What changed in this filing

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Item 1. Financial Statements

2023-11-01 compared with 2023-07-27 · 227 added, 179 removed, 991 unchanged (29% of the section changed)

6 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

11 unchanged sentences

Income tax provision ( 354 ) ( 184 ) ( 1,280 ) ( 595 )

(Loss)/gain on equity method investment transactions ( 23 ) ( 8 ) 464 ( 13 )

Gain/(loss) on equity method investment transactions

1 ( 6 ) 465 ( 19 )

Equity method investment net earnings 10 85 116 300

14 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

17 unchanged sentences

dollars, except share data)

September 30,

2023 December 31, 2022

Cash and cash equivalents $ 1,610 $ 1,923

Trade receivables (net of allowances of $ 64 at June 30, 2023

Trade receivables (net of allowances of $ 63 at September 30, 2023

and $ 45 at December 31, 2022)

Other receivables (net of allowances of $ 54 at June 30, 2023

Other receivables (net of allowances of $ 52 at September 30, 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 June 30, 2023 and December 31, 2022)

1,996,537,778 shares issued at September 30, 2023 and December 31, 2022)

Additional paid-in capital 32,181 32,143

1 unchanged sentence

Accumulated other comprehensive losses ( 11,232 ) ( 10,947 )

Treasury stock, at cost ( 635,538,156 shares at June 30, 2023 and

Treasury stock, at cost ( 635,672,022 shares at September 30, 2023 and

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

18 unchanged sentences

Interest Total

Three Months Ended June 30, 2023

Balances at April 1, 2023 $ — $ 32,112 $ 33,040 $ ( 10,814 ) $ ( 26,110 ) $ 46 $ 28,274

Three Months Ended September 30, 2023

Balances at July 1, 2023 $ — $ 32,148 $ 33,458 $ ( 10,710 ) $ ( 26,249 ) $ 32 $ 28,679

Comprehensive earnings/(losses):

12 unchanged sentences

— — — — — ( 5 ) ( 5 )

Balances at June 30, 2023 $ — $ 32,148 $ 33,458 $ ( 10,710 ) $ ( 26,249 ) $ 32 $ 28,679

Six Months Ended June 30, 2023

Balances at September 30, 2023 $ — $ 32,181 $ 33,866 $ ( 11,232 ) $ ( 26,280 ) $ 25 $ 28,560

Nine Months Ended September 30, 2023

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

13 unchanged sentences

— — 14 — — ( 9 ) 5

Balances at June 30, 2023 $ — $ 32,148 $ 33,458 $ ( 10,710 ) $ ( 26,249 ) $ 32 $ 28,679

Three Months Ended June 30, 2022

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

Balances at September 30, 2023 $ — $ 32,181 $ 33,866 $ ( 11,232 ) $ ( 26,280 ) $ 25 $ 28,560

Three Months Ended September 30, 2022

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

Comprehensive earnings/(losses):

12 unchanged sentences

— — — — — ( 2 ) ( 2 )

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

Six Months Ended June 30, 2022

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

Nine Months Ended September 30, 2022

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

13 unchanged sentences

— — 3 — — ( 6 ) ( 3 )

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

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

See accompanying notes to the condensed consolidated financial statements.

3 unchanged sentences

(in millions of U.S.

For the Six Months Ended

For the Nine Months Ended

September 30,

CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES

3 unchanged sentences

Stock-based compensation expense 109 88

Deferred income tax provision/(benefit) 101 ( 32 )

Deferred income tax provision

Asset impairments and accelerated depreciation 95 178

4 unchanged sentences

Unrealized (gain)/loss on derivative contracts ( 259 ) 220

Unrealized gain on marketable securities ( 593 ) —

Gain on marketable securities

Other non-cash items, net 53 32

16 unchanged sentences

Issuances of commercial paper, maturities greater than 90 days 67 —

Repayments of commercial paper, maturities greater than 90 days ( 67 ) —

Net (repayments)/issuances of short-term borrowings ( 1,070 ) 1,370

3 unchanged sentences

Dividends paid ( 1,581 ) ( 1,457 )

Other 134 143

Net cash used in financing activities ( 5,074 ) ( 297 )

2 unchanged sentences

Cash, cash equivalents and restricted cash:

(Decrease)/Increase ( 395 ) ( 1,618 )

( 271 ) ( 1,358 )

Balance at beginning of period 1,948 3,553

23 unchanged sentences

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 six months of 2023 of previously recorded charges primarily as a result of higher than expected collection of trade receivables and inventory recoveries.

We reversed $ 22 million during the remainder of 2022 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.

5 unchanged sentences

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

Argentina and Türkiye represent 1.6 % and 0.8 % of our consolidated net revenues with remeasurement losses of $ 10 million and $ 16 million for the three months ended June 30, 2023, respectively, and 2.3 % and 0.9 % of our consolidated net revenues with remeasurement losses of $ 21 million and $ 17 million for the six months ended June 30, 2023.

Argentina and Türkiye represent 1.6 % and 0.5 % of our consolidated net revenues with remeasurement losses of $ 20 million and $ 2 million for the three months ended September 30, 2023, respectively, and 1.6 % and 0.8 % of our consolidated net revenues with remeasurement losses of $ 41 million and $ 19 million for the nine months ended September 30, 2023.

Given the continued volatility of these currencies, impacts to our financial statements in future periods could be significantly different from historical levels.

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 within other current assets of $ 71 million as of June 30, 2023 and $ 25 million as of December 31, 2022.

Total cash, cash equivalents and restricted cash was $ 1,553 million as of June 30, 2023 and $ 1,948 million as of December 31, 2022.

We also have restricted cash within other current assets of $ 67 million as of September 30, 2023 and $ 25 million as of December 31, 2022.

Total cash, cash equivalents and restricted cash was $ 1,677 million as of September 30, 2023 and $ 1,948 million as of December 31, 2022.

Allowances for Credit Losses

6 unchanged sentences

Currency ( 2 ) 4 ( 1 )

Balance at June 30, 2023 $ ( 64 ) $ ( 54 ) $ ( 15 )

Balance at September 30, 2023 $ ( 63 ) $ ( 52 ) $ ( 14 )

Transfers of Financial Assets

The outstanding principal amount of receivables under our uncommitted revolving non-recourse accounts receivable factoring arrangements amounted to $ 744 million as of June 30, 2023 and $ 516 million as of December 31, 2022.

The outstanding principal amount of receivables under our uncommitted revolving non-recourse accounts receivable factoring arrangements amounted to $ 755 million as of September 30, 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 $ 62 million in operating lease and $ 73 million in finance lease right-of-use assets obtained in exchange for lease obligations during the six months ended June 30, 2023 and $ 125 million in operating lease and $ 76 million in finance lease right-of-use assets obtained in exchange for lease obligations during the six months ended June 30, 2022.

We recorded $ 86 million in operating lease and $ 101 million in finance lease right-of-use assets obtained in exchange for lease obligations during the nine months ended September 30, 2023 and $ 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.

Supply Chain Financing

7 unchanged sentences

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 our outstanding accounts payable related to suppliers that participate in the SCF programs was $ 2.3 billion and $ 2.4 billion, respectively, as of June 30, 2023 and December 31, 2022.

New Accounting Pronouncements

35 unchanged sentences

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

Ricolino added incremental net revenues of $ 155 million during the three months and $ 326 million during the six months ended June 30, 2023, and operating income of $ 7 million during the three months and $ 16 million during the six months ended June 30, 2023.

We incurred acquisition integration costs of $ 10 million during the three months and $ 16 million during the six months ended June 30, 2023.

We incurred $ 1 million of acquisition-related costs during the three months and six months ended June 30, 2022.

Ricolino added incremental net revenues of $ 180 million during the three months and $ 506 million during the nine months ended September 30, 2023, and operating income of $ 15 million during the three months and $ 31 million during the nine months ended September 30, 2023.

We incurred acquisition integration costs of $ 14 million during the three months and $ 30 million during the nine months ended September 30, 2023.

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

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

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

maker of nutritious energy bars with organic ingredients.

nutritious energy bars with organic ingredients.

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

5 unchanged sentences

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 of assets acquired and liabilities assumed and have recorded a preliminary purchase price allocation of:

We have completed the valuation of assets acquired and liabilities assumed and have recorded a purchase price allocation of:

(in millions)

3 unchanged sentences

Property, plant and equipment 186

Operating leases right of use assets 22

Operating lease right-of-use assets

Deferred tax assets 107

18 unchanged sentences

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

Clif Bar added incremental net revenues of $ 240 million during the three months and $ 458 million during the six months ended June 30, 2023, and operating income of $ 35 million during the three months and $ 70 million during the six months ended June 30, 2023.

We incurred acquisition integration costs of $ 16 million during the three months and $ 55 million during the six months ended June 30, 2023.

Through the one-year anniversary of the acquisition, Clif Bar added incremental net revenues of $ 71 million during the three months and $ 529 million during the nine months ended September 30, 2023, and operating income of $ 11 million during the three months and $ 81 million during the nine months ended September 30, 2023.

We also incurred acquisition integration costs of $ 37 million during the three months and $ 92 million during the nine months ended September 30, 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.

We incurred $ 4 million of acquisition-related costs during the three months and six months ended June 30, 2022.

During the three and nine months ended September 30, 2022, we incurred acquisition integration costs of $ 16 million and an inventory step-up charge of $ 20 million.

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 100 % of the equity of Chipita Global S.A.

1 unchanged sentence

The acquisition of Chipita offers a strategic complement to our existing portfolio and advances our strategy to become the global leader in broader snacking.

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 € 0.4 billion ($ 0.4 billion) for a total purchase price of € 1.7 billion ($ 1.8 billion).

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 € 0.4 billion ($ 0.4 billion) for a total purchase price of € 1.7 billion ($ 1.8 billion).

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

3 unchanged sentences

Property, plant and equipment 379

Finance leases right of use assets 8

Finance lease right-of-use assets

Definite-life intangible assets 48

17 unchanged sentences

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

We incurred acquisition integration costs of $ 4 million during the three months and $ 10 million during the six months ended June 30, 2023.

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

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

We incurred acquisition integration costs of $ 5 million during the three months and $ 15 million during the nine months ended September 30, 2023.

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-related costs of $ 21 million during the nine months ended September 30, 2022.

Developed Market Gum - Held for Sale

On December 16, 2022, we entered into an agreement to sell our 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 $ 22 million in the three months ended June 30, 2023 and $ 52 million in the six months ended June 30, 2023.

We incurred divestiture-related costs of $ 14 million in the three months ended September 30, 2023 and $ 66 million in the nine months ended September 30, 2023.

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

As of June 30,

As of September 30,

2023 As of December 31, 2022

(in millions)

Assets held for sale

Other receivables, net of allowances

Inventories, net 83 79

1 unchanged sentence

Property, plant and equipment, net 164 159

Operating lease right-of-use assets

Goodwill 290 292

Intangible assets, net 697 671

Deferred income taxes

Noncurrent assets held for sale (2)

Total assets held for sale

$ 1,245 $ 1,201

Liabilities held for sale

Accrued employment costs $ — $ 4

Other current liabilities

Current liabilities held for sale (3)

Accrued pension costs 1 —

Long-term operating lease liabilities

Deferred income taxes — 15

Noncurrent liabilities held for sale (4)

Total liabilities held for sale

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

2 unchanged sentences

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

On October 1, 2023, we completed the sale of our developed market gum business in the United States, Canada, and Europe to Perfetti Van Melle Group, excluding the Portugal business which we retained pending regulatory approval.

We completed the sale of the Portugal business to Perfetti Van Melle Group on October 23, 2023.

We received net cash proceeds of $ 1.4 billion, subject to certain closing adjustments, that can be utilized for general corporate purposes, including the support of our commercial paper program.

Inventories consisted of the following:

As of June 30,

As of September 30,

2023 As of December 31, 2022

6 unchanged sentences

Property, plant and equipment consisted of the following:

As of June 30,

As of September 30,

2023 As of December 31, 2022

7 unchanged sentences

Property, plant and equipment, net $ 9,142 $ 9,020

For the six months ended June 30, 2023, capital expenditures of $ 495 million excluded $ 305 million of accrued capital expenditures remaining unpaid at June 30, 2023 and included payment for the $ 324 million of capital expenditures that were accrued and unpaid at December 31, 2022.

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

For the nine months ended September 30, 2023, capital expenditures of $ 780 million excluded $ 321 million of accrued capital expenditures remaining unpaid at September 30, 2023 and included payment for the $ 324 million of capital expenditures that were accrued and unpaid at December 31, 2022.

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 the $ 249 million of capital expenditures that were accrued and unpaid at December 31, 2021.

Goodwill and Intangible Assets

12 unchanged sentences

3 — — ( 33 ) ( 30 )

Balance at June 30, 2023 $ 1,591 $ 3,050 $ 8,143 $ 10,886 $ 23,670

Balance at September 30, 2023 $ 1,560 $ 2,998 $ 7,892 $ 10,857 $ 23,307

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

2 unchanged sentences

Intangible assets consisted of the following (in millions):

As of June 30, 2023 As of December 31, 2022

As of September 30, 2023 As of December 31, 2022

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

4 unchanged sentences

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

(2) In 2023, we recorded $ 26 million of intangible asset impairment charges related to a chocolate brand in the North America segment for $ 20 million and a biscuit brand in the Europe segment for $ 6 million 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 trademarks, customer-related intangibles, process technology, licenses and non-compete agreements.

Amortization expense for intangible assets was $ 37 million for the three months and $ 76 million for the six months ended June 30, 2023 and $ 32 million for the three months and $ 64 million for the six months ended June 30, 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 June 30, 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 second 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 June 30, 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.

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

Amortization expense for intangible assets was $ 38 million for the three months and $ 114 million for the nine months ended September 30, 2023 and $ 32 million for the three months and $ 96 million for the nine months ended September 30, 2022.

For the next five years, we currently estimate annual amortization expense of approximately $ 145 million in 2023-2025, approximately $ 95 million in 2026 and approximately $ 90 million in 2027 (reflecting September 30, 2023 exchange rates).

During the third quarter of 2023, we performed our annual impairment assessment test for goodwill and indefinite-life intangible assets as of July 1, 2023.

Our 2023 annual testing of goodwill resulted in no impairments as each reporting unit had fair value in excess of carrying value.

As part of our goodwill quantitative assessment, we compare a reporting unit's estimated fair value to its carrying value.

If the carrying value of the reporting unit exceeds the fair value, we would record an impairment for the difference.

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

For our Europe and North America reporting units, we used a market-based weighted average cost of capital of 7.1 % to discount projected cash flows of those operations.

For our Latin America and AMEA reporting units, we used a risk-rated discount rate of 10.1 % to discount projected cash flows from those operations.

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

Given the uncertainty of the global macroeconomic 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 our control, such as discount rates, changes significantly, then the estimated fair values of a reporting unit might decline and lead to a goodwill impairment in the future.

Our 2023 annual testing of indefinite-life intangible assets resulted in an impairment of $ 26 million related to a chocolate brand in the North America segment and a biscuit brand in the Europe segment.

The impairments were driven by changes in projections as a result of current and expected operating environment.

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

We use several accepted valuation methods, including Relief from Royalty, excess earnings and excess margin.

The valuation methods utilize estimates of future sales, earnings growth rates, royalty rates and discount rates to determine the fair value of each intangible asset.

We identified thirteen brands that each had a fair value in excess of book value of 10% or less.

The aggregate book value of the thirteen brands was $ 3.5 billion as of September 30, 2023, of which $ 1.8 billion is related to five recently acquired brands.

We believe our current plans for each of these brands will allow them to not be impaired, but if plans to grow brand earnings and expand margin are not met or specific valuation factors outside of our control, such as discount rates, change then a brand or brands could become impaired in the future.

Marketable Securities

1 unchanged sentence

"KDP") during the first quarter of 2023, to below 5 % of the outstanding shares, 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.

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

On June 8, 2023, we sold 23 million shares of KDP, which reduced our ownership by 1.6 %, from 3.2 % to 1.6 % of the total outstanding shares.

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

On July 13, 2023, we sold 23 million shares, the remainder of our shares of KDP.

We received proceeds of approximately $ 704 million.

On March 2, 2023, we sold 30 million shares of KDP, which reduced our ownership interest by 2.1 %, from 5.3 % to 3.2 % of the total outstanding shares.

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

On June 8, 2023, we sold 23 million shares of KDP, which reduced our ownership by 1.6 percentage points, from 3.2 % to 1.6 % of the total outstanding shares.

We received proceeds of approximately $ 708 million.

On March 2, 2023, we sold 30 million shares of KDP, which reduced our ownership interest by 2.1 percentage points, from 5.3 % to 3.2 % of the total outstanding shares.

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

Pre-tax gains and losses for marketable securities are summarized below (in millions):

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

(in millions)

Loss/(gain) on marketable securities sold during the period $ — $ ( 593 )

Unrealized loss/(gain) on equity securities held as of the end of the period 90 ( 300 )

Dividend income ( 5 ) ( 14 )

Dividend income and other

Total loss/(gain) on marketable securities $ 1 $ ( 606 )

In the table above, loss/(gain) on marketable securities sold during the period reflects the difference between the sale proceeds and the carrying value of the equity securities at the beginning of the period or the date of the change of accounting for our investment in KDP, if later.

We reported marketable securities of $ 705 million as of June 30, 2023 in other current assets in the Company's Condensed Consolidated Balance Sheet.

On July 13, 2023, we sold the remainder of our KDP investment, approximately 23 million shares, and received approximately $ 704 million in proceeds.

Equity Method Investments

2 unchanged sentences

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

As of June 30, 2023, we owned 18.1 %, 50.0 % and 49.0 %, respectively, of these companies' outstanding shares.

Our investments accounted for under the equity method of accounting totaled $ 3.2 billion as of June 30, 2023 and $ 4.9 billion as of December 31, 2022.

As of September 30, 2023, we owned 17.7 %, 50.0 % and 49.0 %, respectively, of these companies'

outstanding shares.

Our investments accounted for under the equity method of accounting totaled $ 3.1 billion as of September 30, 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 $ 71 million and cash dividends of zero in the three months ended June 30, 2023, and equity earnings of $ 98 million and cash dividends of $ 14 million in the three months ended June 30, 2022.

We recorded equity earnings of $ 106 million and cash dividends of $ 102 million in the six months ended June 30, 2023 and equity earnings of $ 215 million and cash dividends of $ 121 million in the six months ended June 30, 2022.

Based on the quoted closing prices as of June 30, 2023, the fair value of our publicly-traded investment in JDEP wa s $ 2.6 billion , and there was no other than temporary impairment identified.

We recorded equity earnings of $ 10 million and cash dividends of $ 34 million in the three months ended September 30, 2023, and equity earnings of $ 85 million and cash dividends of $ 48 million in the three months ended September 30, 2022.

We recorded equity earnings of $ 116 million and cash dividends of $ 136 million in the nine months ended September 30, 2023 and equity earnings of $ 300 million and cash dividends of $ 169 million in the nine months ended September 30, 2022.

Based on the quoted closing prices as of September 30, 2023, the fair value of our publicly traded investment in JDEP was $ 2.4 billion, and there was no other than temporary impairment identified.

JDEP Transactions

On April 3, 2023, we sold approximately 7.7 million shares of JDEP, which reduced our ownership interest by 1.6 %, from 19.7 % to 18.1 % of the total outstanding shares.

We received cash proceeds of € 198 million ($ 217 million) and recorded a loss of € 18 million ($ 19 million) on this sale during the three months ended June 30, 2023.

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

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

During the three months ended September 30, 2023, options were exercised on 2.2 million shares, which reduced our ownership by 0.4 percentage point, from 18.1 % to 17.7 % of the total outstanding shares.

We received cash proceeds of € 57 million ($ 62 million) and recorded a loss of € 3 million ($ 4 million) for these sales during the three months ended September 30, 2023.

We continue to have board representation with two directors on 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.

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.

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

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

We received cash proceeds of € 500 million ($ 529 million) and recorded a loss of € 8 million ($ 8 million) on this sale during the three months ended June 30, 2022.

On April 3, 2023, we sold approximately 7.7 million shares of JDEP, which reduced our ownership interest by 1.6 percentage points, from 19.7 % to 18.1 % of the total outstanding shares.

We received cash proceeds of € 198 million ($ 217 million) and recorded a loss of € 18 million ($ 19 million) on this sale during the second quarter of 2023.

On May 8, 2022, we sold approximately 18.6 million of our JDEP shares back to JDEP, which reduced our ownership interest by approximately 3 percentage points.

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

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 JDEP’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 JDEP's shares, this would represent approximately 8.5 million shares or approximately 10 % of our equity interest in JDEP as of June 30, 2023.

If all bonds were redeemed in exchange for JDEP's shares, this would represent approximately 8.5 million shares or approximately 10 % of our equity interest in JDEP as of September 30, 2023.

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

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The primary objective of the Simplify to Grow Program is to reduce our operating cost structure in both our supply chain and overhead costs.

The program covers severance as well as asset disposals and other manufacturing and

procurement-related one-time costs.

The program covers severance as well as asset disposals and other manufacturing and procurement-related one-time costs.

Since inception, we have incurred total restructuring and implementation charges of $ 5.2 billion related to the Simplify to Grow Program.

1 unchanged sentence

Restructuring Costs

The Simplify to Grow Program liability activity for the six months ended June 30, 2023 was:

The Simplify to Grow Program liability activity for the nine months ended September 30, 2023 was:

Write-downs and Other (1)

6 unchanged sentences

Currency — — —

Liability balance, June 30, 2023 (5)

Liability balance, September 30, 2023 (5)

$ 151 $ — $ 151

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

(2) We recorded restructuring charges of $ 2 million in the three months ended June 30, 2023 and $ 4 million in the three months ended June 30, 2022 and restructuring charges of $ 32 million in the six months ended June 30, 2023 and $ 15 million in the six months ended June 30, 2022 within asset impairment and exit costs and benefit plan non-service income.

(3) We spent $ 17 million in the three months ended June 30, 2023 and $ 16 million in the three months ended June 30, 2022 and spent $ 35 million in the six months ended June 30, 2023 and $ 33 million in the six months ended June 30, 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 $ 5 million in the three months ended June 30, 2023 and a charge of $ 7 million in the three months ended June 30, 2022 and a charge of $ 6 million in the six months ended June 30, 2023 and $ 9 million in the six months ended June 30, 2022.

(5) At June 30, 2023, $ 118 million of our net restructuring liability was recorded within other current liabilities and $ 41 million was recorded within other long-term liabilities.

(2) We recorded restructuring charges of $ 16 million in the three months ended September 30, 2023 and a gain of $ 10 million due to the sale of assets included in the restructuring program as well as restructuring charges of $ 3 million in the three months ended September 30, 2022.

We recorded restructuring charges of $ 48 million in the nine months ended September 30, 2023 and $ 8 million in the nine months ended September 30, 2022 within asset impairment and exit costs and benefit plan non-service income.

(3) We spent $ 12 million in the three months ended September 30, 2023 and $ 12 million in the three months ended September 30, 2022 and spent $ 47 million in the nine months ended September 30, 2023 and $ 45 million in the nine months ended September 30, 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 $ 8 million in the three months ended September 30, 2023 and a gain of $ 10 million in the three months ended September 30, 2022 and recognized a charge of $ 14 million in the nine months ended September 30, 2023 and a gain of $ 1 million in the nine months ended September 30, 2022.

(5) At September 30, 2023, $ 111 million of our net restructuring liability was recorded within other current liabilities and $ 40 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 $ 4 million in the three months ended June 30, 2023 and $ 19 million in the three months ended June 30, 2022, and we recorded implementation costs of $ 9 million in the six months ended June 30, 2023 and $ 39 million in the six months ended June 30, 2022.

Within our continuing results of operations, we recorded implementation costs of $ 4 million in the three months ended September 30, 2023 and $ 23 million in the three months ended September 30, 2022, and we recorded implementation costs of $ 13 million in the nine months ended September 30, 2023 and $ 62 million in the nine months ended September 30, 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 six months ended June 30, 2023 and June 30, 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:

During the three and nine months ended September 30, 2023 and September 30, 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 June 30, 2023

For the Three Months Ended September 30, 2023

Restructuring Costs $ ( 1 ) $ 5 $ — $ 11 $ 1 $ 16

1 unchanged sentence

Total $ — $ 4 $ 1 $ 12 $ 3 $ 20

For the Three Months Ended June 30, 2022

For the Three Months Ended September 30, 2022

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

1 unchanged sentence

Total $ ( 1 ) $ 1 $ 8 $ — $ 8 $ 16

For the For the Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

Restructuring Costs $ ( 2 ) $ 7 $ 27 $ 16 $ — $ 48

1 unchanged sentence

Total $ ( 2 ) $ 6 $ 30 $ 20 $ 7 $ 61

For the For the Six Months Ended June 30, 2022

For the Nine Months Ended

September 30, 2022

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

9 unchanged sentences

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

As of June 30, 2023 As of December 31, 2022

As of September 30, 2023 As of December 31, 2022

Outstanding Weighted-

5 unchanged sentences

Total short-term borrowings $ 1,221 $ 2,299

Our uncommitted credit lines and committed credit lines available as of June 30, 2023 and December 31, 2022 include:

As of June 30, 2023 As of December 31, 2022

Our uncommitted credit lines and committed credit lines available as of September 30, 2023 and December 31, 2022 include:

As of September 30, 2023 As of December 31, 2022

Facility Amount Borrowed Amount Facility Amount Borrowed Amount

13 unchanged sentences

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

At June 30, 2023, we complied with this covenant as our shareholders' equity, as defined by the covenant, was $ 39.4 billion.

At September 30, 2023, we complied with this covenant as our shareholders' equity, as defined by the covenant, was $ 39.8 billion.

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

There are no credit rating triggers, provisions or other financial covenants that could require us to post collateral as security.

(2) On April 18, 2023, we entered into a credit facility secured by pledged deposits.

Under this agreement, we may draw up to a total of $ 0.2 billion in loans from the facility.

On April 25, 2023, we drew down $ 0.2 billion bearing a variable rate based on SOFR plus an applicable margin.

(2) On October 18, 2023, we terminated the credit facility due to expire on December 29, 2023.

(3) On March 31, 2022, we entered into a supplemental term loan credit facility that can be utilized for general corporate purposes, including acquisitions.

3 unchanged sentences

We repaid $ 1.0 billion on March 3, 2023, $ 0.3 billion on April 3, 2023, and $ 0.7 billion on May 3, 2023 in term loans.

(4) On April 18, 2023, we entered into a credit facility secured by pledged deposits.

Under this agreement, we may draw up to a total of $ 0.2 billion in loans from the facility.

On April 25, 2023, we drew down $ 0.2 billion bearing a variable rate based on SOFR plus an applicable margin.

Long-Term Debt

As of June 30, 2023, the Company reclassified the net carrying value of debt of $ 500 million due within one year from long-term debt to current portion of long-term debt.

As of September 30, 2023, the Company reclassified the net carrying value of debt of $ 2.0 billion due within one year from long-term debt to current portion of long-term debt.

Fair Value of Our Debt

2 unchanged sentences

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

As of June 30, 2023 As of December 31, 2022

As of September 30, 2023 As of December 31, 2022

(in millions)

4 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

3 unchanged sentences

related expenses — — 1 129

Other (income)/expense, net ( 49 ) 9 ( 107 ) ( 43 )

Other income, net

( 68 ) ( 43 ) ( 175 ) ( 86 )

Interest and other expense, net $ 66 $ 71 $ 258 $ 337

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

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 June 30, 2023 As of December 31, 2022

As of September 30, 2023 As of December 31, 2022

Derivatives Liability

22 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 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 .

(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, Investments .

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 June 30, 2023

As of September 30, 2023

Fair Value of Net

10 unchanged sentences

Net investment hedge contracts 72 — 72 —

Equity method investment contracts ( 5 ) — ( 5 ) —

Total derivatives $ 475 $ ( 41 ) $ 516 $ —

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This model requires assumptions related to the market price of the underlying note and associated credit spread combined with the share of price, expected dividend yield, and expected volatility of the JDE Peet’s shares over the life of the option.

Our options to sell shares of JDEP are valued using the Black-Scholes option pricing model.

This model requires assumptions related to the stock price of JDE Peet's shares, strike price of each European style option, time to expiry, expected dividend yield and the interpolated market-implied volatility of JDE Peet's active market of listed options.

Our calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the observable market interest rate curve.

7 unchanged sentences

Notional Amount

As of June 30,

As of September 30,

2023 As of December 31, 2022

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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.

Based on current market conditions, we would expect to transfer gains of $ 58 million (net of taxes) for interest rate cash flow hedges to earnings during the next 12 months.

Cash Flow Hedge Coverage

As of June 30, 2023, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 3 years, 2 months .

As of September 30, 2023, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 2 years, 11 months .

Hedges of Net Investments in International Operations

2 unchanged sentences

operations against movements in exchange rates.

The aggregate notional value as of June 30, 2023 was $ 7.8 billion.

The aggregate notional value as of September 30, 2023 was $ 7.6 billion.

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

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

5 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

6 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

7 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

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

September 30, For the Nine Months Ended

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

2023 2022 2023 2022

10 unchanged sentences

Equity method investment

contracts 1 — 3 — (Loss)/gain on equity method investment transactions

contracts 4 ( 3 ) 7 ( 3 ) Gain/(loss) on equity method investment transactions

Total $ 88 $ ( 41 ) $ 278 $ 231

2 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

7 unchanged sentences

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

As of June 30, 2023

As of September 30, 2023

Total Fair Value of

25 unchanged sentences

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

(2) The other contingent consideration liabilities are recorded at fair value, with $ 12 million and $ 102 million classified as other current liabilities and $ 83 million and $ 88 million classified as long term liabilities at June 30, 2023 and December 31, 2022.

(2) The other contingent consideration liabilities are recorded at fair value, with $ 108 million and $ 102 million classified as other current liabilities at September 30, 2023 and December 31, 2022, respectively, and $ 88 million classified as long-term liabilities at 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

June 30, For the Three Months Ended

September 30, For the Three Months Ended

September 30,

2023 2022 2023 2022

5 unchanged sentences

Net loss from experience differences — 1 10 14

Prior service cost

Settlement losses and other expenses 5 5 — —

Net periodic pension (benefit)/cost $ ( 3 ) $ 2 $ ( 1 ) $ ( 16 )

Net periodic pension (benefit)

$ ( 3 ) $ — $ ( 2 ) $ ( 9 )

Plans Non-U.S.

For the Six Months Ended

June 30, For the Six Months Ended

For the Nine Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

9 unchanged sentences

Employer Contributions

During the six months ended June 30, 2023, we contributed $ 3 million to our U.S.

During the nine months ended September 30, 2023, we contributed $ 3 million to our U.S.

pension plans and $ 90 million to our non-U.S.

2 unchanged sentences

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

As of June 30, 2023, we plan to make further contributions of approximately $ 3 million to our U.S.

As of September 30, 2023, we plan to make further contributions of approximately $ 3 million to our U.S.

plans and $ 29 million to our non-U.S.

4 unchanged sentences

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

In connection with the discounted long-term liability, we recorded accreted interest of $ 2 million and $ 5 million for the three and six months ended June 30, 2023 and 2022, within interest and other expense, net.

As of June 30, 2023, the remaining discounted withdrawal liability was $ 336 million, with $ 15 million recorded in other current liabilities and $ 321 million recorded in long-term other liabilities.

In connection with the discounted long-term liability, we recorded accreted interest of $ 3 million and $ 8 million for the three and nine months ended September 30, 2023 and $ 3 million and $ 8 million for the three and nine months ended September 30, 2022, within interest and other expense, net.

As of September 30, 2023, the remaining discounted withdrawal liability was $ 332 million, with $ 15 million recorded in other current liabilities and $ 317 million recorded in long-term other liabilities.

Postretirement and Postemployment Benefit Plans

The net periodic postretirement (benefit)/cost was $( 2 ) million for the three and six months ended June 30, 2023 and $ 3 million and $ 6 million for the three and six months ended June 30, 2022.

The net periodic postemployment

cost was zero and $ 1 million for the three and six months ended June 30, 2023 and 2022.

The net periodic postretirement (benefit)/cost was $( 2 ) million and $( 4 ) million for the three and nine months ended

September 30, 2023 and $ 3 million and $ 9 million for the three and nine months ended September 30, 2022.

The net periodic postemployment cost was $ 2 million and $ 3 million for the three and nine months ended September 30, 2023 and $ 1 million and $ 2 million for the three and nine months ended September 30, 2022.

Stock Options

11 unchanged sentences

Options canceled ( 270,017 ) 57.52

Balance at June 30, 2023 19,942,372 49.81 5 years $ 461 million

(1) Cash received from options exercised was $ 56 million in the three months and $ 105 million in the six months ended June 30, 2023.

The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $ 9 million in the three months and $ 17 million in the six months ended June 30, 2023

Balance at September 30, 2023 19,221,834 49.82 5 years $ 376 million

(1) Cash received from options exercised was $ 29 million in the three months and $ 134 million in the nine months ended September 30, 2023.

The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $ 2 million in the three months and $ 19 million in the nine months ended September 30, 2023.

Performance Share Units and Other Stock-Based Awards

15 unchanged sentences

( 247,953 ) 62.58

Balance at June 30, 2023 4,865,426 62.18

Balance at September 30, 2023 4,747,691 62.18

(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 zero in the three months and $ 2 million in the six months ended June 30, 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.

7 unchanged sentences

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

During the six months ended June 30, 2023, we repurchased approximately 8.8 million shares of Common Stock at an average cost of $ 68.16 per share, or an aggregate cost of approximately $ 602 million, all of which was paid

during the period except for approximately $ 6 million settled in July 2023.

During the nine months ended September 30, 2023, we repurchased approximately 9.6 million shares of Common Stock at an average cost of $ 68.55 per share, or an aggregate cost of approximately $ 659 million, all of which was paid during the period.

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

As of June 30, 2023, we have approximately $ 5.4 billion in remaining share repurchase capacity.

As of September 30, 2023, we have approximately $ 5.3 billion in remaining share repurchase capacity.

Commitments and Contingencies

22 unchanged sentences

On January 3, 2020, the District Court granted plaintiffs' request to certify a class.

In November 2022, the District Court adjourned the trial date it had previously set for November 30 and ordered the parties to brief Kraft’s motions to decertify the class and for summary judgment, which was completed on July 25, 2023.

In November 2022, the District Court adjourned the trial date it had previously set for November 30, 2022 and ordered the parties to brief Kraft’s motions to decertify the class and for summary judgment, which has been completed.

It is not possible to predict the outcome of these matters;

3 unchanged sentences

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 June 30, 2023 and December 31, 2022, we have accrued (in accordance with U.S.

GAAP) a liability of € 300 million ($ 328 million as of June 30, 2023) within other current liabilities in the consolidated balance sheet as an estimate of the possible cost to resolve this matter.

As of September 30, 2023 and December 31, 2022, we have accrued (in accordance with U.S.

GAAP) a liability of € 300 million ($ 317 million as of September 30, 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.

5 unchanged sentences

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

As of June 30, 2023 and December 31, 2022, we had no material third-party guarantees recorded on our condensed consolidated balance sheet.

As of September 30, 2023 and December 31, 2022, we had no material third-party guarantees recorded on our condensed consolidated balance sheet.

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

2 unchanged sentences

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

Amounts reclassified from accumulated other comprehensive earnings/(losses) to net earnings (net of tax) were net (losses)/gains of $ 11 million in the second quarter of 2023 and $ 82 million in the second quarter of 2022 and $ 41 million in the first six months of 2023 and $ 40 million in the first six months of 2022..

Amounts reclassified from accumulated other comprehensive earnings/(losses) to net earnings (net of tax) were net (losses)/gains of $ 35 million in the third quarter of 2023 and $ 103 million in the third quarter of 2022 and $( 6 ) million in the first nine months of 2023 and $ 143 million in the first nine months of 2022.

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

28 unchanged sentences

Tax expense/(benefit) on reclassifications (3)

( 2 ) ( 2 ) 1 ( 25 )

Currency impact ( 1 ) 6 — 13

10 unchanged sentences

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

As of the second quarter of 2023, our estimated annual effective tax rate, which excludes discrete tax impacts, was 24.6 %.

As of the third quarter of 2023, our estimated annual effective tax rate, which excludes discrete tax impacts, was 25.9 %.

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

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

tax laws as well as both favorable and unfavorable impacts from the mix of pre-tax income in various non-U.S.

jurisdictions.

Our 2023 second quarter effective tax rate of 23.1 % included a $ 50 million net tax benefit related to gains and losses on KDP marketable securities and a $ 29 million net tax expense incurred in connection with unrealized gains and losses on hedging activities as well as other discrete net tax expense of $ 4 million.

Our effective tax rate for the six months ended June 30, 2023 of 27.3 % was higher due to a $ 127 million net tax expense incurred in connection with the KDP share sale during the first quarter (the earnings are reported separately on our statement of earnings and thus not included in earnings before income taxes).

Excluding this impact, our effective tax rate for the six months ended June 30, 2023 was 23.6 %.

The 23.6% rate included a $ 151 million net tax expense related to gains and losses on KDP marketable securities ($ 201 million net tax expense in Q1 and $ 50 million net tax benefit in Q2) as well as the associated pre-tax impacts.

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

Our 2023 third quarter effective tax rate was 26.6 % and includes those same impacts.

Our effective tax rate for the nine months ended September 30, 2023 of 27.1 % was high due to a $ 127 million net tax expense incurred in connection with the KDP share sale during the first quarter (the earnings were reported separately on our statement of earnings and thus not included in earnings before income taxes).

Excluding this impact, our effective tax rate for the nine months ended September 30, 2023 was 24.4 %.

The 24.4 % rate included a $ 151 million net tax expense related to pre-tax gains and losses on KDP marketable securities ($ 201 million net tax expense in Q1 and $ 50 million net tax benefit in Q2).

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

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 and our tax related to earnings from equity method investments (the earnings were 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.

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.

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

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

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

The estimated annual effective tax rate also considered 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 % considered 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.

Earnings per Share

1 unchanged sentence

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

2 unchanged sentences

Noncontrolling interest earnings

( 4 ) ( 1 ) ( 9 ) ( 8 )

Net earnings attributable to Mondelēz International $ 984 $ 532 $ 4,009 $ 2,134

8 unchanged sentences

We exclude antidilutive Mondelēz International stock options and long-term incentive plan shares from our calculation of weighted-average shares for diluted EPS.

We excluded antidilutive stock options and performance share units of 2.8 million for the three months ended June 30, 2023 and 3.4 million for the three months ended June 30, 2022 and 2.7 million for the six months ended June 30, 2023 and 2022.

We excluded antidilutive stock options and performance share units of 2.5 million for the three months ended September 30, 2023 and 3.3 million for the three months ended September 30, 2022 and 2.8 million for the nine months ended September 30, 2023 and 2.9 million for the nine months ended September 30, 2022.

Segment Reporting

14 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2023 2022 2023 2022

25 unchanged sentences

Net revenues by product category were:

For the Three Months Ended June 30, 2023

For the Three Months Ended September 30, 2023

America AMEA Europe North

7 unchanged sentences

Total net revenues $ 1,305 $ 1,791 $ 3,086 $ 2,847 $ 9,029

For the Three Months Ended June 30, 2022

For the Three Months Ended September 30, 2022

America AMEA Europe North

7 unchanged sentences

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

For the Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

America AMEA Europe North

7 unchanged sentences

Total net revenues $ 3,744 $ 5,339 $ 9,319 $ 8,300 $ 26,702

For the Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

America AMEA Europe North

8 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements