What is the primary purpose of this 8-K filing?

The primary purpose of this 8-K filing is to disclose the retrospective adjustment to Mondelēz International's non-GAAP financial results, specifically Adjusted Earnings Per Share (Adjusted EPS), following the partial sale of its equity method investment in Keurig Dr Pepper Inc. (KDP) in November 2020. This adjustment involves removing the equity method investment net earnings related to the divested KDP shares from historical non-GAAP Adjusted EPS figures.

How does this change affect Mondelēz International's reported financial results?

This filing primarily affects the company's non-GAAP Adjusted EPS figures for historical periods (2018, 2019, 2020) and going forward from Q1 2021. Mondelēz International's U.S. GAAP financial results remain unchanged from what was previously reported. Other non-GAAP financial measures, such as Organic Net Revenue, Adjusted Gross Profit, and Adjusted Operating Income, are also not impacted by this specific adjustment.

Why is Mondelēz International making these adjustments to its non-GAAP results?

The company is making these adjustments to reflect the partial sale of its KDP shares as a divestiture in its non-GAAP reporting, consistent with its definitions of non-GAAP financial measures. Due to KDP's reporting lag, the impact of the sale on non-GAAP Adjusted EPS begins in Q1 2021, necessitating the removal of related earnings from prior non-GAAP historical periods for comparability.

What are the implications for investors regarding the KDP investment?

Investors should understand that Mondelēz International has reduced its ownership stake in KDP. While its GAAP results will continue to reflect its share of KDP's earnings, its non-GAAP Adjusted EPS will exclude the earnings attributable to the divested portion of the KDP investment. The company is providing recast historical non-GAAP data to ensure transparency and facilitate comparisons.

MDLZ 8-K: Regulation FD

Summary

This 8-K filing from Mondelēz International (MDLZ) concerns the retrospective adjustment of its non-GAAP financial results, specifically Adjusted Earnings Per Share (Adjusted EPS), due to the partial sale of its equity method investment in Keurig Dr Pepper Inc. (KDP) on November 17, 2020. While the company's GAAP financial results remain unchanged, the sale, which reduced MDLZ's ownership stake to 8.4%, is treated as a divestiture in its non-GAAP reporting. Due to KDP's one-quarter lag reporting, this change will impact MDLZ's non-GAAP financials starting from Q1 2021. Consequently, the equity method investment net earnings related to the divested KDP shares have been removed from historical non-GAAP Adjusted EPS for periods going back to 2018. Investors should note that this filing primarily involves a reclassification within non-GAAP metrics and does not alter previously reported GAAP figures or other non-GAAP measures like Organic Net Revenue or Adjusted Operating Income. The company is providing recast financial information for 2018, 2019, and 2020 to reflect this change, offering transparency on how this specific divestiture impacts their non-GAAP performance metrics. The provided information is supplemental and does not amend prior SEC filings.

Key Highlights

1Mondelēz International is retroactively adjusting its non-GAAP financial results, specifically Adjusted EPS, due to a partial sale of its KDP stake.
2The partial sale of KDP shares, completed in November 2020, reduced MDLZ's ownership to 8.4% and is being treated as a divestiture in non-GAAP reporting.
3This change impacts historical non-GAAP Adjusted EPS for 2018, 2019, and 2020, with the equity method investment net earnings related to the sold KDP shares removed.
4GAAP financial results and other non-GAAP measures (Organic Net Revenue, Adjusted Gross Profit, Adjusted Operating Income) are not affected by this adjustment.
5The impact on non-GAAP financial results will be reflected from Q1 2021 onwards due to KDP's one-quarter lag reporting.
6The company is furnishing supplemental recast financial information to reflect these non-GAAP changes.

Mondelez International, Inc. 8-K Report, Regulation FD Disclosure (Apr 8, 2021)

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Key Highlights

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