What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-07-30 compared with 2024-04-30 · 416 added, 149 removed, 465 unchanged (55% of the section changed)

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Macroeconomic environment

We continue to observe significant market and geopolitical uncertainty, inflationary pressures, supply constraints and exchange rate volatility.

We continue to observe significant market and geopolitical uncertainty, fluctuating consumer demand, inflationary pressures, supply constraints and exchange rate volatility.

As a result, we experienced significantly higher operating costs, including higher overall raw material, labor and energy costs that have continued to rise.

In particular, we expect to face higher cocoa costs, as the market price for cocoa beans has increased significantly year-over-year and it is likely that prices will remain elevated for some time.

In particular, we expect to continue to face higher cocoa costs, as the market price for cocoa beans has increased significantly year-over-year and it is likely that prices will remain elevated for some time.

Refer to Commodity Trends for additional information.

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In February 2022, following the Russian military invasion of Ukraine, we stopped production and closed our facilities in Ukraine;

since then we have taken steps to protect the safety of our employees and to restore operations at our two manufacturing facilities, which were significantly damaged in March 2022.

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

since then we have taken steps to protect the safety of our employees and to fully restore operations at our two manufacturing facilities, which were significantly damaged in March 2022.

See Note 1, Basis of Presentation - War in Ukraine , to the condensed consolidated financial statements, and refer to Items Affecting Comparability of Financial Results for additional information.

We have suspended new capital investments and our advertising spending in Russia, but as a food company with more than 2,500 employees in the country, we have not ceased operations given we believe we play a role in the continuity of the food supply.

We continue to evaluate the situation in Ukraine and Russia and our ability to control our operating activities and businesses on an ongoing basis and comply with applicable international sanctions, and we continue to consolidate both our Ukrainian and Russian subsidiaries.

During the first quarter of 2024, Ukraine generated 0.4% and Russia generated 2.6% of consolidated net revenue and during the first quarter of 2023, Ukraine generated 0.4% and Russia generated 2.8% of consolidated net revenue.

Our Russian net revenues declined in the first quarter of 2024 due to the suspension of advertising as well as currency weakness.

Despite the decrease in revenues, the profitability of our Russian business in the first quarter of 2024 remained above historical levels.

We cannot predict if the recent strength in our Russian business will continue in the future.

Our operations in Russia are subject to risks, including the temporary or permanent loss of assets or our ability to conduct business operations in Russia and the partial or full impairment of our Russian assets in future periods, or the termination of our business operations, based on actions taken by Russia, other parties or us.

We continue to evaluate the situation in Ukraine and Russia and our ability to control our operating activities and businesses on an ongoing basis and comply with applicable international sanctions.

We continue to consolidate both our Ukrainian and Russian subsidiaries.

During the second quarter of 2024, Ukraine generated 0.4% and Russia generated 2.9% of consolidated net revenue and during the second quarter of 2023, Ukraine generated 0.3% and Russia generated 2.8% of consolidated net revenue.

The profitability of and the assets held by our Russian business continue to remain above historical levels.

We cannot predict if the recent performance of our Russian business will continue in the future.

Our operations in Russia are subject to risks, including the temporary or permanent loss of assets due to expropriation or further curtailment of our ability to conduct business operations in Russia.

In the event this were to occur, this could lead to the partial or full impairment of our Russian assets or deconsolidation of the operations in Russia in future periods, or the termination of our business operations, based on actions taken by Russia, other parties or us.

For additional information, see the risk factors in our Annual Report on Form 10-K for the year ended December 31, 2023, including the risk entitled “ The war in Ukraine has impacted and could continue to impact our business operations, financial performance and results of operations.

Developments in the Middle East

In October 2023, conflict developed in the Middle East between Hamas and Israel, and has expanded to some parts of the region.

In the first quarter of 2024, we experienced sales impacts related to this conflict in certain AMEA markets, but this did not have a material impact on our business, results of operations or financial condition.

In October 2023, conflict developed in the Middle East between Hamas and Israel, and has expanded to other parts of the region.

In the second quarter of 2024, we experienced sales impacts related to this conflict in certain AMEA markets, but this did not have a material impact on our business, results of operations or financial condition.

We continue to evaluate the impacts of these developments on our business and we cannot predict if it will have a significant impact in the future.

ERP System Implementation

In July 2024, our Board of Directors approved funding of $1.2 billion for a multi-year systems transformation program to upgrade our global ERP and supply chain systems (the “ERP System Implementation”).

The ERP System Implementation spending comprises both capital expenditures and operating expenses, of which a majority is expected to relate to operating expenses.

The operating expenses associated with the ERP System Implementation represent incremental transformational costs above the normal ongoing level of spending on information technology to support operations.

The ERP System Implementation program will be implemented by region in several phases with spending occurring over the next five years, with expected completion by year-end 2028.

Refer to Non-GAAP financial measures for additional information.

Extreme Price Growth in Argentina

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Additionally within the MD&A discussion, "currency-related items" totals the impact of extreme pricing and the currency translation rate changes.

Currency-related items impacted our non-GAAP financial measures for the three months ended March 31, 2024 as follows:

Refer to Non-GAAP financial measures for additional information.

Currency-related items impacted our non-GAAP financial measures for the three months ended June 30, 2024 as follows:

• Organic Net Revenue:

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In Emerging Markets, unfavorable currency-related items of $193 million (5.9pp) were driven by unfavorable currency translation rate changes of $521 million (15.8pp), partially offset by the adjustment for extreme pricing of $328 million (9.9pp).

In Developed Markets, unfavorable currency-related items of $23 million (0.4pp) were driven by unfavorable currency translation rate changes.

• Adjusted Operating Income:

Unfavorable currency-related items of $57 million were driven by unfavorable currency translation rate changes of $119 million, partially offset by the adjustment for extreme pricing of $62 million.

• Adjusted EPS:

Unfavorable currency-related items of $0.04 were driven by unfavorable currency translation rate changes of $0.08, partially offset by the adjustment for extreme pricing of $0.04.

Currency-related items impacted our non-GAAP financial measures for the six months ended June 30, 2024 as follows:

• Organic Net Revenue:

In total, unfavorable currency-related items of $348 million (2.0pp) were driven by unfavorable currency translation rate changes of $1,057 million (6.1pp), partially offset by the adjustment for extreme pricing of $709 million (4.1pp).

In Emerging Markets, unfavorable currency-related items of $359 million (5.2pp) were driven by unfavorable currency translation rate changes of $1,068 million (15.5pp), partially offset by the adjustment for extreme pricing of $709 million (10.3pp).

In Developed Markets, favorable currency-related items of $11 million (0.1pp) were driven by favorable currency translation rate changes.

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Unfavorable currency-related items of $0.07 were driven by unfavorable currency translation rate changes of $0.21, partially offset by the adjustment for extreme pricing of $0.14.

Please refer to Non-GAAP financial measures for additional information.

In 2022, we announced our intention to divest our developed market gum and global Halls candy businesses and in the fourth quarter of 2022, we announced an agreement to sell the developed market gum business.

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Keurig Dr Pepper Transactions (Nasdaq:

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

We recorded a pre-tax gain on equity method transactions of $493 million (or $368 million after-tax) during the first quarter of 2023.

Our reduction in ownership to below 5% eliminated our governance rights that had allowed us to exert substantial influence over KDP and resulted in a change of accounting from equity method investment accounting to accounting for equity interests with readily determinable fair values ("marketable securities") during the first quarter of 2023.

Subsequently in 2023, we sold the remainder of our shares

of KDP and exited our investment in the company.

During the first quarter of 2023, we sold approximately 30 million shares of KDP, which reduced our ownership interest to 3.2%.

We recorded a pre-tax gain on equity method transactions of $493 million (or $368 million after-tax).

Our reduction in ownership to below 5% resulted in a change of accounting from equity method investment accounting to accounting for equity interests with readily determinable fair values ("marketable securities").

On June 8, 2023, we sold 23 million shares of KDP, which reduced our ownership to 1.6%.

Subsequently in 2023, we sold the remainder of our shares of KDP and exited our investment in the company.

JDE Peet’s Transactions (Euronext Amsterdam:

During the three months ended March 31, 2024, we determined there was an other-than-temporary impairment of our investment in JDEP, resulting in an impairment charge of €612 million ($665 million).

During the first quarter of 2024, we determined there was an other-than-temporary impairment of our investment in JDEP, resulting in an impairment charge of €612 million ($665 million).

During the first quarter of 2023, we sold approximately 7.7 million shares of JDEP, which reduced our ownership to 18.1%.

We recorded a loss of €18 million ($19 million) on this sale.

For additional information, refer to Note 6, Investments and Note 9, Financial Instruments.

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

As of March 31, 2024, numerous countries have now enacted the Organization of Economic Cooperation and Development’s model rules on a global minimum tax with the earliest effective date being for taxable years beginning after December 31, 2023.

As of June 30, 2024, numerous countries have now enacted the Organization of Economic Cooperation and Development’s model rules on a global minimum tax with the earliest effective date being for taxable years beginning after December 31, 2023.

Based on the guidance available thus far, we do not expect this legislation to have a material impact on our consolidated financial statements but we will continue to evaluate it as additional guidance and clarification becomes available.

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Summary of Results

• Net revenues increased 1.4% to $9.3 billion in the first quarter of 2024 as compared to the same period in the prior year.

Net revenue growth in the first quarter of 2024 was driven by higher net pricing and incremental net revenue from a short-term distributor agreement related to the sale of our developed market gum business, partially offset by unfavorable volume/mix, the impact of our 2023 divestiture of the developed market gum business and unfavorable currency-related items, as the U.S.

dollar strengthened relative to most currencies we operate in compared to exchange rates in the prior year.

• Organic Net Revenue, a non-GAAP financial measure, increased 4.2% to $9.4 billion in the first quarter of 2024 as compared to same period in the prior year.

During the first quarter of 2024, Organic Net Revenue grew due to higher net pricing, partially offset by unfavorable volume/mix.

• Net revenues decreased 1.9% to $8.3 billion in the second quarter of 2024 and decreased 0.2% to $17.6 billion in the first six months of 2024 as compared to the same periods in the prior year.

– Net revenue decline in the second quarter of 2024 was driven by unfavorable currency-related items, as the U.S.

dollar strengthened relative to most currencies we operate in compared to exchange rates in the prior year, unfavorable volume/mix and the impact of our 2023 divestiture of the developed market gum business, partially offset by higher net pricing.

– Net revenue decline in the first six months of 2024 was driven by unfavorable volume/mix, unfavorable currency-related items, as the U.S.

dollar strengthened relative to most currencies we operate in compared to exchange rates in the prior year and the impact of our 2023 divestiture of the developed market gum business, partially offset by higher net pricing and incremental net revenue from a short-term distributor agreement related to the sale of our developed market gum business.

• Organic Net Revenue, a non-GAAP financial measure, increased 2.5% to $8.6 billion in the second quarter of 2024 and increased 3.4% to $18.0 billion in the first six months of 2024 as compared to the same periods in the prior year.

During both the second quarter and first six months of 2024, Organic Net Revenue grew due to higher net pricing, partially offset by unfavorable volume/mix.

Organic Net Revenue is on a constant currency basis and excludes revenue from acquisitions and divestitures.

Refer to Non-GAAP Financial Measures for the definition of Organic Net Revenue and Consolidated Results of Operations for our reconciliation with net revenues.

• Diluted EPS attributable to Mondelēz International decreased (31.6)% to $1.04 in the first quarter of 2024 as compared to the same period in the prior year.

Diluted EPS decreased in the first quarter of 2024, driven by an impairment charge on our JDEP equity method investment in 2024, lapping prior-year gains on marketable securities and equity method investment transactions related to our former KDP investment, lapping prior-year operating results from the developed market gum business divested in 2023 and higher costs incurred from our Simplify to Grow program.

These unfavorable items were partially offset by a favorable year-over-year change in mark-to-market impacts from currency and commodity derivatives, an increase in Adjusted EPS, lower divestiture-related costs, lower acquisition integration costs and contingent consideration adjustments and lower equity method investee items.

• Adjusted EPS, a non-GAAP financial measure, increased 10.5% to $0.95 in the first quarter of 2024 as compared to the same period in the prior year.

On a constant currency basis, Adjusted EPS increased 16.3% to $1.00 in the first quarter of 2024 as compared to the same period in the prior year.

Adjusted EPS increased in the first quarter of 2024, driven by operating gains, lower interest expense and fewer shares outstanding, partially offset by unfavorable currency-related items and higher taxes.

• Diluted EPS attributable to Mondelēz International decreased (34.8)% to $0.45 in the second quarter of 2024 and decreased (32.3)% to $1.49 in the first six months of 2024 as compared to the same periods in the prior year.

– Diluted EPS decreased in the second quarter of 2024, driven by an unfavorable year-over-year change in mark-to-market impacts from commodity and currency derivatives, lapping prior-year operating results from the developed market gum business divested in 2023, unfavorable initial impacts from enacted tax law changes, higher acquisition integration costs and contingent consideration adjustments and higher equity method investee items.

These unfavorable items were partially offset by an increase in Adjusted EPS, lapping prior-year losses on marketable securities and equity method investment transactions, lower loss on remeasurement of net monetary position and lower divestiture-related costs.

– Diluted EPS decreased in the first six months of 2024, driven by an impairment charge on our JDEP equity method investment in 2024, lapping prior-year net gains on marketable securities and equity method investment transactions primarily related to our former KDP investment, lapping prior-year operating results from the developed market gum business divested in 2023, unfavorable initial impacts from enacted tax law changes, higher acquisition integration costs and contingent consideration adjustments, higher costs incurred from our Simplify to Grow program and higher equity method investee items.

These unfavorable items were partially offset by an increase in Adjusted EPS, favorable year-over-year change in mark-to-market impacts from commodity and currency derivatives, lower divestiture-related costs and lower loss on remeasurement of net monetary position.

• Adjusted EPS, a non-GAAP financial measure, increased 19.4% to $0.86 in the second quarter of 2024 and increased 15.9% to $1.82 in the first six months of 2024 as compared to the same periods in the prior year.

On a constant currency basis, Adjusted EPS increased 25.0% to $0.90 in the second quarter of 2024 and increased 20.4% to $1.89 in the first six months of 2024 as compared to the same periods in the prior year.

Refer to Non-GAAP Financial Measures for the definition of Adjusted EPS and Consolidated Results of Operations for our reconciliation with diluted EPS.

– Adjusted EPS increased in the second quarter of 2024, driven by operating gains, lower interest expense and fewer shares outstanding, partially offset by unfavorable currency-related items and higher taxes.

– Adjusted EPS increased in the first six months of 2024, driven by operating gains, lower interest expense, fewer shares outstanding and higher benefit plan non-service income, partially offset by unfavorable currency-related items, higher taxes and lapping prior year dividend income related to our former KDP investment.

Discussion and Analysis of Historical Results

4 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

See Note 2024 2023 2024 2023

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Implementation charges (12) (4) (23) (9)

Mark-to-market gains from derivatives (1)

Mark-to-market (losses)/gains from derivatives (1)

Note 9 (573) 168 551 216

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contingent consideration adjustments (1)

(36) (24) (79) (75)

Divestiture-related costs — (22) (4) (52)

Incremental costs due to war in Ukraine (2)

Note 1 (1) — (2) 3

European Commission legal matter Note 12 3 — 3 —

ERP System Implementation costs (3)

Remeasurement of net monetary position Note 1 (9) (26) (17) (38)

1 unchanged sentence

Note 10 (3) (2) (5) (5)

Gain on marketable securities

Loss on debt extinguishment and related expenses Note 8 — (1) — (1)

Initial impacts from enacted tax law changes Note 14 (25) (2) (23) (2)

(Loss)/gain on marketable securities

Note 6 — (194) — 593

(Loss)/gain on equity method investment transactions including impairments (4)

Note 6 — (23) (665) 462

Equity method investee items (5)

(19) — (47) (44)

Effective tax rate Note 14 34.7 % 23.1 % 26.2 % 27.3 %

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Please see the Non-GAAP Financial Measures section at the end of this item and Note 1, Basis of Presentation – War in Ukraine , for additional information.

(3) ERP System Implementation program costs represent incremental operating expenses above the normal ongoing level of spending on information technology to support operations.

These expenses include third-party consulting fees, direct labor costs associated with the program, accelerated depreciation of our existing SAP financial systems and various other expenses, all associated with the implementation of our information technology upgrades.

(4) (Loss)/gain (including non-cash impairment charges) on equity method investment transactions is recorded outside pre-tax operating results on the condensed consolidated statement of earnings.

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Consolidated Results of Operations

Three Months Ended March 31

Three Months Ended June 30

For the Three Months Ended

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0.45 0.69 (0.24) (34.8) %

Net Revenues – Net revenues increased $124 million (1.4%) to $9,290 million in the first quarter of 2024, and Organic Net Revenue (1) increased $378 million (4.2%) to $9,397 million.

Emerging markets net revenues increased 3.8% and emerging markets Organic Net Revenue increased 8.3% (1) .

Net Revenues – Net revenues decreased $164 million (1.9%) to $8,343 million in the second quarter of 2024, and Organic Net Revenue (1) increased $209 million (2.5%) to $8,559 million.

Emerging markets net revenues decreased (1.4)% and emerging markets Organic Net Revenue increased 4.5% (1) .

Developed markets net revenues decreased (2.3)% and developed markets Organic Net Revenue increased 1.2% (1) .

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International

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Reported (GAAP) $ 3,260 $ 5,083 $ 8,343

Short-term distributor agreements

(3) (22) (25)

Currency-related items

Organic (Non-GAAP) $ 3,453 $ 5,106 $ 8,559

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Reported (GAAP) $ 3,306 $ 5,201 $ 8,507

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Divestitures - pp 3.1 pp 1.8 pp

Short-term distributor agreements

(0.1) (0.4) (0.3) pp

Currency-related items

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

Net revenue increase of 1.4% was driven by our underlying Organic Net Revenue growth of 4.2% and the impact of a short-term distributor agreement, partially offset by the impact of our 2023 divestiture of the developed market gum business and unfavorable currency-related items.

Organic Net Revenue growth was driven by higher net pricing, partially offset by unfavorable volume/mix.

Higher net pricing in all regions was due to the benefit of carryover pricing from 2023 as well as the effects of input cost-driven pricing actions taken during the first three months of 2024.

Overall, unfavorable volume/mix was driven by volume declines, due to expected customer price negotiation disruptions in Europe, softer consumer demand in the U.S.

and geopolitical impacts in parts of AMEA, which were partially offset by favorable product mix.

Unfavorable volume/mix was reflected across all regions.

The short-term distributor agreement related to the October 1, 2023 sale of our developed market gum business added incremental net revenues of $25 million.

The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $147 million.

Refer to Note 2, Divestitures, for additional information.

Net revenue decrease of 1.9% was driven by unfavorable currency-related items and the impact of our 2023 divestiture of the developed market gum business, partially offset by our underlying Organic Net Revenue growth of 2.5%.

Currency-related items decreased net revenues by $216 million, driven by unfavorable currency translation rate changes, partially offset by the adjustment for extreme pricing in Argentina.

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Unfavorable currency translation rate changes were due to the strength of the U.S.

dollar relative to several currencies, primarily the

Argentinean peso, as well as the Russian ruble, Turkish lira, Nigerian naira, Chinese yuan and Australian dollar, partially offset by the strength of several currencies relative to the U.S.

dollar, including the Mexican peso, British pound sterling, Brazilian real, euro and Polish zloty.

Operating Income – Operating income increased $1,222 million (81.2%) to $2,727 million in the first quarter of 2024.

dollar relative to several currencies, primarily the Argentinean peso, as well as the Nigerian naira, Russian ruble, Turkish lira, Brazilian real, Egyptian pound, euro and Chinese yuan, partially offset by the strength of a few currencies relative to the U.S.

dollar, including the Mexican peso, British pound sterling, Polish zloty and Colombian peso.

The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $157 million for the second quarter of 2024.

Refer to Note 2, Divestitures, for additional information.

Organic Net Revenue growth was driven by higher net pricing, partially offset by unfavorable volume/mix.

Higher net pricing in all regions was due to the benefit of carryover pricing from 2023 as well as the effects of input cost-driven pricing actions taken during the first six months of 2024.

Overall, unfavorable volume/mix was driven by volume declines, due to expected customer price negotiation disruptions in Europe, softer consumer demand in the U.S.

and Mexico, and geopolitical impacts in parts of AMEA, which were partially offset by favorable product mix.

Unfavorable volume/mix was reflected across all regions.

Operating Income – Operating income decreased $571 million (40.1%) to $854 million in the second quarter of 2024.

Adjusted Operating Income (1) increased $223 million (17.6%) to $1,492 million and Adjusted Operating Income on a constant currency basis (1) increased $280 million (22.1%) to $1,549 million due to the following:

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Simplify to Grow Program (2)

Mark-to-market gains from derivatives (3)

Mark-to-market losses/(gains) from derivatives (3)

571 (171) 742

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Operating results from divestitures (4)

Operating results from short-term distributor agreements (1)

European Commission legal matter (3) — (3)

Incremental costs due to war in Ukraine (5)

ERP System Implementation costs

Remeasurement of net monetary position (5)

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Higher net pricing $ 396

Higher input costs (130)

Lower input costs

Unfavorable volume/mix (68)

Higher selling, general and administrative expenses (79)

Higher asset impairment charges 10

Higher amortization of intangible assets

Lower asset impairment charges

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

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(5) Refer to Note 1, Basis of Presentation , for information on our accounting for the war in Ukraine and our application of highly inflationary accounting for Argentina and Türkiye.

During the first quarter of 2024, we realized higher net pricing, which was partially offset by increased input costs and unfavorable volume/mix.

Higher net pricing, which included the carryover impact of pricing actions taken in 2023 as well as the effects of input cost-driven pricing actions taken during the first three months of 2024, was reflected across all regions.

The increase in input costs was driven by higher raw material costs net of realized gains from our forward purchasing and hedging contracts, partially offset by lower manufacturing costs driven by productivity.

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

Overall, volume/mix was due to volume declines partially offset by favorable product mix.

Unfavorable volume/mix was driven by Europe, North America and Latin America, which was marginally offset by slightly favorable volume/mix in AMEA.

Total selling, general and administrative expenses increased $83 million from the first quarter of 2023, which reflected benefits from a number of factors noted in the table above, including in part, lower divestiture-related costs, the elimination of costs from the developed market gum business divested in 2023, lower acquisition integration costs and contingent consideration adjustments and lower remeasurement loss of net monetary position, marginally offset by higher implementation costs incurred for the Simplify to Grow program.

Excluding these factors, selling, general and administrative expenses increased $138 million from the first quarter of 2023.

During the second quarter of 2024, we realized higher net pricing, which was partially offset by increased input costs and unfavorable volume/mix.

Higher net pricing, which included the carryover impact of pricing actions taken in 2023 as well as the effects of input cost-driven pricing actions taken during the first six months of 2024, was reflected across all regions.

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

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

Overall, unfavorable volume/mix was due to volume declines partially offset by favorable product mix.

Unfavorable volume/mix was experienced in all regions.

Total selling, general and administrative expenses increased $22 million from the second quarter of 2023, which was net of benefits from a number of factors noted in the table above, including in part, the elimination of costs from the developed market gum business divested in 2023, lower divestiture-related costs, lower remeasurement loss of net monetary position and a favorable currency translation impact related to expenses, partially offset by higher acquisition integration costs and contingent consideration adjustments and costs incurred for the ERP System Implementation program.

Excluding these factors, selling, general and administrative expenses increased $79 million from the second quarter of 2023.

The increase was driven primarily by higher advertising and consumer promotion costs and higher overhead costs in part due to increased investments in route to market capabilities.

Unfavorable currency-related items decreased operating income by $70 million primarily due to the strength of the U.S.

dollar relative to most currencies, including the Argentinean peso, Russian ruble, Turkish lira, Chinese yuan, Australian dollar, Nigerian naira and Egyptian pound, partially offset by the strength of a few currencies relative to the U.S.

dollar, primarily the British pound sterling, Mexican peso, Brazilian real, euro and Polish zloty.

Operating income margin increased from 16.4% in the first quarter of 2023 to 29.4% in the first quarter of 2024.

The increase in operating income margin was driven primarily by the favorable year-over-year change in mark-to-market gains/(losses) from currency and commodity hedging activities, higher Adjusted Operating Income margin, lower divestiture-related costs and lower remeasurement loss of net monetary position, partially offset by the impact from the developed market gum business divested in 2023 and higher costs incurred for the Simplify to Grow program.

Adjusted Operating Income margin increased from 16.9% for the first quarter of 2023 to 18.5% for the first quarter of 2024.

The increase was driven primarily by higher net pricing, lower manufacturing costs driven by productivity, favorable product mix and overhead cost leverage, partially offset by higher raw material costs and higher advertising and consumer promotion costs.

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $1,412 million decreased by $669 million (32.1%) in the first quarter of 2024.

Diluted EPS attributable to Mondelēz International was $1.04 in the first quarter of 2024, down $0.48 (31.6%) from the first quarter of 2023.

Adjusted EPS (1) was $0.95 in the first quarter of 2024, up $0.09 (10.5%) from the first quarter of 2023.

Adjusted EPS on a constant currency basis (1) was $1.00 in the first quarter of 2024, up $0.14 (16.3%) from the first quarter of 2023.

Unfavorable currency-related items, net of the adjustment for extreme pricing in Argentina, decreased operating income by $57 million primarily due to the strength of the U.S.

dollar relative to most currencies, including the Argentinean peso, Egyptian pound, Russian ruble, Brazilian real, Turkish lira, euro and Chinese yuan, partially offset by the strength of a few currencies relative to the U.S.

dollar, primarily the Mexican peso, British pound sterling and Polish zloty.

Operating income margin decreased from 16.8% in the second quarter of 2023 to 10.2% in the second quarter of 2024.

The decrease in operating income margin was driven primarily by the unfavorable year-over-year change in mark-to-market gains/(losses) from commodity and currency hedging activities, the impact from the developed market gum business divested in 2023, higher acquisition integration costs and contingent consideration adjustments, costs incurred for the ERP System Implementation program and higher costs incurred for the Simplify to Grow program, partially offset by higher Adjusted Operating Income margin, lower divestiture-related costs and lower remeasurement loss of net monetary position.

Adjusted Operating Income margin increased from 15.2% for the second quarter of 2023 to 17.9% for the second quarter of 2024.

The increase was driven primarily by higher net pricing, lower manufacturing costs driven by productivity and overhead cost leverage, partially offset by higher advertising and consumer promotion costs and higher raw material costs.

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $601 million decreased by $343 million (36.3%) in the second quarter of 2024.

Diluted EPS attributable to Mondelēz International was $0.45 in the second quarter of 2024, down $0.24 (34.8%) from the second quarter of 2023.

Adjusted EPS (1) was $0.86 in the second quarter of 2024, up $0.14 (19.4%) from the second quarter of 2023.

Adjusted EPS on a constant currency basis (1) was $0.90 in the second quarter of 2024, up $0.18 (25.0%) from the second quarter of 2023.

For the Three Months Ended

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Simplify to Grow Program (2)

0.03 0.02 0.01

Mark-to-market gains from derivatives (2)

Mark-to-market losses/(gains) from derivatives (2)

0.34 (0.11) 0.45

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Remeasurement of net monetary position (2)

0.01 0.02 (0.01)

Initial impacts from enacted tax law changes (3)

Gain on marketable securities (4)

— 0.11 (0.11)

Loss/(gain) on equity method investment transactions

Loss on equity method investment transactions

including impairments (4)

1 unchanged sentence

Equity method investee items (5)

0.02 0.03 (0.01)

Adjusted EPS (1)

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GAAP results was computed based on the facts and tax assumptions associated with each item, and such impacts have also been excluded from Adjusted EPS.

• For the three months ended March 31, 2024, taxes for the:

Simplify to Grow Program were $(11) million, mark-to-market gains from derivatives were $227 million, acquisition integration costs and contingent consideration adjustments were $(10) million, remeasurement of net monetary position were zero, loss on equity method investment transactions including impairments were zero and equity method investee items were zero.

• For the three months ended March 31, 2023, taxes for the:

• For the three months ended June 30, 2024, taxes for the:

Simplify to Grow Program were $(6) million, mark-to-market losses from derivatives were $(111) million, acquisition integration costs and contingent consideration adjustments were $(7) million, remeasurement of net monetary position were zero, initial impacts from enacted tax law changes were $25 million and equity method investee items were zero.

• For the three months ended June 30, 2023, taxes for the:

Simplify to Grow Program were $(1) million, mark-to-market gains from derivatives were $21 million, acquisition integration costs and contingent consideration adjustments were $(9) million, divestiture-related costs were $(4) million, operating results from divestitures were $12 million, remeasurement of net monetary position were zero, gain on marketable securities were $(45) million, gain on equity method investment transactions were $(1) million and equity method investee items were zero.

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

(3) Refer to Note 14, Income Taxes , for additional information on the items affecting income taxes.

(4) Refer to Note 6, Investments , for additional information on gains/losses (including non-cash impairment charges) on equity method investment transactions and marketable securities.

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dollar-denominated debt, which is included in currency translation.

(6) Refer to Note 14, Income Taxes , for additional information on the items affecting income taxes.

(7) Refer to Note 11, Stock Plans , for additional information on our equity compensation programs and share repurchase program and Note 15, Earnings per Share , for earnings per share weighted-average share information.

Six Months Ended June 30:

For the Six Months Ended

2024 2023 $ Change

(in millions, except per share data)

Net revenues $ 17,633 $ 17,673 $ (40) (0.2) %

Operating income 3,581 2,930 651 22.2 %

Net earnings attributable to

Mondelēz International

2,013 3,025 (1,012) (33.5) %

Diluted earnings per share attributable to

Mondelēz International

1.49 2.20 (0.71) (32.3) %

Net Revenues – Net revenues decreased $40 million (0.2%) to $17,633 million in the first six months of 2024, and Organic Net Revenue (1) increased $587 million (3.4%) to $17,956 million.

Emerging markets net revenues increased 1.3% and emerging markets Organic Net Revenue increased 6.5% (1) .

Developed markets net revenues decreased (1.2)% and developed markets Organic Net Revenue increased 1.3% (1) .

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

Markets Developed

Markets Mondelēz

International

Six Months Ended June 30, 2024

Reported (GAAP) $ 6,993 $ 10,640 $ 17,633

Short-term distributor agreements

(3) (22) (25)

Currency-related items

Organic (Non-GAAP) $ 7,349 $ 10,607 $ 17,956

Six Months Ended June 30, 2023

Reported (GAAP) $ 6,904 $ 10,769 $ 17,673

Divestitures (3) (301) (304)

Organic (Non-GAAP) $ 6,901 $ 10,468 $ 17,369

Reported (GAAP) 1.3 % (1.2) % (0.2) %

Divestitures — pp 2.8 pp 1.7 pp

Short-term distributor agreements

— (0.2) (0.1)

Currency-related items

5.2 (0.1) 2.0

Organic (Non-GAAP) 6.5 % 1.3 % 3.4 %

Vol/Mix (1.0) pp (3.0) pp (2.1) pp

Pricing 7.5 4.3 5.5

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

Net revenue decrease of 0.2% was driven by unfavorable currency-related items and the impact of our 2023 divestiture of the developed market gum business, partially offset by our underlying Organic Net Revenue growth of 3.4% and the impact of a short-term distributor agreement.

Currency-related items decreased net revenues by $348 million, driven by unfavorable currency translation rate changes, partially offset by the adjustment for extreme pricing in Argentina.

Refer to Recent Developments and Significant Items Affecting Comparability for additional information.

Unfavorable currency translation rate changes were due to the strength of the U.S.

dollar relative to most currencies, primarily the Argentinean peso, as well as the Russian ruble, Turkish lira, Nigerian naira, Chinese yuan, Egyptian pound and Australian dollar, partially offset by the strength of a few currencies relative to the U.S.

dollar, including the Mexican peso, British pound sterling, Polish zloty and Colombian peso.

The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $304 million for the first six months of 2024.

Refer to Note 2, Divestitures, for additional information.

Organic Net Revenue growth was driven by higher net pricing, partially offset by unfavorable volume/mix.

Higher net pricing in all regions was due to the benefit of carryover pricing from 2023 as well as the effects of input cost-driven pricing actions taken during the first six months of 2024.

Overall, unfavorable volume/mix was driven by volume declines, due to expected customer price negotiation disruptions in Europe, softer consumer demand in the U.S.

and Mexico and geopolitical impacts in parts of AMEA, which were partially offset by favorable product mix.

Unfavorable volume/mix

was reflected across all regions.

The short-term distributor agreement related to the October 1, 2023 sale of our developed market gum business added incremental net revenues of $25 million for the first six months of 2024.

Operating Income – Operating income increased $651 million (22.2%) to $3,581 million in the first six months of 2024.

Adjusted Operating Income (1) increased $409 million (14.6%) to $3,202 million and Adjusted Operating Income on a constant currency basis (1) increased $536 million (19.2%) to $3,329 million due to the following:

For the Six Months Ended

2024 2023 $ Change % Change

(in millions)

Operating Income $ 3,581 $ 2,930 $ 651 22.2 %

Simplify to Grow Program (2)

Mark-to-market gains from derivatives (3)

(553) (220) (333)

Acquisition integration costs and

contingent consideration adjustments (4)

Divestiture-related costs (4)

Operating income from divestitures (4)

Operating income from short-term distributor agreements

European Commission legal matter

Incremental costs due to war in Ukraine (5)

ERP System Implementation costs

Remeasurement of net monetary position (5)

Adjusted Operating Income (1)

$ 3,202 $ 2,793 $ 409 14.6 %

Currency-related items

Adjusted Operating Income (constant currency) (1)

$ 3,329 $ 2,793 $ 536 19.2 %

Key Drivers of Adjusted Operating Income (constant currency) $ Change

Higher net pricing $ 962

Higher input costs (105)

Unfavorable volume/mix (121)

Higher selling, general and administrative expenses (217)

Higher amortization of intangible assets

Lower asset impairment charges

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

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

(2) Refer to Note 7, Restructuring Program, for more information.

(3) Refer to Note 9, Financial Instruments , Note 16, Segment Reporting , and Non-GAAP Financial Measures section at the end of this item for more information on the unrealized gains/losses on commodity and forecasted currency transaction derivatives.

(4) Refer to Note 2, Divestitures , for additional information on the October 1, 2023 sale of the developed market gum business.

Refer to Note 2, Acquisitions and Divestitures in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information on our 2022 acquisitions.

(5) Refer to Note 1, Basis of Presentation , for information on our accounting for the war in Ukraine and our application of highly inflationary accounting for Argentina and Türkiye.

During the first six months of 2024, we realized higher net pricing, which was partially offset by increased input costs and unfavorable volume/mix.

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

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

Overall, unfavorable volume/mix was due to volume declines partially offset by favorable product mix.

Unfavorable volume/mix was experienced in all regions.

Total selling, general and administrative expenses increased $105 million from the first six months of 2023, which was net of benefits from a number of factors noted in the table above, including in part, the elimination of costs from the developed market gum business divested in 2023, lower divestiture-related costs, lower remeasurement loss of net monetary position and a favorable currency translation impact related to expenses, marginally offset by costs incurred for the ERP System Implementation program, higher implementation costs incurred for the Simplify to Grow program and lower acquisition integration costs and contingent consideration adjustments.

Excluding these factors, selling, general and administrative expenses increased $217 million from the first six months of 2023.

The increase was driven primarily by higher advertising and consumer promotion costs and higher overhead costs in part due to increased investments in route to market capabilities.

Unfavorable currency changes, net of the adjustment for extreme pricing in Argentina, decreased operating income by $127 million primarily due to the strength of the U.S.

dollar relative to most currencies, including the Argentinean peso, Russian ruble, Turkish lira, Chinese yuan, Egyptian pound, Nigerian naira and Australian dollar, partially offset by the strength of a few currencies relative to the U.S.

dollar, primarily the British pound sterling, Mexican peso and Polish zloty.

Operating income margin increased from 16.6% in the first six months of 2023 to 20.3% in the first six months of 2024.

The increase was driven primarily by higher Adjusted Operating Income margin, favorable year-over-year change in mark-to-market gains/(losses) from commodity and currency hedging activities, lower divestiture-related costs and lower remeasurement loss of net monetary position, partially offset by the impact from the developed market gum business divested in 2023, higher costs incurred for the Simplify to Grow program and costs incurred for the ERP System Implementation program.

Adjusted Operating Income margin increased from 16.1% for the first six months of 2023 to 18.2% for the first six months of 2024.

The increase was driven primarily by higher net pricing, lower manufacturing costs driven by productivity and overhead leverage, partially offset by higher raw material costs and higher advertising and consumer promotion costs.

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $2,013 million decreased by $1,012 million (33.5%) in the first six months of 2024 .

Diluted EPS attributable to Mondelēz International was $1.49 in the first six months of 2024, down $0.71 (32.3%) from the first six months of 2023.

Adjusted EPS (1) was $1.82 in the first six months of 2024, up $0.25 (15.9%) from the first six months of 2023.

Adjusted EPS on a constant currency basis (1) was $1.89 in the first six months of 2024, up $0.32 (20.4%) from the first six months of 2023.

For the Six Months Ended

2024 2023 $ Change % Change

Diluted EPS attributable to Mondelēz International $ 1.49 $ 2.20 $ (0.71) (32.3) %

Simplify to Grow Program (2)

0.04 0.03 0.01

Mark-to-market gains from derivatives (2)

(0.32) (0.14) (0.18)

Acquisition integration costs and

contingent consideration adjustments (2)

0.05 0.04 0.01

Divestiture-related costs (2)

— 0.03 (0.03)

Net earnings from divestitures (2)

— (0.09) 0.09

Remeasurement of net monetary position (2)

0.01 0.03 (0.02)

Initial impacts from enacted tax law changes (3)

Gain on marketable securities (4)

— (0.32) 0.32

Losses/(gains) on equity method investment transactions (4)

0.49 (0.24) 0.73

Equity method investee items (5)

0.04 0.03 0.01

Adjusted EPS (1)

$ 1.82 $ 1.57 $ 0.25 15.9 %

Currency-related items

Adjusted EPS (constant currency) (1)

$ 1.89 $ 1.57 $ 0.32 20.4 %

Key Drivers of Adjusted EPS (constant currency) $ Change

Increase in operations $ 0.30

Change in benefit plan non-service income 0.01

Change in interest and other expense, net (6)

Dividend income from marketable securities (0.01)

Change in income taxes (3)

Change in shares outstanding (7)

Total change in Adjusted EPS (constant currency) (1)

(1) Refer to the Non-GAAP Financial Measures section appearing later in this section.

The tax expense/(benefit) of each of the pre-tax items excluded from our U.S.

GAAP results was computed based on the facts and tax assumptions associated with each item, and such impacts have also been excluded from Adjusted EPS.

• For the six months ended June 30, 2024, taxes for the:

Simplify to Grow Program were $(17) million, mark-to-market gains from derivatives were $116 million, acquisition integration costs and contingent consideration adjustments were $(17) million, remeasurement of net monetary position were zero, initial impacts from enacted tax law changes were $23 million, gain on equity method investment transactions were zero and equity method investee items were zero.

• For the six months ended June 30, 2023, taxes for the:

Simplify to Grow Program were $(7) million, mark-to-market gains from derivatives were $29 million, acquisition integration costs and contingent consideration adjustments were $(22) million, divestiture-related costs were $(8) million, net earnings from divestitures were $28 million, remeasurement of net monetary position were zero, gain on marketable securities were $156 million, gain on equity method investment transactions were $124 million and equity method investee items were zero.

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

(3) Refer to Note 14, Income Taxes , on the items affecting income taxes.

(4) Refer to Note 6, Investments , for more information on the gain/(loss) on equity method investment transactions and marketable securities.

(5) Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peet's equity method investee, such as acquisition and divestiture-related costs and restructuring program costs.

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

dollar-denominated debt, which is included in currency translation.

(7) Refer to Note 11, Stock Plans , for more information on our equity compensation programs and share repurchase program and Note 15, Earnings per Share , for earnings per share weighted-average share information.

Results of Operations by Reportable Segment

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See Note 16, Segment Reporting, for additional information on our segments and Items Affecting Comparability of Financial Results earlier in this section for items affecting our segment operating results.

Our segment net revenues and earnings were:

Our reconciliation of segment net revenues and earnings to consolidated financial statement totals were:

For the Three Months Ended

June 30, For the Six Months Ended

2024 2023 2024 2023

(in millions)

6 unchanged sentences

Earnings before income taxes:

Operating income:

Segment operating income:

Latin America $ 144 $ 134 $ 301 $ 273

AMEA 290 207 701 567

Europe 550 449 1,141 956

North America 545 580 1,094 1,146

Unrealized gains on hedging activities

Unrealized (losses)/gains on hedging activities

(mark-to-market impacts) (571) 171 553 220

4 unchanged sentences

Interest and other expense, net (32) (97) (100) (192)

Gain on marketable securities

(Loss)/gain on marketable securities

— (189) — 607

Earnings before income taxes $ 850 $ 1,161 $ 3,532 $ 3,386

5 unchanged sentences

Segment operating income 144 134 10 7.5 %

Three Months Ended March 31:

Net revenues increased $108 million (8.9%), due to higher net pricing (8.3 pp) and favorable impact of currency-related items (1.8 pp), partially offset by unfavorable volume/mix (1.2 pp).

For the Six Months Ended

2024 2023 $ Change

(in millions)

Net revenues $ 2,551 $ 2,439 $ 112 4.6 %

Segment operating income 301 273 28 10.3 %

Three Months Ended June 30:

Net revenues increased $4 million (0.3%), due to higher net pricing (7.7 pp), partially offset by unfavorable impact of currency-related items (4.2 pp) and unfavorable volume/mix (3.2 pp).

Higher net pricing, net of the adjustment for extreme pricing in Argentina, was driven by input cost-driven pricing actions and reflected across all categories, primarily in Argentina, Mexico and Brazil.

Currency-related items were net positive due to the adjustment for extreme pricing in Argentina, which was mostly offset by unfavorable currency translation rate changes.

Currency-related items were unfavorable, net of the adjustment for extreme pricing in Argentina, due to currency translation rate changes.

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

dollar relative to a few currencies in the region, primarily the Argentinean peso and Chilean peso, partially offset by the strength of several currencies relative to the U.S.

dollar, primarily the Mexican peso and Brazilian real.

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

dollar relative to a few currencies in the region, primarily the Argentinean peso and Brazilian real, partially offset by the strength of a few currencies relative to the U.S.

dollar, primarily the Mexican peso and Colombian peso.

Overall, unfavorable volume/mix reflected consumer softness, primarily in Mexico.

Unfavorable volume/mix was driven by declines in chocolate, cheese & grocery, gum, candy and refreshment beverages, partially offset by a gain in biscuits & baked snacks.

Segment operating income increased $10 million (7.5%), primarily due to higher net pricing and lower manufacturing costs driven by productivity.

These favorable items were partially offset by higher raw material costs, unfavorable currency-related items, unfavorable volume/mix and higher advertising and consumer promotion costs.

Six Months Ended June 30:

Net revenues increased $112 million (4.6%), due to higher net pricing (8.0 pp), partially offset by unfavorable volume/mix (2.2 pp) and unfavorable impact of currency-related items (1.2 pp).

Currency-related items were unfavorable, net of the adjustment for extreme pricing in Argentina, due to currency translation rate changes.

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

dollar relative to several currencies in the region, primarily the Argentinean peso and Chilean peso, partially offset by the strength of several currencies relative to the U.S.

dollar, primarily the Mexican peso and Colombian peso.

Unfavorable volume/mix reflected consumer softness, primarily in Mexico.

Overall, unfavorable volume/mix was driven by declines in chocolate, cheese & grocery, candy, biscuits & baked snacks and gum, partially offset by a gain in refreshment beverages.

Segment operating income increased $28 million (10.3%), primarily due to higher net pricing, lower other selling, general and administrative expenses, lower remeasurement loss on net monetary position and lower manufacturing costs driven by productivity.

These favorable items were partially offset by higher raw material costs, unfavorable currency-related items, higher acquisition integration costs, higher advertising and consumer promotion costs and unfavorable volume/mix.

These favorable items were partially offset by higher raw material costs, unfavorable currency-related items, unfavorable volume/mix, higher advertising and consumer promotion costs and higher acquisition integration costs.

For the Three Months Ended

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Segment operating income 290 207 83 40.1 %

Three Months Ended March 31:

Net revenues increased $11 million (0.6%), due to higher net pricing (6.1 pp), mostly offset by unfavorable currency (5.3 pp) and unfavorable volume/mix (0.2 pp).

For the Six Months Ended

2024 2023 $ Change

(in millions)

Net revenues $ 3,537 $ 3,548 $ (11) (0.3) %

Segment operating income 701 567 134 23.6 %

Three Months Ended June 30:

Net revenues decreased $22 million (1.4%), due to unfavorable currency translation rate changes (5.6 pp) and unfavorable volume/mix (1.8 pp), partially offset by higher net pricing (6.0 pp).

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

dollar relative to most currencies in the region, including the Nigerian naira, Egyptian pound and Chinese yuan.

Overall, unfavorable volume/mix was impacted by geopolitical events in the Middle East and Southeast Asia.

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

Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories.

Segment operating income increased $83 million (40.1%), primarily due to higher net pricing, lower manufacturing costs driven by productivity and lower other selling, general and administrative expenses.

These favorable items were partially offset by higher raw material costs, unfavorable currency translation rate changes, unfavorable volume/mix and higher advertising and consumer promotion costs.

Six Months Ended June 30:

Net revenues decreased $11 million (0.3%), due to unfavorable currency translation rate changes (5.5 pp) and unfavorable volume/mix (0.9 pp), mostly offset by higher net pricing (6.1 pp).

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

dollar relative to most currencies in the region, including the Nigerian naira, Chinese yuan, Australian dollar and Egyptian pound.

dollar relative to most currencies in the region, including the Nigerian naira, Chinese yuan, Egyptian pound and Australian dollar.

Overall, unfavorable volume/mix was impacted by geopolitical events in the Middle East and Southeast Asia.

Unfavorable volume/mix was driven by declines in biscuits & baked snacks, refreshment beverages and cheese & grocery, mostly offset by gains in gum, chocolate and candy.

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

Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories.

Segment operating income increased $134 million (23.6%), primarily due to higher net pricing and lower manufacturing costs driven by productivity.

These favorable items were partially offset by higher other selling, general and administrative expenses, higher raw material costs, unfavorable currency translation rate changes and higher advertising and consumer promotion costs.

These favorable items were partially offset by higher raw material costs, unfavorable currency translation rate changes, higher advertising and consumer promotion costs and unfavorable volume/mix.

For the Three Months Ended

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Segment operating income 550 449 101 22.5 %

Three Months Ended March 31:

Net revenues increased $61 million (1.8%), due to higher net pricing (7.9 pp) and the impact from short-term distributor agreements (0.8 pp), partially offset by unfavorable volume/mix (3.5 pp), the impact of divestitures (1.8 pp) and unfavorable currency translation rate changes (1.6 pp).

For the Six Months Ended

2024 2023 $ Change

(in millions)

Net revenues $ 6,242 $ 6,233 $ 9 0.1 %

Segment operating income 1,141 956 185 19.4 %

Three Months Ended June 30:

Net revenues decreased $52 million (1.8%), due to unfavorable volume/mix (3.1 pp), unfavorable currency translation rate changes (2.5 pp) and the impact of divestitures (2.0 pp), partially offset by higher net pricing (5.8 pp).

Overall, unfavorable volume/mix reflected volume declines due to the impact from customer price negotiation disruptions, partially offset by favorable product mix.

Unfavorable volume/mix was driven by declines in biscuits & baked snacks, chocolate, candy, gum, and refreshment beverages, partially offset by a gain in cheese & grocery.

Unfavorable currency translation rate changes reflected the strength of the U.S.

dollar relative to most currencies across the region, including the Russian ruble, Turkish lira and euro, partially offset by the strength of a few currencies relative to the U.S.

dollar, including the British pound sterling and Polish zloty.

The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $59 million.

Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories except cheese & grocery.

Segment operating income increased $101 million (22.5%), primarily due to higher net pricing, lower raw material costs including the benefit of realized gains from our forward purchasing and hedging contracts, lower remeasurement loss on net monetary position and lower divestiture-related costs.

These favorable items were partially offset by higher other selling, general and administrative expenses, higher advertising and consumer promotion costs, unfavorable volume/mix, lapping prior-year operating results from the developed market gum business divested in 2023, unfavorable currency translation rate changes, higher manufacturing costs and higher costs incurred for the Simplify to Grow Program.

Six Months Ended June 30:

Net revenues increased $9 million (0.1%), due to higher net pricing (6.9 pp), and the impact from short-term distributor agreements (0.4 pp ) , partially offset by unfavorable volume/mix (3.3 pp ) , unfavorable currency translation rate changes (2.0 pp) and the impact of divestitures (1.9 pp ).

Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories except cheese & grocery.

The short-term distributor agreement related to the October 1, 2023 sale of our developed market gum business added incremental net revenues of $25 million.

Overall, unfavorable volume/mix reflected volume declines due to the impact from customer price negotiation disruptions, partially offset by favorable product mix.

Unfavorable volume/mix was driven by declines in biscuits & baked snacks, chocolate, gum, candy and refreshment beverages, partially offset by a gain in cheese & grocery.

The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $55 million.

Unfavorable volume/mix was driven by declines in biscuits & baked snacks, chocolate, candy, gum and refreshment beverages, partially offset by a gain in cheese & grocery.

Unfavorable currency translation rate changes reflected the strength of the U.S.

dollar relative to several currencies across the region, including the Russian ruble and Turkish lira, partially offset by the strength of several currencies relative to the U.S.

dollar, including the British pound sterling, euro and Polish zloty.

Segment operating income increased $84 million (16.6%), primarily due to higher net pricing, lower manufacturing costs driven by productivity, lower divestiture-related costs and lower acquisition integration costs.

These favorable items were partially offset by higher raw material costs, higher other selling, general and administrative expenses, unfavorable volume/mix, higher advertising and consumer promotion costs, lapping prior-year operating results from the developed market gum business divested in 2023, unfavorable currency translation rate changes, higher costs incurred for the Simplify to Grow Program and higher remeasurement loss on net monetary position.

dollar relative to several currencies across the region, including the Russian ruble and Turkish lira, partially offset by the strength of a few currencies relative to the U.S.

dollar, including the British pound sterling and Polish zloty.

The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $114 million.

Segment operating income increased $185 million (19.4%), primarily due to higher net pricing, lower divestiture-related costs, lower manufacturing costs driven by productivity, lower remeasurement loss on net monetary position and lower acquisition integration costs.

These favorable items were partially offset by higher other selling, general

and administrative expenses, unfavorable volume/mix, higher advertising and consumer promotion costs, lapping prior-year operating results from the developed market gum business divested in 2023, unfavorable currency translation rate changes, higher costs incurred for the Simplify to Grow Program, higher incremental costs due to the war in Ukraine and higher raw material costs.

North America

4 unchanged sentences

Segment operating income 545 580 (35) (6.0) %

Three Months Ended March 31:

Net revenues decreased $56 million (2.1%), due to the impact of divestitures (3.5 pp) and unfavorable volume/mix (2.1 pp), partially offset by higher net pricing (3.4 pp) and favorable currency (0.1 pp).

For the Six Months Ended

2024 2023 $ Change

(in millions)

Net revenues $ 5,303 $ 5,453 $ (150) (2.8) %

Segment operating income 1,094 1,146 (52) (4.5) %

Three Months Ended June 30:

Net revenues decreased $94 million (3.4%), due to the impact of divestitures (3.6 pp), unfavorable volume/mix (1.2 pp) and unfavorable currency translation rate changes (0.1 pp), partially offset by higher net pricing (1.5 pp).

The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $98 million.

1 unchanged sentence

Unfavorable volume/mix was driven by declines in biscuits & baked snacks and candy, partially offset by a gain in chocolate.

Unfavorable currency translation rate changes were due to the strength of the U.S.

dollar relative to the Canadian dollar.

Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories.

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

Segment operating income decreased $17 million (3.0%), primarily due to lapping prior-year operating results from the developed market gum business divested in 2023, higher raw material costs, higher advertising and consumer promotion costs, unfavorable volume/mix, higher costs incurred for the Simplify to Grow Program and higher other selling, general and administrative expenses.

These unfavorable items were partially offset by higher net pricing, lower acquisition integration costs and contingent consideration adjustments, lower fixed asset impairment charges and lower manufacturing costs due to productivity.

Segment operating income decreased $35 million (6.0%), primarily due to lapping prior-year operating results from the developed market gum business divested in 2023, higher raw material costs, higher advertising and consumer promotion costs, higher acquisition integration costs and contingent consideration adjustments and unfavorable volume/mix.

These unfavorable items were partially offset by higher net pricing, lower manufacturing costs due to productivity, lower other selling, general and administrative expenses and lower divestiture-related costs.

Six Months Ended June 30:

Net revenues decreased $150 million (2.8%), due to the impact of divestitures (3.6 pp) and unfavorable volume/mix (1.6 pp), partially offset by higher net pricing (2.4 pp).

The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $190 million.

Overall, unfavorable volume/mix reflected consumer softness in the U.S.

Unfavorable volume/mix was driven by declines in biscuits & baked snacks and candy, partially offset by a gain in chocolate.

Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories.

Segment operating income decreased $52 million (4.5%), primarily due to lapping prior-year operating results from the developed market gum business divested in 2023, higher raw material costs, higher advertising and consumer promotion costs and unfavorable volume/mix.

Liquidity and Capital Resources

14 unchanged sentences

Our cash flow activity is noted below:

For the Three Months Ended

For the Six Months Ended

(in millions)

4 unchanged sentences

Net Cash Provided by Operating Activities

The increase in net cash provided by operating activities was primarily due to an increase in cash-basis net earnings, partially offset by unfavorable year-over-year working capital requirements.

This is largely a result of business growth and operating gains.

The increase in net cash provided by operating activities was primarily due to an increase in cash-basis net earnings, largely due to operating gains, partially offset by unfavorable year-over-year working capital movements.

Net Cash (Used in)/Provided by Investing Activities

The reduction in net cash used in/provided by investing activities was largely driven by lapping prior year proceeds from the KDP share sale (refer to Note 6, Investments ).

The reduction in net cash used in/provided by investing activities was largely driven by lapping prior year proceeds from the KDP and JDEP share sales (refer to Note 6, Investments ) combined with higher capital expenditures.

We continue to make capital expenditures primarily to modernize manufacturing facilities, implement new product manufacturing and support productivity initiatives.

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Net Cash Used in Financing Activities

The decrease in cash used in financing activities was primarily due to higher debt proceeds combined with lower debt repayments, partially offset by higher share repurchases and higher dividends paid in the first three months of 2024 compared to the same prior year period.

We paid dividends of $578 million in the first three months of 2024 and $529 million in the first three months of 2023.

The first quarter 2024 dividend of $0.425 per share, declared on February 2, 2024 for shareholders of record as of March 28, 2024, was paid on April 11, 2024.

The decrease in cash used in financing activities was primarily due to higher debt proceeds combined with lower debt repayments, partially offset by higher share repurchases and higher dividends paid in the first six months of 2024 compared to the same prior year period.

We paid dividends of $1,151 million in the first six months of 2024 and $1,055 million in the first six months of 2023.

The second quarter 2024 dividend of $0.425 per share, declared on May 22, 2024 for shareholders of record as of June 28, 2024, was paid on July 12, 2024.

On July 30, 2024, the Audit Committee, with authorization delegated from our Board of Directors, declared a quarterly cash dividend of $0.470 per share of Class A Common Stock, an increase of 11 percent.

This dividend is payable on October 14, 2024, to shareholders of record as of September 30, 2024.

The declaration of dividends is subject to the discretion of our Board of Directors and depends on various factors, including our net earnings, financial condition, cash requirements, future prospects and other factors that our Board of Directors deems relevant to its analysis and decision making.

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

As of March 31, 2024 and December 31, 2023, we had no material third-party guarantees recorded on our condensed consolidated balance sheet.

As of June 30, 2024 and December 31, 2023, we had no material third-party guarantees recorded on our condensed consolidated balance sheet.

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

The nature and amount of our long-term and short-term debt and the proportionate amount of each varies as a result of current and expected business requirements, market conditions and other factors.

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

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

At its December 2023 meeting, our Board of Directors approved a new $2 billion long-term financing authorization that replaced the prior long-term financing authorization of $2 billion.

As of March 31, 2024, $1.45 billion of the long-term financing authorization remained available.

Our total debt was $19.1 billion as of March 31, 2024 and $19.4 billion as of December 31, 2023.

Our debt-to-capitalization ratio was 0.40 at March 31, 2024 and 0.41 at December 31, 2023.

At March 31, 2024, the weighted-average term of our outstanding long-term debt was 7.7 years.

Our average daily commercial paper borrowings outstanding were $1.0 billion in the first three months of 2024 and $2.8 billion in the first three months of 2023.

As of June 30, 2024, $1.45 billion of the long-term financing authorization remained available.

Our total debt was $19.8 billion as of June 30, 2024 and $19.4 billion as of December 31, 2023.

Our debt-to-capitalization ratio was 0.42 at June 30, 2024 and 0.41 at December 31, 2023.

At June 30, 2024, the weighted-average term of our outstanding long-term debt was 7.4 years.

Our average daily commercial paper borrowings outstanding were $0.9 billion in the first six months of 2024 and $3 billion in the first six months of 2023.

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

(“MIHN”), has outstanding debt.

The operations held by MIHN generated approximately 74.2% (or $6.9 billion) of the $9.3 billion of consolidated net revenue in the three months ended March 31, 2024.

The operations held by MIHN represented approximately 75.8% (or $21.6 billion) of the $28.5 billion of net assets as of March 31, 2024.

The operations held by MIHN generated approximately 72.7% (or $12.8 billion) of the $17.6 billion of consolidated net revenue for the six months ended June 30, 2024.

The operations held by MIHN represented approximately 78.7% (or $21.8 billion) of the $27.7 billion of net assets as of June 30, 2024.

Refer to Note 8, Debt and Borrowing Arrangements, for additional information on our debt and debt covenants.

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

During the first three months of 2024, the primary drivers of the increase in our aggregate commodity costs were higher cocoa, sugar, nuts, and other ingredient costs, as well as unfavorable year-over-year currency exchange transaction costs on imported materials, partially offset by lower, dairy, edible oils, grains, energy and packaging costs.

During the first six months of 2024, the primary drivers of the increase in our aggregate commodity costs were higher cocoa, sugar, nuts, and other ingredient costs, as well as unfavorable year-over-year currency exchange transaction costs on imported materials, partially offset by lower, dairy, energy, edible oils, grains and packaging costs.

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

A number of external factors such as the current macroeconomic environment, including global inflation, effects of geopolitical uncertainty, climate and weather conditions, commodity, transportation and labor market conditions, exchange rate volatility and the effects of local and global regulations, governmental agricultural or other programs affect the availability and cost of raw materials and agricultural materials used in our products.

In particular, the

supply of cocoa is exposed to many of these factors, including climate change and weather events, local regulations in cocoa-producing countries, and global regulations such as the EU Deforestation Regulation (which requires companies to ensure that the products they place on the EU market or export from it are not associated with deforestation).

exchange rate volatility and the effects of local and global regulations, governmental agricultural or other programs affect the availability and cost of raw materials and agricultural materials used in our products.

In particular, the supply of cocoa is exposed to many of these factors, including climate change and weather events, local regulations in cocoa-producing countries, and global regulations such as the EU Deforestation Regulation (which requires companies to ensure that the products they place on the EU market or export from it are not associated with deforestation).

These factors could impact the supply of cocoa, which could potentially limit our ability to produce our products and significantly impact profitability.

During the first three months of 2024, price volatility and the higher aggregate cost environment increased due to international supply chain and labor market disruptions and generally higher commodity, transportation and labor costs.

During the first six months of 2024, price volatility and the higher aggregate cost environment increased due to international supply chain and labor market disruptions and generally higher commodity, transportation and labor costs.

We expect these conditions to continue to impact our aggregate commodity costs.

In particular, we expect to face higher cocoa costs in the near- and medium-term due to these factors.

For example, the market price for cocoa beans on the Intercontinental Exchange in London was 283% higher on the last trading day of the first quarter of 2024 compared to the same day in the first quarter of 2023 and it is likely that prices will remain elevated for some time.

For example, the market price for cocoa beans on the Intercontinental Exchange in London was 175% higher on the last trading day of the second quarter of 2024 compared to the same day in the second quarter of 2023 and it is likely that prices will remain elevated for some time.

It is possible that we may not be able to increase prices sufficiently to fully cover the incremental costs of cocoa prices in this environment and/or our hedging strategies may not protect us from increases in cocoa costs, which could result in a significant impact on our profitability.

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Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control.

Important factors that could cause our actual results or performance to differ materially from those contained in or implied by our forward-looking statements include, but are not limited to, the following:

• weakness in macroeconomic conditions in our markets, including as a result of inflation (and related monetary policy actions by governments in response to inflation), instability of certain financial institutions;

Important factors

that could cause our actual results or performance to differ materially from those contained in or implied by our forward-looking statements include, but are not limited to, the following:

• weakness in macroeconomic conditions in our markets, including as a result of inflation (and related monetary policy actions by governments in response to inflation) and the instability of certain financial institutions;

• volatility of commodity and other input costs and availability of commodities, including but not limited to cocoa;

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• unanticipated disruptions to our business, such as malware incidents, cyberattacks or other security breaches, and supply, commodity, labor and transportation constraints;

• our ability to identify, complete, manage and realize the full extent of the benefits, cost savings or synergies presented by strategic transactions, including our recently completed acquisitions of Ricolino, Clif Bar, Chipita, Gourmet Food, Grenade and Hu;

• our ability to identify, complete, implement, manage and realize the full extent of the benefits, cost savings, efficiencies and/or synergies presented by strategic transactions and initiatives, such as our ERP System Implementation program;

• our investments and our ownership interests in those investments, including JDE Peet's;

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We use non-GAAP financial information and believe it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results and provide additional insight and transparency on how we evaluate our business.

We use non-GAAP financial measures to

budget, make operating and strategic decisions and evaluate our performance.

We use non-GAAP financial measures to budget, make operating and strategic decisions and evaluate our performance.

We have detailed the non-GAAP adjustments that we make in our non-GAAP definitions below.

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impact from the European Commission legal matter (14) ;

and impact from pension participation changes (15) .

the impact from pension participation changes (15) ;

and operating costs from the ERP System Implementation program (16) .

We also present “Adjusted Operating Income margin,” which is subject to the same adjustments as Adjusted Operating Income.

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and gains or losses on equity method investment transactions including impairments.

Similarly, within Adjusted EPS, our equity method investment net earnings exclude our proportionate share of our investee's significant operating and non-operating items (18) .

Similarly, within Adjusted EPS, our equity method

investment net earnings exclude our proportionate share of our investee's significant operating and non-operating items (19) .

We also evaluate growth in our Adjusted EPS on a constant currency basis (4) .

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

impact of pricing in excess of 26% year-over-year ("extreme pricing") in Argentina, which is the level at which hyperinflation generally occurs cumulatively over a 3-year period.

Beginning in Q1 2024, due to a significant devaluation of the Argentinean peso that occurred in December 2023 and the resulting distortion it would cause on our non-GAAP constant currency growth rate measures, we now exclude the impact of pricing in excess of 26% year-over-year ("extreme pricing") in Argentina, which is the level at which hyperinflation generally occurs cumulatively over a 3-year period.

We have excluded the impact of extreme pricing in Argentina from our calculation of Organic Net Revenue, Organic Net Revenue growth and other non-GAAP financial constant currency growth measures with a corresponding adjustment to changes in currency exchange rates.

We made this change on a prospective basis due to the distorting effect expected in the current period and future periods following the Argentinian peso devaluation that occurred in December 2023 and did not revise our historical non-GAAP constant currency growth measures.

Beginning in Q2 2024, we added to the non-GAAP definitions the exclusion of operating expenses associated with the ERP System Implementation program as they represent incremental transformational costs above the normal ongoing level of spending on information technology to support operations (see footnote (16) below).

(2) Divestitures include completed sales of businesses, exits of major product lines upon completion of a sale or licensing agreement, the partial or full sale of an equity method investment and changes from equity method investment accounting to accounting for marketable securities.

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We exclude these items to better facilitate comparisons of our underlying operating performance across periods.

(8) Acquisition integration costs and contingent consideration adjustments include one-time costs related to the integration of acquisitions as well as any adjustments made to the fair market value of contingent compensation liabilities that have been previously booked for earn-outs related to acquisitions that do not relate to employee compensation expense.

We exclude these items to better facilitate comparisons of our underlying operating performance across periods.

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2022, we recorded an estimate of the possible cost to resolve this matter.

Due to the unique nature of this matter, we believe it to be infrequent and unusual and therefore exclude it to better facilitate comparisons of our underlying operating performance across periods.

Due to the unique nature of this matter, we believe it to be infrequent and

unusual and therefore exclude it to better facilitate comparisons of our underlying operating performance across periods.

Refer to Note 12, Commitments and Contingencies, for additional information.

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See Note 10, Benefit Plans , for additional information on the multiemployer pension plan withdrawal.

(16) In July 2024, our Board of Directors approved funding of $1.2 billion for a multi-year systems transformation program to upgrade our global ERP and supply chain systems (the “ERP System Implementation”), which is comprised of both capital expenditures and operating expenses, of which a majority is expected to be operating expenses.

The ERP System Implementation program will be implemented in several phases with spending occurring over the next five years, with expected completion by year-end 2028.

These operating expenses will be excluded from our non-GAAP financial measures as they are nonrecurring and excluding those costs will better facilitate comparisons of our underlying operating performance across periods.

Costs incurred in the second quarter represent preliminary planning costs.

(17) In the first quarter of 2023, we began to exclude mark-to-market unrealized gains or losses, as well as realized gains or losses, associated with our marketable securities from our non-GAAP earnings measures.

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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 2. Management’s Discussion and Analysis