Mondelez International, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Overview of Business and Strategy Our core business is making and selling chocolate, biscuits and baked snacks, with additional businesses in adjacent, locally relevant categories including gum & candy, cheese & grocery and powdered beverages around the world. We aim to be the global leader in snacking. Our strategy is to drive long-term growth by focusing on four strategic priorities: accelerating consumer-centric growth, driving operational excellence, creating a winning growth culture and scaling sustainable snacking. We believe the successful implementation of our strategic priorities and leveraging of our attractive global footprint, strong core of iconic global and local brands, marketing, sales, distribution and cost excellence capabilities, and top talent with a growth mindset, will drive consistent top- and bottom-line growth, enabling us to continue to create long-term value for our shareholders. Recent Developments and Significant Items Affecting Comparability Macroeconomic environment 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 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. Our overall outlook for future snacks revenue growth remains strong; however, we anticipate ongoing volatility. We will continue to proactively manage our business in response to the evolving global economic environment, related uncertainty and business risks while also prioritizing and supporting our employees and customers. We continue to take steps to mitigate impacts to our supply chain, operations, technology and assets. War in Ukraine 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 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. 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. ” 29 Table of Contents Developments in the Middle East 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 During December 2023, the Argentinean peso significantly devalued. The peso's devaluation and potential resulting distortion on our non-GAAP Organic Net Revenue, Organic Net Revenue growth and other constant currency growth rate measures resulted in our decision to exclude the impact of pricing in excess of 26% year-over-year ("extreme pricing") in Argentina, from these measures beginning in Q1 2024. The benchmark of 26% represents the minimum annual inflation rate for each year over a 3-year period which would result in a cumulative inflation rate in excess of 100%, the level at which an economy is considered hyperinflationary under U.S. GAAP. Throughout the following MD&A discussion, we now exclude, on a prospective basis, the impact of extreme pricing in Argentina from the net pricing impact of Organic Net Revenue and Organic Net Revenue growth and its related impact on our other non-GAAP financial constant currency growth measures with a corresponding adjustment in changes in currency translation rates. Additionally within the MD&A discussion, "currency-related items" totals the impact of extreme pricing and the currency translation rate changes. 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: In total, unfavorable currency-related items of $216 million (2.6pp) were driven by unfavorable currency translation rate changes of $544 million (6.5pp), partially offset by the adjustment for extreme pricing of $328 million (3.9pp). 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. 30 Table of Contents • Adjusted Operating Income: Unfavorable currency-related items of $127 million were driven by unfavorable currency translation rate changes of $309 million, partially offset by the adjustment for extreme pricing of $182 million. • Adjusted EPS: 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. Divestitures 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. On October 1, 2023, we completed the sale of our developed market gum business 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. Refer to Note 2, Divestitures , for additional details. Investment Transactions Keurig Dr Pepper Transactions (Nasdaq: "KDP") 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: “JDEP”) 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. Taxes We continue to monitor existing and potential future tax reform around the world. 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. Financial Outlook We seek to achieve profitable, long-term growth and manage our business to attain this goal using our key operating metrics: Organic Net Revenue, Adjusted Operating Income and Adjusted EPS. We use these non-GAAP financial metrics and related computations, particularly growth in profit dollars, to evaluate and manage our business and to plan and make near- and long-term operating and strategic decisions. As such, we believe these metrics are useful to investors as they provide supplemental information in addition to our U.S. Generally Accepted Accounting Principles ("U.S. GAAP") financial results. We believe it is useful to provide investors with the same financial information that we use internally to make comparisons of our historical operating results, identify trends in our underlying operating results and evaluate our business. We believe our non-GAAP financial measures should always be considered in relation to our U.S. GAAP results. Refer to Non-GAAP Financial Measures for the definitions of our non-GAAP financial measures and Consolidated Results of Operations for the respective reconciliations. In addition to monitoring our key operating metrics, we monitor developments and trends that could impact our revenue and profitability objectives, as highlighted in our most recently filed Annual Report on Form 10-K for the year ended December 31, 2023. 31 Table of Contents Summary of Results • 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 (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. 32 Table of Contents Discussion and Analysis of Historical Results Items Affecting Comparability of Financial Results The following table includes significant income or (expense) items that affected the comparability of our results of operations and our effective tax rates. Please refer to the notes to the condensed consolidated financial statements indicated below for additional information. Refer also to the Consolidated Results of Operations – Net Earnings and Earnings per Share Attributable to Mondelēz International table for the after-tax per share impacts of these items. For the Three Months Ended June 30, For the Six Months Ended June 30, See Note 2024 2023 2024 2023 (in millions, except percentages) Simplify to Grow Program Note 7 Restructuring charges $ (3) $ (2) $ (45) $ (32) Implementation charges (12) (4) (23) (9) Mark-to-market (losses)/gains from derivatives (1) Note 9 (573) 168 551 216 Acquisition and divestiture-related costs: Note 2 Acquisition integration costs and 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) (9) — (9) — Remeasurement of net monetary position Note 1 (9) (26) (17) (38) Impact from pension participation changes (1) Note 10 (3) (2) (5) (5) 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 % (1) Includes impacts recorded in operating income and interest expense and other, net. Mark-to-market gains/(losses) above also include our equity method investment-related derivative contract mark-to-market gains/(losses) (refer to Note 9, Financial Instruments) that are recorded in the (loss)/gain (including non-cash impairment charges) on equity method investment transactions on our condensed consolidated statement of earnings. (2) Incremental costs due to the war in Ukraine include direct charges such as asset impairments due to damaged facilities and inventory, higher expected allowances for uncollectible accounts receivable and committed compensation. 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. See footnote (1) as mark-to-market gains/(losses) on our equity method-investment-related derivative contracts are presented in the table above within mark-to-market gains/(losses) from derivatives. (5) Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peet's equity method investee, including acquisition and divestiture-related costs, restructuring program costs and intangible asset impairment charges. 33 Table of Contents Consolidated Results of Operations Three Months Ended June 30 For the Three Months Ended June 30, 2024 2023 $ Change % Change (in millions, except per share data) Net revenues $ 8,343 $ 8,507 $ (164) (1.9) % Operating income 854 1,425 (571) (40.1) % Net earnings attributable to Mondelēz International 601 944 (343) (36.3) % Diluted earnings per share attributable to Mondelēz International 0.45 0.69 (0.24) (34.8) % 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) . The underlying changes in net revenues and Organic Net Revenue are detailed below: Emerging Markets Developed Markets Mondelēz International Three Months Ended June 30, 2024 Reported (GAAP) $ 3,260 $ 5,083 $ 8,343 Currency-related items 193 23 216 Organic (Non-GAAP) $ 3,453 $ 5,106 $ 8,559 Three Months Ended June 30, 2023 Reported (GAAP) $ 3,306 $ 5,201 $ 8,507 Divestitures (1) (156) (157) Organic (Non-GAAP) $ 3,305 $ 5,045 $ 8,350 % Change Reported (GAAP) (1.4) % (2.3) % (1.9) % Divestitures - pp 3.1 pp 1.8 pp Currency-related items 5.9 0.4 2.6 pp Organic (Non-GAAP) 4.5 % 1.2 % 2.5 % Vol/Mix (2.2)pp (2.2)pp (2.2)pp Pricing 6.7 3.4 4.7 (1) Please see the Non-GAAP Financial Measures section at the end of this item. 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. 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 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. 34 Table of Contents 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: For the Three Months Ended June 30, 2024 2023 $ Change % Change (in millions) Operating Income $ 854 $ 1,425 $ (571) (40.1) % Simplify to Grow Program (2) 15 6 9 Mark-to-market losses/(gains) from derivatives (3) 571 (171) 742 Acquisition integration costs and contingent consideration adjustments (4) 36 24 12 Divestiture-related costs (4) — 22 (22) Operating results from divestitures (4) — (63) 63 European Commission legal matter (3) — (3) Incremental costs due to war in Ukraine (5) 1 — 1 ERP System Implementation costs 9 — 9 Remeasurement of net monetary position (5) 9 26 (17) Adjusted Operating Income (1) $ 1,492 $ 1,269 $ 223 17.6 % Currency-related items 57 — 57 Adjusted Operating Income (constant currency) (1) $ 1,549 $ 1,269 $ 280 22.1 % Key Drivers of Adjusted Operating Income (constant currency) $ Change Higher net pricing $ 396 Lower input costs 24 Unfavorable volume/mix (68) Higher selling, general and administrative expenses (79) Higher amortization of intangible assets (1) Lower asset impairment charges 8 Total change in Adjusted Operating Income (constant currency) (1) $ 280 (1) Refer to the Non-GAAP Financial Measures section. (2) Refer to Note 7, Restructuring Program, for additional information. (3) Refer to Note 9, Financial Instruments , and the Non-GAAP Financial Measures section at the end of this item for additional 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. 35 Table of Contents 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, 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. 36 Table of Contents 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 June 30, 2024 2023 $ Change % Change Diluted EPS attributable to Mondelēz International $ 0.45 $ 0.69 $ (0.24) (34.8) % Simplify to Grow Program (2) 0.01 0.01 — Mark-to-market losses/(gains) from derivatives (2) 0.34 (0.11) 0.45 Acquisition integration costs and contingent consideration adjustments (2) 0.02 0.01 0.01 Divestiture-related costs (2) — 0.01 (0.01) Operating results from divestitures (2) — (0.04) 0.04 Remeasurement of net monetary position (2) 0.01 0.02 (0.01) Initial impacts from enacted tax law changes (3) 0.02 — 0.02 Gain on marketable securities (4) — 0.11 (0.11) Loss on equity method investment transactions including impairments (4) — 0.02 (0.02) Equity method investee items (5) 0.01 — 0.01 Adjusted EPS (1) $ 0.86 $ 0.72 $ 0.14 19.4 % Currency-related items 0.04 — 0.04 Adjusted EPS (constant currency) (1) $ 0.90 $ 0.72 $ 0.18 25.0 % Key Drivers of Adjusted EPS (constant currency) $ Change Increase in operations $ 0.15 Change in interest and other expense, net (6) 0.03 Change in income taxes (3) (0.02) Change in shares outstanding (7) 0.02 Total change in Adjusted EPS (constant currency) (1) $ 0.18 (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 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. (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 non-U.S. dollar-denominated debt, which is included in currency translation. (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. 37 Table of Contents Six Months Ended June 30: For the Six Months Ended June 30, 2024 2023 $ Change % 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: Emerging 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 359 (11) 348 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 % Change 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 38 Table of Contents 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 June 30, 2024 2023 $ Change % Change (in millions) Operating Income $ 3,581 $ 2,930 $ 651 22.2 % Simplify to Grow Program (2) 68 41 27 Mark-to-market gains from derivatives (3) (553) (220) (333) Acquisition integration costs and contingent consideration adjustments (4) 79 75 4 Divestiture-related costs (4) 4 52 (48) Operating income from divestitures (4) — (120) 120 Operating income from short-term distributor agreements (2) — (2) European Commission legal matter (3) — (3) Incremental costs due to war in Ukraine (5) 2 (3) 5 ERP System Implementation costs 9 — 9 Remeasurement of net monetary position (5) 17 38 (21) Adjusted Operating Income (1) $ 3,202 $ 2,793 $ 409 14.6 % Currency-related items 127 — 127 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 (1) Lower asset impairment charges 18 Total change in Adjusted Operating Income (constant currency) (1) $ 536 (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. 39 Table of Contents During the first six months 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 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. 40 Table of Contents 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 June 30, 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) 0.02 — 0.02 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 0.07 — 0.07 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) 0.03 Dividend income from marketable securities (0.01) Change in income taxes (3) (0.04) Change in shares outstanding (7) 0.03 Total change in Adjusted EPS (constant currency) (1) $ 0.32 (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. 41 Table of Contents Results of Operations by Reportable Segment Our operations and management structure are organized into four operating segments: • Latin America • AMEA • Europe • North America We manage our operations by region to leverage regional operating scale, manage different and changing business environments more effectively and pursue growth opportunities as they arise across our key markets. Our regional management teams have responsibility for the business, product categories and financial results in the regions. We use segment operating income to evaluate segment performance and allocate resources. We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends. 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 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 June 30, 2024 2023 2024 2023 (in millions) Net revenues: Latin America $ 1,232 $ 1,228 $ 2,551 $ 2,439 AMEA 1,587 1,609 3,537 3,548 Europe 2,874 2,926 6,242 6,233 North America 2,650 2,744 5,303 5,453 Net revenues $ 8,343 $ 8,507 $ 17,633 $ 17,673 Earnings before income taxes: 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 (losses)/gains on hedging activities (mark-to-market impacts) (571) 171 553 220 General corporate expenses (67) (79) (134) (156) Amortization of intangible assets (37) (37) (75) (76) Operating income 854 1,425 3,581 2,930 Benefit plan non-service income 28 22 51 41 Interest and other expense, net (32) (97) (100) (192) (Loss)/gain on marketable securities — (189) — 607 Earnings before income taxes $ 850 $ 1,161 $ 3,532 $ 3,386 42 Table of Contents Latin America For the Three Months Ended June 30, 2024 2023 $ Change % Change (in millions) Net revenues $ 1,232 $ 1,228 $ 4 0.3 % Segment operating income 144 134 10 7.5 % For the Six Months Ended June 30, 2024 2023 $ Change % 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 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 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). 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 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, unfavorable volume/mix, higher advertising and consumer promotion costs and higher acquisition integration costs. 43 Table of Contents AMEA For the Three Months Ended June 30, 2024 2023 $ Change % Change (in millions) Net revenues $ 1,587 $ 1,609 $ (22) (1.4) % Segment operating income 290 207 83 40.1 % For the Six Months Ended June 30, 2024 2023 $ Change % 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, 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 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 raw material costs, unfavorable currency translation rate changes, higher advertising and consumer promotion costs and unfavorable volume/mix. 44 Table of Contents Europe For the Three Months Ended June 30, 2024 2023 $ Change % Change (in millions) Net revenues $ 2,874 $ 2,926 $ (52) (1.8) % Segment operating income 550 449 101 22.5 % For the Six Months Ended June 30, 2024 2023 $ Change % 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, 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 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 45 Table of Contents 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 For the Three Months Ended June 30, 2024 2023 $ Change % Change (in millions) Net revenues $ 2,650 $ 2,744 $ (94) (3.4) % Segment operating income 545 580 (35) (6.0) % For the Six Months Ended June 30, 2024 2023 $ Change % 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. 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. 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. 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. These unfavorable items were partially offset by higher net pricing, lower manufacturing costs due to productivity, lower other selling, general and administrative expenses, lower fixed asset impairment charges and lower divestiture-related costs. 46 Table of Contents Liquidity and Capital Resources We believe that cash from operations, our revolving credit facilities, short-term borrowings and our authorized long-term financing will continue to provide sufficient liquidity for our working capital needs, planned capital expenditures and future payments of our contractual, tax and benefit plan obligations and payments for acquisitions, share repurchases and quarterly dividends. We expect to continue to utilize our commercial paper program and international credit lines as needed. We continually evaluate long-term debt issuances to meet our short- and longer-term funding requirements. We also use intercompany loans with our international subsidiaries to improve financial flexibility. Our investment in JDE Peet's provides us additional flexibility. Overall, we do not expect negative effects to our funding sources that would have a material effect on our liquidity, and we continue to monitor our global operations including the impact of ongoing or new developments in Ukraine and the Middle East. To date, we have been successful in generating cash and raising financing as needed. However, if a serious economic or credit market crisis ensues or other adverse developments arise, it could have a material adverse effect on our liquidity, results of operations and financial condition. Our most significant ongoing short-term cash requirements relate primarily to funding operations (including expenditures for raw materials, labor, manufacturing and distribution, trade and promotions, advertising and marketing, tax liabilities, benefit plan obligations and lease expenses) as well as periodic expenditures for acquisitions, shareholder returns (such as dividend payments and share repurchases), property, plant and equipment and any significant one-time non-operating items. Long-term cash requirements primarily relate to funding long-term debt repayments (refer to Note 8, Debt and Borrowing Arrangements ), our U.S. tax reform transition tax liability and deferred taxes (refer to Note 16, Income Taxes, in our Annual Report on Form 10-K for the year ended December 31, 2023), our long-term benefit plan obligations (refer to Note 10, Benefit Plans, and Note 11 , Benefit Plans, in our Annual report on Form 10-K for the year ended December 31, 2023) and commodity-related purchase commitments and derivative contracts (refer to Note 9, Financial Instruments ). We generally fund short- and long-term cash requirements with cash from operating activities as well as cash proceeds from short- and long-term debt financing (refer to Debt below). We generally do not use equity to fund our ongoing obligations. Cash Flow We believe our ability to generate substantial cash from operating activities and readily access capital markets and secure financing at competitive rates are key strengths and give us significant flexibility to meet our short- and long-term financial commitments. Our cash flow activity is noted below: For the Six Months Ended June 30, 2024 2023 (in millions) Net cash provided by/(used in): Operating activities $ 2,146 $ 1,973 Investing activities (847) 1,250 Financing activities (1,604) (3,539) 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, 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 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. We expect 2024 capital expenditures to be up to $1.5 billion, including capital expenditures in connection with our Simplify to Grow Program and for funding our strategic priorities. We expect to continue to fund these expenditures with cash from operations. 47 Table of Contents 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 six months of 2024 compared to the same prior year period. Dividends 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. We anticipate that the 2024 distributions will be characterized as dividends under U.S. federal income tax rules. The final determination will be made on an IRS Form 1099–DIV issued in early 2025. Guarantees As discussed in Note 12, Commitments and Contingencies , we enter into third-party guarantees primarily to cover the long-term obligations of our vendors. As part of these transactions, we guarantee that third parties will make contractual payments or achieve performance measures. 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. Debt 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 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 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 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. Commodity Trends 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 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, 48 Table of Contents 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 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 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. We address higher commodity costs and currency impacts primarily through hedging, higher pricing and manufacturing and overhead cost control. We use hedging techniques to limit the impact of fluctuations in the cost of our principal raw materials; however, we may not be able to fully hedge against commodity cost changes, such as dairy, where there is a limited ability to hedge, and our hedging strategies may not protect us from increases in specific raw material costs. Our commodity procurement practices are intended to mitigate price volatility and provide visibility to future costs, but also may potentially limit our ability to benefit from possible future price decreases. Additionally, our costs for major raw materials will not necessarily reflect market price fluctuations because of our forward purchasing and hedging practices. Due to competitive or market conditions, planned trade or promotional incentives, fluctuations in currency exchange rates or other factors, our pricing actions may also lag commodity cost changes temporarily. Significant Accounting Estimates We prepare our condensed consolidated financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. Our significant accounting policies and estimates are described in Note 1 to our consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations, respectively, in our Annual Report on Form 10-K for the year ended December 31, 2023. Also refer to Note 1, Basis of Presentation , in this report. Forward-Looking Statements This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management, including for future operations, capital expenditures or share repurchases; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief or expectation; and any statements of assumptions underlying any of the foregoing or other future events. Forward-looking statements may include, among others, the words, and variations of words, “will,” “may,” “expect,” “would,” “could,” “might,” “intend,” “plan,” “believe,” “likely,” “estimate,” “anticipate,” “objective,” “predict,” “project,” “drive,” “seek,” “aim,” “target,” “potential,” “commitment,” “outlook,” “continue” or any other similar words. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results or outcomes could differ materially from those projected or assumed in any of our forward-looking statements. 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 49 Table of Contents 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; • geopolitical uncertainty, including the impact of ongoing or new developments in Ukraine and the Middle East, related current and future sanctions imposed by governments and other authorities and related impacts, including on our business operations, employees, reputation, brands, financial condition and results of operations; • competition and our response to channel shifts and pricing and other competitive pressures; • pricing actions and customer and consumer responses to such actions; • promotion and protection of our reputation and brand image; • weakness in consumer spending and/or changes in consumer preferences and demand and our ability to predict, identify, interpret and meet these changes; • risks from operating globally, including in emerging markets, such as political, economic and regulatory risks; • the outcome and effects on us of legal and tax proceedings and government investigations, including the European Commission legal matter; • use of information technology and third party service providers; • 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, 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; • the restructuring program and our other transformation initiatives not yielding the anticipated benefits; • changes in the assumptions on which the restructuring program is based; • the impact of climate change on our supply chain and operations; • global or regional health pandemics or epidemics; • consolidation of retail customers and competition with retailer and other economy brands; • changes in our relationships with customers, suppliers or distributors; • management of our workforce and shifts in labor availability or labor costs; • compliance with legal, regulatory, tax and benefit laws and related changes, claims or actions; • perceived or actual product quality issues or product recalls; • failure to maintain effective internal control over financial reporting or disclosure controls and procedures; • our ability to protect our intellectual property and intangible assets; • tax matters including changes in tax laws and rates, disagreements with taxing authorities and imposition of new taxes; • changes in currency exchange rates, controls and restrictions; • volatility of and access to capital or other markets, rising interest rates, the effectiveness of our cash management programs and our liquidity; • pension costs; • significant changes in valuation factors that may adversely affect our impairment testing of goodwill and intangible assets; and • the risks and uncertainties, as they may be amended from time to time, set forth in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent Quarterly Reports on Form 10-Q. There may be other factors not presently known to us or which we currently consider to be immaterial that could cause our actual results to differ materially from those projected in any forward-looking statements we make. We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this report except as required by applicable law or regulation. In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. 50 Table of Contents Non-GAAP Financial Measures 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 have detailed the non-GAAP adjustments that we make in our non-GAAP definitions below. The adjustments generally fall within the following categories: acquisition and divestiture activities, gains and losses on intangible asset sales and non-cash impairments, major program restructuring activities, constant currency and related adjustments, major program financing and hedging activities and other major items affecting comparability of operating results. We believe the non-GAAP measures should always be considered along with the related U.S. GAAP financial measures. We have provided the reconciliations between the GAAP and non-GAAP financial measures along with a discussion of our underlying GAAP results throughout our Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-Q. Our primary non-GAAP financial measures are listed below and reflect how we evaluate our current and prior-year operating results. As new events or circumstances arise, these definitions could change. When our definitions change, we provide the updated definitions and present the related non-GAAP historical results on a comparable basis (1) . • “Organic Net Revenue” is defined as net revenues (the most comparable U.S. GAAP financial measure) excluding the impacts of acquisitions, divestitures (2) , short-term distributor agreements related to the sale of business (3) and currency rate fluctuations (4) . We believe that Organic Net Revenue reflects the underlying growth from the ongoing activities of our business and provides improved comparability of results. We also evaluate Organic Net Revenue growth from emerging markets and developed markets, and these underlying measures are also reconciled to U.S. GAAP above. • Our emerging markets include our Latin America region in its entirety; the AMEA region, excluding Australia, New Zealand and Japan; and the following countries from the Europe region: Russia, Ukraine, Türkiye, Kazakhstan, Georgia, Poland, Czech Republic, Slovak Republic, Hungary, Bulgaria, Romania, the Baltics and the East Adriatic countries. • Our developed markets include the entire North America region, the Europe region excluding the countries included in the emerging markets definition, and Australia, New Zealand and Japan from the AMEA region. • “Adjusted Operating Income” is defined as operating income (the most comparable U.S. GAAP financial measure) excluding the impacts of the Simplify to Grow Program (5) ; gains or losses (including non-cash impairment charges) on goodwill and intangible assets; divestiture (2) or acquisition gains or losses, divestiture-related costs (6) , acquisition-related costs (7) , and acquisition integration costs and contingent consideration adjustments (8) ; inventory step-up charges (9) ; the operating results of divestitures (2) ; operating results from short-term distributor agreements related to the sale of a business (3) ; remeasurement of net monetary position (10) ; mark-to-market impacts from commodity, forecasted currency and equity method investment transaction derivative contracts (11) ; impact from resolution of tax matters (12) ; 2017 malware incident net recoveries; incremental costs due to the war in Ukraine (13) ; impact from the European Commission legal matter (14) ; 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. We also evaluate growth in our Adjusted Operating Income on a constant currency basis (4) . We believe these measures provide improved comparability of underlying operating results. • “Adjusted EPS” is defined as diluted EPS attributable to Mondelēz International (the most comparable U.S. GAAP financial measure) from continuing operations excluding the impacts of the items listed in the Adjusted Operating Income definition as well as losses on debt extinguishment and related expenses; gains or losses on interest rate swaps no longer designated as accounting cash flow hedges due to changed financing and hedging plans; mark-to-market unrealized gains or losses and realized gains or losses from marketable securities (17) ; initial impacts from enacted tax law changes (18) ; and gains or losses on equity method investment transactions including impairments. Similarly, within Adjusted EPS, our equity method 51 Table of Contents 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) . We believe Adjusted EPS provides improved comparability of underlying operating results. (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. 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. As we record our share of JDE Peet’s ongoing earnings on a one-quarter lag basis, any JDE Peet’s ownership reductions are reflected as divestitures within our non-GAAP results the following quarter. (3) In the fourth quarter of 2023, we began to exclude the operating results from short-term distributor agreements that have been executed in conjunction with the sale of a business. We exclude this item to better facilitate comparisons of our underlying operating performance across periods. (4) Constant currency operating results are calculated by dividing or multiplying, as appropriate, the current-period local currency operating results by the currency exchange rates used to translate the financial statements in the comparable prior-year period to determine what the current-period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year period. Beginning in the first quarter of 2024, we also now include within our currency-related impacts a corresponding adjustment associated with the impact of extreme pricing in Argentina. (5) Non-GAAP adjustments related to the Simplify to Grow Program reflect costs incurred that relate to the objectives of our program to transform our supply chain network and organizational structure. Costs that do not meet the program objectives are not reflected in the non-GAAP adjustments. (6) Divestiture-related costs, which includes costs incurred in relation to the preparation and completion (including one-time costs such as severance related to elimination of stranded costs) of our divestitures as defined in footnote (2), also includes costs incurred associated with our publicly announced processes to sell businesses. We exclude these items to better facilitate comparisons of our underlying operating performance across periods. (7) Acquisition-related costs, which includes transaction costs such as third party advisor, investment banking and legal fees, also includes one-time compensation expense related to the buyout of non-vested ESOP shares and realized gains or losses from hedging activities associated with acquisition funds. 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 recurring employee compensation expense. We exclude these items to better facilitate comparisons of our underlying operating performance across periods. (9) In the third quarter of 2022, we began to exclude the one-time inventory step-up charges associated with acquired companies related to the fair market valuation of the acquired inventory. We exclude this item to better facilitate comparisons of our underlying operating performance across periods. (10) In connection with our applying highly inflationary accounting (refer to Note 1, Basis of Presentation ) for Argentina (beginning in the third quarter of 2018) and Türkiye (beginning in the second quarter of 2022), we exclude the related remeasurement gains or losses related to remeasuring net monetary assets or liabilities denominated in the local currency to the U.S. dollar during the periods presented and the realized gains and losses from derivatives that mitigate the foreign currency volatility related to the remeasurement of the respective net monetary assets or liabilities during the periods presented. (11) We exclude unrealized gains and losses (mark-to-market impacts) from outstanding commodity and forecasted currency and equity method investment transaction derivatives from our non-GAAP earnings measures. The mark-to-market impacts of commodity and forecasted currency transaction derivatives are excluded until such time that the related exposures impact our operating results. Since we purchase commodity and forecasted currency transaction contracts to mitigate price volatility primarily for inventory requirements in future periods, we make this adjustment to remove the volatility of these future inventory purchases on current operating results to facilitate comparisons of our underlying operating performance across periods. We exclude equity method investment transaction derivative contract settlements as they represent protection of value for future divestitures. (12) See Note 12, Commitments and Contingencies , in this report, and Note 14, Commitments and Contingencies , in our Annual Report on Form 10-K for the year ended December 31, 2023. (13) In February 2022, Russia began a military invasion of Ukraine and we stopped our production and closed our facilities in Ukraine for a period of time due to damage incurred to our facilities during the invasion. We began to incur incremental costs directly related to the war including asset impairments, such as property and inventory losses, higher expected allowances for uncollectible accounts receivable and committed compensation. We have isolated and exclude these costs and related impacts as well as subsequent recoveries from our operating results to facilitate evaluation and comparisons of our ongoing results. Incremental costs related to increasing operations in other primarily European facilities are not included with these costs. (14) In the fourth quarter of 2022, we began to exclude the impact from the European Commission legal matter. In November 2019, the European Commission informed us that it initiated an investigation into our alleged infringement of European Union competition law through certain practices allegedly restricting cross-border trade within the European Economic Area. On January 28, 2021, the European Commission announced it had taken the next procedural step in its investigation and opened formal proceedings. We have been cooperating with the investigation and are currently engaged in discussions with the European Commission in an effort to reach a negotiated, proportionate resolution to this matter. As of December 31. 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 52 Table of Contents 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. (15) The impact from pension participation changes represents the charges incurred when employee groups are withdrawn from multiemployer pension plans and other changes in employee group pension plan participation. We exclude these charges from our non-GAAP results because those amounts do not reflect our ongoing pension obligations. 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. 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. 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. 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. These marketable securities gains or losses are not indicative of underlying operations and are excluded to better facilitate comparisons of our underlying operating performance across periods. (18) We have excluded the initial impacts from enacted tax law changes. Initial impacts include items such as the remeasurement of deferred tax balances and the transition tax from the 2017 U.S. tax reform. We exclude initial impacts from enacted tax law changes from our Adjusted EPS as they do not reflect our ongoing tax obligations under the enacted tax law changes. (19) We have excluded our proportionate share of our equity method investees’ significant operating and non-operating items such as acquisition and divestiture-related costs, restructuring program costs and initial impacts from enacted tax law changes, in order to provide investors with a comparable view of our performance across periods. Although we have shareholder rights and board representation commensurate with our ownership interests in our equity method investees and review the underlying operating results and significant operating and non-operating items each reporting period, we do not have direct control over their operations or resulting revenue and expenses. Our use of equity method investment net earnings on an adjusted basis is not intended to imply that we have any such control. Our GAAP “diluted EPS attributable to Mondelēz International from continuing operations” includes all of the investees’ significant operating and non-operating items. We believe that the presentation of these non-GAAP financial measures, when considered together with our U.S. GAAP financial measures and the reconciliations to the corresponding U.S. GAAP financial measures, provides a more complete understanding of the factors and trends affecting our business than could be obtained absent these disclosures. Because non-GAAP financial measures vary among companies, the non-GAAP financial measures presented in this report may not be comparable to similarly titled measures used by other companies. Our use of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for any U.S. GAAP financial measures. A limitation of these non-GAAP financial measures is they exclude items that have an impact on our U.S. GAAP reported results. The best way this limitation can be addressed is by evaluating our non-GAAP financial measures in combination with our U.S. GAAP reported results and carefully evaluating the tables that reconcile U.S. GAAP reported figures to the non-GAAP financial measures in this Form 10-Q, which can be found above under Consolidated Results of Operations . 53 Table of Contents