Summary
This 8-K filing from Mondelez International, Inc. (MDLZ) clarifies the retrospective impact of their secondary offering of Keurig Dr Pepper Inc. (KDP) shares on June 7, 2021. Mondelez sold approximately 28 million KDP shares, reducing their ownership to 6.4% and realizing $997 million in proceeds and a pre-tax gain of $520 million. The key takeaway for investors is how this transaction will affect the company's non-GAAP financial reporting. Specifically, due to the one-quarter lag in reporting KDP's results, the sale will be treated as a divestiture and will impact non-GAAP financial results starting from the third quarter of 2021. Mondelez will remove the equity method investment net earnings related to the sold shares from historical non-GAAP Adjusted EPS figures to provide a clearer comparison of underlying operating performance. Importantly, this change will not affect U.S. GAAP results or other non-GAAP measures like Organic Net Revenue, Adjusted Gross Profit, or Adjusted Operating Income.
Key Highlights
- 1Mondelez participated in a secondary offering of Keurig Dr Pepper Inc. (KDP) shares on June 7, 2021, selling approximately 28 million shares.
- 2The sale reduced Mondelez's ownership in KDP by 2.0% to 6.4%, generating $997 million in proceeds and a pre-tax gain of $520 million.
- 3This transaction is being treated as a 'divestiture' for non-GAAP financial reporting purposes.
- 4The impact on non-GAAP financial results, specifically Adjusted EPS, will be reflected retrospectively starting from Q3 2021.
- 5Historical non-GAAP Adjusted EPS will be recast to exclude equity method investment net earnings from the sold KDP shares.
- 6U.S. GAAP financial results will remain unchanged.
- 7Other key non-GAAP measures such as Organic Net Revenue, Adjusted Gross Profit, and Adjusted Operating Income are not affected by this change.