What is the primary reason for this 8-K filing?

The primary reason for this 8-K filing is to disclose the retrospective impact of Mondelēz International's adoption of new accounting standards related to the presentation of net periodic pension and postretirement benefit costs. This change affects how certain components of these costs are reported in the income statement.

Will this accounting change affect the company's reported Net Earnings or EPS?

No, the filing explicitly states that these changes will have no impact on previously reported consolidated net revenues, net earnings, or earnings per share (EPS), nor on non-GAAP financial results for Organic Net Revenue and Adjusted EPS.

How does this change impact the company's financial reporting?

The adoption requires disaggregating service costs from other components of net benefit costs. Costs other than service costs are now presented on a new line item, "benefit plan non-service (income)/expense," located below operating income. This reclassification affects the presentation of Gross Profit and Operating Income, and their respective non-GAAP measures.

Are the definitions of Mondelēz's non-GAAP financial measures changing?

No, the filing clarifies that the definitions of Mondelēz's non-GAAP financial measures, such as Adjusted Gross Profit and Adjusted Operating Income, did not change as a result of adopting this new accounting standard. The company continues to present these measures to provide investors with additional insights into performance.

MDLZ 8-K: Regulation FD

Summary

Mondelēz International, Inc. (MDLZ) filed an 8-K on April 13, 2018, to disclose the retrospective impact of adopting new accounting standards for net periodic benefit cost presentation, effective January 1, 2018. This change requires disaggregating service cost from other components of net benefit cost, moving the latter to a new line item below operating income called "benefit plan non-service (income)/expense." This reclassification affects reported Gross Profit, Operating Income, and Segment Operating Income, as well as their non-GAAP counterparts (Adjusted Gross Profit, Adjusted Operating Income, Adjusted Segment Operating Income). Importantly, this accounting change does not impact previously reported net revenues, net earnings, EPS, Organic Net Revenue, or Adjusted EPS for any period. The company also provided updated financial schedules for 2015, 2016, and 2017, reflecting these reclassifications. Mondelēz reiterated its commitment to providing non-GAAP financial measures to offer investors additional insights into underlying business trends and performance, explaining the adjustments made to reconcile GAAP to non-GAAP figures, which include restructuring costs, acquisition/divestiture activities, and mark-to-market impacts. The definitions of these non-GAAP measures themselves remain unchanged.

Key Highlights

1Mondelēz International adopted new accounting standards for pension and postretirement benefit costs as of January 1, 2018.
2The adoption requires reclassifying certain benefit plan costs, moving them to a new "benefit plan non-service (income)/expense" line item below operating income.
3This change impacts the presentation of Gross Profit and Operating Income (both GAAP and non-GAAP) for historical periods.
4Net earnings, EPS, net revenue, Organic Net Revenue, and Adjusted EPS remain unaffected by this accounting change.
5Revised financial data for 2015, 2016, and 2017 reflecting the reclassification is provided.
6The company continues to utilize and explain its non-GAAP financial measures for investor transparency, with definitions remaining consistent.
7No new material events or business developments are being disclosed in this filing; it solely pertains to accounting presentation changes.

Mondelez International, Inc. 8-K Report, Regulation FD Disclosure (Apr 13, 2018)

Summary

Key Highlights

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