What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-01 compared with 2022-07-26 · 317 added, 177 removed, 975 unchanged (34% of the section changed)

6 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

28 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

17 unchanged sentences

dollars, except share data)

September 30,

2022 December 31, 2021

Cash and cash equivalents $ 2,177 $ 3,546

Trade receivables (net of allowances of $ 45 at June 30, 2022

Trade receivables (net of allowances of $ 42 at September 30, 2022

and $ 37 at December 31, 2021)

Other receivables (net of allowances of $ 48 at June 30, 2022

Other receivables (net of allowances of $ 49 at September 30, 2022

and $ 49 at December 31, 2021)

27 unchanged sentences

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

1,996,537,778 shares issued at June 30, 2022 and December 31, 2021)

1,996,537,778 shares issued at September 30, 2022 and December 31, 2021)

Additional paid-in capital 32,116 32,097

1 unchanged sentence

Accumulated other comprehensive losses ( 11,231 ) ( 10,624 )

Treasury stock, at cost ( 624,240,103 shares at June 30, 2022 and

Treasury stock, at cost ( 629,145,172 shares at September 30, 2022 and

604,907,239 shares at December 31, 2021)

18 unchanged sentences

Interest Total

Three Months Ended June 30, 2022

Balances at April 1, 2022 $ — $ 32,053 $ 31,163 $ ( 10,425 ) $ ( 24,630 ) $ 55 $ 28,216

Three Months Ended September 30, 2022

Balances at July 1, 2022 $ — $ 32,086 $ 31,431 $ ( 10,638 ) $ ( 25,368 ) $ 42 $ 27,553

Comprehensive earnings/(losses):

12 unchanged sentences

— — — — — ( 2 ) ( 2 )

Balances at June 30, 2022 $ — $ 32,086 $ 31,431 $ ( 10,638 ) $ ( 25,368 ) $ 42 $ 27,553

Six Months Ended June 30, 2022

Balances at September 30, 2022 $ — $ 32,116 $ 31,437 $ ( 11,231 ) $ ( 25,681 ) $ 29 $ 26,670

Nine Months Ended September 30, 2022

Balances at January 1, 2022 $ — $ 32,097 $ 30,806 $ ( 10,624 ) $ ( 24,010 ) $ 54 $ 28,323

13 unchanged sentences

— — 3 — — ( 6 ) ( 3 )

Balances at June 30, 2022 $ — $ 32,086 $ 31,431 $ ( 10,638 ) $ ( 25,368 ) $ 42 $ 27,553

Three Months Ended June 30, 2021

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

Balances at September 30, 2022 $ — $ 32,116 $ 31,437 $ ( 11,231 ) $ ( 25,681 ) $ 29 $ 26,670

Three Months Ended September 30, 2021

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

Comprehensive earnings/(losses):

12 unchanged sentences

— — 1 — — ( 20 ) ( 19 )

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

Six Months Ended June 30, 2021

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

Nine Months Ended September 30, 2021

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

13 unchanged sentences

— — 5 — — ( 20 ) ( 15 )

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

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

See accompanying notes to the condensed consolidated financial statements.

3 unchanged sentences

(in millions of U.S.

For the Six Months Ended

For the Nine Months Ended

September 30,

CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES

24 unchanged sentences

Proceeds from divestitures including equity method investments 604 1,498

Proceeds from sale of property, plant and equipment and other 193 25

Net cash used in investing activities ( 999 ) ( 220 )

Proceeds from derivative settlements and other 585 80

Net cash (used in)/provided by investing activities ( 3,410 ) 106

CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES

Net issuances/(repayments) of other short-term borrowings 219 37

Net issuances/(repayments) of short-term borrowings 1,370 207

Long-term debt proceeds 4,490 5,921

2 unchanged sentences

Dividends paid ( 1,457 ) ( 1,337 )

Other 143 ( 40 )

Net cash used in financing activities ( 297 ) ( 2,971 )

26 unchanged sentences

In March 2022, our two Ukrainian manufacturing facilities in Trostyanets and Vyshhorod were significantly damaged.

During the first quarter of 2022, we evaluated and impaired these and other assets.

During the first quarter of 2022, we evaluated and impaired these and other related assets.

We recorded $ 143 million of total expenses ($ 145 million after-tax) incurred as a direct result of the war, including $ 75 million recorded in asset impairment and exit costs , $ 44 million in cost of sales and $ 24 million in selling, general and administrative expenses.

We recorded $ 75 million of property, plant and equipment impairments, $ 33 million of estimated inventory write-offs, $ 19 million of increased estimated allowances for trade receivables and $ 16 million in accrued expenses.

During the second quarter of 2022, we reversed approximately $ 15 million of previously recorded charges as a result of higher than expected collection of trade receivables and inventory recoveries.

During the second and third quarters of 2022, we reversed approximately $ 15 million and $ 7 million, respectively, of previously recorded charges primarily as a result of higher than expected collection of trade receivables and inventory recoveries.

We continue to consolidate both our Ukrainian and Russian subsidiaries and continue to evaluate our ability to control our operating activities and businesses on an ongoing basis.

11 unchanged sentences

During the first quarter of 2022, primarily based on data published by the Türkiye Statistical Institute that indicated that Türkiye's three-year cumulative inflation rate exceeded 100%, we concluded that Türkiye became a highly inflationary economy for accounting purposes.

As of April 1, 2022, we began to apply highly inflationary accounting for our subsidiaries operating in Türkiye and change their functional currency from the Turkish lira to the U.S.

Our operations in Türkiye contributed $ 46 million or 0.6 % of our condensed consolidated net revenues in the three months and $ 90 million or 0.6 % of our condensed consolidated net revenues in the six months ended June 30, 2022.

As of June 30, 2022, our operations in Türkiye had $ 11 million of Turkish lira denominated net

monetary liabilities.

Within selling, general and administrative expenses, we recorded a remeasurement loss of less than $ 1 million during the three months ended June 30, 2022 related to the revaluation of the Turkish lira denominated net monetary position during the quarter.

As of April 1, 2022, we began to apply highly inflationary accounting for our subsidiaries operating in Türkiye and changed their functional currency from the Turkish lira to the U.S.

Our operations in Türkiye contributed $ 52 million or 0.7 % of our condensed consolidated net revenues in the three months and $ 141 million or 0.6 % of our condensed consolidated net revenues in the nine

months ended September 30, 2022.

As of September 30, 2022, our operations in Türkiye had $ 3 million of Turkish lira denominated net monetary liabilities.

Within selling, general and administrative expenses, we recorded a remeasurement gain of $ 1 million during the three months and nine months ended September 30, 2022 related to the revaluation of the Turkish lira denominated net monetary position over these periods.

During the second quarter of 2018, primarily based on published estimates that indicated that Argentina's three-year cumulative inflation rate exceeded 100%, we concluded that Argentina became a highly inflationary economy for accounting purposes.

As of July 1, 2018, we began to apply highly inflationary accounting for our Argentinean subsidiaries and changed their functional currency from the Argentinean peso to the U.S.

Our operations in Argentina contributed $ 138 million or 1.9 % of consolidated net revenues in the three months and $ 268 million or 1.8 % of our condensed consolidated net revenues in the six months ended June 30, 2022.

As of June 30, 2022, our Argentinean operations had $ 28 million of Argentinean peso denominated net monetary assets.

Within selling, general and administrative expenses, we recorded a remeasurement loss of $ 10 million during the three months and $ 15 million during the six months ended June 30, 2022 as well as a remeasurement loss of $ 3 million during the three months and $ 8 million during the six months ended June 30, 2021 related to the revaluation of the Argentinean peso denominated net monetary position over these periods.

Our operations in Argentina contributed $ 139 million or 1.8 % of consolidated net revenues in the three months and $ 407 million or 1.8 % of our condensed consolidated net revenues in the nine months ended September 30, 2022.

As of September 30, 2022, our Argentinean operations had $ 12 million of Argentinean peso denominated net monetary assets.

Within selling, general and administrative expenses, we recorded a remeasurement loss of $ 12 million during the three months and $ 27 million during the nine months ended September 30, 2022 as well as a remeasurement loss of $ 2 million during the three months and $ 10 million during the nine months ended September 30, 2021 related to the revaluation of the Argentinean peso denominated net monetary position over these periods.

Other Countries.

Since we sell our products in over 150 countries and have operations in approximately 80 countries, we monitor economic and currency-related risks and seek to take protective measures in response to potential exposures.

We continue to monitor the developments in Ukraine and Russia as well as in the ongoing COVID-19 global pandemic and related impacts to our business operations, currencies and net monetary exposures.

Since the global onset of COVID-19 in early 2020 and compounded by the ongoing war in Ukraine and the impact of general economic conditions, including inflation, most countries in which we do business experienced periods of significant economic uncertainty as well as exchange rate volatility.

We continue to monitor the developments in Ukraine and Russia and the COVID-19 global pandemic and related impacts to our business operations, currencies and net monetary exposures.

Related to the war and pandemic, most countries in which we do business experienced periods of significant economic uncertainty, inflation and exchange rate volatility.

At this time, within our consolidated entities, Argentina and Türkiye are highly inflationary economies as noted above, and we continue to monitor currency volatility and associated risks, such as increased risk of highly inflationary economies and related accounting.

1 unchanged sentence

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

We also have restricted cash that is recorded within other current assets of $ 11 million as of June 30, 2022 and $ 7 million as of December 31, 2021.

Total cash, cash equivalents and restricted cash was $ 1,935 million as of June 30, 2022 and $ 3,553 million as of December 31, 2021.

We also have restricted cash that is recorded within other current assets of $ 18 million as of September 30, 2022 and $ 7 million as of December 31, 2021.

Total cash, cash equivalents and restricted cash was $ 2,195 million as of September 30, 2022 and $ 3,553 million as of December 31, 2021.

Allowances for Credit Losses:

9 unchanged sentences

Currency 3 4 —

Balance at June 30, 2022 $ ( 45 ) $ ( 48 ) $ ( 16 )

Balance at September 30, 2022 $ ( 42 ) $ ( 49 ) $ ( 13 )

Transfers of Financial Assets:

5 unchanged sentences

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

The outstanding principal amount of receivables under these arrangements amounted to $ 700 million as of June 30, 2022 and $ 761 million as of December 31, 2021.

The outstanding principal amount of receivables under these arrangements amounted to $ 743 million as of September 30, 2022 and $ 761 million as of December 31, 2021.

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

1 unchanged sentence

Non-Cash Lease Transactions:

We recorded $ 125 million in operating lease and $ 76 million in finance lease right-of-use assets obtained in exchange for lease obligations during the six months ended June 30, 2022 and $ 115 million in operating lease and $ 44 million in finance lease right-of-use assets obtained in exchange for lease obligations during the six months ended June 30, 2021.

We recorded $ 206 million in operating lease and $ 135 million in finance lease right-of-use assets obtained in exchange for lease obligations during the nine months ended September 30, 2022 and $ 159 million in operating lease and $ 59 million in finance lease right-of-use assets obtained in exchange for lease obligations during the nine months ended September 30, 2021.

New Accounting Pronouncements:

8 unchanged sentences

Based on our evaluation of our contracts to date, we do not expect this ASU to have a material impact on our consolidated financial statements.

In September 2022, the FASB issued an ASU which enhances the transparency of supplier finance programs by requiring additional disclosure about the key terms of these programs and a rollforward of the related obligations to understand the effects of these programs on working capital, liquidity and cash flows.

The ASU is effective for fiscal years beginning after December 15, 2022, except for the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

We are currently assessing the impact on our consolidated financial statements and related disclosures.

Acquisitions and Divestitures

On June 20, 2022, we announced an agreement to acquire Clif Bar & Company (“Clif Bar”), a leading U.S.

maker of nutritious energy bars with organic ingredients for a purchase price of approximately $ 2.9 billion, subject to closing purchase price adjustments.

On November 1, 2022, we acquired Grupo Bimbo's confectionery business, Ricolino, located primarily in Mexico.

The cash consideration paid for Ricolino totaled $ 1.3 billion.

During the nine months ended September 30, 2022, we incurred $ 1 million of acquisition-related costs.

We also incurred during the three and nine months ended September 30, 2022, acquisition integration costs of $ 7 million in preparation for the acquisition.

On August 1, 2022, we acquired 100 % of the equity of Clif Bar & Company (“Clif Bar”), a leading U.S.

maker of nutritious energy bars with organic ingredients.

The acquisition expands our global snack bar business and complements our refrigerated snacking and performance nutrition bar portfolios.

The total cash payment of $ 2.9 billion includes purchase price consideration of $ 2.6 billion, net of cash received, and one-time compensation expense of $ 0.3 billion related to the buyout of the non-vested employee stock ownership plan ("ESOP") shares.

This compensation expense is considered an acquisition-related cost.

The acquisition of Clif Bar includes a contingent consideration arrangement that may require us to pay additional consideration to the sellers for achieving certain revenue and earnings targets in 2025 and 2026 that exceed our base financial projections for the business implied in the upfront purchase price.

The possible payments range from zero to a maximum total of $ 2.4 billion, with higher payouts requiring the achievement of targets that generate rates of returns in excess of the base financial projections.

In connection with this acquisition, we expect to generate a meaningful cash tax benefit over time from the amortization of acquisition-related intangibles.

The transaction, which will be funded through a combination of debt and cash on hand, is subject to relevant antitrust approvals and closing conditions and is expected to close in the third quarter of 2022.

During the second quarter of 2022, we incurred $ 4 million of acquisition-related costs.

On April 24, 2022, we entered into an agreement with Grupo Bimbo to acquire Ricolino, its confectionery business located primarily in Mexico for a purchase price of approximately $ 1.3 billion, subject to closing purchase price adjustments.

The transaction, which will be funded through a combination of debt and cash on hand, is subject to relevant antitrust approvals and closing conditions and is expected to close late in the third quarter or early in the fourth quarter of 2022.

During the second quarter of 2022, we incurred $ 1 million of acquisition-related costs.

The estimated fair value of the contingent consideration obligation at the acquisition date was $ 440 million determined using a Monte Carlo simulation.

Significant assumptions used in assessing the fair value of the liability include financial projections for net revenue, gross profit, and earnings before interest, tax, depreciation and amortization ("EBITDA"), as well as discount and volatility rates.

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

(in millions)

Receivables 76

Inventory 124

Other current assets 9

Property, plant and equipment 186

Operating leases right of use assets 22

Deferred tax assets 93

Definite life intangible assets 200

Indefinite life intangible assets 1,450

Goodwill 1,016

Other assets 14

Assets acquired $ 3,289

Current liabilities 159

Contingent consideration 440

Other liabilities 15

Total purchase price 2,675

cash received ( 99 )

Net Cash Paid $ 2,576

Within identifiable intangible assets, we allocated $ 1,450 million to trade names, which have an indefinite-life.

The fair value for the Clif and Luna trade names, were determined using the relief-from-royalty method, a form of the income approach, at the acquisition date.

The fair value measurement of intangible assets are based on significant unobservable inputs, and thus represent Leve l 3 inputs.

Significant assumptions used in assessing the fair values of intangible assets include forecasted future revenue, discount and royalty rates.

We expect to generate a meaningful cash tax benefit over time from the amortization of acquisition-related intangibles.

Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired and arises principally as a result of expansion opportunities and synergies across the U.S.

and other key markets.

All of the goodwill was assigned to the North America segment.

Tax deductible goodwill is expected to be $ 1.4 billion and will be amortized.

Clif Bar added incremental net revenues of $ 157 million and operating loss of $ 33 million during the three months ended September 30, 2022.

The operating loss includes acquisition integration costs of $ 16 million and an inventory step-up charge of $ 20 million incurred during the three months ended September 30, 2022.

We also incurred acquisition-related costs of $ 292 million during the three months and $ 296 million during the nine months ended September 30, 2022.

These acquisition-related costs are primarily related to the buyout of the non-vested ESOP shares.

On January 3, 2022, we acquired Chipita Global S.A.

27 unchanged sentences

All of the goodwill was assigned to the Europe segment.

Chipita added incremental net revenues of $ 180 million during the three months and $ 332 million during t he six months ended June 30, 2022, and operating income of $ 10 million during the three months and $ 14 million during the six months ended June 30, 2022.

We incurred acquisition-related costs of $ 21 million during the six months ended June 30, 2022 and $ 6 million during the three months and six months ended June 30, 2021.

We incurred integration costs of $ 36 million during the three months and $ 71 million during the six months ended June 30, 2022.

Chipita added incremental net revenues of $ 158 million during the three months and $ 490 million during the nine months ended September 30, 2022, and operating income of $ 25 million during the three months and $ 39 million during the nine months ended September 30, 2022.

We incurred acquisition-related costs of $ 21 million during the nine months ended September 30, 2022 and $ 6 million during the nine months ended September 30, 2021.

We incurred acquisition integration costs of $ 14 million during the three months and $ 85 million during the nine months ended September 30, 2022.

We incurred acquisition integration costs of $ 6 million in the three and nine months ended September 30, 2021.

On November 1, 2021, we completed the sale of MaxFoods Pty Ltd, an Australian packaged seafood business that we had acquired as part of our acquisition of Gourmet Food Holdings Pty Ltd (“Gourmet Food”).

2 unchanged sentences

We have recorded a purchase price allocation of net tangible and intangible assets acquired and liabilities assumed of $ 41 million to indefinite-lived intangible assets, $ 80 million to definite-lived intangible assets, $ 164 million to goodwill, $ 19 million to property, plant and equipment, $ 18 million to inventory, $ 25 million to accounts receivable, $ 12 million to other assets, $ 5 million to operating right of use assets, $ 3 million to other current assets, $ 19 million to current liabilities and $ 5 million to long-term operating lease liabilities.

Through the one-year anniversary of the acquisition, Gourmet Food added incremental net revenues of $ 14 million, and operating income of $ 1 million during the six months ended June 30, 2022.

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

Through the one-year anniversary of the acquisition, Gourmet Food added incremental net revenues of $ 14 million, and operating income of $ 1 million during the nine months ended September 30, 2022.

We incurred acquisition integration costs of $ 1 million during the three months ended September 30, 2022.

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

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

The acquisition of Grenade expands our position into the premium nutrition segment.

We have recorded a

purchase price allocation of net tangible and intangible assets acquired and liabilities assumed of $ 82 million to indefinite-lived intangible assets, $ 28 million to definite-lived intangible assets, $ 181 million to goodwill, $ 1 million to property, plant and equipment, $ 11 million to inventory, $ 18 million to accounts receivable, $ 25 million to current liabilities, $ 20 million to deferred tax liabilities and $ 15 million to long-term other liabilities.

Through the one-year anniversary of the acquisition, Grenade added incremental net revenues of $ 21 million, and operating income of $ 2 million during the six months ended June 30, 2022.

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

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

Through the one-year anniversary of the acquisition, Grenade added incremental net revenues of $ 21 million, and operating income of $ 2 million during the nine months ended September 30, 2022.

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

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

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

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

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

During the third quarter of 2021, we recorded a $ 70 million reduction to the liability due to changes in the expected pace of growth.

During the third quarter of 2022, we recorded an additional $ 7 million reduction to the liability due to further changes to forecasted future results.

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

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

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

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

Inventories consisted of the following:

As of June 30,

As of September 30,

2022 As of December 31, 2021

6 unchanged sentences

Property, plant and equipment consisted of the following:

As of June 30,

As of September 30,

2022 As of December 31, 2021

7 unchanged sentences

Property, plant and equipment, net $ 8,632 $ 8,658

For the six months ended June 30, 2022, capital expenditures of $ 385 million excluded $ 239 million of accrued capital expenditures remaining unpaid at June 30, 2022 and included payment for $ 249 million of capital expenditures that were accrued and unpaid at December 31, 2021.

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

For the nine months ended September 30, 2022, capital expenditures of $ 621 million excluded $ 255 million of accrued capital expenditures remaining unpaid at September 30, 2022 and included payment for $ 249 million of

capital expenditures that were accrued and unpaid at December 31, 2021.

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

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

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

7 unchanged sentences

Goodwill by segment was:

As of June 30,

As of September 30,

2022 As of December 31, 2021

6 unchanged sentences

Intangible assets consisted of the following:

As of June 30,

As of September 30,

2022 As of December 31, 2021

5 unchanged sentences

Intangible assets, net $ 19,313 $ 18,291

Indefinite-life intangible assets consist principally of brand names purchased through our acquisitions of Nabisco Holdings Corp., the Spanish and Portuguese operations of United Biscuits, the global LU biscuit business of Groupe Danone S.A.

and Cadbury Limited.

Indefinite-life intangible assets consist principally of brand names purchased through our acquisitions of Nabisco Holdings Corp., the global LU biscuit business of Groupe Danone S.A., Cadbury Limited and Clif Bar.

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

Amortization expense for intangible assets was $ 32 million for the three months and $ 64 million for the six months ended June 30, 2022 and $ 32 million for the three months and $ 70 million for the six months ended June 30, 2021.

For the next five years, we currently estimate annual amortization expense of approximately $ 125 million in 2022-2024, approximately $ 105 million in 2025 and approximately $ 65 million in 2026 (reflecting June 30, 2022 exchange rates).

Amortization expense for intangible assets was $ 32 million for the three months and $ 96 million for the nine months ended September 30, 2022 and $ 32 million for the three months and $ 102 million for the nine months ended September 30, 2021.

For the next five years, we currently estimate annual amortization expense of approximately $ 130 million in 2022-2024, approximately $ 110 million in 2025 and approximately $ 75 million in 2026 (reflecting September 30, 2022 exchange rates).

Changes in goodwill and intangible assets consisted of:

4 unchanged sentences

Currency ( 1,391 ) ( 1,301 )

Divestiture ( 8 ) —

Acquisitions 1,808 2,386

Asset impairments — ( 101 )

Balance at June 30, 2022 $ 22,103 $ 20,342

Balance at September 30, 2022 $ 22,387 $ 21,274

Changes to goodwill and intangibles were:

• Acquisitions - In connection with our acquisition of Chipita, we recorded a preliminary purchase price allocation of $ 791 million to goodwill and $ 734 million to intangible assets.

• Acquisitions - In connection with our 2022 acquisitions, we recorded preliminary purchase price allocations of $ 1 billion to goodwill and $ 1.7 billion to intangible assets for Clif Bar and $ 791 million to goodwill and $ 734 million to intangible assets for Chipita.

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

• Asset impairment - As further described below, during the first quarter of 2022, we recorded a $ 78 million intangible asset impairment in AMEA due to lower than expected growth and profitability of a local biscuit brand sold in select markets in AMEA and Europe.

During the second quarter of 2022, we evaluated our goodwill and intangible asset impairment risk through an assessment of potential triggering events, including qualitative and quantitative of the overall global economic environment and impacts from the war in Ukraine.

Based on the results of our assessment, we concluded there were no impairment indicators for goodwill and intangible assets.

During the first quarter of 2022, we recorded a $ 78 million impairment charge within asset impairment and exit costs based on the excess carrying value over the estimated fair value of a biscuit brand.

During the second quarter of 2021, we recorded $ 32 million of intangible asset impairments resulting primarily from lower than expected sales growth for one brand across our North America segment.

We use several accepted valuation methods in our indefinite-life impairment testing, 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.

During our 2021 annual indefinite-life intangible asset testing in the third quarter of 2021, we identified eight brands, including the one brand impaired during the first quarter of 2022, that each had a fair value in excess of book value of 10% or less.

The aggregate book value of the eight brands was $ 987 million as of June 30, 2022.

• Asset impairment - As further described below, we recorded a $ 78 million and $ 23 million intangible asset impairment, during the first and third quarters of 2022, respectively, in Asia, Middle East and Africa ("AMEA") due to lower than expected growth and profitability of two local biscuit brands sold in select markets in AMEA and Europe.

During the third quarter of 2022, we performed our annual impairment assessment test for goodwill and indefinite-life intangible assets as of July 1, 2022.

Our 2022 annual testing of goodwill resulted in no impairments as each reporting unit had sufficient fair value in excess of its carrying value.

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

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

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

This year, for our Europe and North America reporting units, we used a market based, weighted-average cost of capital of 6.8 % to discount the projected cash flows of those operations.

For our Latin America and AMEA reporting units, we used a risk-rated discount rate of 9.8 %.

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

Given the uncertainty of the global economic environment, those estimates could be significantly different than future performance.

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

During our 2022 annual testing of indefinite-life intangible assets, we recorded a $ 23 million impairment charge in the third quarter of 2022 related to one brand.

The impairment arose due to lower than expected growth and profitability in a local biscuit brand in AMEA.

The impairment charge was 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.

During our annual testing, we use several accepted valuation methods, including relief from 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 identified eight brands, including the one brand impaired during the third quarter of 2022, that each had a fair value in excess of book value of 10% or less.

The aggregate book value of the eight brands was $ 1.4 billion as of September 30, 2022.

We continue to monitor our brand performance, particularly in light of the significant global economic uncertainties and related impacts to our business.

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

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

During interim periods, we evaluate our goodwill and intangible asset impairment risk through an assessment of potential triggering events.

During the first quarter of 2022, we determined a local biscuit brand in AMEA was impaired.

We recorded a $ 78 million impairment charge for the brand within asset impairment and exit costs based on the excess carrying value over its estimated fair value.

Equity Method Investments

7 unchanged sentences

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

As of June 30, 2022, we owned 19.8 %, 5.3 %, 50.0 % and 49.0 %, respectively, of these companies' outstanding shares.

Our investments accounted for under the equity method of accounting totaled $ 4.7 billion as of June 30, 2022 and $ 5.3 billion as of December 31, 2021.

We recorded equity earnings of $ 98 million and cash dividends of $ 14 million in the second quarter of 2022 and equity earnings of $ 107 million and cash dividends of $ 20 million in the second quarter of 2021.

We recorded equity earnings of $ 215 million and cash dividends of $ 121 million in the first six months of 2022 and equity earnings of $ 185 million and cash dividends of $ 94 million in the first six months of 2021.

Based on the quoted closing prices as of June 30, 2022, the combined fair value of our publicly-traded investments in JDEP and KDP wa s $ 5.4 billion , and for each investment, its fair value exceeded its carrying value.

As of September 30, 2022, we owned 19.8 %, 5.3 %, 50.0 % and 49.0 %, respectively, of these companies' outstanding shares.

Our investments accounted for under the equity method of accounting totaled $ 4.5 billion as of September 30, 2022 and $ 5.3 billion as of December 31, 2021.

We recorded equity earnings of $ 85 million and cash dividends of $ 48 million in the third quarter of 2022 and equity earnings of $ 105 million and cash dividends of $ 64 million in the third quarter of 2021.

We recorded equity earnings of $ 300 million and cash dividends of $ 169 million in the first nine months of 2022 and equity earnings of $ 290 million and cash dividends of $ 158 million in the first nine months of 2021.

Based on the quoted closing prices as of September 30, 2022, the combined fair value of our publicly-traded investments in JDEP and KDP wa s $ 5.5 billion , and for each investment, its fair value exceeded its carrying value.

JDE Peet’s Transactions:

4 unchanged sentences

On September 20, 2021, we issued € 300 million exchangeable bonds, which are redeemable at maturity in September 2024 at their principal amount in cash or, at our option, through the delivery of an equivalent number of JDE Peet’s ordinary shares based on an initial exchange price of € 35.40 and, as the case may be, an additional amount in cash.

If all bonds were redeemed in exchange for JDE Peet's shares, this would represent approximately 8.5 million shares or approximately 9 % of our equity interest in JDE Peet's as of June 30, 2022.

If all bonds were redeemed in exchange for JDE Peet's shares, this would represent approximately 8.5 million shares or approximately 9 % of our equity interest in JDE Peet's as of September 30, 2022.

Refer to Note 9, Financial Instruments , for further details on this transaction.

Keurig Dr Pepper Transactions:

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

We received $ 500 million of proceeds and recorded a pre-tax gain of $ 248 million (or $ 189 million after-tax) during the third quarter of 2021.

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

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

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

We received $ 997 million of proceeds and recorded a pre-tax gain of $ 520 million (or $ 392 million after-tax) during the second quarter of 2021.

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

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

Restructuring Program

10 unchanged sentences

Restructuring Costs :

The Simplify to Grow Program liability activity for the six months ended June 30, 2022 was:

Write-downs Total

The Simplify to Grow Program liability activity for the nine months ended September 30, 2022 was:

Write-downs (1)

(in millions)

Liability balance, January 1, 2022 $ 211 $ — $ 211

Charges 8 7 15

Cash spent (3)

( 45 ) ( 45 )

Non-cash settlements/adjustments (4)

Currency ( 18 ) — ( 18 )

Liability balance, June 30, 2022 $ 174 $ — $ 174

• We recorded restructuring charges of $ 4 million in the second quarter of 2022 and $ 100 million in the second quarter of 2021 and $ 15 million in the first six months of 2022 and $ 188 million in the first six months of 2021 within asset impairment and exit costs and benefit plan non-service income.

• We spent $ 16 million in the second quarter of 2022 and $ 30 million in the second quarter of 2021 and $ 33 million in the first six months of 2022 and $ 64 million in the first six months of 2021 in cash severance and related costs.

• We recognized non-cash asset write-downs (including accelerated depreciation and asset impairments), and other adjustments, including any gains on sale of restructuring program assets, which totaled $ 7 million in the second quarter of 2022 and $ 76 million in the second quarter of 2021 and $ 9 million in the first six months of 2022 and $ 116 million in the first six months of 2021.

• At June 30, 2022, $ 119 million of our net restructuring liability was recorded within other current liabilities and $ 55 million was recorded within other long-term liabilities.

Liability balance, September 30, 2022 (5)

$ 157 $ — $ 157

(1) Includes gains as a result of assets sold which are included in the restructuring program.

(2) We recorded a $ 10 million gain in the third quarter of 2022 due to the sale of assets included in the restructuring program as well as restructuring charges of $ 3 million, and restructuring charges of $ 8 million in the first nine months of 2022.

We recorded restructuring charges of $ 62 million in the third quarter and $ 250 million in the first nine months of 2021.

This activity is recorded within asset impairment and exit costs and benefit plan non-service income.

(3) We spent $ 12 million in the third quarter of 2022 and $ 65 million in the third quarter of 2021 and $ 45 million in the first nine months of 2022 and $ 129 million in the first nine months of 2021 in cash severance and related costs.

(4) We recognized non-cash asset write-downs (including accelerated depreciation and asset impairments), and other adjustments, including any gains on sale of restructuring program assets, which totaled a gain of $ 10 million in the third quarter and $ 1 million in the first nine months of 2022 and a charge of $ 54 million in the third quarter and of $ 170 million in the first nine months of 2021.

(5) At September 30, 2022, $ 106 million of our net restructuring liability was recorded within other current liabilities and $ 51 million was recorded within other long-term liabilities.

Implementation Costs:

4 unchanged sentences

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

Within our continuing results of operations, we recorded implementation costs of $ 19 million in the second quarter of 2022 and $ 33 million in the second quarter of 2021 and $ 39 million in the first six months of 2022 and $ 67 million in the first six months of 2021.

Within our continuing results of operations, we recorded implementation costs of $ 23 million in the third quarter of 2022 and $ 65 million in the third quarter of 2021 and $ 62 million in the first nine months of 2022 and $ 132 million in the first nine months of 2021.

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

Restructuring and Implementation Costs:

During the three and six months ended June 30, 2022 and June 30, 2021, and since inception of the Simplify to Grow Program, we recorded the following restructuring and implementation costs within segment operating income and earnings before income taxes:

During the three and nine months ended September 30, 2022 and September 30, 2021, and since inception of the Simplify to Grow Program, we recorded the following restructuring and implementation costs within segment operating income and earnings before income taxes:

America AMEA Europe North

1 unchanged sentence

(in millions)

For the Three Months Ended June 30, 2022

For the Three Months Ended September 30, 2022

Restructuring Costs $ ( 2 ) $ 1 $ 3 $ ( 8 ) $ ( 1 ) $ ( 7 )

1 unchanged sentence

Total $ ( 1 ) $ 1 $ 8 $ — $ 8 $ 16

For the Three Months Ended June 30, 2021

For the Three Months Ended September 30, 2021

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

1 unchanged sentence

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

For the Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

Restructuring Costs $ ( 5 ) $ 3 $ 5 $ 4 $ 1 $ 8

1 unchanged sentence

Total $ — $ 7 $ 23 $ 28 $ 12 $ 70

For the Six Months Ended June 30, 2021

For the Nine Months Ended September 30, 2021

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

8 unchanged sentences

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

As of June 30, 2022 As of December 31, 2021

As of September 30, 2022 As of December 31, 2021

Outstanding Weighted-

5 unchanged sentences

Total short-term borrowings $ 1,753 $ 216

Our uncommitted credit lines and committed credit lines available as of June 30, 2022 and December 31, 2021 include:

As of June 30, 2022 As of December 31, 2021

Our uncommitted credit lines and committed credit lines available as of September 30, 2022 and December 31, 2021 include:

As of September 30, 2022 As of December 31, 2021

Facility Amount Borrowed Amount Facility Amount Borrowed Amount

2 unchanged sentences

Credit facility expiry (1) :

November 30, 2022 (2)

February 23, 2022 — — 2,500 —

February 22, 2023 2,500 — — —

March 11, 2023 (3)

February 27, 2024 — — 4,500 —

July 29, 2025 (2)

2,000 2,000 — —

February 23, 2027 4,500 — — —

1 unchanged sentence

The revolving credit agreement includes a covenant that we maintain a minimum shareholders' equity of at least $ 25.0 billion, excluding accumulated other comprehensive earnings/(losses), the cumulative effects of any changes in accounting principles and earnings/(losses) recognized in connection with the ongoing application of any mark-to-market accounting for pensions and other retirement plans.

At June 30, 2022, we complied with this covenant as our shareholders' equity, as defined by the covenant, was $ 38.1 billion.

At September 30, 2022, we complied with this covenant as our shareholders' equity, as defined by the covenant, was $ 37.9 billion.

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

2 unchanged sentences

Under this agreement we may draw up to a total of $ 2.0 billion in term loans from the facility.

The maturity dates of any loans drawn under this facility will be three years after the funding date of the applicable loan(s).

On July 29, 2022, we drew down $ 2.0 billion in term loans, due July 29, 2025, bearing interest at a variable annual rate based on SOFR plus an applicable margin.

(3) On July 11, 2022, we entered into a supplemental term loan credit facility that can be utilized for general corporate purposes, including acquisitions.

22 unchanged sentences

Debt Repayments

On January 3, 2022, we closed on our acquisition of Chipita and assumed and entirely paid down € 0.4 billion ($ 0.4 billion) of Chipita's debt during the six months ended June 30, 2022.

During the six months ended June 30, 2022, we issued the following notes (in millions):

During the nine months ended September 30, 2022, we repaid the following notes (in millions):

Interest Rate Maturity Date Amount USD Equivalent

Various Various (1)

2.125 % September 2022 (2)

0.650 % July 2022 Fr.

(1) On January 3, 2022, we closed on our acquisition of Chipita and assumed and entirely paid down € 0.4 billion ($ 0.4 billion) of Chipita's debt during the nine months ended September 30, 2022.

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

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

During the nine months ended September 30, 2022, we issued the following notes (in millions):

Issuance Date Interest Rate Maturity Date Gross Proceeds (1)

Gross Proceeds USD Equivalent

September 2022 (2)

4.250 % September 2025 $ 500 $ 500

March 2022 2.125 % March 2024 $ 500 $ 500

2 unchanged sentences

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

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

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

Fair Value of Our Debt:

The fair value of our short-term borrowings at June 30, 2022 and December 31, 2021 reflects current market interest rates and approximates the amounts we have recorded on our consolidated balance sheets.

The fair value of our short-term borrowings at September 30, 2022 and December 31, 2021 reflects current market interest rates and approximates the amounts we have recorded on our consolidated balance sheets.

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

As of June 30, 2022 As of December 31, 2021

As of September 30, 2022 As of December 31, 2021

(in millions)

4 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

5 unchanged sentences

Interest and other expense, net $ 71 $ 82 $ 337 $ 358

Other income includes amounts excluded from hedge effectiveness related to our net investment hedge derivative contracts and early settlement of forecasted currency derivative transactions due to changes in related future cash flows.

Other expense/(income) includes amounts excluded from hedge effectiveness related to our net investment hedge derivative contracts and early settlement of forecasted currency derivative transactions due to changes in related future cash flows.

Refer to Note 9, Financial Instruments .

2 unchanged sentences

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

As of June 30, 2022 As of December 31, 2021

As of September 30, 2022 As of December 31, 2021

Derivatives Liability

13 unchanged sentences

Commodity contracts 224 214 387 137

Interest rate contracts 6 — — —

Equity method investment contracts (2)

14 unchanged sentences

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

As of June 30, 2022

As of September 30, 2022

Fair Value of Net

46 unchanged sentences

Notional Amount

As of June 30,

As of September 30,

2022 As of December 31, 2021

15 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

7 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

8 unchanged sentences

Cash Flow Hedge Coverage:

As of June 30, 2022, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 4 years, 2 months .

As of September 30, 2022, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 3 years, 11 months .

Hedges of Net Investments in International Operations:

2 unchanged sentences

operations against movements in exchange rates.

The aggregate notional value as of June 30, 2022 was $ 7.1 billion.

The aggregate notional value as of September 30, 2022 was $ 6.5 billion.

Net investment hedge derivative contract impacts on other comprehensive earnings and net earnings were:

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

5 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

7 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

7 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

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

September 30, For the Nine Months Ended

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

2022 2021 2022 2021

13 unchanged sentences

In the first quarter of 2022, we had early settlements of forecasted currency exchange contracts comprised of $ 74 million in cost of sales, $ 5 million in selling, general and administrative expenses and $ 20 million in interest and other expense, net.

Fair Value of Contingent Consideration

The following is a summary of our contingent consideration liability activity:

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

Liability at beginning of period $ 173 $ 221 $ 159 $ 56

Contingent consideration arising from acquisitions 440 — 440 145

Changes in fair value — ( 67 ) 16 ( 47 )

Currency — — ( 2 ) —

Liability at end of period $ 613 $ 154 $ 613 $ 154

Contingent consideration was recorded at fair value in the condensed consolidated balance sheets as follows:

As of September 30, 2022

Fair Value of Net

Asset/(Liability) Quoted Prices in

Active Markets

for Identical

(Level 1) Significant

Other Observable

(Level 2) Significant

(in millions)

$ 455 $ — $ — 455

Total contingent consideration $ 613 $ — $ — $ 613

As of December 31, 2021

Fair Value of Net

Asset/(Liability) Quoted Prices in

Active Markets

for Identical

(Level 1) Significant

Other Observable

(Level 2) Significant

(in millions)

$ 159 $ — $ — $ 159

Total contingent consideration $ 159 $ — $ — $ 159

(1) In connection with the Clif Bar acquisition, we entered into a contingent consideration arrangement that may require us to pay additional consideration to the sellers for achieving certain net revenue, gross profit and EBITDA targets in 2025 and 2026 that exceed our base financial projections for the business implied in the upfront purchase price.

The estimated fair value of the contingent consideration obligation at the acquisition date was determined using a Monte Carlo simulation and recorded in other liabilities.

Significant assumptions used in assessing the fair value of the liability include financial projections for net revenue, gross profit, and EBITDA, as well as discount and volatility rates.

Fair value adjustments are primarily recorded in selling, general and administrative expenses in the condensed consolidated statement of earnings.

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

(2) The other contingent consideration liabilities are recorded at fair value, with $ 101 million classified as other current liabilities at September 30, 2022 and $ 57 million and $ 159 million classified as long term liabilities at September 30, 2022 and December 31, 2021.

The fair value of this contingent consideration was determined using a Monte Carlo valuation model based on Level 3 inputs, including management's latest estimate of forecasted future results.

Other key assumptions included discount rate and volatility.

Fair value adjustments are recorded in selling, general and administrative expenses in the condensed consolidated statement of earnings.

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

Benefit Plans

4 unchanged sentences

For the Three Months Ended

June 30, For the Three Months Ended

September 30, For the Three Months Ended

September 30,

2022 2021 2022 2021

10 unchanged sentences

Plans Non-U.S.

For the Six Months Ended

June 30, For the Six Months Ended

For the Nine Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

9 unchanged sentences

Net periodic pension cost/(benefit) $ 2 $ 8 $ ( 20 ) $ ( 46 )

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

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

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

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

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

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

Employer Contributions:

During the six months ended June 30, 2022, we contributed $ 1 million to our U.S.

During the nine months ended September 30, 2022, we contributed $ 3 million to our U.S.

pension plans and $ 137 million to our non-U.S.

pension plans, including $ 41 million to plans in the United Kingdom and Ireland.

pension plans.

We make contributions to our pension plans in accordance with local funding arrangements and statutory minimum funding requirements.

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

As of June 30, 2022, over the remainder of 2022, we plan to make further contributions of approximately $ 2 million to our U.S.

plans and approximately $ 83 million to our non-U.S.

As of September 30, 2022, we plan to make further contributions of approximately $ 46 million to our non-U.S.

plans for the remainder of 2022.

Our actual contributions may be different due to many factors, including changes in tax and other benefit laws, significant differences between expected and actual pension asset performance or interest rates.

2 unchanged sentences

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

In connection with the discounted long-term liability, we recorded accreted interest of $ 2 million and $ 5 million in the three and six months ended June 30, 2022 and $ 3 million and $ 6 million in the three months and six months ended June 30, 2021 within interest and other expense, net.

As of June 30, 2022, the remaining discounted withdrawal liability was $ 352 million, with $ 15 million recorded in other current liabilities and $ 337 million recorded in long-term other liabilities.

In connection with the discounted long-term liability, we recorded accreted interest of $ 3 million and $ 8 million in the three and nine months ended September 30, 2022 and $ 2 million and $ 8 million in the three and nine months ended September 30, 2021 within interest and other expense, net.

As of September 30, 2022, the remaining discounted withdrawal liability was $ 348 million, with $ 15 million recorded in other current liabilities and $ 333 million recorded in long-term other liabilities.

Postretirement Benefit Plans

1 unchanged sentence

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

9 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

17 unchanged sentences

Options canceled ( 435,613 ) 55.31

Balance at June 30, 2022 22,340,794 45.63 5 years $ 373 million

(1) Cash received from options exercised was $ 31 million in the three months and $ 101 million in the six months ended June 30, 2022.

The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $ 4 million in the three months and $ 14 million in the six months ended June 30, 2022.

Balance at September 30, 2022 21,535,949 45.82 5 years $ 226 million

(1) Cash received from options exercised was $ 22 million in the three months and $ 123 million in the nine months ended September 30, 2022.

The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $ 3 million in the three months and $ 17 million in the nine months ended September 30, 2022.

Performance Share Units and Other Stock-Based Awards:

13 unchanged sentences

Forfeited ( 398,436 ) 60.66

Balance at June 30, 2022 4,698,085 59.57

Balance at September 30, 2022 4,588,108 59.59

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

(2) The actual tax benefit/(expense) realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled $( 1 ) million in the three months and $ 4 million in the six months ended June 30, 2022.

(2) The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled less than $ 1 million in the three months and $ 4 million in the nine months ended September 30, 2022.

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

2 unchanged sentences

Share Repurchase Program:

Between 2013 and 2017, our Board of Directors authorized the repurchase of a total of $ 13.7 billion of our Common Stock through December 31, 2018.

On January 31, 2018, our Finance Committee, with authorization delegated from our Board of Directors, approved an increase of $ 6.0 billion in the share repurchase program, raising the authorization to $ 19.7 billion of Common Stock repurchases, and extended the program through December 31, 2020.

On December 2, 2020, our Board of Directors approved an increase of $ 4.0 billion in the share repurchase program, raising the authorization to $ 23.7 billion of Common Stock repurchases, and extended the program through December 31, 2023.

Between 2013 and 2020, our Board of Directors authorized the repurchase of a total of $ 23.7 billion of our Common Stock and extended the program through December 31, 2023.

Repurchases under the program are determined by management and are wholly discretionary.

Prior to January 1, 2022, we had repurchased approximately $ 20.0 billion of Common Stock pursuant to this authorization.

During the six months ended June 30, 2022, we repurchased approximately 23 million shares of Common Stock at an average cost of $ 64.39 per share, or an aggregate cost of approximately $ 1.5 billion, all of which was paid during the period except for approximately $ 15 million settled in July 2022.

During the nine months ended September 30, 2022, we repurchased approximately 29 million shares of Common Stock at an average cost of $ 63.78 per share, or an aggregate cost of approximately $ 1.8 billion, all of which was paid during the period except for approximately $ 20 million settled in October 2022.

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

As of June 30, 2022, we have approximately $ 2.2 billion in remaining share repurchase capacity.

As of September 30, 2022, we have approximately $ 1.8 billion in remaining share repurchase capacity.

Commitments and Contingencies

Legal Proceedings:

We routinely are involved in legal proceedings, claims, disputes, regulatory matters and governmental inspections or investigations arising in the ordinary course of or incidental to our business, including those noted below in this section.

We record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable, and the amount of the loss can be reasonably estimated.

We routinely are involved in various pending or threatened legal proceedings, claims, disputes, regulatory matters and governmental inquiries, inspections or investigations arising in the ordinary course of or incidental to our business, including those noted below in this section.

We record provisions in the consolidated financial statements for pending legal matters when we determine that an unfavorable outcome is probable, and the amount of the loss can be reasonably estimated.

For matters we have not provided for that are reasonably possible to result in an unfavorable outcome, management is unable to estimate the possible loss or range of loss or such amounts have been determined to be immaterial.

At present we believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position, results of operations or cash flows.

However, legal proceedings and government investigations are subject to inherent uncertainties, and unfavorable rulings or other events could occur.

Unfavorable resolutions could involve substantial monetary damages.

In addition, in matters for which conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in particular ways, precluding particular business practices or requiring other remedies.

At present we believe that the ultimate outcome of these legal proceedings and regulatory and governmental matters, individually and in the aggregate, will not materially harm our financial position, results of operations or cash flows.

However, legal proceedings and regulatory and governmental matters are subject to inherent uncertainties, and unfavorable rulings or other events could occur.

Unfavorable resolutions could involve substantial fines, civil or criminal penalties, and other expenditures.

An unfavorable outcome might result in a material adverse impact on our business, results of operations or financial position.

2 unchanged sentences

District Court for the Northern District of Illinois (the "District Court"), Eastern Division (the “CFTC action”) following its investigation of activities related to the trading of December 2011 wheat futures contracts that occurred prior to the spin-off of Kraft Foods Group.

The complaint alleged that Kraft Foods Group and Mondelēz Global (1) manipulated or attempted to manipulate the wheat markets during the fall of 2011;

complaint alleged that Kraft Foods Group and Mondelēz Global (1) manipulated or attempted to manipulate the wheat markets during the fall of 2011;

(2) violated position limit levels for wheat futures;

24 unchanged sentences

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

At June 30, 2022, we had no material third-party guarantees recorded on our condensed consolidated balance sheet.

At September 30, 2022, we had no material third-party guarantees recorded on our condensed consolidated balance sheet.

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

2 unchanged sentences

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

Amounts reclassified from accumulated other comprehensive earnings/(losses) to net earnings (net of tax) were net losses of $( 82 ) million in the second quarter of 2022 and $ 25 million in the second quarter of 2021 and $( 40 ) million in the first six months of 2022 and $ 59 million in the first six months of 2021.

Amounts reclassified from accumulated other comprehensive earnings/(losses) to net earnings (net of tax) were net gains of $ 103 million in the third quarter of 2022 and $ 26 million in the third quarter of 2021 and $ 143 million in the first nine months of 2022 and $ 63 million in the first nine months of 2021.

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

45 unchanged sentences

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

As of the second quarter of 2022, our estimated annual effective tax rate, which excludes discrete tax impacts, was 24.4 %.

As of the third quarter of 2022, our estimated annual effective tax rate, which excludes discrete tax impacts, was 24.0 %.

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

1 unchanged sentence

jurisdictions.

The estimated annual effective tax rate also considers the impact of the

establishment of a valuation allowance related to a deferred tax asset arising from the anticipated 2022 Ukraine

Our 2022 second quarter effective tax rate of 23.4 % was favorably impacted by discrete net tax benefits of $ 2 million.

The discrete net tax benefit primarily consisted of a net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions and an expense from tax law changes in various jurisdictions.

Our effective tax rate for the six months ended June 30, 2022 of 22.6 % was favorably impacted by discrete net tax benefits of $ 64 million primarily driven by the Chipita acquisition.

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

The estimated annual effective tax rate also considers the impact of the establishment of a valuation allowance related to a deferred tax asset arising from the anticipated 2022 Ukraine loss as well as the expense related to the buyout of the Clif Bar ESOP that was recorded to third quarter earnings before income taxes with no associated income tax benefit, as any tax impacts are included in the tax purchase price.

Our 2022 third quarter effective tax rate of 28.8 % was high due to the Clif Bar ESOP expense.

Excluding this impact, our third quarter effective tax rate of 19.9 % was favorably impacted by discrete net tax benefits of $ 28 million.

The discrete net tax benefit primarily consisted of a $ 43 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions, partially offset by a $ 13 million expense from U.S.

state tax law changes.

Our effective tax rate for the nine months ended September 30, 2022 of 24.2 % considers the unfavorable impacts of the Ukraine loss and the Clif Bar ESOP expense as well as favorable discrete net tax benefits of $ 92 million.

The discrete net tax benefit primarily consisted of a $ 75 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions and a $ 43 million net benefit from the Chipita acquisition, partially offset by $ 22 million expense from tax law changes in various jurisdictions.

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

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

1 unchanged sentence

jurisdictions.

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

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

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

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

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

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

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

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

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

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

3 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

12 unchanged sentences

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

We excluded antidilutive stock options and performance share units of 3.4 million in the second quarter of 2022 and 3.4 million in the second quarter of 2021 and 2.7 million in the first six months of 2022 and 3.6 million in the first six months of 2021.

We excluded antidilutive stock options and performance share units of 3.3 million in the third quarter of 2022 and 2.7 million in the third quarter of 2021 and 2.9 million in the first nine months of 2022 and 3.0 million in the first nine months of 2021.

Segment Reporting

14 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

25 unchanged sentences

Net revenues by product category were:

For the Three Months Ended June 30, 2022

For the Three Months Ended September 30, 2022

America AMEA Europe North

7 unchanged sentences

Total net revenues $ 913 $ 1,704 $ 2,649 $ 2,497 $ 7,763

Three Months Ended June 30, 2021 (1)

For the Three Months Ended September 30, 2021 (1)

America AMEA Europe North

7 unchanged sentences

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

For the Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

America AMEA Europe North

7 unchanged sentences

Total net revenues $ 2,615 $ 5,106 $ 8,210 $ 6,870 $ 22,801

Six Months Ended June 30, 2021 (1)

For the Nine Months Ended September 30, 2021 (1)

America AMEA Europe North

11 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements