclude the impacts of the items listed in the Adjusted Operating Income tables above as well as net earnings from divestitures; a loss related to interest rate swaps; a loss on debt extinguishment and related expenses; initial impacts from enacted tax law changes, gain on equity method investment transactions; and our proportionate share of significant operating and non-operating items recorded by our JDE Peet's and KDP equity method investees. We also evaluate Adjusted EPS on a constant currency basis. We believe Adjusted EPS provides improved comparability of underlying operating results. For the Three Months Ended September 30, 2021 2020 $ Change % Change Diluted EPS attributable to Mondelēz International $ 0.89 $ 0.78 $ 0.11 14.1 % Simplify to Grow Program (2) 0.06 0.06 — Intangible asset impairment charges (2) — 0.03 (0.03) Mark-to-market gains from derivatives (2) (0.08) (0.08) — Acquisition integration costs and contingent consideration adjustments (2) (0.03) — (0.03) Net earnings from divestitures (3) — (0.01) 0.01 Initial impacts from enacted tax law changes (4) — 0.02 (0.02) Gain on equity method investment transactions (5) (0.13) (0.19) 0.06 Equity method investee items (6) — 0.03 (0.03) Adjusted EPS $ 0.71 $ 0.64 $ 0.07 10.9 % Favorable currency translation (0.01) — (0.01) Adjusted EPS (constant currency) $ 0.70 $ 0.64 $ 0.06 9.4 % 60 Table of Contents For the Nine Months Ended September 30, 2021 2020 $ Change % Change Diluted EPS attributable to Mondelēz International $ 2.33 $ 1.66 $ 0.67 40.4 % Simplify to Grow Program (2) 0.20 0.14 0.06 Intangible asset impairment charges (2) 0.02 0.08 (0.06) Mark-to-market (gains)/losses from derivatives (2) (0.16) 0.03 (0.19) Acquisition integration costs and contingent consideration adjustments (2) (0.03) — (0.03) Acquisition-related costs (2) 0.01 0.01 — Net earnings from divestiture (2) (0.01) (0.04) 0.03 Costs associated with JDE Peet's transaction (2) — 0.21 (0.21) Remeasurement of net monetary position (2) 0.01 — 0.01 Impact from pension participation changes (2) 0.02 0.01 0.01 Loss related to interest rate swaps (7) — 0.05 (0.05) Loss on debt extinguishment (8) 0.07 — 0.07 Initial impacts from enacted tax law changes (4) 0.07 0.02 0.05 Gain on equity method investment transactions (5) (0.40) (0.31) (0.09) Equity method investee items (6) 0.04 0.05 (0.01) Adjusted EPS $ 2.17 $ 1.91 $ 0.26 13.6 % Favorable currency translation (0.09) — (0.09) Adjusted EPS (constant currency) $ 2.08 $ 1.91 $ 0.17 8.9 % (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 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 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 , 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. (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. (7) Refer to Note 9, Financial Instruments , for information on our interest rate swaps that we no longer designate as cash flow hedges. (8) Refer to Note 8, Debt and Borrowing Arrangements , for more information on the loss on debt extinguishment and related expenses. 61 Table of Contents