How will this change in accounting principle affect Mondelēz's reported financial results?

The change means Mondelēz will now report its share of KDP's earnings and dividends with a one-quarter lag, to align with KDP's public reporting. This will lead to revised historical and future figures for equity method investment net earnings, net earnings, and earnings per share (EPS), including Adjusted EPS. However, it will not impact net revenues, gross profit, or operating income.

Does this change impact the value of my Mondelēz shares?

This filing primarily concerns accounting and reporting methodology for an equity investment. While it revises reported EPS and net earnings figures, it does not change the underlying operational performance of Mondelēz's core business. Investors should review the specific revised EPS numbers to understand the retrospective impact on historical earnings per share.

Where can I find the revised financial numbers?

The revised financial schedules, including both GAAP and non-GAAP figures, are provided in Exhibit 99.1 to this Form 8-K filing. This exhibit contains the detailed reconciliations and revised amounts for periods including 2016, 2017, and portions of 2018.

MDLZ 8-K: Regulation FD

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

The 8-K filing is to inform investors about a change in Mondelēz International's accounting principle related to its investment in Keurig Dr Pepper Inc. (KDP). This change is a result of the merger that formed KDP and will affect how the company reports its share of KDP's financial results.

Summary

Mondelez International, Inc. (MDLZ) has filed an 8-K report on October 16, 2018, to disclose a change in its accounting principle for reporting its investment in Keurig Dr Pepper Inc. (KDP). This change was necessitated by the merger of Keurig Green Mountain, Inc. with Dr Pepper Snapple Group, Inc., which created KDP. Following the merger, Mondelez holds a 13.8% ownership stake in KDP and continues to account for this investment using the equity method. The core of this disclosure is the adoption of a one-quarter lag in reporting KDP's earnings and dividends. This means Mondelez will recognize its share of KDP's financial results with a delay, aligning with KDP's public reporting schedule. This change affects the retrospective reporting of equity method investment net earnings, net earnings, and earnings per share (EPS), including non-GAAP Adjusted EPS. Notably, the company states that this change has no impact on its consolidated net revenues, gross profit, or operating income, nor on other key non-GAAP measures like Organic Net Revenue, Adjusted Gross Profit, and Adjusted Operating Income.

Key Highlights

1Mondelēz International is changing its accounting principle for its investment in Keurig Dr Pepper Inc. (KDP) following KDP's formation.
2The company will now report its share of KDP's earnings and dividends on a one-quarter lag basis, aligning with KDP's public financial reporting.
3This accounting change impacts reported equity method investment net earnings, net earnings, and earnings per share (EPS), including non-GAAP Adjusted EPS.
4Key GAAP and non-GAAP financial results for 2016, 2017, and parts of 2018 have been revised to reflect this change retrospectively.
5The company explicitly states that this change does not affect consolidated net revenues, gross profit, or operating income.
6Other non-GAAP financial measures such as Organic Net Revenue, Adjusted Gross Profit, and Adjusted Operating Income remain unaffected.
7Exhibit 99.1 provides detailed financial schedules and reconciliations for the revised GAAP and non-GAAP figures.

Mondelez International, Inc. 8-K Report, Regulation FD Disclosure (Oct 16, 2018)

Summary

Key Highlights

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