Item 7.01. Regulation FD Disclosure.
Mondel?zInternational, Inc. and subsidiaries (collectively, "we," "our" or "Mondel?z International") are furnishing this current report to provide supplemental non-GAAP financial information related to the retrospective impact of (1) our sale of Keurig Dr Pepper Inc. ("KDP") shares onAugust 2, 2021 , and (2) our sale ofMaxFoods Pty Ltd ("MaxFoods"), an Australian packaged seafood business onNovember 1, 2021 . Due to our reporting of KDP's results on a one-quarter lag basis, the impact of the sale of the KDP shares will affect our non-GAAP financial results beginning with our fourth quarter endedDecember 31, 2021 . Consistent with our definitions of our non-GAAP financial measures, we will reflect the partial sale of our equity method investment in KDP as well as the sale ofMaxFoods as divestitures. These changes will result in the recasting of our historical non-GAAP financial results and provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results, and provide additional insight and transparency on how we evaluate our business.
Change to our Historical Non-GAAP Financial Results in Connection with our Sale of KDP Shares
As previously disclosed in our Quarterly Report on Form 10-Q for the three months endedSeptember 30, 2021 , we sold approximately 14.7 million shares of KDP onAugust 2, 2021 , which reduced our ownership interest by 1.0% to 5.3% of the total outstanding shares. We received$500 million of proceeds and recorded a pre-tax gain of$248 million (or$189 million after tax) during the third quarter of 2021. We consider the 1.0% ownership reduction resulting from this sale of shares a partial sale of our equity method investment in KDP. Consistent with our definitions of our non-GAAP financial measures, we consider this sale to be a divestiture. Due to our reporting of KDP's results on a one-quarter lag basis, the impact of the sale of these shares will affect our non-GAAP financial results beginning with the fourth quarter endedDecember 31, 2021 . Therefore, we will remove the equity method investment net earnings results related to this partial sale of our equity method investment in KDP from our non-GAAP financial results for Adjusted EPS for all historical periods presented. OurU.S. GAAP results, which include our historical equity method investment net earnings from KDP, will not change from what was previously reported.
Change to our Historical Non-GAAP Financial Results in Connection with our Sale
of
OnNovember 1, 2021 , we completed the sale ofMaxFoods , an Australian packaged foods business that we had recently acquired as part of ourApril 1, 2021 acquisition ofGourmet Foods Holdings Pty Ltd. As a result of this divestiture, consistent with the definitions of our non-GAAP financial measures, we will remove the results of this operation from our non-GAAP financial results for Adjusted Gross Profit, Adjusted Operating Income and Adjusted EPS for the second and third quarters of 2021 only, as these are the only quarters' results impacted by this divestiture. Our non-GAAP financial measure for Organic Net Revenue for these periods will not change, as the net revenue from this business was previously included as net revenue from acquisitions which is already excluded from our Organic Net Revenue financial measure. OurU.S. GAAP results, which include the results of the divested operation through the divestiture closing date noted above, will not change from what was previously reported.
Recast Amounts Reflecting Changes in Historical Non-GAAP Results
See the summary chart below and Exhibit 99.1 for the unaudited GAAP and recast non-GAAP financial information for the first three quarters of 2021, all quarters of 2020 and 2019, the first nine months of 2021 and the years endedDecember 31, 2020 and 2019. This supplemental disclosure does not amend any disclosure contained in any of our priorSEC filings. Mondel?z International, Inc. and Subsidiaries Recast Amounts Reflecting Change Due to Divestiture (in millions of U.S. dollars, except per share data) (Unaudited) 2019 2020 2021 2019 2020 2021 FY FY Sep YTD Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Reported (GAAP) Gross Profit$ 10,337 $ 10,446 $ 8,421 $ 2,593 $ 2,469 $ 2,516 $ 2,759 $ 2,451 $ 2,331 $ 2,792 $ 2,872 $ 2,966 $ 2,631 $ 2,824 Operating Income 3,843 3,853 3,449
1,036 1,025 876 906 856 713 1,135 1,149 1,283 872 1,294 Equity method investment net earnings
501 421 290
166 109 114 112 121 106 84 110 78 107 105 Provision for income taxes
2 1,224 952
189 216 (633 ) 230 148 341 391 344 212 398 342 Net earnings attributable to Mondel?z International
3,929 3,555 3,297 967 803 1,426 733 736 544 1,119 1,156 961 1,078 1,258 Diluted earnings per share attributable to Mondel?z International$ 2.69 $ 2.47 $ 2.33 $
0.66
Adjusted (Non-GAAP) - As Recast Gross Profit$ 10,333 $ 10,521 $ 8,261 $ 2,591 $ 2,452 $ 2,525 $ 2,765 $ 2,656 $ 2,347 $ 2,659 $ 2,859 $ 2,866 $ 2,648 $ 2,747 Operating Income 4,264 4,401 3,600
1,090 1,008 1,065 1,101 1,106 942 1,165 1,188 1,292 1,075 1,233 Equity method investment net earnings
354 384 318 96 84 86 88 96 101
90 97 121 102 95 Provision for income taxes
839 878 760
198 201 163 277 194 125 279 280 250 233 277 Net earnings attributable to Mondel?z International
3,492 3,694 3,054 919 806 908 859 949 870 922 953 1,123 930 1,001 Diluted earnings per share attributable to Mondel?z International$ 2.40 $ 2.56 $ 2.16 $ 0.63 $ 0.55 $ 0.62 $ 0.59 $ 0.66 $ 0.60 $ 0.64 $ 0.66 $ 0.79 $ 0.66 $ 0.71 Numbers in bold represent our non-GAAP financial measures that were recast due to the items noted above. See GAAP to non-GAAP reconciliation schedules provided in Exhibit 99.1.
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Financial Schedules
Exhibit 99.1 to this Form 8-K contains financial schedules that provide the reconciliations for our recast non-GAAP financial results for Adjusted Gross Profit and Adjusted Operating Income, due to the sale ofMaxFoods , for the second quarter, third quarter and first nine months of 2021, and for Adjusted EPS, due to the partial sale of our equity method investment in KDP and the sale ofMax Foods , for the first three quarters of 2021, all quarters of 2020 and 2019, the first nine months of 2021 and the years endedDecember 31, 2020 and 2019.
• Schedule 1 provides reconciliations of the differences between reported Gross
Profit and Operating Income (GAAP) and the recast Adjusted Gross Profit and
Adjusted Operating Income (non-GAAP) measures.
• Schedule 2 provides reconciliations of the differences between the reported
Operating Income (GAAP) and the recast Adjusted Operating Income (non-GAAP)
by reportable segment.
• Schedule 3 provides reconciliations of the differences between the reported
(GAAP) financial measures for Operating Income to Net Earnings Attributable
to Mondel?z International and the recast Adjusted (non-GAAP) financial
measures for these items. Equity method investment net earnings and provision
for income taxes are components used to calculate net earnings and diluted
earnings per share attributable to Mondel?z International. • Schedule 4 provides reconciliations between the reported Diluted EPS attributable to Mondel?z International (GAAP) and the recast Adjusted EPS (non-GAAP) for comparative periods.
Non-GAAP Financial Measures
We use non-GAAP financial information and believe it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results, and provide additional insight and transparency on how we evaluate our business. For additional information regarding our non-GAAP financial measures, see Exhibit 99.2.
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibits are being furnished with this Current Report on Form 8-K.
99.1 Financial schedules - Unaudited GAAP and Non-GAAP Financial Information.
99.2 Non-GAAP Financial Measures - Additional Information.
104 The cover page from Mondel?z
8-K, formatted in Inline XBRL (included as Exhibit 101).
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