Does this filing change Mondelēz's reported GAAP results?

No. The U.S. GAAP results, including equity method investment earnings from JDEP and results of the gum business through their sale dates, are unchanged. Only the non-GAAP measures (Organic Net Revenue, Adjusted Gross Profit, Adjusted Operating Income and Adjusted EPS) are recast.

Why are the non-GAAP results being recast?

The company treats the partial JDEP share sales and the developed market gum divestiture as divestitures under its non-GAAP definitions. Removing their results improves comparability of underlying operating performance across periods, and the recast changes take effect for historical periods presented.

When will the JDEP share sale affect non-GAAP earnings?

Because JDEP reports on a one-quarter lag, the effect on non-GAAP results starts in the fourth quarter ended December 31, 2023, when the Q3 2023 share sales are reflected as a divestiture.

How much cash did the gum divestiture bring in, and how can it be used?

Mondelēz received net cash proceeds of about $1.4 billion, subject to closing adjustments. The company can use it for general corporate purposes, including supporting its commercial paper program.

Where can investors find the detailed recast figures?

Exhibit 99.1 contains the unaudited GAAP-to-non-GAAP reconciliations for the first three quarters and nine months of 2023, all quarters of 2021 and 2022, and full-year 2021 and 2022. Exhibit 99.2 provides additional definitions and methodology.

MDLZ 8-K: Regulation FD

01—Abstract

Summary

Summary of the 8-K filed January 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Mondelēz International (MDLZ) is furnishing supplemental, Regulation FD non-GAAP information to recast its historical results for two divestitures: the partial sale of its equity method stake in JDE Peet's (JDEP) during Q3 2023, and the sale of its developed market gum business, completed October 1, 2023 (Portugal business sold October 23, 2023).

The filing does not change any U.S. GAAP results; it only restates non-GAAP measures (Organic Net Revenue, Adjusted Gross Profit, Adjusted Operating Income, and Adjusted EPS) for all historical periods presented, which were recast for 2021, 2022 and the first nine months of 2023. The JDEP share sales involved options covering about 7.7 million shares, of which 2.2 million were exercised in Q3 2023. This reduced Mondelēz's ownership from 18.1% to 17.7%, generated proceeds of about $62 million^a, and produced a small loss of about $4 million.

Because JDEP is reported on a one-quarter lag, the effect on non-GAAP results begins in Q4 2023. Mondelēz keeps two board seats and continues to use equity method accounting. The gum divestiture brought in net cash proceeds of about $1.4 billion^b, which can fund general corporate purposes, including commercial paper repayment.

Recast figures show the gum business removed roughly $483 million^c of nine-month 2023 net revenue and $193 million of operating income. Recast Adjusted EPS for Q3 2023 is $0.77 versus $0.72 as originally adjusted, and for nine months 2023 it is $2.35 versus $2.46. The changes are presentational, and investors should compare recast non-GAAP figures with the GAAP reconciliations in Exhibit 99.1.

02—Key points

Key Highlights

Recast non-GAAP results for 2021, 2022 and 9M 2023 remove the developed market gum business, sold to Perfetti Van Melle; U.S. GAAP results are unchanged.
The gum divestiture generated net cash proceeds of about $1.4 billion, usable for general corporate purposes including commercial paper support.
Gum business removed about $483M of 9M 2023 net revenue and $193M of operating income from recast Adjusted results.
Mondelēz sold 2.2M JDEP shares in Q3 2023 for about $62M, reducing its stake from 18.1% to 17.7%, and recorded a $4M loss.
JDEP share sales are treated as divestitures for non-GAAP purposes starting Q4 2023 because of the one-quarter reporting lag; equity method accounting continues with two board seats retained.
Recast Adjusted EPS for Q3 2023 is $0.77 (versus $0.72 as originally reported on an adjusted basis); 9M 2023 Adjusted EPS is $2.35 (versus $2.46).
The disclosure is supplemental Reg FD information and does not amend prior SEC filings.

03—Questions

Frequently Asked Questions

Does this filing change Mondelēz's reported GAAP results?
No. The U.S. GAAP results, including equity method investment earnings from JDEP and results of the gum business through their sale dates, are unchanged. Only the non-GAAP measures (Organic Net Revenue, Adjusted Gross Profit, Adjusted Operating Income and Adjusted EPS) are recast.
Why are the non-GAAP results being recast?
The company treats the partial JDEP share sales and the developed market gum divestiture as divestitures under its non-GAAP definitions. Removing their results improves comparability of underlying operating performance across periods, and the recast changes take effect for historical periods presented.
When will the JDEP share sale affect non-GAAP earnings?
Because JDEP reports on a one-quarter lag, the effect on non-GAAP results starts in the fourth quarter ended December 31, 2023, when the Q3 2023 share sales are reflected as a divestiture.
How much cash did the gum divestiture bring in, and how can it be used?
Mondelēz received net cash proceeds of about $1.4 billion, subject to closing adjustments. The company can use it for general corporate purposes, including supporting its commercial paper program.
Where can investors find the detailed recast figures?
Exhibit 99.1 contains the unaudited GAAP-to-non-GAAP reconciliations for the first three quarters and nine months of 2023, all quarters of 2021 and 2022, and full-year 2021 and 2022. Exhibit 99.2 provides additional definitions and methodology.

04—Continue

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