Why is Mondelēz restating its historical non-GAAP financial results?

Mondelēz is restating its historical non-GAAP financial results to reflect the impact of divestitures and business changes, such as the sale of JDE Peet's shares, the sale of a business in Argentina, and the expiration of a Kraft Heinz license. This is done to provide a clearer and more comparable view of the company's ongoing operational performance by removing the financial contributions of these divested entities or expired agreements from non-GAAP metrics.

How will these changes affect my understanding of Mondelēz's performance?

These adjustments are designed to enhance comparability. By removing the results of divested businesses and expired agreements from non-GAAP measures, investors can more easily identify trends and assess the performance of Mondelēz's core, continuing operations. It provides a better baseline for evaluating future performance.

Do these adjustments change Mondelēz's official U.S. GAAP financial statements?

No, these adjustments are specifically to the company's non-GAAP financial measures. The reported U.S. GAAP financial results, which are the company's official accounting statements, remain unchanged. The recast non-GAAP figures are provided as supplemental information.

When will the impact of these changes be fully reflected in Mondelēz's financial reporting?

The impact of the sale of the Argentine business and the KHC license expiration are treated as divestitures from the respective dates of those events. The sale of JDEP shares will affect non-GAAP financial results beginning with the third quarter ended September 30, 2022, due to JDEP's results being reported on a one-quarter lag basis.

MDLZ 8-K: Regulation FD

Summary

Mondelēz International, Inc. (MDLZ) filed an 8-K on October 11, 2022, to provide supplemental non-GAAP financial information. This filing details the retrospective impact of several divestitures and business changes on their historical non-GAAP financial results. Specifically, it addresses the sale of JDE Peet's (JDEP) shares, the sale of a business in Argentina, and the expiration of a Kraft Heinz Company (KHC) license agreement for Kraft mayonnaise in Latin America. These adjustments are intended to enhance comparability and provide greater transparency into the company's underlying operational performance by removing the impact of these transactions from non-GAAP measures like Organic Net Revenue, Adjusted Gross Profit, Adjusted Operating Income, and Adjusted EPS for all historical periods presented. The company is recasting its historical non-GAAP financial results to reflect these changes. This retrospective adjustment is particularly relevant for the third quarter of 2022 and subsequent periods, especially concerning the JDEP share sale due to the one-quarter lag in reporting JDEP's results. Investors should note that these adjustments do not alter the company's reported U.S. GAAP financial results, which continue to include the historical financial impact of these divested businesses and investments.

Key Highlights

1Mondelēz is retroactively adjusting its historical non-GAAP financial results to reflect divestitures and business changes.
2Key transactions impacting the adjustments include the sale of JDE Peet's (JDEP) shares, the sale of an Argentine business, and the expiration of a Kraft Heinz license.
3These adjustments aim to improve comparability and transparency in assessing the company's ongoing operational performance.
4The recast non-GAAP results will be applied to Organic Net Revenue, Adjusted Gross Profit, Adjusted Operating Income, and Adjusted EPS.
5The impact of the JDEP share sale will affect non-GAAP results starting with the third quarter of 2022 due to reporting lag.
6U.S. GAAP financial results remain unchanged and continue to reflect the historical impact of these transactions.
7Detailed financial schedules reconciling GAAP and recast non-GAAP figures are provided in Exhibit 99.1.

Mondelez International, Inc. 8-K Report, Regulation FD Disclosure (Oct 11, 2022)

Summary

Key Highlights

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