What changed in this filing

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Item 1. Financial Statements

2023-04-27 compared with 2022-11-01 · 280 added, 533 removed, 759 unchanged (52% of the section changed)

6 unchanged sentences

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

Net revenues $ 9,166 $ 7,764

3 unchanged sentences

Asset impairment and exit costs 47 164

Gain on acquisition — — — ( 9 )

Amortization of intangible assets 39 32

2 unchanged sentences

Interest and other expense, net 95 168

Gain on marketable securities ( 796 ) —

Earnings before income taxes 2,225 959

Income tax provision ( 658 ) ( 210 )

(Loss)/gain on equity method investment transactions ( 6 ) 250 ( 19 ) 745

Gain/(loss) on equity method investment transactions 487 ( 5 )

Equity method investment net earnings 35 117

14 unchanged sentences

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

Net earnings $ 2,089 $ 861

16 unchanged sentences

dollars, except share data)

September 30,

2023 December 31, 2022

Cash and cash equivalents $ 1,917 $ 1,923

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

Trade receivables (net of allowances of $ 60 at March 31, 2023

and $ 45 at December 31, 2022)

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

Other receivables (net of allowances of $ 65 at March 31, 2023

and $ 59 at December 31, 2022)

27 unchanged sentences

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

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

1,996,537,778 shares issued at March 31, 2023 and December 31, 2022)

Additional paid-in capital 32,112 32,143

1 unchanged sentence

Accumulated other comprehensive losses ( 10,814 ) ( 10,947 )

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

Treasury stock, at cost ( 634,260,938 shares at March 31, 2023 and

630,646,687 shares at December 31, 2022)

18 unchanged sentences

Interest Total

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):

Net earnings — — 532 — — 1 533

Other comprehensive earnings/(losses),

net of income taxes

— — — ( 593 ) — ( 12 ) ( 605 )

Exercise of stock options and issuance of

other stock awards

— 30 ( 2 ) — 25 — 53

Common Stock repurchased — — — — ( 338 ) — ( 338 )

Cash dividends declared ($ 0.390 per share)

— — ( 524 ) — — — ( 524 )

Dividends paid on noncontrolling interest

and other activities

— — — — — ( 2 ) ( 2 )

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

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Balances at January 1, 2023 $ — $ 32,143 $ 31,481 $ ( 10,947 ) $ ( 25,794 ) $ 37 $ 26,920

13 unchanged sentences

— — 14 — — ( 1 ) 13

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):

Net earnings — — 1,258 — — 4 1,262

Other comprehensive earnings/(losses),

net of income taxes

— — — ( 332 ) — ( 5 ) ( 337 )

Exercise of stock options and issuance of

other stock awards

— 24 ( 3 ) — 22 — 43

Common Stock repurchased — — — — ( 326 ) — ( 326 )

Cash dividends declared ($ 0.315 per share)

— — ( 489 ) — — — ( 489 )

Dividends paid on noncontrolling interest

and other activities

— — 1 — — ( 20 ) ( 19 )

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

Nine Months Ended September 30, 2021

Balances at March 31, 2023 $ — $ 32,112 $ 33,040 $ ( 10,814 ) $ ( 26,110 ) $ 46 $ 28,274

Three Months Ended March 31, 2022

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

13 unchanged sentences

— — — — — ( 1 ) ( 1 )

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

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

See accompanying notes to the condensed consolidated financial statements.

3 unchanged sentences

(in millions of U.S.

For the Nine Months Ended

September 30,

For the Three Months Ended

CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES

3 unchanged sentences

Stock-based compensation expense 38 24

Deferred income tax (benefit)/provision 41 159

Deferred income tax provision/(benefit) 199 ( 70 )

Asset impairments and accelerated depreciation 18 155

Loss on early extinguishment of debt — 38

Gain on acquisition — ( 9 )

Loss/(gain) on equity method investment transactions 19 ( 745 )

(Gain)/loss on equity method investment transactions ( 487 ) 5

Equity method investment net earnings ( 35 ) ( 117 )

Distributions from equity method investments 102 107

Other non-cash items, net 252 ( 52 )

Unrealized gain on derivative contracts ( 67 ) ( 13 )

Unrealized gain on marketable securities ( 787 ) —

Non-cash items, net 25 —

Change in assets and liabilities,

11 unchanged sentences

Proceeds from divestitures including equity method investments 1,034 66

Proceeds from derivative settlements and other 585 80

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

(Payments)/proceeds from investments and derivative settlements ( 176 ) 78

Net cash provided by/(used in) investing activities 636 ( 1,441 )

CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES

4 unchanged sentences

Dividends paid ( 529 ) ( 491 )

Other 143 ( 40 )

Net cash used in financing activities ( 1,757 ) ( 1,280 )

22 unchanged sentences

We account for investments over which we exercise significant influence under the equity method of accounting.

Investments over which we do not have significant influence or control are not material and as there are no readily determinable fair values for the equity interests, these investments are carried at cost with changes in the investment recognized to the extent cash is received.

Investments with readily determinable fair values for which we do not have the ability to exercise significant influence are measured at fair value.

War in Ukraine

2 unchanged sentences

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 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 recorded $ 143 million of total expenses ($ 145 million after-tax) incurred as a direct result of the war.

We reversed $ 22 million during the remainder of 2022 and $ 3 million during the first quarter of 2023 of previously recorded charges primarily as a result of higher than expected collection of trade receivables and inventory recoveries.

We continue to make targeted repairs on both our plants and have partially reopened and restarted limited production in both plants.

We also continue to support our Ukraine employees, including paying salaries to those not yet able to return to work until full production returns.

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.

In connection with these findings and impacts, we have made estimates and assumptions based on information available to us.

We base our estimates on historical experience, expectations of future impacts and other assumptions that we believe are reasonable.

Given the uncertainty of the ongoing effects of the war in Ukraine, and its impact on the global economic environment, our estimates could be significantly different than future performance.

Currency Translation and Highly Inflationary Accounting :

We translate the results of operations of our subsidiaries from multiple currencies using average exchange rates during each period and translate balance sheet accounts using exchange rates at the end of each period.

We record currency translation adjustments as a component of equity (except for highly inflationary currencies) and realized exchange gains and losses on currency transactions in earnings.

Highly inflationary accounting is triggered when a country’s three-year cumulative inflation rate exceeds 100%.

It requires the remeasurement of financial statements of subsidiaries in the country from the functional currency of the subsidiary to our U.S.

dollar reporting currency.

Local currency monetary assets and liabilities are remeasured into U.S.

dollars using exchange rates as of the latest balance sheet date, with remeasurement gains and losses recognized in net earnings.

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 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 $ 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 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.

Highly Inflationary Accounting

Within our consolidated entities, Argentina and Türkiye (Turkey) are accounted for as highly inflationary economies.

Argentina and Türkiye represent 1.5 % and 1.0 % of our consolidated net revenues with remeasurement losses of $ 11 million and $ 1 million for the period ended March 31, 2023, respectively.

Cash, Cash Equivalents and Restricted Cash

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 $ 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.

We also have restricted cash within other current assets of $ 22 million as of March 31, 2023 and $ 25 million as of December 31, 2022.

Total cash, cash equivalents and restricted cash was $ 1,939 million as of March 31, 2023 and $ 1,948 million as of December 31, 2022.

Allowances for Credit Losses

The allowances for credit losses are recorded against our receivables.

They are developed at a country and region level based on historical collection experiences, current economic condition of specific customers and the forecasted economic condition of countries using various factors such as bond default rates and consumption indexes.

We write off receivables once it is determined that the receivables are no longer collectible and as allowed by local laws.

Changes in allowances for credit losses consisted of:

5 unchanged sentences

Currency ( 1 ) ( 1 ) —

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

Balance at March 31, 2023 $ ( 60 ) $ ( 65 ) $ ( 14 )

Transfers of Financial Assets

We account for transfers of financial assets, such as uncommitted revolving non-recourse accounts receivable factoring arrangements, when we have surrendered control over the related assets.

Determining whether control has transferred requires an evaluation of relevant legal considerations, an assessment of the nature and extent of our continuing involvement with the assets transferred and any other relevant considerations.

We use receivable factoring arrangements periodically when circumstances are favorable to manage liquidity.

We have non-recourse

factoring arrangements in which we sell eligible trade receivables primarily to banks in exchange for cash.

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 $ 743 million as of September 30, 2022 and $ 761 million as of December 31, 2021.

The outstanding principal amount of receivables under our uncommitted revolving non-recourse accounts receivable factoring arrangements amounted to $ 858 million as of March 31, 2023 and $ 516 million as of December 31, 2022.

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 $ 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.

We recorded $ 39 million in operating lease and $ 27 million in finance lease right-of-use assets obtained in exchange for lease obligations during the three months ended March 31, 2023 and $ 95 million in operating lease and $ 56 million in finance lease right-of-use assets obtained in exchange for lease obligations during the three months ended March 31, 2022.

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 March 31, 2023 and December 31, 2022, $ 2.5 billion and $ 2.4 billion, respectively, of our outstanding accounts payable related to suppliers that participate in the SCF programs.

New Accounting Pronouncements

2 unchanged sentences

This ASU is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted.

We are evaluating the timing and effects of adopting this ASU and currently we do not expect this ASU to have a material impact on our consolidated financial statements.

In March 2020 and subsequently in January 2021, the FASB issued an ASU to provide optional accounting guidance for a limited period of time to ease the potential burden in accounting for reference rate reform.

The guidance provides optional expedients and exceptions to existing accounting requirements for contract modifications and hedge accounting related to transitioning from discontinued reference rates, such as LIBOR, to alternative reference rates, if certain criteria are met.

The new accounting requirements can be applied as of the beginning of the interim period including March 12, 2020, or any date thereafter, through December 31, 2022.

We expect to adopt this standard in the fourth quarter of 2022.

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.

We adopted this standard in the first quarter of 2023 and it did not have an 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 roll-forward 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 roll-forward 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.

We adopted, with the exception of the roll-forward requirement, this standard in the first quarter of 2023 and it did not have a material impact on our consolidated financial statements and related disclosures.

Acquisitions and Divestitures

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 November 1, 2022, we acquired 100 % of the equity of Grupo Bimbo's confectionery business, Ricolino, located primarily in Mexico.

The acquisition of Ricolino builds on our continued prioritization of fast-growing snacking segments in key geographies.

The cash consideration paid for Ricolino totaled $ 26 billion Mexican pesos ($ 1.3 billion), net of cash received.

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

(in millions)

Receivables 86

Other current assets 3

Property, plant and equipment 144

Operating leases right of use assets 17

Definite-life intangible assets 218

Indefinite-life intangible assets 339

Assets acquired $ 1,613

Current liabilities 177

Deferred tax liability 77

Operating lease liabilities 17

Other liabilities 12

Total purchase price $ 1,330

cash received ( 22 )

Net Cash Paid $ 1,308

Within identifiable intangible assets, we allocated $ 339 million to trade names, which have an indefinite life.

The fair value for the Ricolino, Dulces Vero, LaCorona and Coronado 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 indefinite-life 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 estimates of future sales, discount and royalty rates.

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 both new and legacy product categories in Mexico.

None of the goodwill recognized is expected to be deductible for income tax purposes.

All of the goodwill was assigned to the Latin American operating segment.

Ricolino added incremental net revenues of $ 171 million and operating income of $ 9 million during the three months ended March 31, 2023.

We incurred acquisition integration costs of $ 6 million during the three months ended March 31, 2023.

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

3 unchanged sentences

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.

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.

1 unchanged sentence

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:

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

(in millions)

23 unchanged sentences

and other key markets.

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

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

Clif Bar added incremental net revenues of $ 218 million and operating income of $ 35 million during the three months ended March 31, 2023.

We incurred acquisition integration costs of $ 39 million during the three months ended March 31, 2023.

These acquisition integration costs include an increase to the contingent consideration liability due to changes to underlying assumptions.

Refer to Note 9, Financial Instruments for additional information.

On January 3, 2022, we acquired 100 % of the equity of Chipita Global S.A.

(“Chipita”), a leading croissants and baked snacks company in the Central and Eastern European markets.

1 unchanged sentence

The cash consideration paid for Chipita totaled € 1.2 billion ($ 1.4 billion), net of cash received, plus the assumption of Chipita’s debt of € 0.5 billion ($ 0.4 billion) for a total purchase price of € 1.7 billion ($ 1.8 billion).

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

We have recorded a purchase price allocation of net tangible and intangible assets acquired and liabilities assumed as follows:

(in millions)

21 unchanged sentences

None of the goodwill recognized is expected to be deductible for income tax purposes.

All of the goodwill was assigned to the Europe segment.

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”).

The sales price was $ 57 million Australian dollars ($ 41 million), net of cash divested with the business, and we recorded an immaterial loss on the transaction.

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

We 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 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 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 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 $ 9 million during the nine months ended September 30, 2021.

All of the goodwill was assigned to the Europe operating segment.

We incurred acquisition integration costs of $ 6 million during the three months ended March 31, 2023.

We incurred acquisition-related costs of $ 21 million and acquisition integration costs of $ 35 million during the three months ended March 31, 2022.

Developed Market Gum - Held for Sale

On December 16, 2022, Mondelēz entered into an agreement to sell its developed market gum business in North America and Europe for $ 1.4 billion.

It is expected to close in Q4 2023, subject to relevant antitrust approvals and closing conditions.

In connection with these agreements, we concluded that the disposal group met the held for sale criteria as of December 31, 2022.

The disposal group is included as part of the North America and Europe operating segments.

We incurred divestiture-related costs of $ 30 million during the three months ended March 31, 2023.

Total assets and liabilities held for sale are comprised of the following:

As of March 31,

2023 As of December 31, 2022

(in millions)

Inventories, net $ 90 $ 79

Current assets held for sale (1)

Property, plant and equipment, net 161 159

Goodwill 292 292

Intangible assets, net 677 671

Noncurrent assets held for sale (2)

$ 1,130 $ 1,122

Accrued employment costs 6 4

Current liabilities held for sale (3)

Deferred income taxes 13 15

Noncurrent liabilities held for sale (4)

(1) Reported in Other current assets on the condensed consolidated balance sheets.

(2) Reported in Other assets on the condensed consolidated balance sheets.

(3) Reported in Other current liabilities on the condensed consolidated balance sheets.

(4) Reported in Other liabilities on the condensed consolidated balance sheets.

Inventories consisted of the following:

As of September 30,

As of March 31,

2023 As of December 31, 2022

6 unchanged sentences

Property, plant and equipment consisted of the following:

As of September 30,

As of March 31,

2023 As of December 31, 2022

7 unchanged sentences

Property, plant and equipment, net $ 9,131 $ 9,020

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

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

Latin America $ ( 2 ) $ — $ ( 3 ) $ —

AMEA 2 — 2 ( 16 )

Europe 1 3 4 6

North America ( 11 ) 48 ( 7 ) 165

Total $ ( 10 ) $ 51 $ ( 4 ) $ 155

For the three months ended March 31, 2023, capital expenditures of $ 223 million excluded $ 290 million of accrued capital expenditures remaining unpaid at March 31, 2023 and included payment for a portion of the $ 324 million of capital expenditures that were accrued and unpaid at December 31, 2022.

For the three months ended March 31, 2022, capital expenditures of $ 167 million excluded $ 244 million of accrued capital expenditures remaining unpaid at March 31, 2022 and included payment for a portion of the $ 249 million of capital expenditures that were accrued and unpaid at December 31, 2021.

Goodwill and Intangible Assets

Goodwill by segment was:

As of September 30,

2022 As of December 31, 2021

(in millions)

Latin America $ 680 $ 674

AMEA 3,067 3,365

Europe 7,542 7,830

North America 11,098 10,109

Goodwill $ 22,387 $ 21,978

Changes in goodwill consisted of:

Latin America AMEA Europe North America Total

January 1, 2022 $ 674 $ 3,365 $ 7,830 $ 10,109 $ 21,978

Currency 41 ( 233 ) ( 550 ) ( 15 ) ( 757 )

Acquisitions (1)

714 — 795 1,020 2,529

Held for Sale (1)

— — ( 66 ) ( 226 ) ( 292 )

Divestitures ( 8 ) — — — ( 8 )

Balance at December 31, 2022 $ 1,421 $ 3,132 $ 8,009 $ 10,888 $ 23,450

Currency 95 ( 18 ) 73 4 154

Balance at March 31, 2023 $ 1,516 $ 3,114 $ 8,082 $ 10,892 $ 23,604

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

Intangible Assets

Intangible assets consisted of the following:

As of September 30,

2022 As of December 31, 2021

(in millions)

Indefinite-life intangible assets $ 18,223 $ 17,299

As of March 31, 2023 As of December 31, 2022

Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount

Definite-life intangible assets $ 3,389 $ ( 2,110 ) $ 1,279 $ 3,354 $ ( 2,057 ) $ 1,297

Indefinite-life intangible assets (1)

18,531 — 18,531 18,413 — 18,413

Accumulated amortization ( 1,961 ) ( 1,999 )

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

Total $ 21,920 $ ( 2,110 ) $ 19,810 $ 21,767 $ ( 2,057 ) $ 19,710

(1) In 2022, we recorded $ 101 million of intangible asset impairment charges related to two biscuit brands in AMEA segment, of which $ 78 million was recorded in the first quarter and $ 23 million was recorded in the third quarter.

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 $ 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:

Goodwill Intangible

Assets, at cost

(in millions)

Balance at January 1, 2022 $ 21,978 $ 20,290

Currency ( 1,391 ) ( 1,301 )

Divestiture ( 8 ) —

Acquisitions 1,808 2,386

Asset impairments — ( 101 )

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

Changes to goodwill and intangibles were:

• 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, 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 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.

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

Amortization expense for intangible assets was $ 39 million for the three months ended March 31, 2023 and $ 32 million for the three months ended March 31, 2022.

For the next five years, we currently estimate annual amortization expense of approximately $ 150 million in 2023-2025, approximately $ 95 million in 2026 and approximately $ 90 million in 2027 (reflecting March 31, 2023 exchange rates).

Impairment Assessment

We test our reporting units and brands for impairment annually as of July 1, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit or brand is less than its carrying amount.During the first quarter of 2023, we evaluated our goodwill impairment and intangible asset impairment risk through an assessment of potential triggering events.

We considered qualitative and quantitative information in our assessment.

We concluded there were no impairment indicators.

During our 2022 annual indefinite-life intangible asset testing, we identified eight brands that each had a fair value in excess of book value of 10% or less.

The aggregate book value of the eight brands was $ 1.6 billion as of March 31, 2023.

We believe our current plans for each of these brands will allow them to not be impaired, but 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.

Marketable Securities

On March 2, 2023, we sold approximately 30 million shares of Keurig Dr Pepper Inc.

"KDP"), which reduced our ownership interest by 2.1 %, from 5.3 % to 3.2 % of the total outstanding shares.

We received approximately $ 1.0 billion in proceeds and recorded a pre-tax gain of $ 493 million (or $ 366 million after tax) on this sale during the first quarter of 2023.

This reduction in ownership, to below 5 % of the outstanding shares of KDP, resulted in a change of accounting for our KDP investment, from equity method investment accounting to accounting for equity interests with readily determinable fair values ("marketable securities") as we no longer have significant influence over KDP.

These marketable securities are measured at fair value based on quoted prices in active markets for identical assets (Level 1).

On March 2, 2023, the date we changed from equity method accounting to marketable securities accounting for this investment, we recorded unrealized gains for marketable securities of $ 755 million (or $ 562 million after tax).

We recorded an additional unrealized gain of $ 32 million (or $ 24 million after tax) during the first quarter, for a total unrealized gain of $ 787 million (or $ 586 million after tax) during the first quarter of 2023.

We reported marketable securities of $ 1.6 billion as of March 31, 2023 in other current assets in the Company's Condensed Consolidated Balance Sheet.

Equity Method Investments

Equity method investments consist of our investments in entities in which we maintain an equity ownership interest and apply the equity method of accounting due to our ability to exert significant influence over decisions relating to their operating and financial affairs.

Revenue and expenses of our equity method investees are not consolidated into our financial statements;

rather, our proportionate share of the earnings of each investee is reflected as equity method investment net earnings .

The carrying values of our equity method investments are also impacted by our proportionate share of items impacting the investee's accumulated other comprehensive income or losses and other items, such as our share of investee dividends.

Our equity method investments include, but are not limited to, our ownership interests in JDE Peet's (Euronext Amsterdam:

"JDEP"), Keurig Dr Pepper Inc.

"KDP"), Dong Suh Foods Corporation and Dong Suh Oil & Fats Co.

"JDEP"), Dong Suh Foods Corporation and Dong Suh Oil & Fats Co.

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

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:

On May 8, 2022, we sold approximately 18.6 million of our JDE Peet’s shares back to JDE Peet’s, which reduced our ownership interest by approximately 3 %.

We received € 500 million ($ 529 million) of proceeds and recorded a loss of € 8 million ($ 8 million) on this sale during the second quarter of 2022.

As we will continue to have significant influence, we will continue to account for our investment in JDE Peet's 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 two directors on the JDE Peet's Board of Directors and we retained certain additional governance rights.

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 September 30, 2022.

As of March 31, 2023, we owned 19.7 %, 50.0 % and 49.0 %, respectively, of these companies' outstanding shares.

We continue to have board representation with two directors on the JDEP's Board of Directors and have retained certain additional governance rights.

As we continue to have significant influence, we continue to account for our investment in JDEP under the equity method.

Our investments accounted for under the equity method of accounting totaled $ 3.4 billion as of March 31, 2023 and $ 4.9 billion as of December 31, 2022.

The investment balance as of December 31, 2022 is inclusive of our investment in KDP.

We recorded equity earnings of $ 35 million and cash dividends of $ 102 million in the first quarter of 2023 and equity earnings of $ 117 million and cash dividends of $ 107 million in the first quarter of 2022.

Based on the quoted closing prices as of March 31, 2023, the fair value of our publicly-traded investment in JDEP wa s $ 2.8 billion , and there was no other than temporary impairment identified.

In 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 March 31, 2023.

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.

On March 30, 2023, we issued options to sell shares of JDEP in tranches equivalent to approximately 7.7 million shares.

These options are exercisable at their maturities which are between July 3, 2023 and September 29, 2023, with strike prices ranging from € 26.10 to € 28.71 per share.

In addition, on April 3, 2023, we sold approximately 7.7 million shares of JDEP and received cash proceeds of € 199 million.

This reduced our ownership interest by 1.6 %, from 19.7 % to 18.1 % of the total outstanding shares.

If all options issued on March 30, 2023 are exercised, our ownership interest will be reduced by an additional 1.6 %.

As we continue to have significant influence, we will continue to account for our investment in JDEP under the equity method.

Restructuring Program

10 unchanged sentences

Restructuring Costs

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

Write-downs (1)

The Simplify to Grow Program liability activity for the three months ended March 31, 2023 was:

Write-downs and Other (1)

(in millions)

3 unchanged sentences

Non-cash settlements/adjustments (4)

— ( 1 ) ( 1 )

Currency 2 — 2

Liability balance, September 30, 2022 (5)

Liability balance, March 31, 2023 (5)

$ 177 $ — $ 177

(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.

(2) We recorded restructuring charges of $ 30 million in the first quarter of 2023 and $ 11 million in the first quarter of 2022 within asset impairment and exit costs and benefit plan non-service income.

(3) We spent $ 18 million in the first quarter of 2023 and $ 17 million in the first quarter of 2022 in cash severance and related costs.

(4) We recognized non-cash asset write-downs (including accelerated depreciation and asset impairments), and other non-cash adjustments, including any gains on sale of restructuring program assets, which totaled a charge of $ 1 million in the first quarter of 2023 and a charge of $ 2 million in the first quarter of 2022.

(5) At March 31, 2023, $ 135 million of our net restructuring liability was recorded within other current liabilities and $ 42 million was recorded within other long-term liabilities.

Implementation Costs

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

Within our continuing results of operations, we recorded implementation costs of $ 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.

Within our continuing results of operations, we recorded implementation costs of $ 5 million in

the first quarter of 2023 and $ 20 million in the first quarter of 2022.

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 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:

During the three months ended March 31, 2023 and March 31, 2022, 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 September 30, 2022

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

Implementation Costs 1 — 5 8 9 23

Total $ ( 1 ) $ 1 $ 8 $ — $ 8 $ 16

For the Three Months Ended September 30, 2021

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

Implementation Costs — 2 6 51 6 65

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

For the Nine Months Ended September 30, 2022

For the Three Months Ended March 31, 2023

Restructuring Costs $ — $ 1 $ 30 $ ( 1 ) $ — $ 30

1 unchanged sentence

Total $ — $ 1 $ 30 $ ( 1 ) $ 5 $ 35

For the Nine Months Ended September 30, 2021

For the Three Months Ended March 31, 2022

Restructuring Costs $ ( 1 ) $ 2 $ 2 $ 8 $ — $ 11

1 unchanged sentence

Total $ — $ 3 $ 7 $ 15 $ 6 $ 31

Total Project (Inception to Date)

Total Project

(Inception to Date)

Restructuring Costs $ 548 $ 555 $ 1,193 $ 656 $ 150 $ 3,102

4 unchanged sentences

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

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

As of March 31, 2023 As of December 31, 2022

Outstanding Weighted-

5 unchanged sentences

Total short-term borrowings $ 2,461 $ 2,299

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

Our uncommitted credit lines and committed credit lines available as of March 31, 2023 and December 31, 2022 include:

As of March 31, 2023 As of December 31, 2022

Facility Amount Borrowed Amount Facility Amount Borrowed Amount

3 unchanged sentences

February 22, 2023 — — 2,500 —

February 22, 2023 2,500 — — —

March 11, 2023 — — 2,000 —

5 unchanged sentences

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

At March 31, 2023, we complied with this covenant as our shareholders' equity, as defined by the covenant, was $ 39.0 billion.

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

3 unchanged sentences

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.

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 eighteen months after the funding date of the applicable loan(s).

On March 3, 2023, we repaid $ 1.0 billion in term loans.

Subsequently on April 3, 2023, we repaid $ 0.3 billion.

On April 6, 2023, we entered into an additional revolving credit agreement that can be utilized for general corporate purposes and to support our commercial paper program.

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

This agreement will terminate on December 29, 2023.

Long-Term Debt

Tender Offers:

On March 18, 2022, we completed a tender offer in cash and redeemed long term U.S.

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

Interest Rate Redemption Date Maturity Date Amount Redeemed USD Equivalent

3.625 % March 2022 February 2026 $ 130 $ 130

4.125 % March 2022 May 2028 $ 211 $ 211

2.750 % March 2022 April 2030 $ 500 $ 500

6.500 % March 2022 November 2031 $ 17 $ 17

7.000 % March 2022 August 2037 $ 10 $ 10

6.875 % March 2022 February 2038 $ 21 $ 21

6.875 % March 2022 January 2039 $ 8 $ 8

6.500 % March 2022 February 2040 $ 36 $ 36

4.625 % March 2022 May 2048 $ 54 $ 54

We recorded a $ 129 million loss on debt extinguishment and related expenses within interest and other expense, net, consisting of $ 38 million paid in excess of carrying value of the debt and from recognizing unamortized discounts and deferred financing costs in earnings and $ 91 million from recognizing unamortized forward starting swap losses in earnings at the time of the debt extinguishment.

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

On March 18, 2022, we completed a redemption of long term U.S.

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

Interest Rate Redemption Date Maturity Date Amount Redeemed USD Equivalent

0.625 % March 2022 July 2022 $ 1,000 $ 1,000

Debt Repayments

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

March 2022 2.625 % March 2027 $ 750 $ 750

March 2022 3.000 % March 2032 $ 750 $ 750

(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.

As of March 31, 2023, the Company reclassified the net carrying value of debt of $ 800 million due within one year from long-term debt to current portion of long-term debt.

Fair Value of Our Debt

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 short-term borrowings reflects current market interest rates and approximates the amounts we have recorded on our consolidated balance sheets.

The fair value of our term loans was determined using quoted prices for similar instruments in markets that are not active (Level 2 valuation data) 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 September 30, 2022 As of December 31, 2021

As of March 31, 2023 As of December 31, 2022

(in millions)

4 unchanged sentences

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

2 unchanged sentences

related expenses — 129

Other expense/(income), net ( 43 ) ( 5 ) ( 86 ) ( 54 )

Other (income), net ( 58 ) ( 52 )

Interest and other expense, net $ 95 $ 168

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.

Other income, net includes amounts excluded from hedge effectiveness related to our net investment hedge derivative contracts.

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 September 30, 2022 As of December 31, 2021

As of March 31, 2023 As of December 31, 2022

Derivatives Liability

4 unchanged sentences

accounting hedges:

Currency exchange contracts $ 5 $ 13 $ — $ —

Interest rate contracts $ 123 39 $ 132 35

16 unchanged sentences

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

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

Refer to Note 6, Equity Method Investments .

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

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

(2) Equity method investment contracts consist of two types of derivatives:

(a) options to sell shares of JDEP in tranches equivalent to approximately 7.7 million shares that are exercisable at maturity over the third quarter of 2023 with strike prices ranging between € 26.10 and € 28.71 per share and (b) the bifurcated embedded derivative option that was a component of the September 20, 2021 € 300 million exchangeable bonds issuance.

Refer to Note 8, Debt and Borrowing Arrangements .

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

1 unchanged sentence

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

As of September 30, 2022

As of March 31, 2023

Fair Value of Net

46 unchanged sentences

Notional Amount

As of September 30,

As of March 31,

2023 As of December 31, 2022

9 unchanged sentences

dollar debt designated as net investment hedges

British pound sterling notes

Swiss franc notes

1 unchanged sentence

Cash Flow Hedges

Cash flow hedge activity, net of taxes, within accumulated other comprehensive earnings/(losses) included:

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

Accumulated (loss)/gain at beginning of period $ ( 88 ) $ ( 142 ) $ ( 148 ) $ ( 161 )

Transfer of realized losses/(gains) in fair value

to earnings ( 122 ) ( 52 ) ( 193 ) ( 139 )

Unrealized (loss)/gain in fair value 127 45 258 151

Accumulated (loss)/gain at end of period $ ( 83 ) $ ( 149 ) $ ( 83 ) $ ( 149 )

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

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

Currency exchange contracts –

forecasted transactions $ ( 4 ) $ — $ ( 8 ) $ —

Interest rate contracts 126 52 201 139

Total $ 122 $ 52 $ 193 $ 139

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

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

Currency exchange contracts –

forecasted transactions $ 4 $ ( 6 ) $ 8 $ —

Interest rate contracts 123 51 250 151

Total $ 127 $ 45 $ 258 $ 151

Cash flow hedge ineffectiveness was not material for all periods presented.

We record pre-tax (i) gains or losses reclassified from accumulated other comprehensive earnings/(losses) into earnings, (ii) gains or losses on ineffectiveness and (iii) gains or losses on amounts excluded from effectiveness testing in interest and other expense, net for interest rate contracts.

Cash flow hedge activity, net of taxes, is recorded within accumulated other comprehensive earnings/(losses).

Refer to Note 13, Reclassifications from Accumulated Other Comprehensive Income for further information on current period activity.

Based on current market conditions, we would expect to transfer losses of $ 8 million (net of taxes) for interest rate cash flow hedges to earnings during the next 12 months.

Cash Flow Hedge Coverage

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 .

As of March 31, 2023, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 3 years, 5 months .

Hedges of Net Investments in International Operations

2 unchanged sentences

operations against movements in exchange rates.

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

The aggregate notional value as of March 31, 2023 was $ 7.6 billion.

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

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

After-tax gain/(loss) on NIH contracts (1)

$ 440 $ 50 $ 788 $ 73

After-tax (loss)/gain on NIH contracts (1)

(1) Amounts recorded for unsettled and settled NIH derivative contracts are recorded in the cumulative translation adjustment within other comprehensive earnings.

1 unchanged sentence

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

Amounts excluded from the assessment of

hedge effectiveness (1)

$ 32 $ 19 $ 84 $ 58

Amounts excluded from the assessment of hedge effectiveness (1)

(1) We elected to record changes in the fair value of amounts excluded from the assessment of effectiveness in net earnings within interest and other expense, net.

dollar debt designated as net investment hedges

After-tax gains/(losses) related to hedges of net investments in international operations in the form of euro, British pound sterling, Swiss franc and Canadian dollar-denominated debt were recorded within the cumulative translation adjustment section of other comprehensive income and were:

After-tax gains/(losses) related to hedges of net investments in international operations were recorded within the cumulative translation adjustment section of other comprehensive income and were:

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

6 unchanged sentences

For the Three Months Ended

September 30, For the Nine Months Ended

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

2022 2021 2022 2021

March 31, Location of Gain/(Loss) Recognized in Earnings

(in millions)

11 unchanged sentences

Total $ 24 $ 242

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

1 unchanged sentence

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 $ 642 $ 159

Contingent consideration arising from acquisitions 440 — 440 145

Changes in fair value 17 6

Currency — — ( 2 ) —

Liability at end of period $ 659 $ 165

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

As of March 31, 2023

Total Fair Value of

Liability Quoted Prices in

Active Markets

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As of December 31, 2022

Fair Value of Net

Asset/(Liability) Quoted Prices in

Total Fair Value of

Liability Quoted Prices in

Active Markets

7 unchanged sentences

(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 other contingent consideration liabilities are recorded at fair value within long term liabilities.

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.

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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.

(2) The other contingent consideration liabilities are recorded at fair value, with $ 113 million and $ 102 million classified as other current liabilities and $ 81 million and $ 88 million classified as long term liabilities at March 31, 2023 and December 31, 2022.

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.

8 unchanged sentences

For the Three Months Ended

September 30, For the Three Months Ended

September 30,

2022 2021 2022 2021

(in millions)

Service cost $ 1 $ 1 $ 22 $ 29

Interest cost 13 10 47 39

Expected return on plan assets ( 21 ) ( 18 ) ( 92 ) ( 106 )

Amortization:

Net loss from experience differences 1 4 14 32

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

Curtailment credit (1)

Settlement losses and other expenses 5 5 — —

Net periodic pension cost/(benefit) $ — $ 2 $ ( 9 ) $ ( 11 )

Plans Non-U.S.

For the Nine Months Ended

September 30, For the Nine Months Ended

September 30,

March 31, For the Three Months Ended

2023 2022 2023 2022

6 unchanged sentences

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

Curtailment credit (1)

Settlement losses and other expenses 5 3 — —

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 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.

Net periodic pension (benefit)/cost $ ( 3 ) $ — $ ( 1 ) $ 5

Employer Contributions

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

During the three months ended March 31, 2023, we contributed $ 2 million to our U.S.

pension plans and $ 37 million to our non-U.S.

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

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

As of March 31, 2023, we plan to make further contributions of approximately $ 4 million to our U.S.

plans and $ 82 million to our non-U.S.

plans for the remainder of 2023.

1 unchanged sentence

Multiemployer Pension Plans

On July 11, 2019, we received an undiscounted withdrawal liability assessment related to our complete withdrawal from the Bakery and Confectionery Union and Industry International Pension Fund totaling $ 526 million requiring pro-rata monthly payments over 20 years.

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

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

In connection with the discounted long-term liability, we recorded accreted interest of $ 3 million and $ 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

Net periodic postretirement health care cost/(benefit) consisted of the following:

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

Service cost $ 1 $ 1 $ 2 $ 3

Interest cost 2 2 6 6

Amortization:

Net loss from experience differences — 1 — 2

Prior service credit — — 1 —

Net periodic postretirement health care cost/(benefit) $ 3 $ 4 $ 9 $ 11

Postemployment Benefit Plans

Net periodic postemployment cost consisted of the following:

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

Service cost $ 1 $ 2 $ 3 $ 5

Interest cost 1 1 2 2

Amortization of net gains ( 1 ) ( 2 ) ( 3 ) ( 3 )

Net periodic postemployment cost $ 1 $ 1 $ 2 $ 4

In connection with the discounted long-term liability, we recorded accreted interest of $ 3 million in the three months ended March 31, 2023 and March 31, 2022, within interest and other expense, net.

As of March 31, 2023, the remaining discounted withdrawal liability was $ 340 million, with $ 15 million recorded in other current liabilities and $ 325 million recorded in long-term other liabilities.

Postretirement and Postemployment Benefit Plans

The net periodic postretirement cost was zero for the three months ended March 31, 2023 and $ 3 million for the three months ended March 31, 2022.

The net periodic postemployment cost was $ 1 million for the three months ended March 31, 2023 and $ 1 million for the three months ended March 31, 2022.

Stock Options

11 unchanged sentences

Options canceled ( 109,897 ) 48.36

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.

Balance at March 31, 2023 21,382,157 49.27 6 years $ 437 million

(1) Cash received from options exercised was $ 49 million in the three months ended March 31, 2023.

The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $ 8 million in the three months ended March 31, 2023.

Performance Share Units and Other Stock-Based Awards

Our performance share unit, deferred stock unit and historically granted restricted stock activity is reflected below:

Our performance share unit (PSU), deferred stock unit (DSU) and other stock-based activity is reflected below:

of Shares Grant Date Weighted-Average

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Total shares granted 2,149,375 66.63 $ 143 million

Vested (2) (3)

( 1,598,781 ) 63.07 $ 101 million

Forfeited (2)

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

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

(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.

( 91,430 ) 60.77

Balance at March 31, 2023 4,910,838 61.99

(1) Includes PSUs and DSUs.

(2) Includes PSUs, DSUs and other stock-based awards.

(3) The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled $ 2 million in the three months ended March 31, 2023.

(4) The grant date fair value of PSUs 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.

The Monte Carlo simulation model incorporates the probability of achieving the total shareholder return market condition.

2 unchanged sentences

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, 2023, we had repurchased approximately $ 22.0 billion of Common Stock pursuant to this authorization.

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

Our Board of Directors approved a new program authorizing the repurchase of up to $ 6.0 billion of our Common Stock through December 31, 2025.

This authorization, effective January 1, 2023, replaces our current share repurchase program.

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

During the three months ended March 31, 2023, we repurchased approximately 6.2 million shares of Common Stock at an average cost of $ 65.93 per share, or an aggregate cost of approximately $ 407 million, all of which was paid during the period except for approximately $ 8 million settled in April 2023.

All share repurchases were funded

through available cash and commercial paper issuances.

As of March 31, 2023, we have approximately $ 5.6 billion in remaining share repurchase capacity.

Commitments and Contingencies

11 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.

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

The 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;

17 unchanged sentences

Although the CFTC action and the class action complaints involve the same alleged conduct, the resolution of the CFTC matter may not be dispositive as to the outcome of the class action.

In November 2019, the European Commission informed us that it initiated an investigation into our alleged infringement of European Union competition law through certain practices restricting cross-border trade within the European Economic Area.

On January 28, 2021, the European Commission announced it took the next procedural step in its investigation and opened formal proceedings.

We are cooperating with the investigation and are engaging with the European Commission as its investigation proceeds.

It is not possible to predict how long the investigation will take or the ultimate outcome of this matter.

As previously disclosed, in November 2019, the European Commission informed us that it initiated an investigation into our alleged infringement of European Union competition law through certain practices allegedly restricting cross-border trade within the European Economic Area.

On January 28, 2021, the European Commission announced it had taken the next procedural step in its investigation and opened formal proceedings.

We have been cooperating with the investigation and discussions with the European Commission are progressing in an effort to reach a negotiated, proportionate resolution in this matter.

As of March 31, 2023 and December 31, 2022, we have accrued (in accordance with U.S.

GAAP) a liability of € 300 million ($ 325 million as of March 31, 2023) within other current liabilities in the consolidated balance sheet as an estimate of the possible cost to resolve this matter.

It is not possible to predict if our ongoing discussions will result in a negotiated resolution, or result in a negotiated resolution in a higher amount, or when we will have clarity on the ultimate outcome of these discussions.

If our discussions do not result in a negotiated resolution, we expect that the European Commission will pursue

proceedings against the Company, including the imposition of a fine, and we would defend against any allegations made in such proceedings.

There is a possibility that the final liability could be materially higher than the amount accrued.

However, due to the inherent uncertainty of the discussions and possible outcomes, any possible loss or range of loss different from the amount accrued is not reasonably estimable at this time.

Third-Party Guarantees

1 unchanged sentence

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

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

At March 31, 2023, 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 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.

Amounts reclassified from accumulated other comprehensive earnings/(losses) to net earnings (net of tax) were net gains of $ 30 million in the first quarter of 2023 and $ 42 million in the first quarter of 2022.

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

13 unchanged sentences

Settlement losses and other expenses (1)

Curtailment credit (2)

— ( 3 ) — ( 17 )

Tax expense/(benefit) on reclassifications (3)

( 2 ) ( 9 ) ( 14 ) ( 26 )

Currency impact ( 18 ) 32

6 unchanged sentences

Losses/(gains) reclassified into net earnings:

Currency exchange contracts (4)

Interest rate contracts (2)

( 121 ) ( 52 ) ( 174 ) ( 137 )

Tax expense/(benefit) on reclassifications (3)

( 2 ) — ( 25 ) ( 2 )

Currency impact 1 2

1 unchanged sentence

Balance at end of period ( 44 ) ( 96 )

Accumulated other comprehensive income

attributable to Mondelēz International:

Accumulated other comprehensive income attributable to Mondelēz International:

Balance at beginning of period $ ( 10,947 ) $ ( 10,624 )

4 unchanged sentences

(1) These reclassified losses are included in net periodic benefit costs disclosed in Note 10, Benefit Plans .

(2) These amounts include equity method investment transactions recorded within gain on equity method investment transactions.

(3) Taxes reclassified to earnings are recorded within the provision for income taxes.

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

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

(3) Taxes reclassified to earnings are recorded within the provision for income taxes.

As of the first quarter of 2023, our estimated annual effective tax rate, which excludes discrete tax impacts, was 24.3 %.

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

tax laws and our tax related to earnings from equity method investments (the earnings are reported separately on our statement of earnings and thus not included in earnings before income taxes), partially offset by favorable impacts from the mix of pre-tax income in various non-U.S.

tax laws partially offset by favorable impacts from the mix of pre-tax income in various non-U.S.

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 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 %.

Our 2023 first quarter effective tax rate of 29.6 % was high due to a $ 127 million net tax expense incurred in connection with the KDP share sale (the earnings are reported separately on our statement of earnings and thus not included in earnings before income taxes).

Associated with the KDP share sale, we also recorded a $ 201 million net tax expense related to the change of accounting for our KDP investment from equity method investment accounting to accounting for equity interests with readily determinable fair values.

Excluding these tax impacts as well as the associated pre-tax impacts, our effective tax rate for the three months ended March 31, 2023 of 23.0 % was favorably impacted by discrete net tax benefits of $ 20 million, primarily driven by a $ 30 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.

As of the first quarter of 2022, our estimated annual effective tax rate, which excluded discrete tax impacts, was 24.8 %.

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

1 unchanged sentence

jurisdictions.

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

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

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

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

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

Treasury Department.

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.

Our effective tax rate for the three months ended March 31, 2022 of 21.9 % was favorably impacted by discrete net tax benefits of $ 62 million, primarily driven by the Chipita acquisition, which resulted in the release of a portion of the valuation allowance recorded against the deferred tax asset for the step-up of intangible assets in Switzerland.

Earnings per Share

1 unchanged sentence

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions, except per share data)

10 unchanged sentences

Mondelēz International $ 1.52 $ 0.61

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 3.3 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.

We exclude antidilutive Mondelēz International stock options and long-term incentive plan shares from our calculation of weighted-average shares for diluted EPS, which are 2.2 million in the first quarter of 2023 and 2.1 million in the first quarter of 2022.

Segment Reporting

We manufacture and market primarily snack food products, including biscuits, chocolate, gum & candy and various cheese & grocery products, as well as powdered beverage products.

We manufacture and market primarily snack food products, including chocolate, biscuits and baked snacks, as well as gum & candy, cheese & grocery and powdered beverages.

We manage our global business and report operating results through geographic units.

12 unchanged sentences

For the Three Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

(in millions)

8 unchanged sentences

Latin America $ 139 $ 103

AMEA 257 267 740 842

Europe 507 377

North America 566 418

Unrealized (losses)/gains on hedging activities

Unrealized gains/(losses) on hedging activities

(mark-to-market impacts) 49 27

1 unchanged sentence

Amortization of intangible assets ( 39 ) ( 32 )

Gain on acquisition — — — 9

Acquisition-related costs — ( 21 )

2 unchanged sentences

Interest and other expense, net ( 95 ) ( 168 )

Gain on marketable securities 796 —

Earnings before income taxes $ 2,225 $ 959

2 unchanged sentences

Net revenues by product category were:

For the Three Months Ended September 30, 2022

America AMEA Europe North

America Total

(in millions)

Biscuits $ 272 $ 655 $ 892 $ 2,166 $ 3,985

Chocolate 240 640 1,290 62 2,232

Gum & Candy 202 204 172 269 847

Beverages 111 119 25 — 255

Cheese & Grocery 88 86 270 — 444

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

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

America AMEA Europe North

America Total

(in millions)

Biscuits $ 218 $ 585 $ 859 $ 1,785 $ 3,447

Chocolate 208 623 1,371 68 2,270

Gum & Candy 157 205 157 235 754

Beverages 89 112 27 — 228

Cheese & Grocery 79 104 300 — 483

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

For the Nine Months Ended September 30, 2022

For the Three Months Ended March 31, 2023

America AMEA Europe North

1 unchanged sentence

(in millions)

Biscuits $ 751 $ 1,880 $ 2,844 $ 5,866 $ 11,341

Biscuits & Baked Snacks $ 276 $ 669 $ 1,062 $ 2,313 $ 4,320

Chocolate 368 747 1,670 84 2,869

3 unchanged sentences

Total net revenues $ 1,211 $ 1,939 $ 3,307 $ 2,709 $ 9,166

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

For the Three Months Ended March 31, 2022

America AMEA Europe North

1 unchanged sentence

(in millions)

Biscuits $ 592 $ 1,677 $ 2,518 $ 5,299 $ 10,086

Biscuits & Baked Snacks $ 224 $ 657 $ 951 $ 1,799 $ 3,631

Chocolate 248 706 1,512 77 2,543

3 unchanged sentences

Total net revenues $ 826 $ 1,867 $ 2,935 $ 2,136 $ 7,764

(1) Our snack product categories include biscuits, chocolate and gum & candy.

During the first quarter of 2022, we realigned some of our products between our biscuits and chocolate categories;

as such, we reclassified the product category net revenues on a basis consistent with the 2022 presentation.

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