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Item 7. Management’s Discussion and Analysis

2022-02-04 compared with 2021-02-05 · 503 added, 522 removed, 787 unchanged (57% of the section changed)

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Recent Developments and Significant Items Affecting Comparability

We have been actively monitoring the outbreak of COVID-19 and its impact globally.

Our highest priorities continue to be the safety of our employees and working with our employees and network of suppliers and customers to help maintain the global food supply chain.

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) and e-commerce, and especially for categories such as biscuits.

Other parts of our business were negatively affected by mandated lockdowns and other related restrictions including some of our emerging markets with a greater concentration of traditional trade (such as small family-run stores) as well as our world travel retail (such as international duty-free stores) and foodservice businesses.

During the second quarter especially, lockdowns and other related measures or restrictions had a negative impact on emerging markets with a greater concentration of traditional trade due to store closures (particularly in our Latin America region as well as parts of our AMEA region) as well as in categories like gum and candy, which are more traditionally purchased and consumed out of home.

In the second half of the year, demand grew in both developed and emerging markets as the negative impacts of COVID-19 during the second quarter subsided and a number of our key markets returned to higher growth.

A sharp reduction in global travel continues to negatively impact our world travel retail business, and lower out-of-home consumption continues to negatively impact our foodservice business as well as sales of our gum and candy products.

During 2020, we also experienced temporary disruptions in operations in some of our emerging markets that were not material to our consolidated results.

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

As the COVID-19 global pandemic continues and new variants of the virus emerge, such as Omicron in late 2021, our main priorities continue 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, the first year of the pandemic, 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 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 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 2021, net revenue growth was 8.0% and Organic Net Revenue growth was 5.2%.

In 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 overall outlook for future snacks revenue growth remains strong, but as the pandemic continues, we anticipate increased volatility in revenues until COVID-related risks and the international supply chain issues and labor and transportation constraints subside and snacks consumption stabilizes to a more normal growth level.

We continue to track new developments and ongoing impacts from the pandemic.

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

In the second half 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.

Our Employees, Customers and Communities

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In many locations, our employees are working remotely whenever possible.

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

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

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

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

• We have been hiring frontline employees in the U.S.

As more employees who have been working remotely return to shared workplaces, we have enhanced safety protocols we will follow 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.

• We increased our $15 million global commitment to assist those most impacted by COVID-19 to approximately $28 million to date.

We have been supporting local and global organizations that are responding to food instability and providing emergency relief.

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

as well as in other countries, have significantly tightened.

We recognize the demand for talent and continue to actively work to safeguard, engage, attract and retain our employees.

• Since the start of the pandemic, 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

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

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

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

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

• We have not experienced material disruptions in our workforce;

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

• Commodity costs have become more volatile due to the COVID-19 outbreak.

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

We anticipate continued commodity cost volatility as the pandemic continues.

• We have experienced temporary disruptions in operations in some of our emerging markets.

The disruptions were not material to our consolidated results for 2020.

In the future, the ongoing COVID-19 outbreak could disrupt our global supply chain, operations and routes to market or those of our suppliers, their suppliers, or our co-manufacturers or distributors.

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

• Our 2020 net revenue and net earnings in U.S.

dollars were negatively affected by currency translation losses from a generally stronger U.S.

dollar relative to other currencies in the countries in which we operate.

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

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

We continued to incur higher costs in these areas in response to the ongoing pandemic as we worked to protect our employees and deliver our products timely and safely to our customers.

Most other aspects of our global supply chain and operations did not change materially during 2020.

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

As we respond to this evolving situation, we intend to continue to execute on our strategic operating plans.

However, disruptions, higher operating costs or uncertainties like those noted above could result in delays or modifications to our plans and initiatives.

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

Beginning in the second half of 2021, we began to experience more significant supply chain disruptions and higher operating costs as noted below:

• As global supply, transportation and labor disruptions escalated in the second half of 2021, particularly in the U.S.

and U.K., we incurred higher operating costs in our business.

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

manufacturing and sales distribution facilities for several weeks.

In September 2021, after working with our employees and union representatives to resolve the strike, we entered into a new collective bargaining agreement at these facilities.

In the fourth quarter of 2021, we did not experience significant operating or labor disruptions.

However, we anticipate some disruption in early 2022 and higher expected absenteeism due to illness within our operations and among our third-party suppliers and business partners primarily as a result of the Omicron variant.

Throughout the second half of 2021, we also experienced labor-related disruptions in our network of third-party logistics and external manufacturing, and we anticipate labor shortage-related issues will continue into 2022.

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 are expected to 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 2021 will continue in 2022.

While we have not had significant delays or unavailability of raw ingredients or other supplies, we continue to monitor this risk.

At this time, we believe we will be able to continue to source raw materials and other supplies we use in our business.

• 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 increase product or distribution costs and prices and continue to negatively affect operations and results.

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

While we have not had long-term, severe supply chain disruptions, we do not know whether or how our supply chain or operations may be negatively

affected if the pandemic continues.

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 over the last several years and months have strengthened our ability to operate through current conditions:

• During 2019, we generated $4.0 billion of cash from operations, or $3.0 billion after deducting capital expenditures.

• During 2020, we generated $4.0 billion of cash from operations, or $3.1 billion after capital expenditures.

Also, as of December 31, 2020, we had $3.6 billion of cash and cash equivalents on hand.

• During 2020, we also received cash of €350 million ($394 million) from our participation in the JDE Peet's public share offerings and $2,094 million from our participation in the KDP secondary offering and subsequent KDP share sales (see additional information below and in Note 7, Equity Method Investments ).

• As a precautionary measure, in March, we also suspended our share repurchase program, which was reinstated during our fourth quarter.

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

Some of these payments were made in the fourth quarter of 2020;

the remainder will come due in 2021 and 2022.

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

• Based on our current available cash and access to financing markets, we do not anticipate any issue funding our next long-term debt maturities of approximately $1.5 billion in October 2021 and approximately $0.3 billion in December 2021 and after paying approximately $0.8 billion of maturing debt in January 2021.

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

During the initial outbreak of COVID-19 in March, we put supplemental short-term credit facilities in place, which we have since retired in full.

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

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

We continue to have $6.0 billion of undrawn credit facilities as well as other forms of short-term and long-term financing options available (refer to the Liquidity and Capital Resources section and Note 9, Debt and Borrowing Arrangements ).

We have been, and we expect to continue to be, in compliance with our debt covenants.

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:

• In 2021, we generated $4.1 billion of cash from operations, or approximately $3.2 billion after deducting capital expenditures.

During 2020 and 2019, we also generated $4.0 billion of cash from operations, or $3.1 billion in 2020 and $3.0 billion in 2019 after deducting capital expenditures.

• As of December 31, 2021, we had $3.5 billion of cash and cash equivalents on hand.

As further discussed below, in January 2022, we acquired Chipita S.A.

to expand our snacks portfolio.

We paid approximately €1.3 billion ($1.5 billion) in cash and we assumed and substantially paid down €0.4 billion ($0.4 billion) of Chipita’s debt in January for a total purchase price of approximately €1.7 billion ($1.9 billion).

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

• During 2021, we generated cash of approximately $1.5 billion from the sale of KDP shares.

During 2020, we also received cash of €350 million ($394 million) from our participation in the JDE Peet’s public share offerings and approximately $2.1 billion from our participation in the KDP secondary offering and subsequent KDP share sales (see additional information below and in Note 7, Equity Method Investments ).

• 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 debt to long-term debt at a low cost.

We renewed one of our credit facilities in early 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 December 31, 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 9, Debt and Borrowing Arrangements ).

Our Financial Position

• We evaluated the realizability of our assets and whether there are any impairment indicators.

• 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.

• In connection with the ongoing pandemic, we identified a decline in demand for certain of our brands, primarily in the gum category, that prompted additional evaluation of our indefinite-life intangible assets during the second quarter of 2020 in addition to our annual testing in the third quarter of 2020.

In connection with the testing, we concluded that eight brands were impaired and we recorded $144 million of impairment charges in 2020.

• 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 biscuit brand was impaired and we recorded a $32 million impairment charge.

During 2020, we concluded that eight brands were impaired and we recorded $144 million of impairment charges.

While we did not identify impairment triggers for other brands, there continues to be significant uncertainty due to the pandemic.

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• Our equity investments in JDE Peet’s and KDP give us additional financial flexibility.

• We will continue to monitor the quality of our assets and our overall financial position over coming quarters.

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

While some of the initial impacts of the pandemic on our business moderated in the second half of 2020, the business and economic environment remains uncertain and additional impacts may arise 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.

However, the elevated consumer demand we experienced primarily in some of our developed market countries in 2020 may not continue.

We are unable to predict how long this sustained demand will last or how significant it will be.

We expect the COVID-19 outbreak to result in lower revenues primarily in some of our emerging market countries that have a higher concentration of traditional trade outlets (such as small family-run stores), our gum and candy categories (which are more instant consumption in nature), as well as our world travel retail (such as international duty-free stores) and foodservice businesses.

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

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

• 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.

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 meet the demand of consumers for our snacks, food and beverage products.

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

Also, different markets and

parts of our business may 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 continue to prioritize and support our employees and customers;

monitor and work 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 as we seek to position the Company to withstand the current uncertainty related to this pandemic.

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.

Chipita Acquisition

On January 3, 2022, we closed on our acquisition of Chipita S.A., which is a strategic complement to our existing snacks portfolio and advances our strategy to become the global leader in broader snacking.

The cash consideration for Chipita totaled €1.3 billion ($1.5 billion) and we assumed and also substantially paid down €0.4 billion ($0.4 billion) of Chipita’s debt in January for a total purchase price of approximately €1.7 billion ($1.9 billion).

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

KDP and JDE Peet’s Equity Method Investment Transactions

On July 9, 2018, Keurig Green Mountain, Inc.

("Keurig") closed on its definitive merger agreement with Dr Pepper Snapple Group, Inc., and formed Keurig Dr Pepper Inc.

"KDP"), a publicly traded company.

Following the close of the transaction, our 24.2% investment in Keurig together with our shareholder loan receivable became a 13.8% investment in KDP.

During 2018, we recorded a pre-tax gain of $778 million (or $586 million after-tax).

In connection with the KDP transaction, in the third quarter of 2018, we changed our accounting principle to reflect our share of Keurig's historical and KDP's ongoing earnings on a one-quarter lag basis for all periods presented while we continue to record dividends when cash is received.

During 2019, we recognized a $23 million pre-tax gain related to the impact of a KDP acquisition that decreased our ownership interest from 13.8% to 13.6%.

On March 4, 2020, we participated in a secondary offering of KDP shares and sold approximately 6.8 million shares, which reduced our ownership interest by 0.5% to 13.1% of the total outstanding shares.

On June 7, 2021, we sold approximately 28 million shares of KDP, 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 were 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% of total outstanding shares.

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

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The cash taxes associated with the KDP share sales were paid in 2020.

During 2019, we recognized a $23 million pre-tax gain related to the impact of a KDP acquisition that decreased our ownership interest from 13.8% to 13.6%.

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

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

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 that is payable in 2020 and 2021.

We also incurred a $261 million tax expense.

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

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

Consistent with our accounting for KDP and in connection with JDE Peet's becoming a public company, during the second quarter of 2020, we changed our accounting principle to reflect our share of JDE historical results and JDE Peet's ongoing results on a one-quarter lag basis while we continue to record dividends when cash is received.

We determined a lag was preferable as it enables us to continue to report our quarterly and annual results on a timely basis and to record our share of JDE Peet's ongoing results once JDE Peet's has publicly reported its results.

This change was applied retrospectively to all periods presented.

For additional information, refer to Note 7, Equity Method Investments , and Note 16, Income Taxes .

Swiss and U.S.

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

For additional information, refer to Note 7, Equity Method Investments , Note 16, Income Taxes , and Note 9, Debt and Borrowing Arrangements .

We continue to monitor existing and potential future tax reform.

In 2019, the most significant tax reform impact was from Swiss tax reform.

On August 6, 2019, Switzerland published changes to its Federal tax law in the Official Federal Collection of Laws.

On September 27, 2019, the Zurich Canton published their decision on the September 1, 2019 Zurich Canton public vote regarding the Cantonal changes associated with the Swiss Federal tax law change.

The intent of these tax law changes was to replace certain preferential tax regimes with a new set of internationally accepted measures that are hereafter referred to as “Swiss tax reform”.

The intent of these tax law changes was to replace certain preferential tax regimes with a new set of

internationally accepted measures that are hereafter referred to as “Swiss tax reform”.

Based on these Federal / Cantonal events, our position is the enactment of Swiss tax reform for U.S.

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The ongoing impacts of these Swiss tax reform law changes became effective January 1, 2020.

On December 22, 2017, the United States enacted tax reform legislation ("U.S.

tax reform") that included a broad range of business tax provisions and a one-time transition tax on accumulated foreign earnings and profits.

See Note 16, Income Taxes , for more information on our annual effective tax rates and Swiss and U.S.

Multiemployer Pension Plan Withdrawal

In 2018, we executed a complete withdrawal from the Bakery and Confectionery Union and Industry International Pension Fund (the "Fund") and recorded a $429 million estimated withdrawal liability.

On July 11, 2019, we received an undiscounted withdrawal liability assessment from the Fund totaling $526 million requiring pro-rata monthly payments over 20 years.

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

Within selling, general and administrative expenses, we recorded a $35 million ($26 million net of tax) adjustment related to the discounted withdrawal liability.

Within interest and other expense, net, we recorded accreted interest on the long-term liability of $11 million in 2020, $12 million in 2019 and $6 million in 2018.

As of December 31, 2020, the remaining discounted withdrawal liability was $375 million, with $14 million recorded in other current liabilities and $361 million recorded in long-term other liabilities.

See Note 16, Income Taxes , for more information.

Summary of Results

• Net revenues were approximately $26.6 billion in 2020 and $25.9 billion in 2019, an increase of 2.8% in 2020 and a decrease of 0.3% in 2019.

In 2020, net revenues were significantly impacted by the COVID-19 outbreak and response.

In developed markets, particularly North America, demand for our products, primarily biscuits and chocolate, grew significantly as consumers increased their food purchases for in-home consumption.

In some of our emerging markets, where we have a greater concentration of traditional trade, as well as in our gum and candy, world travel retail and foodservice businesses, where we sell products that are typically consumed away from home, net revenues were negatively affected by mandated lockdowns and other related restrictions.

In the second half of the year the negative impacts we experienced from COVID-19, particularly during the second quarter, subsided, resulting in a return to revenue growth across a number of our key markets.

– Net revenue increased in 2020, driven by higher net pricing, favorable volume/mix and incremental net revenues from our acquisitions of Give & Go in 2020 and Perfect Snacks in 2019.

• Net revenues were approximately $28.7 billion in 2021 and $26.6 billion in 2020, an increase of 8.0% in 2021 and an increase of 2.8% in 2020.

In 2021, our net revenue growth 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 were not yet back to pre-pandemic levels.

In developed markets, increased food purchases for in-home consumption continued to drive net revenue growth, partially offset by declines in some markets as they lapped prior-year 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 in 2020, with strong revenue growth in 2021 across most of our key markets, though some markets remained challenged.

In addition, our out-of-home consumption businesses, which experienced significant negative impacts from the pandemic in 2020, continued to recover, particularly our gum and candy, foodservice and world travel retail businesses.

– Net revenues increased in 2021, driven by favorable volume/mix, higher net pricing, a significant impact from favorable currency translation, as most currencies we operate in strengthened against the U.S.

dollar compared to exchange rates in the prior year, and incremental net revenues from our acquisitions of Gourmet Foods, Grenade and Hu in 2021 and Give & Go in 2020.

– Net revenues increased in 2020, driven by higher net pricing, favorable volume/mix and incremental net revenues from our acquisitions of Give & Go in 2020 and Perfect Snacks in 2019.

These items were partially offset by the significant impact of unfavorable currency translation, as the U.S.

dollar strengthened against most currencies in which we operate compared to exchange rates in the prior year, as well as the May 28, 2019 divestiture of most of our cheese business in the Middle East and Africa.

– Net revenue decreased in 2019, driven by the impact of unfavorable currency translation and the impact of the divestiture of most of our cheese business in the Middle East and Africa.

Net revenues were positively affected by higher net pricing and favorable volume/mix, as well as our acquisitions of Perfect Snacks in 2019 and Tate's Bake Shop in 2018.

• Organic Net Revenue increased 5.2% to $28.0 billion in 2021 and increased 3.7% to $26.8 billion in 2020.

While Organic Net Revenue in 2020 was impacted by the COVID-19 outbreak and response described above, Organic Net Revenue increased in both 2020 and 2019 due to higher net pricing and favorable volume/mix.

Organic Net Revenue increased in both 2021 and 2020 due to favorable volume/mix and higher net pricing, despite impacts from the COVID-19 pandemic described above.

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 decreased 8.2% to $2.47 in 2020 and increased 20.6% to $2.69 in 2019.

– Diluted EPS decreased in 2020 primarily driven by lapping the prior-year benefit from Swiss tax reform, costs associated with the JDE Peet's transaction, loss on debt extinguishment, higher intangible asset impairment charges, unfavorable year-over-year mark-to-market impacts from currency and commodity derivatives, lapping a prior-year gain on divestiture, lapping the prior-year benefit from pension participation changes and the unfavorable impact on net earnings from divestitures.

• Diluted EPS attributable to Mondelēz International increased 23.1% to $3.04 in 2021 and decreased 8.2% to $2.47 in 2020.

– Diluted EPS increased in 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, lower intangible asset impairment charges, lapping the prior-year loss on interest rate swaps, lower losses on debt extinguishment and related expenses, lower Simplify to Grow program costs and a net benefit from acquisition integration costs and contingent consideration adjustments.

These factors were partially offset by a lower gain on equity method investment transactions, higher initial impacts from enacted tax law changes, lower net earnings from divestitures, lapping the prior-year benefit from the resolution of tax matters and higher impact from pension participation changes.

– Diluted EPS decreased in 2020 primarily driven by lapping the prior-year benefit from initial impacts from enacted tax law changes, costs associated with the JDE Peet's transaction, loss on debt extinguishment, unfavorable year-over year change in equity method investee items, higher intangible asset impairment charges, unfavorable year-over-year mark-to-market impacts from currency and commodity derivatives, lapping a prior-year gain on divestiture and lapping the prior-year benefit from pension participation changes.

These factors were partially offset by gains on equity method investment transactions, higher Adjusted EPS, favorable change from the resolution of tax matters (a benefit in 2020 as compared to an expense in 2019), lower Simplify to Grow program costs and lower losses related to interest rate swaps.

– Diluted EPS increased in 2019 primarily driven by the benefit from Swiss tax reform, lapping the prior-year impact from pension participation changes, operating gains, lower Simplify to Grow program costs, an increase in equity method investment earnings, lapping the prior-year loss on debt extinguishment, fewer shares outstanding, a gain on divestiture, lower interest expense and a benefit from current-year pension participation changes, partially offset by lapping the prior-year gain on equity method investment transactions, unfavorable currency translation, a loss related to interest rate swaps, the expense from the resolution of tax matters in 2019 and an unfavorable year-over-year change in mark-to-market impacts from currency and commodity derivatives.

See our Discussion and Analysis of Historical Results appearing later in this section for further details.

• Adjusted EPS increased 12.1% to $2.87 in 2021 and increased 6.7% to $2.56 in 2020.

On a constant currency basis, Adjusted EPS increased 9.0% to $2.79 in 2021 and increased 8.3% to $2.60 in 2020.

– For 2020, operating gains, an increase in benefit plan non-service income and fewer shares outstanding, partially offset by unfavorable currency translation and a decrease in equity method investment earnings drove the Adjusted EPS growth.

– For 2019, operating gains, increased equity method investment earnings, fewer shares outstanding, lower interest expense and lower taxes, partially offset by unfavorable currency translation drove the Adjusted EPS growth.

– For 2021, operating gains, favorable currency translation, fewer shares outstanding, higher equity method investment earnings and lower interest expense, partially offset by higher taxes primarily due to a lower net benefit from non-recurring discrete tax items, drove the Adjusted EPS growth.

– For 2020, operating gains, an increase in benefit plan non-service income and fewer shares outstanding, partially offset by unfavorable currency translation, primarily drove the Adjusted EPS growth.

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

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In addition to monitoring our key operating metrics, we monitor a number of developments and trends that could impact our revenue and profitability objectives.

COVID-19 – We continue to monitor and respond to the COVID-19 outbreak.

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

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 may also have a negative effect on our derivative counterparties and could also 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.

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 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 such as Omicron 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 also 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 will continue to prioritize the safety of our employees and consumers and we may continue to incur increased labor, customer service, commodity, transportation and other costs.

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

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

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

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

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

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

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

Chipita acquisition – As described above, on January 3, 2022, we closed on our acquisition of Chipita S.A.

The cash consideration for Chipita totaled €1.3 billion ($1.5 billion) and we assumed and substantially paid down €0.4 billion ($0.4 billion) of Chipita’s debt in January for a total purchase price of approximately €1.7 billion ($1.9 billion).

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

Demand – We monitor consumer spending and our market share within the food and beverage categories in which we sell our products.

While gum and candy category growth was down due to less on-the-go consumption, the overall snack category continued to grow in 2020, in part due to increased consumer demand for snacks purchases for in-home consumption during the COVID-19 outbreak.

As part of our strategic plan, we seek to drive category growth by leveraging our local and consumer-focused commercial approach, making investments in our brand and snacks portfolio, building strong routes to market in both emerging and developed markets and improving our availability across multiple channels.

Core snacks categories continued to expand in 2021 due to the continued growth of snacking as a consumer behavior around the world.

across multiple channels.

We believe these actions will help drive demand in our categories and strengthen our positions across markets.

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Our recent research underscores the growth of snacking worldwide and how behavior, sentiment and routines surrounding food are being reshaped by COVID-19.

Snacking, which was already increasing among consumers, has accelerated further in 2020 as consumers spend more time at home, according to the second annual State of Snacking report, commissioned by Mondelēz International and issued in November 2020.

Snacking, which was already increasing among consumers, continues to grow according to snack category findings noted above and supported by the findings from the third annual State of Snacking report, commissioned by Mondelēz International and issued in January 2022.

The report was conducted in conjunction with consumer poll specialist The Harris Poll and summarizes the findings from interviews with thousands of consumers across 12 countries.

The report shows that consumers see snacking as an important source of comfort, connection and community, especially during the past year.

For many, snacking offers moments of satisfaction and peace, with a majority of respondents noting it has helped distract them from a challenging year.

We believe that snacks continue to be a source of comfort as well as excitement and variety for consumers.

Social media increasingly helps consumers find food trends, inspiration and connection on their social media and other feeds.

Consumers are also interested in buying snacks conveniently, whether through same-day delivery apps, shipped sources or different retail settings.

Many consumers also continue to prioritize sustainability in their purchase decisions, valuing sustainably sourced ingredients, low carbon footprint preparation and lower waste packaging.

We seek to continue to offer snacks that meet consumer needs and preferences and align with our strategic priorities.

Volatility of Global Markets – Our growth strategy depends in part on our ability to expand our operations, including in emerging markets.

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Volatility in these markets affects demand for and the costs of our products and requires frequent changes in how we operate our business.

As further discussed in COVID-19 above and in Item 7A, Quantitative and Qualitative Disclosures about Market Risk, volatility in global consumer, commodity, currency and capital markets increased significantly during 2020 and is expected to continue until the COVID-19 outbreak is largely resolved.

See also below for a discussion of Brexit as well as Argentina, which was designated a highly inflationary economy in 2018.

In addition, the imposition of increased or new tariffs, quotas, trade barriers or similar restrictions on our sales or key commodities and potential changes in U.S.

As further discussed in COVID-19 above and in Item 7A, 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 into 2022 as we manage through the pandemic and new COVID-19 variants, the related recovery, labor shortages, inflation, supply chain disruptions (including any potential disruptions in the availability of raw materials, packaging, transportation, energy or other supplies) and adverse weather factors.

(See also below for a discussion of Brexit and Argentina, which was designated a highly inflationary economy in 2018.) In addition, the imposition of increased or new tariffs, quotas, trade barriers or similar restrictions on our sales or key commodities and potential changes in U.S.

trade programs, trade relations, regulations, taxes or fiscal policies might negatively affect our sales or profitability.

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We also continue to optimize our manufacturing and other operations and invest in our brands through ongoing research and development, advertising, marketing and consumer promotions.

Pricing – Our net revenue growth and profitability may be affected as we adjust prices to address new conditions.

We adjust our product prices based on a number of variables including demand, the competitive environment and changes in our product input costs.

We generally have increased prices in response to higher commodity costs, currency and other market factors.

In 2021, we anticipate changing market conditions to continue to impact pricing.

Price changes may affect net revenues or market share in the near term as the market adjusts to changes in input costs and other market conditions.

Pricing – Our net revenue growth and profitability may be affected as we adjust prices to address new conditions, such as increasing input and operating costs due to supply, transportation and labor constraints and higher cost trends we experienced, particularly in the second half of 2021.

We adjust our product prices based on a number of variables including market factors, transportation, logistics and changes in our product input costs, and we have increased prices to control costs given recent significant cost inflation.

However, we may not be able to adjust pricing fully or timely in response to rising costs, and this may negatively affect our revenue, margins or earnings.

Operating Costs – Our operating costs include raw materials, labor, selling, general and administrative expenses, taxes, currency impacts and financing costs.

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To remain competitive on our operating structure, we continue to work on programs to expand our profitability, such as our Simplify to Grow Program, which is designed to bring about significant reductions in our operating cost structure in both our supply chain and overhead costs.

Taxes – We continue to monitor existing and potential future tax reform.

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

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

tax reform reduced the U.S.

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

During the second half of 2021, in particular, we experienced higher operating costs, including higher overall raw material, transportation, labor and fuel costs that we anticipate will continue into 2022.

Taxes – We continue to monitor existing and potential future tax reform around the world.

During November 2021, the U.S.

House of Representatives passed a bill that contains significant changes to currently enacted U.S.

tax rules but the Senate has not yet acted on it.

In December 2021, the OECD released model rules for a global minimum tax.

Both of these proposed legislative changes could have a material effect on us if enacted.

Currency – As a global company with 75.1% of our net revenues generated outside the United States, we are continually exposed to changes in global economic conditions and currency movements.

While we hedge significant forecasted currency exchange transactions as well as currency translation impacts from certain net assets of our non-U.S.

operations, including the United Kingdom, we cannot fully predict or eliminate all adverse impacts arising from changes in currency exchange rates on our consolidated financial results.

operations, we cannot fully predict or eliminate all adverse impacts arising from changes in currency exchange rates on our consolidated financial results.

To partially offset currency translation impacts arising from our overseas operations, we enter into net investment hedges primarily in the form of local currency-denominated debt, cross-currency swaps and other financial instruments.

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As currency movements can make comparison of year-over-year operating performance challenging, we isolate the impact of currency and also report growth on a constant currency basis, holding prior-year currency exchange rates constant, so that prior-year and current-year results can be compared on a consistent basis.

Brexit – On December 24, 2020, the European Union and the United Kingdom reached an agreement on a new trade arrangement that became effective on January 1, 2021.

Main trade provisions include the continuation of no tariffs or quotas on trade between the U.K.

so long as we meet prescribed trade terms.

We will also need to meet product and labeling standards for both the U.K.

and we have already begun to introduce these changes gradually.

may also set its own trade policies with countries such as the United States, Australia and New Zealand that currently do not have free trade agreements with the E.U.

Brexit – Following Brexit in 2020, a new trade arrangement was reached between the U.K.

that began on January 1, 2021.

The main trade provisions include the continuation of no tariffs or quotas on trade between the U.K.

subject to prescribed trade terms, including but not limited to meeting product and labeling standards for both the U.K.

Cross-border trade between the U.K.

will be subject to new customs regulations, documentation and reviews.

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

border crossings, however, we anticipate increased shipping costs and near-term delays because of the need for ongoing customs inspections and related procedures.

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.

Volatility in foreign currencies and other markets may also arise as the U.K.

work though the new trade arrangements.

Once the new rules are formalized, there could be other near- or long-term negative impacts.

We have been taking protective measures to limit disruptions to our supply chain and sales to limit potential negative impacts on our results of operations, financial condition and cash flows.

We continue to increase our resources in customer service & logistics as well as in our factories and on our customs support teams.

We are adapting our systems and processes for new and increased customs transactions.

We continue to enhance resilience plans to aid in dealing with anticipated border delays.

We are working to address new regulatory requirements such as packaging changes.

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

Any disagreements on trade terms or supply chain or distribution delays or other disruptions could negatively affect our U.K.

In 2020, we generated 9.0% of our net revenues in the U.K.

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

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

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

We have made investments in resources, systems and processes to meet the new ongoing requirements and we 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, inflationary cost pressures increased in our U.K.

business in 2021, as we 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 2021, we generated 9.3% of our consolidated net revenues in the U.K.

advertising and promotion ban – In the United Kingdom, a ban on specific types of TV and online advertising of food containing levels of fat, sugar or salt above specified thresholds is expected to go into effect in 2023, and new measures restricting certain promotions and in-store placement of some of those products are expected to go into effect in October 2022.

Although we are unable to estimate precisely the impact of the restrictions, they could significantly negatively affect our U.K.

results of operations in 2022 and thereafter.

Argentina – as further discussed in Note 1, Summary of Significant Accounting Policies – Currency Translation and Highly Inflationary Accounting, on July 1, 2018, we began to apply highly inflationary accounting for our Argentinean subsidiaries.

As a result, we recorded a remeasurement loss of $9 million in 2020, a remeasurement gain of $4 million in 2019 and a remeasurement loss of $11 million in 2018 within selling, general and administrative expenses related to the revaluation of the Argentinean peso denominated net monetary position over these periods.

As a result, we recorded a remeasurement loss of $13 million in 2021, a remeasurement loss of $9 million in 2020 and a remeasurement gain of $4 million in 2019 within selling, general and administrative expenses related to the revaluation of the Argentinean peso denominated net monetary position over these periods.

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.

Gum Portfolio Review – During 2021, we began and continue to conduct a strategic review of our developed market gum business.

We expect to complete the review and have more information in mid 2022.

Financing Costs – We regularly evaluate our variable and fixed-rate debt.

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We continued to secure low-cost short and long-term debt during 2021.

We continue to use interest rate swaps and other financial instruments to manage our exposure to interest rate and cash flow variability, protect the value of our existing currency assets and liabilities and protect the value of our debt.

We also enter into cross-currency interest rate swaps and forwards to hedge our non-U.S.

In September 2021, we issued our first green bonds, raising nearly €2.0 billion and enabling us to cost-effectively fund eligible projects that align with our sustainability priorities in the areas of building a thriving ingredient supply chain and reducing our environmental impact.

In September 2021, through our subsidiary Mondelez International Holdings Netherlands B.V.

(“MIHN”), we also issued €300 million of zero interest exchangeable notes that are redeemable for cash or existing ordinary shares of JDE Peet's at our option.

We also continue to use interest rate swaps and other financial instruments to manage our exposure to interest rate and cash flow variability, protect the value of our existing currency assets and liabilities and protect the value of our debt.

We also enter into cross-currency interest rate swaps, forwards and option collars to hedge our non-U.S.

net investments against adverse movements in exchange rates.

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Refer to Note 9, Debt and Borrowing Arrangements , and Note 10, Financial Instruments , for additional information on our debt and derivative activity.

Cybersecurity Risks – We continue to devote focused resources to network security, backup and disaster recovery, enhanced training and other security measures to protect our systems and data.

We also focus on enhancing the monitoring and detection of threats in our environment, including but not limited to the manufacturing environment and operational technologies, as well as adjusting information security controls based on updated threats.

While we have taken a number of security measures to protect our systems and data, security measures cannot provide absolute certainty or guarantee that we will be successful in preventing or responding to every breach or disruption on a timely basis.

Cybersecurity Risks – Global cybersecurity risks continue to increase, including during the pandemic and as more employees are working remotely and virtually outside of traditional workplaces.

In response, we continue to be on heightened alert and dedicate focused resources to network security, backup and disaster recovery and to provide ongoing workforce training and employ security measures to protect our systems and data.

We are also focusing on enhancing the monitoring and detection of threats in our environment, including but not limited to the manufacturing environment and operational technologies, as well as adjusting information security controls based on updated threats.

While we have taken security measures to protect our systems and data, security measures cannot provide absolute certainty or guarantee that we will be successful in preventing or responding to every breach or disruption on a timely basis.

Discussion and Analysis of Historical Results

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Acquisition and divestiture-related costs Note 2

Acquisition integration costs (4) — (3)

Acquisition integration costs and

contingent consideration adjustments 40 (4) —

Acquisition-related costs (25) (15) (3)

Net gain on acquisition and divestitures 8 — 44

Divestiture-related costs (22) (4) (6)

Net gain on divestiture — 44 —

Costs associated with JDE Peet's transaction Note 7 — (48) —

Remeasurement of net monetary position (9) 4 (11)

Remeasurement of net monetary position Note 1 (13) (9) 4

Impact from pension participation changes (1)

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CEO transition remuneration (2)

(Loss)/gain related to interest rate swaps Note 9 & 10 (103) (111) 10

Loss related to interest rate swaps Note 9 & 10 — (103) (111)

Loss on debt extinguishment Note 9 (137) (185) —

Swiss tax reform net impacts Note 16 — 767 —

tax reform discrete net tax impacts Note 16 — (5) (19)

Initial impacts from enacted tax law changes Note 16 (100) (36) 752

Gain/(loss) on equity method

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(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 10, Financial Instruments ) that are recorded in the gain on equity method investment transactions on our consolidated statement of earnings.

(2) Please see the Non-GAAP Financial Measures section at the end of this item for additional information.

(3) Gain/(loss) on equity method investment transactions is recorded outside pre-tax operating results on the 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.

(4) 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.

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Net Revenues – Net revenues increased $2,139 million (8.0%) to $28,720 million in 2021, and Organic Net Revenue increased $1,388 million (5.2%) to $27,969 million.

Developed markets net revenue increased 8.0% and developed markets Organic Net Revenue increased 4.5%.

Emerging markets net revenues decreased 6.0%, including an unfavorable currency impact, and emerging markets Organic Net Revenue increased 2.3%.

Developed markets net revenues increased 6.3% and developed markets Organic Net Revenue increased 1.6%.

Emerging markets net revenues increased 11.4% and emerging markets Organic Net Revenue increased 12.2%.

The underlying changes in net revenues and Organic Net Revenue are detailed below:

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Total change in net revenues 8.0 %

Add back the following items affecting comparability:

Unfavorable currency 2.4 pp

Impact of divestiture 0.2 pp

Removing the following items affecting comparability:

Favorable currency (1.7) pp

Impact of acquisitions (1.0) pp

Impact of divestiture (0.1) pp

Total change in Organic Net Revenue (1)

Higher net pricing 1.9 pp

Favorable volume/mix 2.6 pp

Higher net pricing 2.6 pp

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

Net revenues were higher in developed markets, particularly North America, where due to the COVID-19 outbreak and response, demand for our products, primarily biscuits and chocolate, grew significantly as consumers increased their food purchases for in-home consumption.

However, our gum and candy categories as well as our world travel retail and foodservice businesses were negatively impacted by COVID-19.

In emerging markets, where we have a greater concentration of traditional trade, several markets were challenged by COVID-19 impacts, particularly those with significant gum and candy portfolios.

Overall, as the negative impacts of COVID-19 experienced in the first half of the year subsided in the second half of the year, revenue growth began to recover in a number of our key emerging markets, though overall emerging markets net revenues declined due to unfavorable currency impacts.

Net revenue increase of 2.8% was driven by our underlying Organic Net Revenue growth of 3.7% and the impact of acquisitions, mostly offset by unfavorable currency and the impact of a prior-year divestiture.

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

Higher net pricing in all regions except Europe was due to the benefit of carryover pricing from 2019 as well as the effects of input cost-driven pricing actions taken during 2020.

Favorable volume/mix in North America and Europe, partially offset by unfavorable volume/mix in Latin America and AMEA, included strong volume gains tempered by unfavorable mix reflecting shifts in consumer purchases in response to the COVID-19 outbreak.

The April 1, 2020 acquisition of Give & Go added incremental net revenues of $390 million and the July 16, 2019 acquisition of a majority interest in Perfect Snacks added incremental net revenues of $55 million in 2020.

Unfavorable currency impacts decreased net revenues by $637

million, due primarily to the strength of the U.S.

dollar relative to most currencies, including the Brazilian real, Argentinean peso, Russian ruble, Mexican peso, Indian rupee, South African rand and Turkish lira, partially offset by the strength of several currencies relative to the U.S.

dollar, including the euro, Philippine peso, British pound sterling, Egyptian pound and Swedish krona.

The impact of the May 28, 2019 divestiture of most of our cheese business in the Middle East and Africa resulted in a year-over-year decline in net revenues of $55 million.

Net revenue increase of 8.0% was driven by our underlying Organic Net Revenue growth of 5.2%, favorable currency, the impact of acquisitions and the partial year contribution of a business divested on November 1, 2021 which had been part of an earlier 2021 acquisition.

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

In developed markets, increased food purchases for in-home consumption continued to drive net revenue growth, partially offset by declines in some markets as they lapped strong volume growth in 2020 resulting from increased consumer demand due to the pandemic.

In addition, 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 2021.

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

Favorable volume/mix in Europe, AMEA and Latin America was primarily driven by strong volume gains as we lapped the significant negative impacts of the pandemic in many of our key markets.

This was partially offset by unfavorable volume/mix in North America as the region lapped very strong prior-year volume growth from significant food purchases for in-home consumption due to the pandemic.

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 2021.

Favorable currency impacts

increased net revenues by $462 million, due primarily to the strength of several currencies relative to the U.S.

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

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

The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $47 million (constant currency basis), the March 25, 2021 acquisition of Grenade added incremental net revenues of $63 million (constant currency basis), the January 4, 2021 acquisition of Hu added incremental net revenues of $38 million and the April 1, 2020 acquisition of Give & Go added incremental net revenues of $106 million in 2021.

The packaged seafood business, which was part of our April 1, 2021 acquisition of Gourmet Food but divested on November 1, 2021, added incremental net revenues of $35 million prior to its divestiture.

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

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Mark-to-market gains from derivatives (4)

Acquisition integration costs (5)

Acquisition-related costs (5)

Divestiture-related costs (5)

Operating income from divestiture (5)

Net gain on divestiture (5)

Costs associated with JDE Peet's transaction (6)

Remeasurement of net monetary position (7)

Impact from pension participation changes (7)

Impact from resolution of tax matters (8)

CEO transition remuneration (1)

Swiss tax reform impact (9)

Adjusted Operating Income (1) for the Year Ended December 31, 2020

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Higher selling, general and administrative expenses

VAT-related settlements

Impact from acquisitions (5)

Lower amortization of intangible assets 80

Total change in Adjusted Operating Income (constant currency) (1)

Unfavorable currency translation (59)

Favorable currency translation 118

Total change in Adjusted Operating Income (1)

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Mark-to-market gains from derivatives (4)

Acquisition integration costs (5)

Acquisition integration costs and contingent consideration adjustments (5)

Acquisition-related costs (5)

Net gain on acquisition and divestiture (5)

Divestiture-related costs (5)

Costs associated with JDE Peet's transaction (10)

Operating income from divestiture (5)

Remeasurement of net monetary position (7)

Impact from pension participation changes (9)

Impact from resolution of tax matters (8)

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(2) Refer to Note 8, Restructuring Program , for more information.

(3) Refer to Note 6, Goodwill and Intangible Assets, for more information on intangible asset impairments.

(4) Refer to Note 10, Financial Instruments , Note 18, Segment Reporting , and Non-GAAP Financial Measures section at the end of this item for more information on the unrealized gains/losses on commodity and forecasted currency transaction derivatives.

(5) Refer to Note 2, Acquisitions and Divestitures , for more information on the April 1, 2020 acquisition of a significant majority interest in Give & Go, the July 16, 2019 acquisition of a majority interest in Perfect Snacks and the May 28, 2019 divestiture of most of our cheese business in the Middle East and Africa.

(3) Refer to Note 6, Goodwill and Intangible Assets , for more information.

(4) Refer to Note 10, Financial Instruments , Note 18, Segment Reporting , and Non-GAAP Financial Measures 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 January 3, 2022 acquisition of Chipita, April 1, 2021 acquisition of Gourmet Food, March 25, 2021 acquisition of a majority interest in Grenade, January 4, 2021 acquisition of the remaining 93% of equity in Hu and April 1, 2020 acquisition of a significant majority interest in Give & Go.

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

(7) Refer to Note 1, Summary of Significant Accounting Policies – Currency Translation and Highly Inflationary Accounting , for information on our application of highly inflationary accounting for Argentina.

(7) Refer to Note 11, Benefit Plans , for more information.

(8) Refer to Note 14, Commitments and Contingencies – Tax Matters , for more information.

(9) Refer to Note 16, Income Taxes , for more information on Swiss tax reform.

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

(9) Refer to Note 11, Benefit Plans , for more information.

During 2021, we realized higher net pricing and favorable volume/mix, which was largely offset by increased input costs.

Higher net pricing, which included the carryover impact of pricing actions taken in 2019 as well as the effects of input cost-driven pricing actions taken during 2020, was reflected in all regions except Europe.

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

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

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

Total selling, general and administrative expenses decreased $38 million from 2019, due to a number of factors noted in the table above, including in part, a favorable currency impact related to expenses, favorable change from the resolution of tax matters (a benefit in 2020 as compared to an expense in 2019), lower implementation costs incurred for the Simplify to Grow Program, lapping prior-year value-added tax (“VAT”) related settlements, lapping prior-year CEO transition remuneration and lapping the prior-year divestiture.

These decreases were partially offset by the impact of acquisitions, costs associated with the JDE Peet's transaction, lapping the benefit from prior-year pension participation changes, unfavorable change in remeasurement of net monetary position in Argentina (remeasurement loss in 2020 as compared to a remeasurement gain in 2019) and higher acquisition-related 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 2021, was reflected in all regions.

Favorable volume/mix was driven by Europe, AMEA and Latin America, which was 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 2020 from significant food purchases for in-home consumption 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 year-over-year incremental COVID-19 related costs.

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

Total selling, general and administrative expenses increased $165 million from 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, lower benefits from the resolution of tax matters and higher acquisition-related costs, which were partially offset by lower implementation costs incurred for the Simplify to Grow Program, lapping prior-year costs associated with the JDE Peet's transaction and a net benefit from acquisition integration costs and contingent consideration adjustments.

Excluding these factors, selling, general and administrative expenses increased $133 million from 2020.

The increase was driven primarily by higher advertising and consumer promotion costs, partially offset by lower overhead spending net of incremental COVID-19 related costs.

We recorded an expense of $11 million from a VAT-related settlement in Latin America in 2019.

Unfavorable currency changes decreased operating income by $59 million due primarily to the strength of the U.S.

dollar relative to most currencies, including the Brazilian real, Russian ruble, Indian rupee, Swiss franc, South African rand and Turkish Lira, partially offset by the strength of several currencies relative to the U.S.

dollar, including the euro, Egyptian pound, Philippine peso, British pound sterling and Swedish krona.

Operating income margin decreased from 14.9% in 2019 to 14.5% in 2020.

The decrease in operating income margin was driven primarily by the year-over-year unfavorable change in mark-to-market gains/(losses) from currency and commodity hedging activities, higher intangible asset impairment charges, costs associated with the JDE Peet's transaction, lapping the prior-year gain on a divestiture and lapping the benefit from prior-year pension participation changes, partially offset by the favorable impact from the resolution of tax matters and lower costs for the Simplify to Grow Program.

Adjusted Operating Income margin increased from 16.5% in 2019 to 16.6% in 2020.

The increase in Adjusted Operating Income margin was driven primarily by higher pricing, lower manufacturing costs reflecting productivity net of incremental COVD-19 costs, and selling, general and administrative cost leverage, mostly offset by higher raw material costs.

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $3,555 million decreased by $374 million (9.5%) in 2020.

Diluted EPS attributable to Mondelēz International was $2.47 in 2020, down $0.22 (8.2%) from 2019.

The increase was driven primarily by higher advertising and consumer promotion costs, partially offset by lower overhead spending including lower year-over-year incremental COVID-19 related costs.

Favorable currency changes increased operating income by $118 million due primarily to the strength of several currencies relative to the U.S.

dollar, including the British pound sterling, euro, Chinese yuan.

Australian dollar and Canadian dollar, partially offset by the strength of the U.S.

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

Operating income margin increased from 14.5% in 2020 to 16.2% in 2021.

The increase in operating income margin was driven primarily by the favorable year-over-year change in mark-to-market gains/(losses) from currency and commodity hedging activities, lower intangible asset impairment charges, lower Simplify to Grow program costs, 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 the impact from pension participation changes, higher divestiture-related costs and higher acquisition-related costs.

Adjusted Operating Income margin for 2021 was flat to 2020 at 16.6%.

Adjusted Operating Income margin was unchanged as higher net pricing, lower manufacturing costs due to productivity and lower year-over-year incremental COVID-19 costs, and lower selling, general and administrative costs were offset by higher raw material costs, unfavorable product mix and higher advertising and consumer promotion costs.

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $4,300 million increased by $745 million (21.0%) in 2021.

Diluted EPS attributable to Mondelēz International was $3.04 in 2021, up $0.57 (23.1%) from 2020.

Adjusted EPS (1) was $2.87 in 2021, up $0.31 (12.1%) from 2020.

4 unchanged sentences

Mark-to-market gains from derivatives (2)

Acquisition-related costs (2)

Net earnings from divestitures (2) (3)

Net gain on divestiture (2)

Costs associated with JDE Peet's transaction (2)

Remeasurement of net monetary position (2)

Impact from pension participation changes (2)

Impact from resolution of tax matters (2)

CEO transition remuneration (2)

Loss related to interest rate swaps (4)

Swiss tax reform net impacts (5)

Loss on equity method investment transaction (6)

Loss on debt extinguishment (5)

Initial impacts from enacted tax law changes (6)

Gain on equity method investment transaction (7)

Equity method investee items (8)

1 unchanged sentence

Increase in operations 0.14

Decrease in equity method investment net earnings (0.01)

VAT-related settlements

Impact from acquisitions (2)

Changes in benefit plan non-service income

Increase in equity method investment net earnings 0.03

Changes in interest and other expense, net (9)

Changes in income taxes (6)

Changes in shares outstanding (10)

Adjusted EPS (constant currency) (1) for the Year Ended December 31, 2021

Unfavorable currency translation (0.03)

Favorable currency translation 0.08

Adjusted EPS (1) for the Year Ended December 31, 2021

2 unchanged sentences

Mark-to-market gains from derivatives (2)

Acquisition integration costs and contingent consideration adjustments (2)

Acquisition-related costs (2)

Divestiture-related costs (2)

Net earnings from divestitures (2) (3)

Costs associated with JDE Peet's transaction (2)

Remeasurement of net monetary position (2)

Impact from pension participation changes (2)

Impact from resolution of tax matters (2)

Loss related to interest rate swaps (4)

Loss on debt extinguishment (5)

Initial impacts from enacted tax law changes (6)

Gain on equity method investment transactions (7)

6 unchanged sentences

As we record our share of KDP and JDE Peet’s ongoing earnings on a one-quarter lag basis, we reflected the impact of prior-quarter sales of KDP and JDE Peet’s shares within divested results as if the sales occurred at the beginning of all periods presented.

(4) Refer to Note 10, Financial Instruments , for information on interest rate swaps no longer designated as cash flow hedges.

(5) Refer to Note 16, Income Taxes , for more information on the impacts of Swiss and U.S.

(4) Refer to Note 10, Financial Instruments , for information on our interest swaps that we no longer designate as cash flow hedges.

(5) Refer to Note 9, Debt and Borrowing Arrangements , for more information on the loss on debt extinguishment and related expenses.

(6) Refer to Note 16, Income Taxes , for information on income taxes.

(7) Refer to Note 7, Equity Method Investments , for more information on gains and losses on equity method investment transactions.

(8) 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.

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

dollar-denominated debt which is included in currency translation.

(10) Refer to Note 12, Stock Plans , for more information on our equity compensation programs and share repurchase program and Note 17, Earnings per Share , for earnings per share weighted-average share information.

(9) Refer to Note 9, Debt and Borrowing Arrangements , for more information on losses on debt extinguishment.

2020 compared with 2019

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Mondelēz International 2.47 2.69 (0.22) (8.2) %

Net Revenues – Net revenues decreased $70 million (0.3%) to $25,868 million in 2019, and Organic Net Revenue increased $1,067 million (4.1%) to $26,879 million.

Emerging markets net revenues increased 0.2%, including an unfavorable currency impact, and emerging markets Organic Net Revenue increased 7.7%.

Net Revenues – Net revenues increased $713 million (2.8%) to $26,581 million in 2020, and Organic Net Revenue increased $960 million (3.7%) to $26,773 million.

Developed markets net revenue increased 8.0% and developed

markets Organic Net Revenue increased 4.5%.

Emerging markets net revenues decreased 6.0%, including an unfavorable currency impact, and emerging markets Organic Net Revenue increased 2.3%.

The underlying changes in net revenues and Organic Net Revenue are detailed below:

1 unchanged sentence

Total change in net revenues 2.8 %

Add back the following items affecting comparability:

Removing the following items affecting comparability:

Unfavorable currency 2.4 pp

5 unchanged sentences

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

Net revenue decrease of 0.3% was driven by unfavorable currency and the impact of a divestiture, partially offset by our underlying Organic Net Revenue growth of 4.1% and the impact of acquisitions.

However, our gum and candy categories as well as our world travel retail and foodservice businesses were negatively impacted by COVID-19.

In emerging markets, where we have a greater concentration of traditional trade, several markets were challenged by COVID-19 impacts, particularly those with significant gum and candy portfolios.

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

Higher net pricing in all regions except Europe was due to the benefit of carryover pricing from 2019 as well as the effects of input cost-driven pricing actions taken during 2020.

Unfavorable currency impacts decreased net revenues by $637 million, due primarily to the strength of the U.S.

dollar relative to most currencies, including the Argentinean peso, euro, Brazilian real, British pound sterling, Australian dollar, Chinese yuan, Indian rupee, Turkish lira and South African rand.

The impact of the divestiture of most of our cheese business in the Middle East and Africa on May 28, 2019 resulted in a year-over-year decline in net revenues of $71 million.

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

Net pricing was up, which includes the benefit of carryover pricing from 2018 as well as the effects of input cost-driven pricing actions taken during 2019.

Higher net pricing was reflected in Latin America, North America and AMEA as net pricing in Europe was flat.

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

The July 16, 2019 acquisition of a majority interest in Perfect Snacks added net revenues of $53 million and the June 7, 2018 acquisition of Tate’s Bake Shop added incremental net revenues of $35 million in 2019.

dollar, including the euro, Philippine peso, British pound sterling, Egyptian pound and Swedish krona.

The impact of the May 28, 2019 divestiture of most of our cheese business in the Middle East and Africa resulted in a year-over-year decline in net revenues of $55 million.

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

Operating Income – Operating income increased $10 million (0.3%) to $3,853 million in 2020.

Adjusted Operating Income decreased $38 million (0.9%) to $4,264 million and Adjusted Operating Income on a constant currency basis increased $189 million (4.4%) to $4,491 million due to the following:

Adjusted Operating Income (1) increased $137 million (3.2%) to $4,401 million and Adjusted Operating Income on a constant currency basis increased $196 million (4.6%) to $4,460 million due to the following:

Income Change

4 unchanged sentences

Mark-to-market gains from derivatives (4)

Acquisition integration costs (5)

Acquisition-related costs (5)

1 unchanged sentence

Operating income from divestiture (5)

Net gain on divestiture (5)

Remeasurement of net monetary position (6)

2 unchanged sentences

CEO transition remuneration (1)

Initial impacts from enacted tax law changes (9)

Adjusted Operating Income (1) for the Year Ended December 31, 2019

12 unchanged sentences

Mark-to-market gains from derivatives (4)

Acquisition integration costs (5)

Acquisition-related costs (5)

Divestiture-related costs (5)

Operating income from divestiture (6)

Net gain on divestiture (6)

Costs associated with JDE Peet's transaction (10)

Remeasurement of net monetary position (6)

Impact from pension participation changes (8)

Impact from resolution of tax matters (8)

CEO transition remuneration (1)

Swiss tax reform impact (10)

Operating Income for the Year Ended December 31, 2020

2 unchanged sentences

(2) Refer to Note 8, Restructuring Program , for more information.

(3) Refer to Note 6, Goodwill and Intangible Assets, for more information on intangible asset impairments.

(5) Refer to our Annual Report on Form 10-K for the year ended December 31, 2018 for more information on the acquisition of a biscuit business in Vietnam.

(6) Refer to Note 2, Acquisitions and Divestitures , for more information on the July 16, 2019 acquisition of a majority interest in Perfect Snacks, the May 28, 2019 divestiture of most of our cheese business in the Middle East and Africa and the June 7, 2018 acquisition of Tate's Bake Shop.

(3) Refer to Note 6, Goodwill and Intangible Assets , for more information.

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

1 unchanged sentence

(8) Refer to Note 14, Commitments and Contingencies – Tax Matters , for more information.

(10) Refer to Note 16, Income Taxes , for more information on Swiss tax reform.

During 2019, we realized higher net pricing, which was partially offset by increased input costs.

Higher net pricing, which included the carryover impact of pricing actions taken in 2018 as well as the effects of input cost-driven pricing actions taken during 2019, was reflected in Latin America, North America and AMEA as net pricing in Europe was flat.

The increase in input costs was driven by higher raw material costs, partially offset by lower manufacturing costs due to productivity efforts.

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

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

Total selling, general and administrative expenses decreased $339 million from 2018, due to a number of factors noted in the table above, including in part, the lapping of the prior-year impact from pension participation changes, favorable currency impact, the benefit from current-year pension participation changes, favorable change in remeasurement of net monetary position in Argentina (remeasurement gain in 2019 as compared to a remeasurement loss in 2018), the lapping of a prior-year expense from the resolution of a tax matter, lower CEO transition remuneration and lower acquisition-related costs.

These decreases were partially offset by the expenses from the resolution of tax matters in 2019, higher implementation costs incurred for the Simplify to Grow program, the impact of acquisitions, the lapping of a benefit from a prior-year VAT-related settlement, a VAT cost settlement in 2019 and higher divestiture-related costs.

(9) Refer to Note 16, Income Taxes , for more information on initial impacts from enacted tax law changes.

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

During 2020, we realized higher net pricing and favorable volume/mix, which was largely offset by increased input costs.

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

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

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

Excluding these factors, selling, general and administrative expenses increased $77 million from 2019.

The increase was driven primarily by higher overheads reflecting route-to-market investments and higher advertising and consumer promotion costs.

We recorded an expense of $11 million from a VAT-related settlement in Latin America in 2019 and a benefit of $21 million from a VAT-related settlement in Latin America in 2018.

The increase was driven primarily by higher advertising and consumer promotion costs, partially offset by lower overhead spending net of incremental COVID-19 related costs.

We recorded an expense of $11 million from a VAT-related settlement in Latin America in 2019.

Unfavorable currency changes decreased operating income by $59 million due primarily to the strength of the U.S.

dollar relative to most currencies, including the euro, Argentinean peso, British pound sterling, Brazilian real, Australian dollar, Chinese yuan and Indian rupee.

Operating income margin increased from 12.8% in 2018 to 14.9% in 2019.

The increase in operating income margin was driven primarily by the lapping of the prior-year impact from pension participation changes, lower Simplify to Grow Program costs, a gain on divestiture, the benefit from current-year pension participation changes, the lapping of a prior-year expense from the resolution of a tax matter and lower CEO transition remuneration, partially offset by the expenses from the resolution of tax matters in 2019 and the year-over-year unfavorable change in mark-to-market gains/(losses) from currency and commodity hedging activities.

Adjusted Operating Income margin decreased from 16.7% in 2018 to 16.5% in 2019.

The decrease in Adjusted Operating Income margin was driven primarily by higher raw material costs, mostly offset by higher pricing and lower manufacturing costs.

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $3,929 million increased by $612 million (18.5%) in 2019.

Diluted EPS attributable to Mondelēz International was $2.69 in 2019, up $0.46 (20.6%) from 2018.

dollar relative to most currencies, including the Brazilian real, Russian ruble, Indian rupee, Swiss franc, South African rand and Turkish lira, partially offset by the strength of several currencies relative to the U.S.

dollar, including the euro, Egyptian pound, Philippine peso, British pound sterling and Swedish krona.

Operating income margin decreased from 14.9% in 2019 to 14.5% in 2020.

Adjusted Operating Income margin increased from 16.5% in 2019 to 16.6% in 2020.

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $3,555 million decreased by $374 million (9.5%) in 2020.

Diluted EPS attributable to Mondelēz International was $2.47 in 2020, down $0.22 (8.2%) from 2019.

Adjusted EPS (1) was $2.56 in 2020, up $0.16 (6.7%) from 2019.

4 unchanged sentences

Mark-to-market gains from derivatives (2)

Acquisition-related costs (2)

Net earnings from divestitures (2) (3)

Remeasurement of net monetary position (2)

Net gain on divestitures (2)

Impact from pension participation changes (2)

1 unchanged sentence

CEO transition remuneration (2)

Gain related to interest rate swaps (4)

Loss on debt extinguishment (5)

tax reform discrete net tax expense (6)

Gain on equity method investment transaction (7)

Loss related to interest rate swaps (4)

Initial impacts of enacted tax law changes (5)

Loss on equity method investment transaction (6)

Equity method investee items (7)

3 unchanged sentences

VAT-related settlements 0.01

Impact from acquisitions (2)

Changes in benefit plan non-service income 0.04

Changes in interest and other expense, net (8)

7 unchanged sentences

Mark-to-market gains from derivatives (2)

Acquisition-related costs (2)

Net earnings from divestitures (2) (3)

Net gain on divestiture (2)

Costs associated with JDE Peet's transaction (2)

Remeasurement of net monetary position (2)

Impact from pension participation changes (2)

Impact from resolution of tax matters (2)

CEO transition remuneration (2)

Loss related to interest rate swaps (4)

Swiss tax reform net impacts (6)

Loss on equity method investment transactions (7)

Loss on debt extinguishment (10)

Initial impacts of enacted tax law changes (5)

Gain on equity method investment transactions (6)

Equity method investee items (7)

2 unchanged sentences

(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) Divestitures include completed sales of businesses, partial or full sales of equity method investments and exits of major product lines upon completion of a sale or licensing agreement.

1 unchanged sentence

(4) Refer to Note 10, Financial Instruments , for information on interest rate swaps no longer designated as cash flow hedges.

(5) Refer to Note 9, Debt and Borrowing Arrangements , for more information on losses on debt extinguishment.

(6) Refer to Note 16, Income Taxes , for more information on the impacts of U.S.

and Swiss tax reform.

(5) Refer to Note 16, Income Taxes , for information on income taxes.

(6) Refer to Note 7, Equity Method Investments , for more information on gains and losses on equity method investment transactions.

2 unchanged sentences

dollar-denominated debt which is included in currency translation.

(10) Refer to Note 16, Income Taxes , for more information on the items affecting income taxes.

(9) Refer to Note 12, Stock Plans , for more information on our equity compensation programs and share repurchase program and Note 17, Earnings per Share , for earnings per share weighted-average share information.

(10) Refer to Note 9, Debt and Borrowing Arrangements , for more information on losses on debt extinguishment.

Results of Operations by Operating Segment

32 unchanged sentences

Amortization of intangible assets (134) (194) (174)

Net gain on divestiture — 44 —

Net gain on acquisition and divestitures 8 — 44

Acquisition-related costs (25) (15) (3)

15 unchanged sentences

2021 compared with 2020:

Net revenues increased $320 million (12.9%), due to higher net pricing (13.6 pp) and favorable volume/mix (6.8 pp), partially offset by unfavorable currency (7.5 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 negative impacts from the pandemic that we experienced in the prior year subsided across the region.

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 most currencies in the region including the Argentinean peso and Brazilian real.

Segment operating income increased $72 million (38.1%), primarily due to higher net pricing, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), favorable volume/mix 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, unfavorable currency, divestiture-related costs incurred in 2021, higher other selling, general and administrative expenses and lower benefits from the resolution of tax matters.

2020 compared with 2019:

Net revenues decreased $541 million (17.9%), due to unfavorable currency (18.1 pp) and unfavorable volume/mix (7.5 pp), partially offset by higher net pricing (7.7 pp).

5 unchanged sentences

Segment operating income decreased $152 million (44.6%), primarily due to higher raw material costs, unfavorable volume/mix, unfavorable currency, higher other selling, general and administrative expenses (net of lapping the expense of VAT-related settlements in 2019) and an unfavorable change in remeasurement of net monetary position in Argentina (remeasurement loss in 2020 as compared to a remeasurement gain in 2019).

These unfavorable items were partially offset by higher net pricing, lower manufacturing costs (net of incremental COVID-19 related costs), lower costs incurred for the Simplify to Grow Program and higher benefits from the resolution of a tax matters.

2019 compared with 2018:

Net revenues decreased $184 million (5.7%), due to unfavorable currency (13.5 pp) and unfavorable volume/mix (2.1 pp), partially offset by higher net pricing (9.9 pp).

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

dollar relative to most currencies in the region including the Argentinean peso and Brazilian real.

Unfavorable volume/mix was due to the impact of pricing-related elasticity, and was driven by declines in refreshment beverages, candy, cheese & grocery and chocolate, partially offset by gains in biscuits and gum.

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

Segment operating income decreased $69 million (16.8%), primarily due to higher raw material costs, unfavorable currency, unfavorable volume/mix, the lapping of the 2018 benefit from the resolution of a Brazilian indirect tax matter of $26 million, higher manufacturing costs and higher other selling, general and administrative expenses (including lapping the benefit from a VAT-related settlement in 2018 and the expense of a VAT-related settlement in 2019).

These unfavorable items were partially offset by higher net pricing, lower costs incurred for the Simplify to Grow Program, favorable change in remeasurement of net monetary position in Argentina (remeasurement gain in 2019 as compared to a remeasurement loss in 2018) and lower advertising and consumer promotion costs.

For the Years Ended

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2021 compared with 2020:

Net revenues increased $725 million (12.6%), due to favorable volume/mix (5.3 pp), favorable currency (3.8 pp), higher net pricing (2.0 pp), the impact of an acquisition (0.9 pp) and the partial year contribution of a business divested on November 1, 2021 which had been part of an earlier 2021 acquisition (0.6 pp).

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

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

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

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

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

The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $47 million (constant currency basis) in 2021.

Segment operating income increased $233 million (28.4%), primarily due to lower manufacturing costs (productivity and lower incremental COVID-19 related costs), higher net pricing, favorable volume/mix, lower costs incurred for the Simplify to Grow Program, favorable currency, the impact of an acquisition, lapping prior-year intangible asset impairment charges and the partial year contribution of a business divested which had been part of an earlier 2021 acquisition.

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.

2020 compared with 2019:

Net revenues decreased $30 million (0.5%), due to unfavorable currency (1.3 pp), the impact of a divestiture (0.9 pp) and unfavorable volume/mix (0.6 pp), partially offset by higher net pricing (2.3 pp).

8 unchanged sentences

These favorable items were partially offset by higher raw material costs, unfavorable volume/mix, unfavorable currency and the impact of the prior-year divestiture.

2019 compared with 2018:

Net revenues increased $41 million (0.7%), due to favorable volume/mix (3.6 pp) and higher net pricing (1.7 pp), mostly offset by unfavorable currency (3.3 pp) and the impact of a divestiture (1.3 pp).

Favorable volume/mix was driven by gains across all categories except refreshment beverages and candy.

Higher net pricing was reflected across all categories.

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

dollar relative to several currencies in the region, including the Australian dollar, Chinese yuan, Indian rupee and South African rand.

The divestiture of most of our cheese business in the Middle East and Africa on May 28, 2019, resulted in a year-over-year decline in net revenues of $71 million.

Segment operating income decreased $11 million (1.6%), primarily due to higher raw material costs, expenses from the resolution of tax matters in India totaling $87 million, higher advertising and consumer promotion costs, unfavorable currency, higher other selling, general and administrative expenses, the impact of the divestiture and higher intangible asset impairment charges.

These unfavorable items were partially offset by lower manufacturing costs, higher net pricing, lower costs incurred for the Simplify to Grow Program and favorable volume/mix.

For the Years Ended

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2021 compared with 2020:

Net revenues increased $949 million (9.3%), due to favorable currency (3.7 pp), favorable volume/mix (3.6 pp), higher net pricing (1.4 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, Norwegian krone, Swedish krona and Czech koruna, 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 remained 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 $63 million (constant currency basis) in 2021.

Segment operating income increased $317 million (17.9%), primarily due to favorable volume/mix, higher net pricing, lower Simplify to Grow Program costs, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), favorable currency, lapping prior-year intangible asset impairment charges, lower other selling, general and administrative expenses and the impact of an acquisition.

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

2020 compared with 2019:

Net revenues increased $235 million (2.4%), due to favorable volume/mix (2.8 pp), partially offset by lower net pricing (0.3 pp) and unfavorable currency (0.1 pp).

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Unfavorable currency impacts reflected the strength of the U.S.

dollar relative to several currencies in the region, including the Russian ruble, Turkish lira, Norwegian krone and Ukrainian hryvnya mostly offset by the strength of several currencies in the region relative to the U.S.

dollar relative to several currencies in the region, including the Russian ruble, Turkish lira, Norwegian krone and Ukrainian hryvnia, mostly offset by the strength of several currencies in the region relative to the U.S.

dollar, primarily the euro, British pound sterling, Swedish krona and Swiss franc.

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These favorable items were partially offset by higher raw material costs, lower net pricing, higher intangible asset impairment charges, higher other selling, general and administrative expenses and unfavorable currency.

2019 compared with 2018:

Net revenues decreased $150 million (1.5%), due to unfavorable currency (5.2 pp), partially offset by favorable volume/mix (3.7 pp), as net pricing was flat.

Unfavorable currency impacts reflected the strength of the U.S.

dollar relative to most currencies in the region, primarily the euro, British pound sterling, Turkish lira and Swedish krona.

Favorable volume/mix was driven by gains across all categories except gum.

Net pricing was flat as higher net pricing in gum and candy was offset by lower net pricing in all other categories.

Segment operating income decreased $2 million (0.1%), primarily due to unfavorable currency, higher raw material costs and higher advertising and consumer promotion costs.

These unfavorable items were mostly offset by favorable volume/mix, lower manufacturing costs and lower intangible asset impairment charges.

North America

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2021 compared with 2020:

Net revenues increased $145 million (1.8%), due to the impact of acquisitions (1.8 pp), higher net pricing (1.0 pp) and favorable currency (0.6 pp), partially offset by unfavorable volume/mix (1.6 pp).

The April 1, 2020 acquisition of Give & Go added incremental net revenues of $106 million and the January 4, 2021 acquisition of Hu added incremental net revenues of $38 million in 2021.

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

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

Unfavorable volume mix reflected volume declines as the region lapped prior-year strong volume growth driven by significantly increased food purchases for in-home consumption due to the pandemic as well as impacts from labor disruptions and supply chain constraints in the second half of 2021.

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

Segment operating income decreased $216 million (13.6%), primarily due to unfavorable volume/mix, higher raw material costs, higher Simplify to Grow Program costs and higher advertising and consumer promotion costs.

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

2020 compared with 2019:

Net revenues increased $1,049 million (14.8%), due to favorable volume/mix (6.3 pp), the impact of acquisitions (6.3 pp) and higher net pricing (2.3 pp), partially offset by unfavorable currency (0.1 pp).

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These favorable items were partially offset by higher advertising and consumer promotion costs, intangible asset impairment charges, higher other selling, general and administrative expenses (including incremental COVID-19 related costs), higher raw material costs, lapping the benefit from prior-year pension participation changes and higher costs incurred for the Simplify to Grow Program.

2019 compared with 2018:

Net revenues increased $223 million (3.2%), due to higher net pricing (2.3 pp) and the impact of acquisitions (1.3 pp), partially offset by unfavorable currency (0.3 pp) and unfavorable volume/mix (0.1 pp).

Higher net pricing was reflected across all categories except chocolate.

Unfavorable currency impact was due to the strength of the U.S.

dollar relative to the Canadian dollar.

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

Segment operating income increased $602 million (70.9%), primarily due to lapping prior-year pension participation changes, higher net pricing, lower manufacturing costs, lower costs incurred for the Simplify to Grow Program, benefit from current-year pension participation changes, lapping prior-year intangible asset impairment charges and the impact from the acquisitions of Perfect Snacks and Tate's Bake Shop.

These favorable items were partially offset by higher raw material costs, higher other selling, general and administrative expenses and unfavorable volume/mix.

Critical Accounting Estimates

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

If the carrying value of a reporting unit’s net assets exceeds its fair value, we would recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit fair value.

In 2021, 2020 and 2019, there were no impairments of goodwill.

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If the carrying value of the asset exceeds its estimated fair value, the asset is impaired and its carrying value is reduced to the estimated fair value.

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

We recorded charges related to gum, chocolate, biscuits and candy brands of $83 million in North America, $53 million in Europe, $5 million in AMEA and $3 million in Latin America.

During 2021, we recorded $32 million of intangible asset impairment charges related to a biscuit brand in North America.

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

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

We also identified nine brands, including the eight impaired brands, with $753 million of aggregate book value as of December 31, 2020 that each had a fair value in excess of book value of 10% or less.

We also identified eight brands with $1,146 million of aggregate book value as of December 31, 2021 that each had a fair value in excess of book value of 10% or less.

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

If the brand earnings expectations 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.

In 2019, we recorded charges related to gum, chocolate, biscuits and candy brands of $39 million in Europe, $15 million in AMEA and $3 million in Latin America.

In 2018, we recorded charges related to gum, chocolate, biscuits and candy brands of $45 million in Europe, $14 million in North America and $9 million in AMEA.

In 2020, we recorded $144 million of intangible asset impairment charges related to gum, chocolate, biscuits and candy brands, with $83 million in North America, $53 million in Europe, $5 million in AMEA and $3 million in Latin America.

In 2019, we recorded $57 million of intangible asset impairment charges related to gum, chocolate, biscuits and candy brands, with $39 million in Europe, $15 million in AMEA and $3 million in Latin America.

Refer to Note 6, Goodwill and Intangible Assets , for additional information.

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postretirement health care costs 1 — — —

In accordance with obligations we have under collective bargaining agreements, we participate in multiemployer pension plans.

In 2017, the only individually significant multiemployer plan we contributed to was the Bakery and Confectionery Union and Industry International Pension Fund.

Our obligation to contribute to the Fund arose with respect to 8 collective bargaining agreements covering most of our employees represented by the Bakery, Confectionery, Tobacco and Grain Millers Union.

All of those collective bargaining agreements expired in 2016.

In 2018, we executed a complete withdrawal from the Fund and recorded a $429 million estimated withdrawal liability.

On July 11, 2019, we received an undiscounted withdrawal liability assessment from the Fund totaling $526 million requiring pro-rata monthly payments over 20 years and we recorded a $35 million final adjustment to reduce our

withdrawal liability as of June 30, 2019.

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

As of December 31, 2020, the remaining discounted withdrawal liability was $375 million.

See additional information on our employee benefit plans in Note 11, Benefit Plans .

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The outcome of these final determinations could have a material effect on our provision for income taxes, net earnings or cash flows in the period in which the determination is made.

See Note 16, Income Taxes , for further discussion of the impacts from Swiss and U.S.

tax reform in our financial statements, as well as additional information on our effective tax rate, current and deferred taxes, valuation allowances and unrecognized tax benefits.

See Note 16, Income Taxes , for further discussion of the impacts from Swiss tax reform in our financial statements, as well as additional information on our effective tax rate, current and deferred taxes, valuation allowances and unrecognized tax benefits.

Contingencies:

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

In light of the current uncertainty in the global markets 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.

As a precautionary measure and to preserve financial flexibility, we temporarily increased our credit facility borrowing capacity in 2020.

In the third quarter of 2020, we completed the retirement of this incremental short-term borrowing capacity and have returned our credit facility available capacity to pre-COVID-19 levels.

Refer to Note 9, Debt and Borrowing Arrangements , for additional details.

In connection with COVID-19 and various legislatively authorized tax payment deferral mechanisms available for income tax, indirect tax (such as value-added tax) and payroll tax in a number of jurisdictions, we were able to defer certain of these tax payments, which provided a cash benefit that reverses when the payments come due.

Some of these payments were made in the fourth quarter of 2020;

the remainder will come due in 2021 and 2022.

The benefits associated with the deferral of these payments were not material.

We expect to continue to utilize our commercial paper program and international credit lines as needed, and we secured and continue to evaluate long-term debt issuances to meet our short- and longer-term funding requirements.

We expect to continue to utilize our commercial paper program and international credit lines as needed.

We continually 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.

Overall, 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 ensues, it could have a material adverse effect on our liquidity, results of operations and financial condition.

Our investments in JDE Peet's and KDP also provide us additional flexibility.

Overall, we do not expect negative effects to our funding sources that would have a material effect on our liquidity, and to date, we have been successful in raising financing as needed, including during the pandemic, and generally on favorable terms.

However, in connection with the COVID-19 pandemic or otherwise, if a serious economic or credit market crisis ensues, it could have a material adverse effect on our liquidity, results of operations and financial condition.

Our most significant ongoing short-term cash requirements relate primarily to funding operations (including expenditures for raw materials, labor, manufacturing and distribution, trade and promotions, advertising and marketing, tax liabilities, benefit plan obligations and lease expenses) as well as periodic expenditures for acquisitions, shareholder returns (such as dividend payments and share repurchases) and property, plant and equipment.

Long-term cash requirements primarily relate to funding long-term debt repayments (refer to Note 9, Debt and Borrowing Arrangements ), our U.S.

tax reform transition tax liability and deferred taxes (refer to Note 16, Income Taxes ), our long-term benefit plan obligations (refer to Note 11, Benefit Plans ) and commodity-related purchase commitments and derivative contracts (refer to Note 10, Financial Instruments ).

We generally fund short- and long-term cash requirements with cash from operating activities as well as cash proceeds from short- and long-term debt financing (refer to Debt below).

We generally do not use equity to fund our ongoing obligations.

We believe our ability to generate substantial cash from operating activities and readily access capital markets and secure financing at competitive rates are key strengths and give us significant flexibility to meet our short and long-term financial commitments.

Our cash flow activity over the last three years is noted below:

Net cash provided by operating activities $ 4,141 $ 3,964 $ 3,965

Operating activities provided net cash of $3,964 million in 2020, $3,965 million in 2019 and $3,948 million in 2018.

Net cash (used in)/provided by investing activities $ (26) $ 500 $ (960)

Net cash used in financing activities $ (4,069) $ (2,215) $ (2,787)

Net Cash Provided by Operating Activities:

The increase in net cash provided by operating activities in 2021 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 operating activities was largely flat in 2020 relative to 2019 as higher cash tax payments in 2020 (primarily related to sales of KDP and JDE Peet's shares and the resolution of several indirect tax matters under a tax amnesty program in India) and the payment of costs associated with the JDE Peet's transaction in 2020 were largely offset by working capital improvements.

The increase in net cash provided by operating activities in 2019 relative to 2018 was due primarily to higher earnings, increased distributions from equity method investments and lower pension contributions, partially offset by increased working capital requirements including higher tax payments.

Net Cash Provided by/Used in Investing Activities:

Net cash provided by investing activities was $500 million in 2020, compared to net cash used in investing activities of $960 million in 2019 and $1,224 million in 2018.

Net Cash Used in/Provided by Investing Activities:

Net cash from investing activities was lower in 2021 due primarily to lower cash proceeds from partial sales of our equity method investment shares (refer to Note 7, Equity Method Investments ) and higher capital expenditures, partially offset by less cash paid for acquisitions in 2021 for Hu, Grenade and Gourmet Food than in 2020 for Give & Go (refer to Note 2, Acquisitions and Divestitures ).

The increase in net cash provided by investing activities in 2020 relative to 2019 was primarily due to cash received from the sale of shares in the JDE Peet's and KDP offerings and lower capital expenditures, partially offset by cash paid to acquire a majority interest in Give & Go.

The decrease in net cash used in investing activities in 2019 relative to 2018 was primarily due to less cash expended for acquisitions in 2019 than in 2018, lower capital expenditures and the 2019 cash proceeds from the divestiture of primarily our cheese business in the Middle East and Africa, partially offset by lower cash received as a result of the settlement and replacement of several net investment hedge derivative contracts and cash paid to settle our forward-starting interest rate swaps.

Capital expenditures were $965 million in 2021, $863 million in 2020 and $925 million in 2019.

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 up to $1.0 billion, including capital expenditures in connection with our Simplify to Grow Program.

We expect 2022 capital expenditures to be up to $1.2 billion, including capital expenditures in connection

with our Simplify to Grow Program and for funding our strategic priorities.

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 $2,215 million in 2020, $2,787 million in 2019 and $2,329 million in 2018.

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 2021 than in 2020.

The decrease in net cash used in financing activities in 2020 relative to 2019 was primarily due to higher net debt issuances and lower share repurchases, partially offset by higher dividends paid and lower proceeds from stock option exercises in 2020.

The increase in net cash used in financing activities in 2019 relative to 2018 was primarily due to lower net debt issuances and higher dividends paid in 2019, partially offset by lower share repurchases.

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

Refer to Note 9, Debt and Borrowing Arrangements , for details of our recent tender offers, debt issuances and maturities.

Chipita Acquisition

On January 3, 2022, we closed on our acquisition of Chipita S.A.

The cash consideration for Chipita totaled €1.3 billion ($1.5 billion) and we assumed and substantially paid down €0.4 billion ($0.4 billion) of Chipita's debt in January for a total purchase price of approximately €1.7 billion ($1.9 billion).

Cash paid for the business was raised from cash from operations and by issuing long-term debt in the third quarter of 2021.

Refer to Note 2, Acquisitions and Divestitures , and Note 9, Debt and Borrowing Arrangements , for additional details.

Supply Chain Financing

As part of our continued efforts to improve our working capital efficiency, we have worked with our suppliers over the past several years to optimize our terms and conditions, which include the extension of payment terms.

Our current payment terms with a majority of our suppliers are from 30 to 180 days, which we deem to be commercially reasonable.

We also facilitate voluntary supply chain financing (“SCF”) programs through several participating financial institutions.

Under these programs, our suppliers, at their sole discretion, determine invoices that they want to sell to participating financial institutions.

Our suppliers’ voluntary inclusion of invoices in SCF programs has no bearing on our payment terms or amounts due.

Our responsibility is limited to making payments based upon the agreed-upon contractual terms.

No guarantees are provided by the Company or any of our subsidiaries under the SCF programs and we have no economic interest in the suppliers’ decision to participate in the SCF programs.

Amounts due to our suppliers that elected to participate in the SCF program are included in accounts payable in our consolidated balance sheet.

We have been informed by the participating financial institutions that as of December 31, 2021, and December 31, 2020, $2.5 billion and $2.1 billion, respectively, of our accounts payable to suppliers that participate in the SCF programs are outstanding.

As discussed in Note 14, Commitments and Contingencies , we enter into third-party guarantees primarily to cover the long-term obligations of our vendors.

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

At December 31, 2021, we had no material third-party guarantees recorded on our consolidated balance sheet.

Guarantees do not have, and we do not expect them to have, a material effect on our liquidity.

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.

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As such, we may issue commercial paper or secure other forms of financing throughout the year to meet short-term working capital or other financing needs.

One of our subsidiaries, Mondelez International Holdings Netherlands B.V.

(“MIHN”), has outstanding debt.

Refer to Note 9, Debt and Borrowing Arrangements .

The operations held by MIHN generated approximately 71.8% (or $19.1 billion) of the $26.6 billion of consolidated net revenue during fiscal year 2020 and represented approximately 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 December 31, 2020, we had $6.0 billion of long-term financing authority remaining.

In January 2021, we repaid approximately $0.8 billion of maturing debt.

Refer to Note 9, Debt and Borrowing Arrangements , for a projection of long-term debt scheduled to mature (including current maturities and finance leases) in future periods.

In the next 12 months, we expect to repay approximately $1.7 billion of maturing long-term debt including:

$1.5 billion in October 2021 and $0.3 billion in December 2021.

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

$1.2 billion in July 2022 and $0.5 billion in September 2022.

We fund ongoing debt maturities and other long-term obligations using cash on hand or we may refinance obligations with long-term debt or short-term financing (such as our commercial paper borrowings) depending on financing available, timing considerations, flexibility to raise funding and the cost of financing.

During December 2021, our Board of Directors approved a new $7.0 billion long-term financing authority to replace the prior $6.0 billion authority.

As of December 31, 2021, all $7.0 billion of the long-term financing authorization remained available.

Our total debt was $19.5 billion at December 31, 2021 and $20.0 billion at December 31, 2020.

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

At December 31, 2020, the weighted-average term of our outstanding long-term debt was 7.4 years.

The weighted-average term of

our outstanding long-term debt was 9.5 years at December 31, 2021 and 7.4 years at December 31, 2020.

Our average daily commercial borrowings were $0.5 billion in 2021, $2.3 billion in 2020 and $4.1 billion in 2019.

We had no commercial paper borrowings outstanding at December 31, 2020 and $2.6 billion outstanding as of December 31, 2019.

We had commercial paper borrowings of $0.2 billion at December 31, 2021 and no commercial paper borrowings outstanding as of December 31, 2020.

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

As of December 31, 2021, we continued to be in compliance with our debt covenants.

One of our subsidiaries, MIHN, has outstanding debt.

Refer to Note 9, Debt and Borrowing Arrangements .

The operations held by MIHN generated approximately 73.5% (or $21.1 billion) of the $28.7 billion of consolidated net revenue during fiscal year 2021 and represented approximately 79.2% (or $22.4 billion) of the $28.3 billion of net assets as of December 31, 2021.

Refer to Note 9, Debt and Borrowing Arrangements , for more information on our debt and debt covenants.

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

During 2020, 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 cocoa, dairy, sugar, energy, packaging, nuts, grains and other ingredients costs, partially offset by lower costs for oils.

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

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

A number of external factors such as the current COVID-19 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.

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

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

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

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

We have no significant off-balance sheet arrangements other than the contractual obligations discussed below.

As discussed in Note 14, Commitments and Contingencies , we enter into third-party guarantees primarily to cover the long-term obligations of our vendors.

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

At December 31, 2020, we had no material third-party guarantees recorded on our consolidated balance sheet.

Guarantees do not have, and we do not expect them to have, a material effect on our liquidity.

Aggregate Contractual Obligations:

The following table summarizes our contractual obligations at December 31, 2020.

Total 2021 2022-23 2024-25 2026 and Thereafter

(in millions)

$ 19,855 $ 2,669 $ 4,434 $ 3,081 $ 9,671

Interest expense (2)

4,194 427 705 556 2,506

Finance leases (3)

276 81 122 51 22

Operating leases 757 203 262 123 169

Purchase obligations:

Inventory and production costs 6,612 3,750 2,314 473 75

Other 1,188 853 248 87 —

32,882 7,983 8,085 4,371 12,443

tax reform transition liability (5)

936 95 247 497 97

Multiemployer pension plan

withdrawal liability (6)

489 26 53 53 357

Other long-term liabilities (7)

208 33 33 34 108

Total $ 34,515 $ 8,137 $ 8,418 $ 4,955 $ 13,005

(1) Amounts include the expected cash payments of our long-term debt, including the current portion and excluding finance leases, which are presented separately in the table above.

The amounts also exclude $94 million of net unamortized non-cash bond premiums, discounts, bank fees and mark-to-market adjustments related to our interest rate swaps recorded in total debt.

(2) Amounts represent the expected cash payments of our interest expense on our long-term debt.

Interest calculated on our non-U.S.

dollar denominated debt was forecasted using currency exchange rates as of December 31, 2020.

(3) Amounts exclude imputed interest on finance leases of $20 million.

(4) Purchase obligations for inventory and production costs (such as raw materials, indirect materials and supplies, packaging, co-manufacturing arrangements, storage and distribution) are commitments for projected needs to be utilized in the normal course of business.

Other purchase obligations include commitments for marketing, advertising, capital expenditures, information technology and professional services.

Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure and approximate timing of the transaction.

Most arrangements are cancelable without a significant penalty and with short notice (usually 30 days).

Any amounts reflected on the consolidated balance sheet as accounts payable and accrued liabilities are excluded from the table above.

(5) In connection with U.S.

tax reform, we estimate paying a total $1.3 billion transition tax liability through 2026.

As of December 31, 2020, the amount outstanding was $0.9 billion.

See Note 16, Income Taxes , for additional information on U.S.

tax reform and its impact on our financial statements.

(6) During 2018, we executed a complete withdrawal liability from our most individually significant multiemployer pension plan.

On July 11, 2019, we received an undiscounted withdrawal liability assessment from the Fund totaling $526 million requiring pro-rata monthly payments over 20 years through 2039.

See Note 11, Benefit Plans, for additional information on our multiemployer pension plan withdrawal liability.

(7) Other long-term liabilities in the table above include the long-term liabilities and any current portion of these obligations.

We have included the estimated future benefit payments for our postretirement health care plans through December 31, 2030 of $172 million.

We are unable to reliably estimate the timing of the payments beyond 2030;

as such, they are excluded from the above table.

There are also another $18 million of various other long-term liabilities that are expected to be paid over the next 5 years.

In addition, the following long-term liabilities included on the consolidated balance sheet are excluded from the table above:

accrued pension costs, unrecognized tax benefits, insurance accruals and other accruals.

As of December 31, 2020, our unrecognized tax benefit, including associated interest and penalties, classified as a long-term payable is $515 million.

We currently expect to make approximately $236 million in contributions to our pension plans in 2021.

As a result of international supply chain, transportation and labor market disruptions and generally higher

commodity, transportation and labor costs in the second half of 2021, we expect price volatility and a higher aggregate cost environment to continue in 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.

Equity and Dividends

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See Note 13, Capital Stock , to the consolidated financial statements and Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – Issuer Purchases of Equity Securities, for more information on our share repurchase program.

As of December 31, 2020, our Board of Director has authorized share repurchases up to $23.7 billion through December 31, 2023.

Under this program, we have repurchased approximately $17.9 billion of shares through December 31, 2020 ($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 $40.57 per share.

As of December 31, 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 $20.0 billion of shares through December 31, 2021 ($2.1 billion in 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 $41.95 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.

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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.

acquisition and 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.

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• “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 and developed markets.

We also evaluate Organic Net Revenue growth from emerging markets and developed markets.

• Our emerging markets include our Latin America region in its entirety;

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and the following countries from the Europe region:

Russia, Ukraine, Turkey, Kazakhstan, Belarus, Georgia, Poland, Czech Republic, Slovak Republic, Hungary, Bulgaria, Romania, the Baltics and the East Adriatic countries.

Russia, Ukraine, Türkiye, 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.

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

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

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

the operating results of divestitures (2) ;

remeasurement of net monetary position (5) ;

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

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

impact from resolution of tax matters (7) ;

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impact from pension participation changes (9) ;

Swiss tax reform impacts (10) ;

initial impacts from enacted tax law changes (10) ;

and costs associated with the JDE Peet's transaction.

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• “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) ;

gains or losses on interest rate swaps no longer designated as accounting cash flow hedges due to changed financing and hedging plans and U.S.

and Swiss tax reform impacts (10) .

gains or losses on interest rate swaps no longer designated as accounting cash flow hedges due to changed financing and hedging plans, net earnings from divestitures (2) ;

and gains or losses on equity method investment transactions.

Similarly, within Adjusted EPS, our equity method investment net earnings exclude our proportionate share of our investees’ significant operating and non-operating items (11) .

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(1) When items no longer impact our current or future presentation of non-GAAP operating results, we remove these items from our non-GAAP definitions.

During 2020, we added to the non-GAAP definitions the exclusion of costs associated with the JDE Peet's transaction.

Refer to Note 7, Equity Method Investments , and Note 16, Income Taxes , for more information on the JDE Peet's transaction.

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 derivatives 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 7, Equity Method Investments , for information on acquisitions and divestitures impacting the comparability of our results.

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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, Summary of Significant Accounting Policies ), we excluded the remeasurement gains or losses related to remeasuring net monetary assets or liabilities in Argentina to be consistent with our prior accounting for these remeasurement gains/losses for Venezuela when it was subject to highly inflationary accounting prior to 2016.

(6) During the third quarter of 2016, we began to exclude unrealized gains and losses (mark-to-market impacts) from outstanding commodity and forecasted currency transaction derivatives from our non-GAAP earnings measures until such time that the related exposures impact our operating results.

Since we purchase commodity and forecasted currency transaction contracts to mitigate price volatility primarily for inventory requirements in future periods, we made this adjustment to remove the volatility of these future inventory purchases on current operating results to facilitate comparisons of our underlying operating performance across periods.

We also discontinued designating commodity and forecasted currency transaction derivatives for hedge accounting treatment.

To facilitate comparisons of our underlying operating results, we have recast all historical non-GAAP earnings measures to exclude the mark-to-market impacts.

(5) During the third quarter of 2018, as we began to apply highly inflationary accounting for Argentina (refer to Note 1, Summary of Significant Accounting Policies ), 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 from our non-GAAP earnings measures.

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

Since we purchase commodity and forecasted currency transaction contracts to mitigate price volatility primarily for inventory requirements in future periods, we make this adjustment to remove the volatility of these future inventory purchases on current operating results to facilitate comparisons of our underlying operating performance across periods.

We exclude equity method investment transaction derivative contract settlements as they represent protection of value for future divestitures.

(7) See Note 14, Commitments and Contingencies – Tax Matters , for additional information.

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See Note 11, Benefit Plans , for more information on the multiemployer pension plan withdrawal.

(10) We exclude the impact of the 2019 Swiss tax reform and 2017 U.S.

During the third quarter of 2019, Swiss Federal and Zurich Cantonal tax events drove our recognition of a Swiss tax reform net benefit to our results of operations.

On December 22, 2017, the United States enacted tax reform legislation that included a broad range of business tax provisions.

We exclude these tax reform impacts from our Adjusted EPS as they do not reflect our ongoing tax obligations under the new tax reforms.

Refer to Note 16, Income Taxes , for more information on our current year estimated annual effective tax rate and Swiss and U.S.

tax reform impacts, in order to provide investors with a comparable view of our performance across periods.

(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.

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.

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 Note 16, Income Taxes , for more information on the impact of Swiss and U.S.

(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.

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Our use of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for any U.S.

GAAP financial measure.

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.

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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 these underlying measures are also reconciled to U.S.

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

For the Year Ended December 31, 2021 For the Year Ended December 31, 2020

7 unchanged sentences

Impact of acquisitions — (254) (254) — — —

Impact of divestitures — — — (55) — (55)

Impact of a divestiture — (35) (35) — — —

Organic Net Revenue $ 10,206 $ 17,763 $ 27,969 $ 9,097 $ 17,484 $ 26,581

8 unchanged sentences

Impact of acquisitions — (445) (445) — — —

Impact of divestitures (55) — (55) (126) — (126)

Impact of a divestiture — — — (55) — (55)

Organic Net Revenue $ 9,846 $ 16,927 $ 26,773 $ 9,620 $ 16,193 $ 25,813

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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;

GAAP financial measure) were to exclude the impacts of the Simplify to Grow Program;

intangible asset impairment charges;

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

acquisition integration costs;

acquisition and divestiture-related costs;

operating income from divestiture;

net gain from divestiture;

costs associated with the JDE Peet's transaction;

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;

operating income from divestitures;

net gain on an acquisition and divestitures;

costs associated with JDE Peet's transaction;

the remeasurement of net monetary position;

impact from pension participation changes;

impact from the resolution of tax matters;

CEO transition remuneration and Swiss tax reform impact.

impact from resolution of tax matters;

CEO transition remuneration;

and initial impacts from enacted tax law changes.

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

7 unchanged sentences

Mark-to-market gains from derivatives (3)

Acquisition integration costs (4)

(279) (16) (263)

Acquisition integration costs and

contingent consideration adjustments (4)

Acquisition-related costs (4)

Net gain on acquisition and divestiture (4)

Divestiture-related costs (4)

Operating income from divestiture (4)

Net gain on divestiture (5)

Costs associated with JDE Peet's transaction (5)

2 unchanged sentences

Impact from resolution of tax matters (8)

(20) 85 (105)

CEO transition remuneration (10)

Swiss tax reform impact (11)

Adjusted Operating Income $ 4,775 $ 4,401 $ 374 8.5 %

Unfavorable currency translation 59 — 59

Favorable currency translation (118) — (118)

Adjusted Operating Income (constant currency) $ 4,657 $ 4,401 $ 256 5.8 %

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Simplify to Grow Program (1)

442 626 (184)

Intangible asset impairment charges (2)

Mark-to-market gains from derivatives (3)

(91) (141) 50

Acquisition integration costs (4)

3 unchanged sentences

Net gain on divestiture (4)

Costs associated with JDE Peet's transaction (5)

Remeasurement of net monetary position (6)

Impact from pension participation changes (7)

(35) 423 (458)

Impact from resolution of tax matters (8)

(20) 85 (105)

CEO transition remuneration (9)

Swiss tax reform impact (11)

Initial impacts from enacted tax law changes (10)

Adjusted Operating Income $ 4,401 $ 4,264 $ 137 3.2 %

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(1) Refer to Note 8, Restructuring Program , for more information.

(2) Refer to Note 6, Goodwill and Intangible Assets, for more information on trademark impairments.

(3) Refer to Note 10, Financial Instruments , Note 18, Segment Reporting , and Non-GAAP Financial Measures section at the end of this item for more information on the unrealized gains/losses on commodity and forecasted currency transaction derivatives.

(4) Refer to Note 2, Acquisitions and Divestitures , for more information on the April 1, 2020 acquisition of a significant majority interest in Give & Go and the June 7, 2018 acquisition of Tate's Bake Shop.

Refer to our Annual Report on Form 10-K for the year ended December 31, 2018 for more information on the acquisition of a biscuit business in Vietnam.

(5) Refer to Note 2, Acquisitions and Divestitures , for more information on the April 1, 2020 acquisition of a significant majority interest in Give & Go, the July 16, 2019 acquisition of a majority interest in Perfect Snacks, the May 28, 2019 divestiture of most of our cheese business in the Middle East and Africa and the June 7, 2018 acquisition of Tate's Bake Shop.

(2) Refer to Note 6, Goodwill and Intangible Assets, for more information.

(4) Refer to Note 2, Acquisitions and Divestitures , for more information on the January 3, 2022 acquisition of Chipita, April 1, 2021 acquisition of Gourmet Food, March 25, 2021 acquisition of a majority interest in Grenade, January 4, 2021 acquisition of the remaining 93% of equity in Hu and April 1, 2020 acquisition of a significant majority interest in Give & Go.

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

2 unchanged sentences

(8) Refer to Note 14, Commitments and Contingencies – Tax Matters , for more information.

(10) Refer to the Non-GAAP Financial Measures definition and related table notes.

(11) Refer to Note 16, Income Taxes , for more information on Swiss tax reform.

(9) Refer to the Non-GAAP Financial Measures definition and related notes.

(10) Refer to Note 16, Income Taxes , 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 gains/(losses) related to interest rate swaps;

loss on debt extinguishment;

Swiss tax reform net impacts;

tax reform discrete net tax impact;

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;

losses related to interest rate swaps;

losses on debt extinguishment and related expenses;

initial impacts from enacted tax laws changes;

gains or losses on equity method investment transactions;

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(0.17) (0.01) (0.16)

Acquisition integration costs and

contingent consideration adjustments (2)

(0.02) — (0.02)

Acquisition-related costs (2)

Divestiture-related costs (2)

Net earnings from divestitures (2)

(0.02) (0.07) 0.05

Net gain on divestiture (2)

— (0.03) 0.03

Costs associated with JDE Peet's transaction (2)

— 0.20 (0.20)

Remeasurement of net monetary position (2)

3 unchanged sentences

— (0.02) 0.02

CEO transition remuneration (2)

— 0.01 (0.01)

Loss related to interest rate swaps (3)

1 unchanged sentence

Loss on debt extinguishment (4)

Swiss tax reform net impacts (2)

0.07 0.10 (0.03)

(Gain)/loss on equity method

investment transactions (6)

Initial impacts from enacted tax law changes (5)

0.07 0.02 0.05

Gain on equity method investment transactions (6)

(0.39) (0.55) 0.16

Equity method investee items (7)

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Adjusted EPS $ 2.87 $ 2.56 $ 0.31 12.1 %

Unfavorable currency translation 0.03 — 0.03

Favorable currency translation (0.08) — (0.08)

Adjusted EPS (constant currency) $ 2.79 $ 2.56 $ 0.23 9.0 %

5 unchanged sentences

Intangible asset impairment charges (2)

0.08 0.03 0.05

Mark-to-market gains from derivatives (2)

1 unchanged sentence

Acquisition-related costs (2)

— 0.01 (0.01)

Net earnings from divestitures (2)

2 unchanged sentences

— (0.03) 0.03

Costs associate with JDE Peet's transaction (2)

Remeasurement of net monetary position (2)

— 0.01 (0.01)

Impact from pension participation changes (2)

3 unchanged sentences

CEO transition remuneration (2)

Net loss/(gain) related to interest rate swaps (3)

— 0.01 (0.01)

Loss on debt extinguishment (4)

— 0.07 (0.07)

Swiss tax reform net impacts (2)

Loss related to interest rate swaps (3)

0.05 0.08 (0.03)

tax reform discrete net tax expense (5)

Loss on debt extinguishment (4)

Initial impacts from enacted tax law changes (5)

0.02 (0.52) 0.54

Loss/(gain) on equity method investment

transactions (6)

(Gain)/loss on equity method investment transactions (6)

(0.55) 0.01 (0.56)

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• 2021 taxes for the:

Simplify to Grow Program were $(81) million, intangible asset impairment charges were $(33) million, mark-to-market gains from derivatives were $8 million, acquisition-related costs were zero, net earnings from divestitures were $5 million, costs associated with the JDE Peet's transaction were $250 million, loss on remeasurement of net monetary position were zero, impact from pension participation changes were $(2) million, impact from resolution of tax matters were $16 million, net loss related to interest rate swaps were $(24) million, loss on debt extinguishment were $(46) million, gains on equity method investment transactions were $202 million and equity method investee items were $(10) million.

Simplify to Grow Program were $(83) million, intangible asset impairment charges were $(8) million, mark-to-market gains from derivatives were $44 million, acquisition-related costs were $(4) million, acquisition integration costs and contingent consideration adjustments were $12 million, divestiture-related costs were $(8) million, net earnings from divestitures were $9 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 $100 million, gain on equity method investment transactions were $184 million and equity method investee items were $(4) million.

• 2020 taxes for the:

Simplify to Grow Program were $(103) million, intangible asset impairment charges were $(14) million, mark-to-market gains from derivatives were $19 million, net earnings from divestitures were $7 million, net gain on divestiture were $3 million, impact from pension participation changes were $8 million, impact from resolution of tax matters were $(21) million, CEO transition remuneration were zero, net loss related to interest rate swaps were zero, Swiss tax reform were $(769) million, net loss on equity method investment transactions were $6 million and equity method investee items were $(9) million.

Simplify to Grow Program were $(81) million, intangible asset impairment charges were $(33) million, mark-to-market gains from derivatives were $8 million, acquisition-related costs were zero, net earnings from divestitures were $26 million, costs associated with the JDE Peet's transaction were $250 million, loss on remeasurement of net monetary position were zero, impact from pension participation changes were $(2) million, impact from resolution of tax matters were $16 million, loss related to interest rate swaps were $(24) million, loss on debt extinguishment were $(46) million, initial impacts from enacted tax law changes were $36 million, gains on equity method investment transactions were $202 million and equity method investee items were $(4) million.

• 2019 taxes for the:

Simplify to Grow Program were $(156) million, intangible asset impairment charges were $(16) million, mark-to-market gains from derivatives were $10 million, acquisition-related costs were $(3) million, net earnings from divestitures were $9 million, impact from pension participation changes were $(108) million, impact from resolution of tax matters were $(6) million, CEO transition remuneration were $(5) million, net gain related to interest rate swaps were $2 million, loss on debt extinguishment were $(35) million, U.S.

tax reform were $19 million, gain on equity method investment transaction were $192 million and equity method investee items were $15 million.

Simplify to Grow Program were $(103) million, intangible asset impairment charges were $(14) million, mark-to-market gains from derivatives were $19 million, net earnings from divestitures were $23 million, net gain on divestiture were $3 million, impact from pension participation changes were $8 million, impact from resolution of tax matters were $(21) million, CEO transition remuneration were zero, loss related to interest rate swaps were zero, initial impacts from enacted tax law changes were $(754) million, net loss on equity method investment transactions were $6 million and equity method investee items were $(3) million.

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

(3) Refer to Note 10, Financial Instruments , for information on interest rate swaps no longer designated as cash flow hedges.

(4) Refer to Note 9, Debt and Borrowing Arrangements , for more information on losses on debt extinguishment.

(5) Refer to Note 16, Income Taxes , for more information on the impact of U.S.

(6) Refer to Note 7, Equity Method Investments, for more information on gains and losses on equity method investment transactions.

(3) Refer to Note 10, Financial Instruments , for information on our interest rate swaps that we no longer designate as cash flow hedges.

(4) Refer to Note 9, Debt and Borrowing Arrangements , for more information on the loss on debt extinguishment and related expenses.

(5) Refer to Note 16, Income Taxes , and the Non-GAAP Financial Measures section for more information.

(6) Refer to Note 7, Equity Method Investments , for more information on the gains and losses 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.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis