|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Virginia
|
|
52-2284372
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
Three Parkway North,
Deerfield, Illinois
|
|
60015
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer x
|
|
|
|
Accelerated filer ¨
|
Non-accelerated filer ¨
|
|
|
|
Smaller reporting company ¨
|
|
|
Emerging growth company ¨
|
|
|
|
Page No.
|
PART I -
|
FINANCIAL INFORMATION
|
|
|
|
|
Item 1.
|
Financial Statements (Unaudited)
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
PART II -
|
OTHER INFORMATION
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net revenues
|
$
|
6,288
|
|
|
$
|
6,530
|
|
|
$
|
19,165
|
|
|
$
|
18,930
|
|
Cost of sales
|
3,874
|
|
|
3,981
|
|
|
11,362
|
|
|
11,549
|
|
||||
Gross profit
|
2,414
|
|
|
2,549
|
|
|
7,803
|
|
|
7,381
|
|
||||
Selling, general and administrative expenses
|
1,508
|
|
|
1,338
|
|
|
4,939
|
|
|
4,276
|
|
||||
Asset impairment and exit costs
|
125
|
|
|
182
|
|
|
290
|
|
|
524
|
|
||||
Net gain on divestitures
|
—
|
|
|
(187
|
)
|
|
—
|
|
|
(184
|
)
|
||||
Amortization of intangibles
|
44
|
|
|
45
|
|
|
132
|
|
|
133
|
|
||||
Operating income
|
737
|
|
|
1,171
|
|
|
2,442
|
|
|
2,632
|
|
||||
Benefit plan non-service income
|
(19
|
)
|
|
(10
|
)
|
|
(47
|
)
|
|
(30
|
)
|
||||
Interest and other expense, net
|
86
|
|
|
19
|
|
|
414
|
|
|
262
|
|
||||
Earnings before income taxes
|
670
|
|
|
1,162
|
|
|
2,075
|
|
|
2,400
|
|
||||
Provision for income taxes
|
(310
|
)
|
|
(272
|
)
|
|
(662
|
)
|
|
(510
|
)
|
||||
Gain on equity method investment transaction
|
757
|
|
|
—
|
|
|
757
|
|
|
—
|
|
||||
Equity method investment net earnings
|
80
|
|
|
92
|
|
|
399
|
|
|
249
|
|
||||
Net earnings
|
1,197
|
|
|
982
|
|
|
2,569
|
|
|
2,139
|
|
||||
Noncontrolling interest earnings
|
(3
|
)
|
|
(1
|
)
|
|
(11
|
)
|
|
(6
|
)
|
||||
Net earnings attributable to
Mondelēz International
|
$
|
1,194
|
|
|
$
|
981
|
|
|
$
|
2,558
|
|
|
$
|
2,133
|
|
Per share data:
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share attributable to
Mondelēz International
|
$
|
0.81
|
|
|
$
|
0.65
|
|
|
$
|
1.73
|
|
|
$
|
1.41
|
|
Diluted earnings per share attributable to
Mondelēz International
|
$
|
0.81
|
|
|
$
|
0.64
|
|
|
$
|
1.72
|
|
|
$
|
1.39
|
|
Dividends declared
|
$
|
0.26
|
|
|
$
|
0.22
|
|
|
$
|
0.70
|
|
|
$
|
0.60
|
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net earnings
|
$
|
1,197
|
|
|
$
|
982
|
|
|
$
|
2,569
|
|
|
$
|
2,139
|
|
Other comprehensive earnings/(losses), net of tax:
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustment
|
(193
|
)
|
|
325
|
|
|
(859
|
)
|
|
1,242
|
|
||||
Pension and other benefit plans
|
47
|
|
|
(10
|
)
|
|
209
|
|
|
(42
|
)
|
||||
Derivative cash flow hedges
|
25
|
|
|
(19
|
)
|
|
5
|
|
|
11
|
|
||||
Total other comprehensive earnings/(losses)
|
(121
|
)
|
|
296
|
|
|
(645
|
)
|
|
1,211
|
|
||||
Comprehensive earnings/(losses)
|
1,076
|
|
|
1,278
|
|
|
1,924
|
|
|
3,350
|
|
||||
less: Comprehensive earnings/(losses) attributable to
noncontrolling interests
|
—
|
|
|
9
|
|
|
11
|
|
|
30
|
|
||||
Comprehensive earnings/(losses) attributable to
Mondelēz International
|
$
|
1,076
|
|
|
$
|
1,269
|
|
|
$
|
1,913
|
|
|
$
|
3,320
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,373
|
|
|
$
|
761
|
|
Trade receivables (net of allowances of $37 at September 30, 2018
and $50 at December 31, 2017)
|
2,732
|
|
|
2,691
|
|
||
Other receivables (net of allowances of $56 at September 30, 2018
and $98 at December 31, 2017)
|
845
|
|
|
835
|
|
||
Inventories, net
|
2,842
|
|
|
2,557
|
|
||
Other current assets
|
930
|
|
|
676
|
|
||
Total current assets
|
8,722
|
|
|
7,520
|
|
||
Property, plant and equipment, net
|
8,403
|
|
|
8,677
|
|
||
Goodwill
|
20,900
|
|
|
21,085
|
|
||
Intangible assets, net
|
18,136
|
|
|
18,639
|
|
||
Prepaid pension assets
|
171
|
|
|
158
|
|
||
Deferred income taxes
|
236
|
|
|
319
|
|
||
Equity method investments
|
7,006
|
|
|
6,193
|
|
||
Other assets
|
344
|
|
|
366
|
|
||
TOTAL ASSETS
|
$
|
63,918
|
|
|
$
|
62,957
|
|
LIABILITIES
|
|
|
|
||||
Short-term borrowings
|
$
|
4,811
|
|
|
$
|
3,517
|
|
Current portion of long-term debt
|
401
|
|
|
1,163
|
|
||
Accounts payable
|
5,374
|
|
|
5,705
|
|
||
Accrued marketing
|
1,647
|
|
|
1,728
|
|
||
Accrued employment costs
|
671
|
|
|
721
|
|
||
Other current liabilities
|
2,604
|
|
|
2,959
|
|
||
Total current liabilities
|
15,508
|
|
|
15,793
|
|
||
Long-term debt
|
14,852
|
|
|
12,972
|
|
||
Deferred income taxes
|
3,558
|
|
|
3,341
|
|
||
Accrued pension costs
|
1,306
|
|
|
1,669
|
|
||
Accrued postretirement health care costs
|
397
|
|
|
419
|
|
||
Other liabilities
|
2,765
|
|
|
2,689
|
|
||
TOTAL LIABILITIES
|
38,386
|
|
|
36,883
|
|
||
Commitments and Contingencies (Note 12)
|
|
|
|
||||
EQUITY
|
|
|
|
||||
Common Stock, no par value (5,000,000,000 shares authorized and
1,996,537,778 shares issued at September 30, 2018 and December 31, 2017)
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
31,932
|
|
|
31,915
|
|
||
Retained earnings
|
24,075
|
|
|
22,631
|
|
||
Accumulated other comprehensive losses
|
(10,642
|
)
|
|
(9,997
|
)
|
||
Treasury stock, at cost (539,452,295 shares at September 30, 2018 and
508,401,694 shares at December 31, 2017)
|
(19,908
|
)
|
|
(18,555
|
)
|
||
Total Mondelēz International Shareholders’ Equity
|
25,457
|
|
|
25,994
|
|
||
Noncontrolling interest
|
75
|
|
|
80
|
|
||
TOTAL EQUITY
|
25,532
|
|
|
26,074
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
63,918
|
|
|
$
|
62,957
|
|
|
Mondelēz International Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||||||
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Earnings/
(Losses)
|
|
Treasury
Stock
|
|
Non-controlling
Interest*
|
|
Total
Equity
|
||||||||||||||
Balances at January 1, 2017
|
$
|
—
|
|
|
$
|
31,847
|
|
|
$
|
21,125
|
|
|
$
|
(11,118
|
)
|
|
$
|
(16,713
|
)
|
|
$
|
54
|
|
|
$
|
25,195
|
|
Comprehensive earnings/(losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net earnings
|
—
|
|
|
—
|
|
|
2,828
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
2,842
|
|
|||||||
Other comprehensive earnings/(losses), net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
1,121
|
|
|
—
|
|
|
28
|
|
|
1,149
|
|
|||||||
Exercise of stock options and issuance of other stock awards
|
—
|
|
|
68
|
|
|
(83
|
)
|
|
—
|
|
|
360
|
|
|
—
|
|
|
345
|
|
|||||||
Common Stock repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,202
|
)
|
|
—
|
|
|
(2,202
|
)
|
|||||||
Cash dividends declared ($0.82 per share)
|
—
|
|
|
—
|
|
|
(1,239
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,239
|
)
|
|||||||
Dividends paid on noncontrolling interest and other activities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
(16
|
)
|
|||||||
Balances at December 31, 2017
|
$
|
—
|
|
|
$
|
31,915
|
|
|
$
|
22,631
|
|
|
$
|
(9,997
|
)
|
|
$
|
(18,555
|
)
|
|
$
|
80
|
|
|
$
|
26,074
|
|
Comprehensive earnings/(losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net earnings
|
—
|
|
|
—
|
|
|
2,558
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
2,569
|
|
|||||||
Other comprehensive earnings/(losses), net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(645
|
)
|
|
—
|
|
|
—
|
|
|
(645
|
)
|
|||||||
Exercise of stock options and issuance of other stock awards
|
—
|
|
|
17
|
|
|
(90
|
)
|
|
—
|
|
|
283
|
|
|
—
|
|
|
210
|
|
|||||||
Common Stock repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,636
|
)
|
|
—
|
|
|
(1,636
|
)
|
|||||||
Cash dividends declared ($0.70 per share)
|
—
|
|
|
—
|
|
|
(1,030
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,030
|
)
|
|||||||
Dividends paid on noncontrolling interest and other activities
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
(10
|
)
|
|||||||
Balances at September 30, 2018
|
$
|
—
|
|
|
$
|
31,932
|
|
|
$
|
24,075
|
|
|
$
|
(10,642
|
)
|
|
$
|
(19,908
|
)
|
|
$
|
75
|
|
|
$
|
25,532
|
|
*
|
Noncontrolling interest as of September 30, 2017 was $68 million, as compared to $54 million as of January 1, 2017. The change of $14 million during the nine months ended September 30, 2017 was due to $24 million of other comprehensive earnings, net of taxes, and $6 million of net earnings offset by $(16) million of dividends paid.
|
|
For the Nine Months Ended
September 30, |
||||||
|
2018
|
|
2017
|
||||
CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES
|
|
|
|
||||
Net earnings
|
$
|
2,569
|
|
|
$
|
2,139
|
|
Adjustments to reconcile net earnings to operating cash flows:
|
|
|
|
||||
Depreciation and amortization
|
613
|
|
|
604
|
|
||
Stock-based compensation expense
|
92
|
|
|
104
|
|
||
U.S. tax reform transition tax
|
89
|
|
|
—
|
|
||
Deferred income tax provision
|
179
|
|
|
77
|
|
||
Asset impairments and accelerated depreciation
|
120
|
|
|
287
|
|
||
Loss on early extinguishment of debt
|
140
|
|
|
11
|
|
||
Gain on equity method investment transaction
|
(757
|
)
|
|
—
|
|
||
Net gain on divestitures
|
—
|
|
|
(184
|
)
|
||
Equity method investment net earnings
|
(399
|
)
|
|
(249
|
)
|
||
Distributions from equity method investments
|
151
|
|
|
143
|
|
||
Other non-cash items, net
|
344
|
|
|
(238
|
)
|
||
Change in assets and liabilities, net of acquisitions and divestitures:
|
|
|
|
||||
Receivables, net
|
(230
|
)
|
|
(387
|
)
|
||
Inventories, net
|
(431
|
)
|
|
(236
|
)
|
||
Accounts payable
|
(143
|
)
|
|
(426
|
)
|
||
Other current assets
|
41
|
|
|
68
|
|
||
Other current liabilities
|
(320
|
)
|
|
(604
|
)
|
||
Change in pension and postretirement assets and liabilities, net
|
(173
|
)
|
|
(312
|
)
|
||
Net cash provided by operating activities
|
1,885
|
|
|
797
|
|
||
CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(810
|
)
|
|
(721
|
)
|
||
Acquisition, net of cash received
|
(528
|
)
|
|
—
|
|
||
Proceeds from divestiture, net of disbursements
|
—
|
|
|
516
|
|
||
Proceeds from sale of property, plant and equipment and other
|
136
|
|
|
77
|
|
||
Net cash used in investing activities
|
(1,202
|
)
|
|
(128
|
)
|
||
CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES
|
|
|
|
||||
Issuances of commercial paper, maturities greater than 90 days
|
2,433
|
|
|
1,375
|
|
||
Repayments of commercial paper, maturities greater than 90 days
|
(1,494
|
)
|
|
(1,681
|
)
|
||
Net issuances of other short-term borrowings
|
403
|
|
|
2,266
|
|
||
Long-term debt proceeds
|
2,948
|
|
|
350
|
|
||
Long-term debt repaid
|
(1,821
|
)
|
|
(1,468
|
)
|
||
Repurchase of Common Stock
|
(1,650
|
)
|
|
(1,786
|
)
|
||
Dividends paid
|
(980
|
)
|
|
(869
|
)
|
||
Other
|
154
|
|
|
165
|
|
||
Net cash used in financing activities
|
(7
|
)
|
|
(1,648
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(64
|
)
|
|
82
|
|
||
Cash and cash equivalents:
|
|
|
|
||||
Increase/(decrease)
|
612
|
|
|
(897
|
)
|
||
Balance at beginning of period
|
761
|
|
|
1,741
|
|
||
Balance at end of period
|
$
|
1,373
|
|
|
$
|
844
|
|
|
As of September 30,
2018 |
|
As of December 31,
2017 |
||||
|
(in millions)
|
||||||
Raw materials
|
$
|
743
|
|
|
$
|
711
|
|
Finished product
|
2,227
|
|
|
1,975
|
|
||
|
2,970
|
|
|
2,686
|
|
||
Inventory reserves
|
(128
|
)
|
|
(129
|
)
|
||
Inventories, net
|
$
|
2,842
|
|
|
$
|
2,557
|
|
|
As of September 30,
2018 |
|
As of December 31,
2017 |
||||
|
(in millions)
|
||||||
Land and land improvements
|
$
|
431
|
|
|
$
|
458
|
|
Buildings and building improvements
|
2,984
|
|
|
2,979
|
|
||
Machinery and equipment
|
10,997
|
|
|
11,195
|
|
||
Construction in progress
|
919
|
|
|
1,048
|
|
||
|
15,331
|
|
|
15,680
|
|
||
Accumulated depreciation
|
(6,928
|
)
|
|
(7,003
|
)
|
||
Property, plant and equipment, net
|
$
|
8,403
|
|
|
$
|
8,677
|
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Latin America
|
$
|
4
|
|
|
$
|
13
|
|
|
$
|
18
|
|
|
$
|
25
|
|
AMEA
|
(4
|
)
|
|
20
|
|
|
4
|
|
|
62
|
|
||||
Europe
|
9
|
|
|
10
|
|
|
15
|
|
|
52
|
|
||||
North America
|
(4
|
)
|
|
3
|
|
|
5
|
|
|
25
|
|
||||
Non-cash property, plant and equipment
write-downs
|
$
|
5
|
|
|
$
|
46
|
|
|
$
|
42
|
|
|
$
|
164
|
|
|
As of September 30,
2018 |
|
As of December 31,
2017 |
||||
|
(in millions)
|
||||||
Latin America
|
$
|
819
|
|
|
$
|
901
|
|
AMEA
|
3,222
|
|
|
3,371
|
|
||
Europe
|
7,611
|
|
|
7,880
|
|
||
North America
|
9,248
|
|
|
8,933
|
|
||
Goodwill
|
$
|
20,900
|
|
|
$
|
21,085
|
|
|
As of September 30,
2018 |
|
As of December 31,
2017 |
||||
|
(in millions)
|
||||||
Non-amortizable intangible assets
|
$
|
17,288
|
|
|
$
|
17,671
|
|
Amortizable intangible assets
|
2,341
|
|
|
2,386
|
|
||
|
19,629
|
|
|
20,057
|
|
||
Accumulated amortization
|
(1,493
|
)
|
|
(1,418
|
)
|
||
Intangible assets, net
|
$
|
18,136
|
|
|
$
|
18,639
|
|
|
Goodwill
|
|
Intangible
Assets, at cost
|
||||
|
(in millions)
|
||||||
Balance at January 1, 2018
|
$
|
21,085
|
|
|
$
|
20,057
|
|
Currency/other
|
(520
|
)
|
|
(570
|
)
|
||
Acquisition
|
335
|
|
|
210
|
|
||
Asset impairments
|
—
|
|
|
(68
|
)
|
||
Balance at September 30, 2018
|
$
|
20,900
|
|
|
$
|
19,629
|
|
•
|
Acquisition – In connection with the acquisition of Tate's Bake Shop in the second quarter of 2018, we recorded a preliminary purchase price allocation of $335 million to goodwill and $210 million to intangible assets. See Note 2, Divestitures and Acquisitions, for additional information.
|
•
|
Asset impairments – During the third quarter of 2018, we recorded $68 million of intangible asset impairments related to our annual testing of non-amortizable intangible assets as described further below.
|
|
For the Three Months Ended
September 30, 2017 |
|
For the Nine Months Ended
September 30, 2017 |
||||||||||||
|
As Reported
|
|
As Adjusted
|
|
As Reported
|
|
As Adjusted
|
||||||||
|
(in millions)
|
||||||||||||||
Statements of Earnings
|
|
|
|
|
|
|
|
||||||||
Equity method investment net earnings
|
$
|
103
|
|
|
$
|
92
|
|
|
$
|
236
|
|
|
$
|
249
|
|
Net earnings
|
993
|
|
|
982
|
|
|
2,126
|
|
|
2,139
|
|
||||
Net earnings attributable to
Mondelēz International
|
992
|
|
|
981
|
|
|
2,120
|
|
|
2,133
|
|
||||
Earnings per share attributable to
Mondelēz International:
|
|
|
|
|
|
|
|
||||||||
Basic EPS
|
$
|
0.66
|
|
|
$
|
0.65
|
|
|
$
|
1.40
|
|
|
$
|
1.41
|
|
Diluted EPS
|
$
|
0.65
|
|
|
$
|
0.64
|
|
|
$
|
1.38
|
|
|
$
|
1.39
|
|
|
|
|
|
|
|
|
|
||||||||
Statements of Other Comprehensive Earnings
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustment
|
$
|
337
|
|
|
$
|
325
|
|
|
$
|
1,260
|
|
|
$
|
1,242
|
|
Total other comprehensive earnings / (losses)
|
308
|
|
|
296
|
|
|
1,229
|
|
|
1,211
|
|
||||
Comprehensive earnings attributable to
Mondelēz International
|
1,292
|
|
|
1,269
|
|
|
3,325
|
|
|
3,320
|
|
|
As of December 31, 2017
|
||||||
|
As Reported
|
|
As Adjusted
|
||||
|
(in millions)
|
||||||
Balance Sheet
|
|
|
|
||||
Equity method investments
|
$
|
6,345
|
|
|
$
|
6,193
|
|
Deferred income taxes
|
3,376
|
|
|
3,341
|
|
||
Retained earnings
|
22,749
|
|
|
22,631
|
|
||
Accumulated other comprehensive losses
|
(9,998
|
)
|
|
(9,997
|
)
|
||
Total Mondelēz International shareholders' equity
|
26,111
|
|
|
25,994
|
|
||
Total equity
|
26,191
|
|
|
26,074
|
|
|
Severance
and related
costs
|
|
Asset
Write-downs
|
|
Total
|
||||||
|
(in millions)
|
||||||||||
Liability balance, January 1, 2018
|
$
|
464
|
|
|
$
|
—
|
|
|
$
|
464
|
|
Charges
|
175
|
|
|
45
|
|
|
220
|
|
|||
Cash spent
|
(232
|
)
|
|
—
|
|
|
(232
|
)
|
|||
Non-cash settlements/adjustments
|
(3
|
)
|
|
(45
|
)
|
|
(48
|
)
|
|||
Currency
|
(28
|
)
|
|
—
|
|
|
(28
|
)
|
|||
Liability balance, September 30, 2018
|
$
|
376
|
|
|
$
|
—
|
|
|
$
|
376
|
|
|
Latin
America
|
|
AMEA
|
|
Europe
|
|
North
America (1)
|
|
Corporate (2)
|
|
Total
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
For the Three Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring Costs
|
$
|
11
|
|
|
$
|
27
|
|
|
$
|
26
|
|
|
$
|
(9
|
)
|
|
$
|
1
|
|
|
$
|
56
|
|
Implementation Costs
|
16
|
|
|
8
|
|
|
16
|
|
|
23
|
|
|
20
|
|
|
83
|
|
||||||
Total
|
$
|
27
|
|
|
$
|
35
|
|
|
$
|
42
|
|
|
$
|
14
|
|
|
$
|
21
|
|
|
$
|
139
|
|
For the Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring Costs
|
$
|
45
|
|
|
$
|
32
|
|
|
$
|
30
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
113
|
|
Implementation Costs
|
8
|
|
|
11
|
|
|
18
|
|
|
13
|
|
|
12
|
|
|
62
|
|
||||||
Total
|
$
|
53
|
|
|
$
|
43
|
|
|
$
|
48
|
|
|
$
|
19
|
|
|
$
|
12
|
|
|
$
|
175
|
|
For the Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring Costs
|
$
|
47
|
|
|
$
|
50
|
|
|
$
|
96
|
|
|
$
|
17
|
|
|
$
|
10
|
|
|
$
|
220
|
|
Implementation Costs
|
46
|
|
|
28
|
|
|
45
|
|
|
61
|
|
|
35
|
|
|
215
|
|
||||||
Total
|
$
|
93
|
|
|
$
|
78
|
|
|
$
|
141
|
|
|
$
|
78
|
|
|
$
|
45
|
|
|
$
|
435
|
|
For the Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring Costs
|
$
|
76
|
|
|
$
|
105
|
|
|
$
|
149
|
|
|
$
|
71
|
|
|
$
|
17
|
|
|
$
|
418
|
|
Implementation Costs
|
28
|
|
|
31
|
|
|
49
|
|
|
38
|
|
|
33
|
|
|
179
|
|
||||||
Total
|
$
|
104
|
|
|
$
|
136
|
|
|
$
|
198
|
|
|
$
|
109
|
|
|
$
|
50
|
|
|
$
|
597
|
|
Total Project (3)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restructuring Costs
|
$
|
477
|
|
|
$
|
498
|
|
|
$
|
935
|
|
|
$
|
436
|
|
|
$
|
108
|
|
|
$
|
2,454
|
|
Implementation Costs
|
198
|
|
|
157
|
|
|
317
|
|
|
314
|
|
|
256
|
|
|
1,242
|
|
||||||
Total
|
$
|
675
|
|
|
$
|
655
|
|
|
$
|
1,252
|
|
|
$
|
750
|
|
|
$
|
364
|
|
|
$
|
3,696
|
|
(1)
|
During 2018 and 2017, our North America region implementation costs included incremental costs that we incurred related to renegotiating collective bargaining agreements that expired in February 2016 for eight U.S. facilities and related to executing business continuity plans for the North America business.
|
(2)
|
During the first quarter of 2018, in connection with adopting a new pension cost classification accounting standard, we reclassified certain of our benefit plan component costs other than service costs out of operating income into a new line, benefit plan non-service income, on our condensed consolidated statements of earnings. As such, we have recast our historical operating income, segment operating income and restructuring and implementation costs by segment to reflect this reclassification, which had no impact to earnings before income taxes or net earnings. The benefit plan non-service income amounts no longer recorded in segment operating income are included within the Corporate column in the table above. The Corporate column also includes minor adjustments for rounding.
|
(3)
|
Includes all charges recorded since program inception on May 6, 2014 through September 30, 2018.
|
|
As of September 30, 2018
|
|
As of December 31, 2017
|
||||||||||
|
Amount
Outstanding
|
|
Weighted-
Average Rate
|
|
Amount
Outstanding
|
|
Weighted-
Average Rate
|
||||||
|
(in millions)
|
|
|
|
(in millions)
|
|
|
||||||
Commercial paper
|
$
|
4,602
|
|
|
2.4
|
%
|
|
$
|
3,410
|
|
|
1.7
|
%
|
Bank loans
|
209
|
|
|
12.1
|
%
|
|
107
|
|
|
11.5
|
%
|
||
Total short-term borrowings
|
$
|
4,811
|
|
|
|
|
$
|
3,517
|
|
|
|
•
|
$750 million of 3.000% notes that mature in May 2020
|
•
|
$750 million of 3.625% notes that mature in May 2023
|
•
|
$700 million of 4.125% notes that mature in May 2028
|
•
|
$300 million of 4.625% notes that mature in May 2048
|
•
|
$241 million of our 6.500% notes due in February 2040
|
•
|
$97.6 million of our 5.375% notes due in February 2020
|
•
|
$75.8 million of our 6.500% notes due in November 2031
|
•
|
$72.1 million of our 6.875% notes due in February 2038
|
•
|
$42.6 million of our 6.125% notes due in August 2018
|
•
|
$29.3 million of our 6.875% notes due in January 2039
|
•
|
$11.7 million of our 7.000% notes due in August 2037
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Interest expense, debt
|
$
|
117
|
|
|
$
|
89
|
|
|
$
|
334
|
|
|
$
|
295
|
|
Loss on debt extinguishment
|
—
|
|
|
—
|
|
|
140
|
|
|
11
|
|
||||
Loss/(gain) related to interest rate swaps
|
(1
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
||||
Other (income)/expense, net
|
(30
|
)
|
|
(70
|
)
|
|
(50
|
)
|
|
(44
|
)
|
||||
Interest and other expense, net
|
$
|
86
|
|
|
$
|
19
|
|
|
$
|
414
|
|
|
$
|
262
|
|
|
As of September 30, 2018
|
|
As of December 31, 2017
|
||||||||||||
|
Asset
Derivatives
|
|
Liability
Derivatives
|
|
Asset
Derivatives
|
|
Liability
Derivatives
|
||||||||
|
(in millions)
|
||||||||||||||
Derivatives designated as
accounting hedges:
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
59
|
|
|
$
|
359
|
|
|
$
|
15
|
|
|
$
|
509
|
|
Net investment hedge derivative contracts (1)
|
365
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
424
|
|
|
$
|
362
|
|
|
$
|
15
|
|
|
$
|
509
|
|
Derivatives not designated as
accounting hedges:
|
|
|
|
|
|
|
|
||||||||
Currency exchange contracts
|
$
|
133
|
|
|
$
|
47
|
|
|
$
|
65
|
|
|
$
|
76
|
|
Commodity contracts
|
129
|
|
|
170
|
|
|
84
|
|
|
229
|
|
||||
Interest rate contracts
|
—
|
|
|
—
|
|
|
15
|
|
|
11
|
|
||||
|
$
|
262
|
|
|
$
|
217
|
|
|
$
|
164
|
|
|
$
|
316
|
|
Total fair value
|
$
|
686
|
|
|
$
|
579
|
|
|
$
|
179
|
|
|
$
|
825
|
|
(1)
|
Net investment hedge contracts consist of cross-currency interest rate swaps and forward contracts. We also designate some of our non-U.S. dollar denominated debt to hedge a portion of our net investments in our non-U.S. operations. This debt is not reflected in the table above, but is included in long-term debt discussed in Note 8, Debt and Borrowing Arrangements. Both net investment hedge derivative contracts and non-U.S. dollar denominated debt acting as net investment hedges are also disclosed in the Derivative Volume table and the Hedges of Net Investments in International Operations section appearing later in this footnote.
|
|
As of September 30, 2018
|
||||||||||||||
|
Total
Fair Value of Net
Asset/(Liability)
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(in millions)
|
||||||||||||||
Currency exchange contracts
|
$
|
86
|
|
|
$
|
—
|
|
|
$
|
86
|
|
|
$
|
—
|
|
Commodity contracts
|
(41
|
)
|
|
4
|
|
|
(45
|
)
|
|
—
|
|
||||
Interest rate contracts
|
(300
|
)
|
|
—
|
|
|
(300
|
)
|
|
—
|
|
||||
Net investment hedge contracts
|
362
|
|
|
—
|
|
|
362
|
|
|
—
|
|
||||
Total derivatives
|
$
|
107
|
|
|
$
|
4
|
|
|
$
|
103
|
|
|
$
|
—
|
|
|
As of December 31, 2017
|
||||||||||||||
|
Total
Fair Value of Net
Asset/(Liability)
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(in millions)
|
||||||||||||||
Currency exchange contracts
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
Commodity contracts
|
(145
|
)
|
|
(138
|
)
|
|
(7
|
)
|
|
—
|
|
||||
Interest rate contracts
|
(490
|
)
|
|
—
|
|
|
(490
|
)
|
|
—
|
|
||||
Total derivatives
|
$
|
(646
|
)
|
|
$
|
(138
|
)
|
|
$
|
(508
|
)
|
|
$
|
—
|
|
|
Notional Amount
|
||||||
|
As of September 30, 2018
|
|
As of December 31, 2017
|
||||
|
(in millions)
|
||||||
Currency exchange contracts:
|
|
|
|
||||
Intercompany loans and forecasted interest payments
|
$
|
3,797
|
|
|
$
|
7,089
|
|
Forecasted transactions
|
2,677
|
|
|
2,213
|
|
||
Commodity contracts
|
1,018
|
|
|
1,204
|
|
||
Interest rate contracts
|
8,205
|
|
|
6,532
|
|
||
Net investment hedges:
|
|
|
|
||||
Net investment hedge derivative contracts
|
7,079
|
|
|
—
|
|
||
Non-U.S. dollar debt designated as net investment hedges
|
|
|
|
||||
Euro notes
|
3,556
|
|
|
3,679
|
|
||
British pound sterling notes
|
343
|
|
|
459
|
|
||
Swiss franc notes
|
1,426
|
|
|
1,694
|
|
||
Canadian dollar notes
|
465
|
|
|
—
|
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Accumulated (loss)/gain at beginning of period
|
$
|
(133
|
)
|
|
$
|
(91
|
)
|
|
$
|
(113
|
)
|
|
$
|
(121
|
)
|
Transfer of realized (gains)/losses
in fair value to earnings
|
—
|
|
|
(13
|
)
|
|
(9
|
)
|
|
(10
|
)
|
||||
Unrealized gain/(loss) in fair value
|
25
|
|
|
(6
|
)
|
|
14
|
|
|
21
|
|
||||
Accumulated (loss)/gain at end of period
|
$
|
(108
|
)
|
|
$
|
(110
|
)
|
|
$
|
(108
|
)
|
|
$
|
(110
|
)
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Currency exchange contracts –
forecasted transactions
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Commodity contracts
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Interest rate contracts
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Total
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
9
|
|
|
$
|
10
|
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Currency exchange contracts –
forecasted transactions
|
$
|
—
|
|
|
$
|
(11
|
)
|
|
$
|
—
|
|
|
$
|
(37
|
)
|
Commodity contracts
|
—
|
|
|
25
|
|
|
—
|
|
|
31
|
|
||||
Interest rate contracts
|
25
|
|
|
(20
|
)
|
|
14
|
|
|
27
|
|
||||
Total
|
$
|
25
|
|
|
$
|
(6
|
)
|
|
$
|
14
|
|
|
$
|
21
|
|
•
|
cost of sales for currency exchange contracts related to forecasted transactions;
|
•
|
cost of sales for commodity contracts; and
|
•
|
interest and other expense, net for interest rate contracts and currency exchange contracts related to intercompany loans.
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Borrowings
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
4
|
|
Derivatives
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(4
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
As of September 30,
2018 |
|
As of December 31,
2017 |
||||
|
(in millions)
|
||||||
Notional value of borrowings (and related derivatives)
|
$
|
—
|
|
|
$
|
(801
|
)
|
Cumulative fair value hedging adjustments
|
—
|
|
|
—
|
|
||
Carrying amount of borrowings
|
$
|
—
|
|
|
$
|
(801
|
)
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Euro notes
|
$
|
18
|
|
|
$
|
(83
|
)
|
|
$
|
94
|
|
|
$
|
(279
|
)
|
British pound sterling notes
|
5
|
|
|
(8
|
)
|
|
13
|
|
|
(23
|
)
|
||||
Swiss franc notes
|
(10
|
)
|
|
12
|
|
|
6
|
|
|
(53
|
)
|
||||
Canadian notes
|
(6
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
|
Location of
Gain/(Loss)
Recognized
in Earnings
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|||||||||
|
(in millions)
|
|
|
||||||||||||||
Currency exchange contracts:
|
|
|
|
|
|
|
|
|
|
||||||||
Intercompany loans and
forecasted interest payments
|
$
|
16
|
|
|
$
|
(13
|
)
|
|
$
|
30
|
|
|
$
|
(8
|
)
|
|
Interest and other expense, net
|
Forecasted transactions
|
53
|
|
|
(1
|
)
|
|
118
|
|
|
—
|
|
|
Cost of sales
|
||||
Forecasted transactions
|
(1
|
)
|
|
1
|
|
|
(6
|
)
|
|
(1
|
)
|
|
Interest and other expense, net
|
||||
Forecasted transactions
|
2
|
|
|
—
|
|
|
(2
|
)
|
|
2
|
|
|
Selling, general and administrative expenses
|
||||
Commodity contracts
|
(123
|
)
|
|
(17
|
)
|
|
(22
|
)
|
|
(176
|
)
|
|
Cost of sales
|
||||
Total
|
$
|
(53
|
)
|
|
$
|
(30
|
)
|
|
$
|
118
|
|
|
$
|
(183
|
)
|
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||
|
For the Three Months Ended
September 30, |
|
For the Three Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Service cost
|
$
|
11
|
|
|
$
|
12
|
|
|
$
|
36
|
|
|
$
|
40
|
|
Interest cost
|
16
|
|
|
16
|
|
|
49
|
|
|
51
|
|
||||
Expected return on plan assets
|
(22
|
)
|
|
(25
|
)
|
|
(110
|
)
|
|
(110
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Net loss from experience differences
|
6
|
|
|
10
|
|
|
40
|
|
|
43
|
|
||||
Prior service cost/(benefit)
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Settlement losses and other expenses
|
4
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
Net periodic pension cost
|
$
|
15
|
|
|
$
|
19
|
|
|
$
|
14
|
|
|
$
|
23
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||
|
For the Nine Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Service cost
|
$
|
33
|
|
|
$
|
34
|
|
|
$
|
111
|
|
|
$
|
117
|
|
Interest cost
|
46
|
|
|
47
|
|
|
151
|
|
|
148
|
|
||||
Expected return on plan assets
|
(66
|
)
|
|
(75
|
)
|
|
(341
|
)
|
|
(322
|
)
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Net loss from experience differences
|
26
|
|
|
27
|
|
|
124
|
|
|
124
|
|
||||
Prior service cost/(benefit)
|
1
|
|
|
1
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Settlement losses and other expenses
|
19
|
|
|
27
|
|
|
—
|
|
|
2
|
|
||||
Net periodic pension cost
|
$
|
59
|
|
|
$
|
61
|
|
|
$
|
43
|
|
|
$
|
67
|
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Service cost
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
5
|
|
Interest cost
|
4
|
|
|
4
|
|
|
11
|
|
|
11
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Net loss from experience differences
|
4
|
|
|
4
|
|
|
11
|
|
|
11
|
|
||||
Prior service credit (1)
|
(10
|
)
|
|
(10
|
)
|
|
(29
|
)
|
|
(30
|
)
|
||||
Net periodic postretirement health care benefit
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
(1)
|
Amortization of prior service credit included gains of $8 million for the three months ended September 30, 2018 and September 30, 2017 and $24 million for the nine months ended September 30, 2018 and September 30, 2017 related to a change in the eligibility requirement and a change in benefits to Medicare-eligible participants.
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Service cost
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Interest cost
|
2
|
|
|
1
|
|
|
4
|
|
|
3
|
|
||||
Amortization of net gains
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(3
|
)
|
||||
Net periodic postemployment cost
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
6
|
|
|
$
|
4
|
|
|
Shares Subject
to Option
|
|
Weighted-
Average
Exercise or
Grant Price
Per Share
|
|
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||
Balance at January 1, 2018
|
48,434,655
|
|
|
$29.92
|
|
5 years
|
|
$
|
626
|
million
|
Annual grant to eligible employees
|
5,666,530
|
|
|
43.51
|
|
|
|
|
||
Additional options issued
|
162,466
|
|
|
30.99
|
|
|
|
|
||
Total options granted
|
5,828,996
|
|
|
43.16
|
|
|
|
|
||
Options exercised (1)
|
(7,234,369
|
)
|
|
25.62
|
|
|
|
$
|
127
|
million
|
Options canceled
|
(994,002
|
)
|
|
42.79
|
|
|
|
|
||
Balance at September 30, 2018
|
46,035,280
|
|
|
31.99
|
|
5 years
|
|
$
|
509
|
million
|
(1)
|
Cash received from options exercised was $67 million in the three months and $183 million in the nine months ended September 30, 2018. The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $6 million in the three months and $15 million in the nine months ended September 30, 2018.
|
|
Number
of Shares
|
|
Grant Date
|
|
Weighted-Average
Fair Value
Per Share (3)
|
|
Weighted-Average
Aggregate
Fair Value (3)
|
|||
Balance at January 1, 2018
|
7,669,705
|
|
|
|
|
$39.74
|
|
|
||
Annual grant to eligible employees:
|
|
|
Feb 22, 2018
|
|
|
|
|
|||
Performance share units
|
1,048,770
|
|
|
|
|
51.23
|
|
|
||
Deferred stock units
|
788,310
|
|
|
|
|
43.51
|
|
|
||
Additional shares granted (1)
|
349,712
|
|
|
Various
|
|
41.42
|
|
|
||
Total shares granted
|
2,186,792
|
|
|
|
|
46.88
|
|
$
|
103
|
million
|
Vested (2)
|
(2,230,871
|
)
|
|
|
|
38.43
|
|
$
|
86
|
million
|
Forfeited (2)
|
(842,524
|
)
|
|
|
|
41.70
|
|
|
||
Balance at September 30, 2018
|
6,783,102
|
|
|
|
|
42.23
|
|
|
(1)
|
Includes performance share units and deferred stock units.
|
(2)
|
Includes performance share units, deferred stock units and historically granted restricted stock. The actual tax benefit/(expense) realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled $(1) million in the three months and $3 million in the nine months ended September 30, 2018.
|
(3)
|
The grant date fair value of performance share units is determined based on the Monte Carlo simulation model for the market-based total shareholder return component and the closing market price of the Company’s stock on the grant date for performance-based components. The Monte Carlo simulation model incorporates the probability of achieving the total shareholder return market condition. Compensation expense is recognized using the grant date fair values regardless of whether the market condition is achieved, so long as the requisite service has been provided.
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Currency Translation Adjustments:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(8,409
|
)
|
|
$
|
(8,009
|
)
|
|
$
|
(7,740
|
)
|
|
$
|
(8,910
|
)
|
Currency translation adjustments
|
(189
|
)
|
|
279
|
|
|
(746
|
)
|
|
1,037
|
|
||||
Reclassification to earnings related to:
|
|
|
|
|
|
|
|
||||||||
Equity method investment transaction
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Tax (expense)/benefit
|
(10
|
)
|
|
46
|
|
|
(119
|
)
|
|
205
|
|
||||
Other comprehensive earnings/(losses)
|
(193
|
)
|
|
325
|
|
|
(859
|
)
|
|
1,242
|
|
||||
Less: (earnings)/loss attributable to noncontrolling interests
|
3
|
|
|
(8
|
)
|
|
—
|
|
|
(24
|
)
|
||||
Balance at end of period
|
(8,599
|
)
|
|
(7,692
|
)
|
|
(8,599
|
)
|
|
(7,692
|
)
|
||||
Pension and Other Benefit Plans:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(1,982
|
)
|
|
$
|
(2,119
|
)
|
|
$
|
(2,144
|
)
|
|
$
|
(2,087
|
)
|
Net actuarial gain/(loss) arising during period
|
1
|
|
|
(28
|
)
|
|
46
|
|
|
(19
|
)
|
||||
Tax (expense)/benefit on net actuarial gain/(loss)
|
—
|
|
|
25
|
|
|
(9
|
)
|
|
25
|
|
||||
Losses/(gains) reclassified into net earnings:
|
|
|
|
|
|
|
|
||||||||
Amortization of experience losses and prior service costs (1)
|
38
|
|
|
47
|
|
|
129
|
|
|
130
|
|
||||
Settlement losses and other expenses (1)
|
4
|
|
|
6
|
|
|
19
|
|
|
24
|
|
||||
Tax expense/(benefit) on reclassifications (2)
|
(9
|
)
|
|
(10
|
)
|
|
(34
|
)
|
|
(31
|
)
|
||||
Currency impact
|
13
|
|
|
(50
|
)
|
|
58
|
|
|
(171
|
)
|
||||
Other comprehensive earnings/(losses)
|
47
|
|
|
(10
|
)
|
|
209
|
|
|
(42
|
)
|
||||
Balance at end of period
|
(1,935
|
)
|
|
(2,129
|
)
|
|
(1,935
|
)
|
|
(2,129
|
)
|
||||
Derivative Cash Flow Hedges:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(133
|
)
|
|
$
|
(91
|
)
|
|
$
|
(113
|
)
|
|
$
|
(121
|
)
|
Net derivative gains/(losses)
|
30
|
|
|
2
|
|
|
17
|
|
|
31
|
|
||||
Tax (expense)/benefit on net derivative gain/(loss)
|
(5
|
)
|
|
(5
|
)
|
|
(8
|
)
|
|
(1
|
)
|
||||
Losses/(gains) reclassified into net earnings:
|
|
|
|
|
|
|
|
||||||||
Currency exchange contracts – forecasted transactions (3)
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Commodity contracts (3)
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
(15
|
)
|
||||
Interest rate contracts (4)
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
||||
Tax expense/(benefit) on reclassifications (2)
|
—
|
|
|
6
|
|
|
2
|
|
|
3
|
|
||||
Currency impact
|
—
|
|
|
(3
|
)
|
|
5
|
|
|
(9
|
)
|
||||
Other comprehensive earnings/(losses)
|
25
|
|
|
(19
|
)
|
|
5
|
|
|
11
|
|
||||
Balance at end of period
|
(108
|
)
|
|
(110
|
)
|
|
(108
|
)
|
|
(110
|
)
|
||||
Accumulated other comprehensive income
attributable to Mondelēz International:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
(10,524
|
)
|
|
$
|
(10,219
|
)
|
|
$
|
(9,997
|
)
|
|
$
|
(11,118
|
)
|
Total other comprehensive earnings/(losses)
|
(121
|
)
|
|
296
|
|
|
(645
|
)
|
|
1,211
|
|
||||
Less: (earnings)/loss attributable to
noncontrolling interests
|
3
|
|
|
(8
|
)
|
|
—
|
|
|
(24
|
)
|
||||
Other comprehensive earnings/(losses) attributable to
Mondelēz International
|
(118
|
)
|
|
288
|
|
|
(645
|
)
|
|
1,187
|
|
||||
Balance at end of period
|
$
|
(10,642
|
)
|
|
$
|
(9,931
|
)
|
|
$
|
(10,642
|
)
|
|
$
|
(9,931
|
)
|
(1)
|
These reclassified losses are included in the components of net periodic benefit costs disclosed in Note 10, Benefit Plans.
|
(2)
|
Taxes reclassified to earnings are recorded within the provision for income taxes.
|
(3)
|
These reclassified gains or losses are recorded within cost of sales.
|
(4)
|
These reclassified gains or losses are recorded within interest and other expense, net.
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions, except per share data)
|
||||||||||||||
Net earnings
|
$
|
1,197
|
|
|
$
|
982
|
|
|
$
|
2,569
|
|
|
$
|
2,139
|
|
Noncontrolling interest earnings
|
(3
|
)
|
|
(1
|
)
|
|
(11
|
)
|
|
(6
|
)
|
||||
Net earnings attributable to Mondelēz International
|
$
|
1,194
|
|
|
$
|
981
|
|
|
$
|
2,558
|
|
|
$
|
2,133
|
|
Weighted-average shares for basic EPS
|
1,466
|
|
|
1,507
|
|
|
1,477
|
|
|
1,518
|
|
||||
Plus incremental shares from assumed conversions
of stock options and long-term incentive plan shares
|
14
|
|
|
17
|
|
|
14
|
|
|
19
|
|
||||
Weighted-average shares for diluted EPS
|
1,480
|
|
|
1,524
|
|
|
1,491
|
|
|
1,537
|
|
||||
Basic earnings per share attributable to
Mondelēz International
|
$
|
0.81
|
|
|
$
|
0.65
|
|
|
$
|
1.73
|
|
|
$
|
1.41
|
|
Diluted earnings per share attributable to
Mondelēz International
|
$
|
0.81
|
|
|
$
|
0.64
|
|
|
$
|
1.72
|
|
|
$
|
1.39
|
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
Latin America
|
$
|
774
|
|
|
$
|
908
|
|
|
$
|
2,439
|
|
|
$
|
2,666
|
|
AMEA
|
1,398
|
|
|
1,405
|
|
|
4,300
|
|
|
4,290
|
|
||||
Europe
|
2,361
|
|
|
2,442
|
|
|
7,370
|
|
|
6,978
|
|
||||
North America
|
1,755
|
|
|
1,775
|
|
|
5,056
|
|
|
4,996
|
|
||||
Net revenues
|
$
|
6,288
|
|
|
$
|
6,530
|
|
|
$
|
19,165
|
|
|
$
|
18,930
|
|
Earnings before income taxes:
|
|
|
|
|
|
|
|
||||||||
Operating income:
|
|
|
|
|
|
|
|
||||||||
Latin America
|
$
|
100
|
|
|
$
|
256
|
|
|
$
|
318
|
|
|
$
|
469
|
|
AMEA
|
153
|
|
|
82
|
|
|
558
|
|
|
424
|
|
||||
Europe
|
381
|
|
|
393
|
|
|
1,245
|
|
|
1,107
|
|
||||
North America
|
334
|
|
|
325
|
|
|
514
|
|
|
842
|
|
||||
Unrealized gains/(losses) on hedging activities
(mark-to-market impacts) |
(112
|
)
|
|
28
|
|
|
181
|
|
|
(69
|
)
|
||||
General corporate expenses
|
(74
|
)
|
|
(55
|
)
|
|
(228
|
)
|
|
(192
|
)
|
||||
Amortization of intangibles
|
(44
|
)
|
|
(45
|
)
|
|
(132
|
)
|
|
(133
|
)
|
||||
Net gain on divestitures
|
—
|
|
|
187
|
|
|
—
|
|
|
184
|
|
||||
Acquisition-related costs
|
(1
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
||||
Operating income
|
737
|
|
|
1,171
|
|
|
2,442
|
|
|
2,632
|
|
||||
Benefit plan non-service income (1)
|
19
|
|
|
10
|
|
|
47
|
|
|
30
|
|
||||
Interest and other expense, net
|
(86
|
)
|
|
(19
|
)
|
|
(414
|
)
|
|
(262
|
)
|
||||
Earnings before income taxes
|
$
|
670
|
|
|
$
|
1,162
|
|
|
$
|
2,075
|
|
|
$
|
2,400
|
|
(1)
|
During the first quarter of 2018, in connection with adopting a new pension cost classification accounting standard, we reclassified certain of our benefit plan component costs other than service costs out of operating income into a new line item, benefit plan non-service income, on our condensed consolidated statements of earnings. As such, we have recast our historical operating income and segment operating income to reflect this reclassification, which had no impact to earnings before income taxes or net earnings.
|
|
For the Three Months Ended September 30, 2018
|
||||||||||||||||||
|
Latin
America
|
|
AMEA
|
|
Europe
|
|
North
America
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Biscuits
|
$
|
185
|
|
|
$
|
455
|
|
|
$
|
769
|
|
|
$
|
1,422
|
|
|
$
|
2,831
|
|
Chocolate
|
169
|
|
|
524
|
|
|
1,142
|
|
|
66
|
|
|
1,901
|
|
|||||
Gum & Candy
|
220
|
|
|
207
|
|
|
167
|
|
|
267
|
|
|
861
|
|
|||||
Beverages
|
117
|
|
|
103
|
|
|
19
|
|
|
—
|
|
|
239
|
|
|||||
Cheese & Grocery
|
83
|
|
|
109
|
|
|
264
|
|
|
—
|
|
|
456
|
|
|||||
Total net revenues
|
$
|
774
|
|
|
$
|
1,398
|
|
|
$
|
2,361
|
|
|
$
|
1,755
|
|
|
$
|
6,288
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
For the Three Months Ended September 30, 2017 (1)
|
||||||||||||||||||
|
Latin
America
|
|
AMEA
|
|
Europe
|
|
North
America
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Biscuits
|
$
|
210
|
|
|
$
|
445
|
|
|
$
|
778
|
|
|
$
|
1,427
|
|
|
$
|
2,860
|
|
Chocolate
|
207
|
|
|
519
|
|
|
1,179
|
|
|
74
|
|
|
1,979
|
|
|||||
Gum & Candy
|
247
|
|
|
228
|
|
|
185
|
|
|
274
|
|
|
934
|
|
|||||
Beverages
|
155
|
|
|
104
|
|
|
23
|
|
|
—
|
|
|
282
|
|
|||||
Cheese & Grocery
|
89
|
|
|
109
|
|
|
277
|
|
|
—
|
|
|
475
|
|
|||||
Total net revenues
|
$
|
908
|
|
|
$
|
1,405
|
|
|
$
|
2,442
|
|
|
$
|
1,775
|
|
|
$
|
6,530
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30, 2018
|
||||||||||||||||||
|
Latin
America
|
|
AMEA
|
|
Europe
|
|
North
America
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Biscuits
|
$
|
560
|
|
|
$
|
1,284
|
|
|
$
|
2,374
|
|
|
$
|
4,158
|
|
|
$
|
8,376
|
|
Chocolate
|
573
|
|
|
1,537
|
|
|
3,568
|
|
|
169
|
|
|
5,847
|
|
|||||
Gum & Candy
|
668
|
|
|
678
|
|
|
553
|
|
|
729
|
|
|
2,628
|
|
|||||
Beverages
|
394
|
|
|
448
|
|
|
66
|
|
|
—
|
|
|
908
|
|
|||||
Cheese & Grocery
|
244
|
|
|
353
|
|
|
809
|
|
|
—
|
|
|
1,406
|
|
|||||
Total net revenues
|
$
|
2,439
|
|
|
$
|
4,300
|
|
|
$
|
7,370
|
|
|
$
|
5,056
|
|
|
$
|
19,165
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
For the Nine Months Ended September 30, 2017 (1)
|
||||||||||||||||||
|
Latin
America
|
|
AMEA
|
|
Europe
|
|
North
America
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Biscuits
|
$
|
580
|
|
|
$
|
1,201
|
|
|
$
|
2,177
|
|
|
$
|
4,061
|
|
|
$
|
8,019
|
|
Chocolate
|
660
|
|
|
1,457
|
|
|
3,318
|
|
|
194
|
|
|
5,629
|
|
|||||
Gum & Candy
|
701
|
|
|
695
|
|
|
582
|
|
|
741
|
|
|
2,719
|
|
|||||
Beverages
|
477
|
|
|
466
|
|
|
88
|
|
|
—
|
|
|
1,031
|
|
|||||
Cheese & Grocery
|
248
|
|
|
471
|
|
|
813
|
|
|
—
|
|
|
1,532
|
|
|||||
Total net revenues
|
$
|
2,666
|
|
|
$
|
4,290
|
|
|
$
|
6,978
|
|
|
$
|
4,996
|
|
|
$
|
18,930
|
|
(1)
|
During the first quarter of 2018, we realigned some of our products across product categories and as such, we reclassified the product category net revenues on a basis consistent with the 2018 presentation.
|
•
|
Net revenues decreased 3.7% to $6.3 billion in the third quarter of 2018 and increased 1.2% to $19.2 billion in the first nine months of 2018 as compared to the same periods in the prior year. During the third quarter, net revenues declined due to unfavorable currency translation as the U.S. dollar strengthened against most currencies in which we operate compared to exchange rates in the prior year. In addition, the decline reflected unfavorable volume mix, which in part was due to the lapping of last year's partial recovery in the third quarter of 2017 from the malware incident that occurred in the second quarter of 2017. Net revenues were positively impacted by higher net pricing. During the first nine months of 2018, net revenues grew due to higher net pricing and favorable volume/mix. Net revenues also were positively affected by favorable currency translation as the U.S. dollar weakened against several currencies in which we operate compared to exchange rates in the prior year. Net revenue growth was partially offset by the impact of several prior-year business divestitures, which reduced revenues in 2018 as compared to the prior year.
|
•
|
Organic Net Revenue, a non-GAAP financial measure, increased 1.2% to $6.6 billion in the third quarter of 2018 and increased 2.3% to $19.1 billion in the first nine months of 2018 as compared to same periods in the prior year. During the third quarter, Organic Net Revenue increased as a result of higher net pricing, partially offset by unfavorable volume/mix. Unfavorable volume/mix was in part due to the lapping of last year's partial recovery in the third quarter of 2017 from the malware incident that occurred in the second quarter of 2017. For the first nine months of 2018, net revenues grew due to higher net pricing and favorable volume/mix, in part due to the lapping of last year's negative impact from the malware incident. Refer to our Discussion and Analysis of Historical Results, including the Results of Operations by Reportable Segment for additional information. Organic Net Revenue is on a constant currency basis and excludes revenue from acquisitions and divestitures. We use Organic Net Revenue as it provides improved year-over-year comparability of our underlying operating results (see the definition of Organic Net Revenue and our reconciliation with net revenues within Non-GAAP Financial Measures appearing later in this section).
|
•
|
Diluted EPS attributable to Mondelēz International increased 26.6% to $0.81 in the third quarter of 2018 and increased 23.7% to $1.72 in the first nine months of 2018 as compared to the same periods in the prior year. The diluted EPS increase in the third quarter of 2018 was primarily driven by an after-tax gain on the KDP transaction, lower taxes, operating gains and share repurchases, partially offset by lapping a prior-year gain on divestiture, unfavorable year-over-year change mark-to-market impacts from currency and commodity derivatives and lapping the benefit from the resolution of tax matters. The diluted EPS increase during the first nine months of 2018 was primarily driven by the after-tax gain on the KDP transaction, favorable year-over-year change in mark-to-market impacts from currency and commodity derivatives, operating gains, share repurchases and lower taxes, partially offset by the impact from pension participation changes, lapping the benefit from the resolution of tax matters and lapping a prior-year net gain on divestitures.
|
•
|
Adjusted EPS, a non-GAAP financial measure, increased 10.7% to $0.62 in the third quarter of 2018 and increased 13.9% to $1.80 in the first nine months of 2018 as compared to the same periods in the prior year. On a constant currency basis, Adjusted EPS increased 17.9% to $0.66 in the third quarter of 2018 and increased 12.7% to $1.78 in the first nine months of 2018 as compared to the same periods in the prior year. For the third quarter of 2018, lower taxes, operating gains and lower shares outstanding were significant drivers of growth. For the first nine months of 2018, operating gains, lower shares outstanding, lower taxes and lower interest drove the growth. Adjusted EPS and Adjusted EPS on a constant currency basis are non-GAAP financial measures. We use these measures as they provide improved year-over-year comparability of our underlying results (see the definition of Adjusted EPS and our reconciliation with diluted EPS within Non-GAAP Financial Measures appearing later in this section).
|
•
|
Market conditions. Snack categories continued to grow in the third quarter of 2018. Volatility in the global currency and commodity markets also continued.
|
•
|
Argentina, Brexit and currency volatility. As further discussed in Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting, on July 1, 2018, we began to apply highly inflationary accounting for our Argentinian subsidiaries. During the third quarter of 2018, we recorded a $13 million remeasurement loss in net earnings related to the devaluation of our Argentinian peso denominated net monetary assets during the quarter. The mix of monetary assets and liabilities and the exchange rate to convert Argentinian pesos to U.S. dollars could change over time, so it is difficult to predict the overall impact of the Argentina highly inflationary accounting on future net earnings. We continue to monitor the U.K. planned exit from the European Union (Brexit) as well as currencies at risk of devaluation and take protective measures in response to their potential impacts on our results of operations and financial condition.
|
•
|
Collective bargaining agreements. During the second quarter of 2018, we implemented two aspects of our second revised last, best and final offer made to the BCTGM, resulting in our withdrawing from the Fund with respect to the employees covered by the 7 of the 8 collective bargaining agreements. We estimated a partial withdrawal liability of $567 million and within our North America segment, we recorded a discounted liability and charge of $408 million, $305 million net of tax, which represents our best estimate of the partial withdrawal liability absent an assessment from the Fund. We may receive an assessment in 2018 or later, and the ultimate withdrawal liability may change from the currently estimated amount. We will record any future adjustments in the period during which the liability is confirmed or as new information becomes available. We expect to pay the liability in installments over a period of 20 years from the assessment date. We remain committed to negotiating all of the collective bargaining agreements that expired in 2016.
|
•
|
U.S. tax reform. While the 2017 U.S. tax reform reduced the U.S. corporate tax rate and included some beneficial provisions, other provisions could have an adverse effect on our results. Specifically, new provisions that cause U.S. allocated expenses (e.g. interest and general administrative expenses) to be taxed and impose a tax on U.S. cross-border payments could adversely impact our effective tax rate. We continue to evaluate the impacts as additional guidance on implementing the legislation becomes available.
|
•
|
Net investment hedge contracts. In 2018, we entered into cross-currency interest rate swaps and forward contracts with an aggregate notional value of $7.1 billion to hedge our non-U.S. net investments against movements in exchange rates. We expect this hedging to reduce volatility in some of our financing costs and related currency impacts within our interest costs.
|
|
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
See Note
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
(in millions, except percentages)
|
||||||||||||||
Gain on equity method investment
transaction
|
Note 6
|
|
$
|
757
|
|
|
$
|
—
|
|
|
$
|
757
|
|
|
$
|
—
|
|
Simplify to Grow Program
|
Note 7
|
|
|
|
|
|
|
|
|
||||||||
Restructuring charges
|
|
|
(56
|
)
|
|
(113
|
)
|
|
(220
|
)
|
|
(418
|
)
|
||||
Implementation charges
|
|
|
(83
|
)
|
|
(62
|
)
|
|
(215
|
)
|
|
(179
|
)
|
||||
(Loss)/gain related to interest rate swaps
|
Note 8 & 9
|
|
1
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||
Loss on debt extinguishment
|
Note 8
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
(11
|
)
|
||||
Intangible asset impairment charges (1)
|
|
|
(68
|
)
|
|
(71
|
)
|
|
(68
|
)
|
|
(109
|
)
|
||||
CEO transition remuneration (2)
|
|
|
(4
|
)
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
||||
Acquisition and divestiture-related costs
|
Note 2
|
|
|
|
|
|
|
|
|
||||||||
Acquisition-related costs
|
|
|
(1
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
||||
Net gain on divestitures
|
|
|
—
|
|
|
187
|
|
|
—
|
|
|
184
|
|
||||
Divestiture-related costs
|
|
|
—
|
|
|
2
|
|
|
3
|
|
|
(26
|
)
|
||||
Mark-to-market gains/(losses)
from derivatives
|
Note 9
|
|
(112
|
)
|
|
28
|
|
|
181
|
|
|
(69
|
)
|
||||
Impact from resolution of tax matters
|
Note 12
|
|
—
|
|
|
215
|
|
|
(15
|
)
|
|
273
|
|
||||
Impact from pension participation changes
|
Note 10
|
|
(3
|
)
|
|
—
|
|
|
(412
|
)
|
|
—
|
|
||||
Malware incident incremental expenses
|
|
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
(54
|
)
|
||||
U.S. tax reform discrete net tax expense
|
Note 14
|
|
(8
|
)
|
|
—
|
|
|
(95
|
)
|
|
—
|
|
||||
Effective tax rate
|
Note 14
|
|
46.3
|
%
|
|
23.4
|
%
|
|
31.9
|
%
|
|
21.3
|
%
|
(1)
|
Refer to our Annual Report on Form 10-K for the year ended December 31, 2017 for more information on prior-year intangible asset impairment charges.
|
(2)
|
Please see the Non-GAAP Financial Measures section at the end of this item for additional information.
|
|
For the Three Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|||||||
|
(in millions, except per share data)
|
|
|
|||||||||||
Net revenues
|
$
|
6,288
|
|
|
$
|
6,530
|
|
|
$
|
(242
|
)
|
|
(3.7
|
)%
|
Operating income
|
737
|
|
|
1,171
|
|
|
(434
|
)
|
|
(37.1
|
)%
|
|||
Net earnings attributable to
Mondelēz International
|
1,194
|
|
|
981
|
|
|
213
|
|
|
21.7
|
%
|
|||
Diluted earnings per share attributable to
Mondelēz International
|
0.81
|
|
|
0.64
|
|
|
0.17
|
|
|
26.6
|
%
|
|
2018
|
|
Change in net revenues (by percentage point)
|
|
|
Total change in net revenues
|
(3.7
|
)%
|
Add back the following items affecting comparability:
|
|
|
Unfavorable currency
|
4.9
|
pp
|
Impact of divestitures
|
0.3
|
pp
|
Impact of acquisition
|
(0.3
|
)pp
|
Total change in Organic Net Revenue (1)
|
1.2
|
%
|
Higher net pricing
|
1.6
|
pp
|
Unfavorable volume/mix
|
(0.4
|
)pp
|
(1)
|
Please see the Non-GAAP Financial Measures section at the end of this item.
|
|
Operating
Income
|
|
% Change
|
|||
|
(in millions)
|
|
|
|||
Operating Income for the Three Months Ended September 30, 2017
|
$
|
1,171
|
|
|
|
|
Simplify to Grow Program (2)
|
175
|
|
|
|
||
Intangible asset impairment charges (3)
|
71
|
|
|
|
||
Mark-to-market gains from derivatives (4)
|
(28
|
)
|
|
|
||
Malware incident incremental expenses
|
47
|
|
|
|
||
Acquisition integration costs (5)
|
1
|
|
|
|
||
Operating income from divestitures (5)
|
(5
|
)
|
|
|
||
Gain on divestiture (5)
|
(187
|
)
|
|
|
||
Impact from resolution of tax matters (6)
|
(155
|
)
|
|
|
||
Other/rounding
|
(1
|
)
|
|
|
||
Adjusted Operating Income (1) for the
Three Months Ended September 30, 2017
|
$
|
1,089
|
|
|
|
|
Higher net pricing
|
102
|
|
|
|
||
Lower input costs
|
29
|
|
|
|
||
Unfavorable volume/mix
|
(33
|
)
|
|
|
||
Higher selling, general and administrative expenses
|
(58
|
)
|
|
|
||
Impact from acquisition (5)
|
4
|
|
|
|
||
Other/rounding
|
1
|
|
|
|
||
Total change in Adjusted Operating Income (constant currency) (1)
|
45
|
|
|
4.1
|
%
|
|
Unfavorable currency translation
|
(60
|
)
|
|
|
||
Total change in Adjusted Operating Income (1)
|
(15
|
)
|
|
(1.4
|
)%
|
|
Adjusted Operating Income (1) for the
Three Months Ended September 30, 2018
|
$
|
1,074
|
|
|
|
|
Simplify to Grow Program (2)
|
(139
|
)
|
|
|
||
Intangible asset impairment charges (3)
|
(68
|
)
|
|
|
||
Mark-to-market losses from derivatives (4)
|
(112
|
)
|
|
|
||
Acquisition-related costs (5)
|
(1
|
)
|
|
|
||
Remeasurement of net monetary position (7)
|
(13
|
)
|
|
|
||
CEO transition remuneration (1)
|
(4
|
)
|
|
|
||
Operating Income for the Three Months Ended September 30, 2018
|
$
|
737
|
|
|
(37.1
|
)%
|
(1)
|
Refer to the Non-GAAP Financial Measures section at the end of this item.
|
(2)
|
Refer to Note 7, Restructuring Program, for more information.
|
(3)
|
Refer to Note 5, Goodwill and Intangible Assets, for more information on trademark impairments.
|
(4)
|
Refer to Note 9, Financial Instruments, Note 16, Segment Reporting, and Non-GAAP Financial Measures section at the end of this item for more information on the unrealized gains/losses on commodity and forecasted currency transaction derivatives.
|
(5)
|
Refer to Note 2, Divestitures and Acquisitions, for more information on prior-year divestitures and the June 7, 2018 acquisition of Tate's Bake Shop.
|
(6)
|
Refer to Note 12, Commitments and Contingencies – Tax Matters, for more information.
|
(7)
|
Refer to Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting, for information on our application of highly inflationary accounting for Argentina.
|
|
Diluted EPS
|
||
|
|
||
Diluted EPS Attributable to Mondelēz International for the
Three Months Ended September 30, 2017
|
$
|
0.64
|
|
Simplify to Grow Program (2)
|
0.08
|
|
|
Intangible asset impairment charges (2)
|
0.04
|
|
|
Mark-to-market gains from derivatives (2)
|
(0.02
|
)
|
|
Malware incident incremental expenses
|
0.02
|
|
|
Acquisition integration costs (2)
|
—
|
|
|
Divestiture-related costs (3)
|
0.01
|
|
|
Net earnings from divestitures (2)
|
—
|
|
|
Gain on divestiture (2)
|
(0.12
|
)
|
|
Impact from resolution of tax matters (2)
|
(0.09
|
)
|
|
Equity method investee acquisition-related and other adjustments (4)
|
—
|
|
|
Adjusted EPS (1) for the Three Months Ended September 30, 2017
|
$
|
0.56
|
|
Increase in operations
|
0.02
|
|
|
Increase in equity method investment net earnings
|
0.01
|
|
|
Impact from acquisition (2)
|
—
|
|
|
Changes in interest and other expense, net (5)
|
—
|
|
|
Changes in income taxes (6)
|
0.05
|
|
|
Changes in shares outstanding (7)
|
0.02
|
|
|
Adjusted EPS (constant currency) (1) for the Three Months Ended September 30, 2018
|
$
|
0.66
|
|
Unfavorable currency translation
|
(0.04
|
)
|
|
Adjusted EPS (1) for the Three Months Ended September 30, 2018
|
$
|
0.62
|
|
Simplify to Grow Program (2)
|
(0.07
|
)
|
|
Intangible asset impairment charges (2)
|
(0.03
|
)
|
|
Mark-to-market losses from derivatives (2)
|
(0.07
|
)
|
|
Acquisition-related costs (2)
|
—
|
|
|
Remeasurement of net monetary position (2)
|
(0.01
|
)
|
|
CEO transition remuneration (2)
|
—
|
|
|
U.S. tax reform discrete net tax benefit (8)
|
(0.01
|
)
|
|
Gain on equity method investment transaction (9)
|
0.39
|
|
|
Equity method investee acquisition-related and other adjustments (4)
|
(0.01
|
)
|
|
Diluted EPS Attributable to Mondelēz International for the
Three Months Ended September 30, 2018
|
$
|
0.81
|
|
(1)
|
Refer to the Non-GAAP Financial Measures section appearing later in this section.
|
(2)
|
See the Operating Income table above and the related footnotes for more information.
|
(3)
|
Refer to Note 2, Divestitures and Acquisitions, for more information on the sale of a grocery business in Australia and New Zealand and related taxes as well as a related gain on a foreign currency hedge.
|
(4)
|
Includes our proportionate share of unusual or infrequent items, such as acquisition and divestiture-related costs, restructuring program costs and discrete U.S. tax reform impacts recorded by our JDE and Keurig equity method investees.
|
(5)
|
Excludes the currency impact on interest expense related to our non-U.S. dollar-denominated debt which is included in currency translation.
|
(6)
|
Refer to Note 14, Income Taxes, for more information on the items affecting income taxes.
|
(7)
|
Refer to Note 11, Stock Plans, for more information on our equity compensation programs and share repurchase program and Note 15, Earnings per Share, for earnings per share weighted-average share information.
|
(8)
|
Refer to Note 14, Income Taxes, for more information on the impact of the U.S. tax reform.
|
(9)
|
Refer to Note 6, Equity Method Investments, for more information on the KDP transaction.
|
|
For the Nine Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|||||||
|
(in millions, except per share data)
|
|
|
|||||||||||
Net revenues
|
$
|
19,165
|
|
|
$
|
18,930
|
|
|
$
|
235
|
|
|
1.2
|
%
|
Operating income
|
2,442
|
|
|
2,632
|
|
|
(190
|
)
|
|
(7.2
|
)%
|
|||
Net earnings attributable to
Mondelēz International
|
2,558
|
|
|
2,133
|
|
|
425
|
|
|
19.9
|
%
|
|||
Diluted earnings per share attributable to
Mondelēz International
|
1.72
|
|
|
1.39
|
|
|
0.33
|
|
|
23.7
|
%
|
(1)
|
Please see the Non-GAAP Financial Measures section at the end of this item.
|
|
Operating
Income
|
|
% Change
|
|||
|
(in millions)
|
|
|
|||
Operating Income for the Nine Months Ended September 30, 2017
|
$
|
2,632
|
|
|
|
|
Simplify to Grow Program (2)
|
585
|
|
|
|
||
Intangible asset impairment charges (3)
|
109
|
|
|
|
||
Mark-to-market losses from derivatives (4)
|
69
|
|
|
|
||
Malware incident incremental expenses
|
54
|
|
|
|
||
Acquisition integration costs (5)
|
2
|
|
|
|
||
Divestiture-related costs (6)
|
23
|
|
|
|
||
Operating income from divestitures (6)
|
(60
|
)
|
|
|
||
Net gain on divestitures (6)
|
(184
|
)
|
|
|
||
Impact from resolution of tax matters (7)
|
(201
|
)
|
|
|
||
Other/rounding
|
(1
|
)
|
|
|
||
Adjusted Operating Income (1) for the
Nine Months Ended September 30, 2017
|
$
|
3,028
|
|
|
|
|
Higher net pricing
|
229
|
|
|
|
||
Higher input costs
|
(58
|
)
|
|
|
||
Favorable volume/mix
|
24
|
|
|
|
||
Higher selling, general and administrative expenses
|
(19
|
)
|
|
|
||
Impact from acquisition (6)
|
4
|
|
|
|
||
VAT-related settlement
|
21
|
|
|
|
||
Property insurance recovery
|
(27
|
)
|
|
|
||
Other
|
4
|
|
|
|
||
Total change in Adjusted Operating Income (constant currency) (1)
|
178
|
|
|
5.9
|
%
|
|
Favorable currency translation
|
19
|
|
|
|
||
Total change in Adjusted Operating Income (1)
|
197
|
|
|
6.5
|
%
|
|
Adjusted Operating Income (1) for the
Nine Months Ended September 30, 2018
|
$
|
3,225
|
|
|
|
|
Simplify to Grow Program (2)
|
(432
|
)
|
|
|
||
Intangible asset impairment charges (3)
|
(68
|
)
|
|
|
||
Mark-to-market gains from derivatives (4)
|
181
|
|
|
|
||
Acquisition integration costs (5)
|
(2
|
)
|
|
|
||
Acquisition-related costs (6)
|
(14
|
)
|
|
|
||
Divestiture-related costs (6)
|
3
|
|
|
|
||
Remeasurement of net monetary position (8)
|
(13
|
)
|
|
|
||
Impact from pension participation changes (9)
|
(408
|
)
|
|
|
||
Impact from resolution of tax matters (7)
|
(11
|
)
|
|
|
||
CEO transition remuneration (1)
|
(18
|
)
|
|
|
||
Other/rounding
|
(1
|
)
|
|
|
||
Operating Income for the Nine Months Ended September 30, 2018
|
$
|
2,442
|
|
|
(7.2
|
)%
|
(1)
|
Refer to the Non-GAAP Financial Measures section at the end of this item.
|
(2)
|
Refer to Note 7, Restructuring Program, for more information.
|
(3)
|
Refer to Note 5, Goodwill and Intangible Assets, for more information on trademark impairments.
|
(4)
|
Refer to Note 9, Financial Instruments, Note 16, Segment Reporting, and Non-GAAP Financial Measures section at the end of this item for more information on the unrealized gains/losses on commodity and forecasted currency transaction derivatives.
|
(5)
|
Refer to our Annual Report on Form 10-K for the year ended December 31, 2017 for more information on the acquisition of a biscuit business in Vietnam.
|
(6)
|
Refer to Note 2, Divestitures and Acquisitions, for more information on prior-year divestitures and the June 7, 2018 acquisition of Tate's Bake Shop.
|
(7)
|
Refer to Note 12, Commitments and Contingencies – Tax Matters, for more information.
|
(8)
|
Refer to Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting, for information on our application of highly inflationary accounting for Argentina.
|
(9)
|
Refer to Note 10, Benefit Plans, for more information.
|
|
Diluted EPS
|
||
|
|
||
Diluted EPS Attributable to Mondelēz International for the
Nine Months Ended September 30, 2017
|
$
|
1.39
|
|
Simplify to Grow Program (2)
|
0.29
|
|
|
Intangible asset impairment charges (2)
|
0.05
|
|
|
Mark-to-market losses from derivatives (2)
|
0.04
|
|
|
Malware incident incremental expenses
|
0.02
|
|
|
Acquisition integration costs (2)
|
—
|
|
|
Divestiture-related costs (2)
|
0.02
|
|
|
Net earnings from divestitures (2)
|
(0.03
|
)
|
|
Net gain on divestitures (2)
|
(0.11
|
)
|
|
Impact from resolution of tax matters (2)
|
(0.13
|
)
|
|
Loss on debt extinguishment (3)
|
0.01
|
|
|
Equity method investee acquisition-related and other adjustments (4)
|
0.03
|
|
|
Adjusted EPS (1) for the Nine Months Ended September 30, 2017
|
$
|
1.58
|
|
Increase in operations
|
0.08
|
|
|
Increase in equity method investment net earnings
|
0.01
|
|
|
Impact from acquisition (2)
|
—
|
|
|
VAT-related settlements
|
0.01
|
|
|
Property insurance recovery
|
(0.01
|
)
|
|
Changes in interest and other expense, net (5)
|
0.02
|
|
|
Changes in income taxes (6)
|
0.04
|
|
|
Changes in shares outstanding (7)
|
0.05
|
|
|
Adjusted EPS (constant currency) (1) for the Nine Months Ended September 30, 2018
|
$
|
1.78
|
|
Favorable currency translation
|
0.02
|
|
|
Adjusted EPS (1) for the Nine Months Ended September 30, 2018
|
$
|
1.80
|
|
Simplify to Grow Program (2)
|
(0.22
|
)
|
|
Intangible asset impairment charges (2)
|
(0.03
|
)
|
|
Mark-to-market gains from derivatives (2)
|
0.10
|
|
|
Acquisition integration costs (2)
|
—
|
|
|
Acquisition-related costs (2)
|
(0.01
|
)
|
|
Divestiture-related costs (2)
|
—
|
|
|
Remeasurement of net monetary position (2)
|
(0.01
|
)
|
|
Impact from pension participation changes (2)
|
(0.21
|
)
|
|
Impact from resolution of tax matters (2)
|
—
|
|
|
CEO transition remuneration (2)
|
(0.01
|
)
|
|
Net gain related to interest rate swaps (8)
|
0.01
|
|
|
Loss on debt extinguishment (3)
|
(0.07
|
)
|
|
U.S. tax reform discrete net tax expense (9)
|
(0.06
|
)
|
|
Gain on equity method investment transaction (10)
|
0.39
|
|
|
Equity method investee acquisition-related and other adjustments (4)
|
0.04
|
|
|
Diluted EPS Attributable to Mondelēz International for the
Nine Months Ended September 30, 2018
|
$
|
1.72
|
|
(1)
|
Refer to the Non-GAAP Financial Measures section appearing later in this section.
|
(2)
|
See the Operating Income table above and the related footnotes for more information.
|
(3)
|
Refer to Note 8, Debt and Borrowing Arrangements, for more information on losses on debt extinguishment.
|
(4)
|
Includes our proportionate share of unusual or infrequent items, such as acquisition and divestiture-related costs, restructuring program costs and discrete U.S. tax reform impacts recorded by our JDE and Keurig equity method investees.
|
(5)
|
Excludes the currency impact on interest expense related to our non-U.S. dollar-denominated debt which is included in currency translation.
|
(6)
|
Refer to Note 14, Income Taxes, for more information on the items affecting income taxes.
|
(7)
|
Refer to Note 11, Stock Plans, for more information on our equity compensation programs and share repurchase program and Note 15, Earnings per Share, for earnings per share weighted-average share information.
|
(8)
|
Refer to Note 9, Financial Instruments, for information on our interest rate swaps that we no longer designate as cash flow hedges.
|
(9)
|
Refer to Note 14, Income Taxes, for more information on the impact of the U.S. tax reform.
|
(10)
|
Refer to Note 6, Equity Method Investments, for more information on the KDP transaction.
|
•
|
Latin America
|
•
|
AMEA
|
•
|
Europe
|
•
|
North America
|
|
For the Three Months Ended
September 30, |
|
For the Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in millions)
|
||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
Latin America
|
$
|
774
|
|
|
$
|
908
|
|
|
$
|
2,439
|
|
|
$
|
2,666
|
|
AMEA
|
1,398
|
|
|
1,405
|
|
|
4,300
|
|
|
4,290
|
|
||||
Europe
|
2,361
|
|
|
2,442
|
|
|
7,370
|
|
|
6,978
|
|
||||
North America
|
1,755
|
|
|
1,775
|
|
|
5,056
|
|
|
4,996
|
|
||||
Net revenues
|
$
|
6,288
|
|
|
$
|
6,530
|
|
|
$
|
19,165
|
|
|
$
|
18,930
|
|
Earnings before income taxes:
|
|
|
|
|
|
|
|
||||||||
Operating income:
|
|
|
|
|
|
|
|
||||||||
Latin America
|
$
|
100
|
|
|
$
|
256
|
|
|
$
|
318
|
|
|
$
|
469
|
|
AMEA
|
153
|
|
|
82
|
|
|
558
|
|
|
424
|
|
||||
Europe
|
381
|
|
|
393
|
|
|
1,245
|
|
|
1,107
|
|
||||
North America
|
334
|
|
|
325
|
|
|
514
|
|
|
842
|
|
||||
Unrealized gains/(losses) on hedging activities
(mark-to-market impacts) |
(112
|
)
|
|
28
|
|
|
181
|
|
|
(69
|
)
|
||||
General corporate expenses
|
(74
|
)
|
|
(55
|
)
|
|
(228
|
)
|
|
(192
|
)
|
||||
Amortization of intangibles
|
(44
|
)
|
|
(45
|
)
|
|
(132
|
)
|
|
(133
|
)
|
||||
Net gain on divestitures
|
—
|
|
|
187
|
|
|
—
|
|
|
184
|
|
||||
Acquisition-related costs
|
(1
|
)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
||||
Operating income
|
737
|
|
|
1,171
|
|
|
2,442
|
|
|
2,632
|
|
||||
Benefit plan non-service income (1)
|
19
|
|
|
10
|
|
|
47
|
|
|
30
|
|
||||
Interest and other expense, net
|
(86
|
)
|
|
(19
|
)
|
|
(414
|
)
|
|
(262
|
)
|
||||
Earnings before income taxes
|
$
|
670
|
|
|
$
|
1,162
|
|
|
$
|
2,075
|
|
|
$
|
2,400
|
|
(1)
|
During the first quarter of 2018, in connection with adopting a new pension cost classification accounting standard, we reclassified certain of our benefit plan component costs other than service costs out of operating income into a new line item, benefit plan non-service income, on our condensed consolidated statements of earnings. As such, we have recast our historical operating income and segment operating income to reflect this reclassification, which had no impact to earnings before income taxes or net earnings.
|
|
For the Three Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Net revenues
|
$
|
774
|
|
|
$
|
908
|
|
|
$
|
(134
|
)
|
|
(14.8
|
)%
|
Segment operating income
|
100
|
|
|
256
|
|
|
(156
|
)
|
|
(60.9
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
|
For the Nine Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Net revenues
|
$
|
2,439
|
|
|
$
|
2,666
|
|
|
$
|
(227
|
)
|
|
(8.5
|
)%
|
Segment operating income
|
318
|
|
|
469
|
|
|
(151
|
)
|
|
(32.2
|
)%
|
|
For the Three Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Net revenues
|
$
|
1,398
|
|
|
$
|
1,405
|
|
|
$
|
(7
|
)
|
|
(0.5
|
)%
|
Segment operating income
|
153
|
|
|
82
|
|
|
71
|
|
|
86.6
|
%
|
|||
|
|
|
|
|
|
|||||||||
|
For the Nine Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Net revenues
|
$
|
4,300
|
|
|
$
|
4,290
|
|
|
$
|
10
|
|
|
0.2
|
%
|
Segment operating income
|
558
|
|
|
424
|
|
|
134
|
|
|
31.6
|
%
|
|
For the Three Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Net revenues
|
$
|
2,361
|
|
|
$
|
2,442
|
|
|
$
|
(81
|
)
|
|
(3.3
|
)%
|
Segment operating income
|
381
|
|
|
393
|
|
|
(12
|
)
|
|
(3.1
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||||
|
For the Nine Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Net revenues
|
$
|
7,370
|
|
|
$
|
6,978
|
|
|
$
|
392
|
|
|
5.6
|
%
|
Segment operating income
|
1,245
|
|
|
1,107
|
|
|
138
|
|
|
12.5
|
%
|
|
For the Three Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Net revenues
|
$
|
1,755
|
|
|
$
|
1,775
|
|
|
$
|
(20
|
)
|
|
(1.1
|
)%
|
Segment operating income
|
334
|
|
|
325
|
|
|
9
|
|
|
2.8
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|||||||||
|
For the Nine Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ change
|
|
% change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Net revenues
|
$
|
5,056
|
|
|
$
|
4,996
|
|
|
$
|
60
|
|
|
1.2
|
%
|
Segment operating income
|
514
|
|
|
842
|
|
|
(328
|
)
|
|
(39.0
|
)%
|
•
|
“Organic Net Revenue” is defined as net revenues excluding the impacts of acquisitions, divestitures (2) and currency rate fluctuations (3). We also evaluate Organic Net Revenue growth from emerging markets and our Power Brands.
|
•
|
Our emerging markets include our Latin America region in its entirety; the AMEA region, excluding Australia, New Zealand and Japan; and the following countries from the Europe region: Russia, Ukraine, Turkey, Kazakhstan, Belarus, Georgia, Poland, Czech Republic, Slovak Republic, Hungary, Bulgaria, Romania, the Baltics and the East Adriatic countries. (Our developed markets include the entire North America region, the Europe region excluding the countries included in the emerging markets definition, and Australia, New Zealand and Japan from the AMEA region.)
|
•
|
Our Power Brands include some of our largest global and regional brands such as Oreo, Chips Ahoy!, Ritz, TUC/Club Social and belVita biscuits; Cadbury Dairy Milk, Milka and Lacta chocolate; Trident gum; Halls candy; and Tang powdered beverages.
|
•
|
“Adjusted Operating Income” is defined as operating income excluding the impacts of the Simplify to Grow Program (4); gains or losses (including non-cash impairment charges) on goodwill and intangible assets; divestiture (2) or acquisition gains or losses and related divestiture (2), acquisition and integration costs (2); the operating results of divestitures (2); remeasurement of net monetary position (1); mark-to-market impacts from commodity and forecasted currency transaction derivative contracts (5); impact from resolution of tax matters (6); CEO transition remuneration (7); impact from pension participation changes (8); and incremental expenses related to the 2017 malware incident. We also present “Adjusted Operating Income margin,” which is subject to the same adjustments as Adjusted Operating Income. We also evaluate growth in our Adjusted Operating Income on a constant currency basis (3).
|
•
|
“Adjusted EPS” is defined as diluted EPS attributable to Mondelēz International from continuing operations excluding the impacts of the items listed in the Adjusted Operating Income definition as well as losses on debt extinguishment and related expenses; gain on equity method investment transactions; net earnings from divestitures (2); gains or losses on interest rate swaps no longer designated as accounting cash flow hedges due to changed financing and hedging plans and U.S. tax reform discrete impacts (9). Similarly, within Adjusted EPS, our equity method investment net earnings exclude our proportionate share of our investees’ unusual or infrequent items (10). We also evaluate growth in our Adjusted EPS on a constant currency basis (3).
|
(1)
|
When items no longer impact our current or future presentation of non-GAAP operating results, we remove these items from our non-GAAP definitions. During the second quarter of 2018, we added to the non-GAAP definitions the exclusion of the impact from pension participation changes - see footnote (8) below. During the third quarter of 2018, as we began to apply highly inflationary accounting for Argentina (refer to Note 1, Basis of Presentation), we excluded the remeasurement gains or losses related to remeasuring net monetary assets or liabilities in Argentina during the period to be consistent with our prior accounting for these remeasurement gains/losses for Venezuela when it was subject to highly inflationary accounting prior to 2016.
|
(2)
|
Divestitures include completed sales of businesses and exits of major product lines upon completion of a sale or licensing agreement. See Note 2, Divestitures and Acquisitions, for information on divestitures and acquisitions impacting the comparability of our results.
|
(3)
|
Constant currency operating results are calculated by dividing or multiplying, as appropriate, the current-period local currency operating results by the currency exchange rates used to translate the financial statements in the comparable prior-year period to determine what the current-period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year period.
|
(4)
|
Non-GAAP adjustments related to the Simplify to Grow Program reflect costs incurred that relate to the objectives of our program to transform our supply chain network and organizational structure. Costs that do not meet the program objectives are not reflected in the non-GAAP adjustments.
|
(5)
|
During the third quarter of 2016, we began to exclude unrealized gains and losses (mark-to-market impacts) from outstanding commodity and forecasted currency transaction derivatives from our non-GAAP earnings measures until such time that the related exposures impact our operating results. Since we purchase commodity and forecasted currency transaction contracts to mitigate price volatility primarily for inventory requirements in future periods, we made this adjustment to remove the volatility of these future inventory purchases on current operating results to facilitate comparisons of our underlying operating performance across periods. We also discontinued designating commodity and forecasted currency transaction derivatives for hedge accounting treatment. To facilitate comparisons of our underlying operating results, we have recast all historical non-GAAP earnings measures to exclude the mark-to-market impacts.
|
(6)
|
See Note 12, Commitments and Contingencies – Tax Matters, and our Annual Report on Form 10-K for the year ended December 31, 2017 for additional information.
|
(7)
|
On November 20, 2017, Dirk Van de Put succeeded Irene Rosenfeld as CEO of Mondelēz International in advance of her retirement at the end of March 2018. In order to incent Mr. Van de Put to join us, we provided him compensation with a total combined target value of $42.5 million to make him whole for incentive awards he forfeited or grants that were not made to him when he left his former employer. The compensation we granted took the form of cash, deferred stock units, performance share units and stock options. In connection with Irene Rosenfeld’s retirement, we made her outstanding grants of performance share units for the 2016-2018 and 2017-2019 performance cycles eligible for continued vesting and approved a $0.5 million salary for her service as Chairman from January through March 2018. We refer to these elements of Mr. Van de Put’s and Ms. Rosenfeld’s compensation arrangements together as “CEO transition remuneration.” We are excluding amounts we expense as CEO transition remuneration from our non-GAAP results because those amounts are not part of our regular compensation program and are incremental to amounts we would have incurred as ongoing CEO compensation. As a result, in 2017, we excluded amounts expensed for the cash payment to Mr. Van de Put and partial vesting of his equity grants. In 2018, we excluded amounts paid for Ms. Rosenfeld’s service as Chairman and partial vesting of Mr. Van de Put’s and Ms. Rosenfeld’s equity grants.
|
(8)
|
The impact from pension participation changes represents the charges incurred when employee groups are withdrawn from multiemployer pension plans and other changes in employee group pension plan participation. We exclude these charges from our non–GAAP results because those amounts do not reflect our ongoing pension obligations. See Note 10, Benefit Plans, for more information on the multiemployer pension plan partial withdrawal.
|
(9)
|
On December 22, 2017, the United States enacted tax reform legislation that included a broad range of business tax provisions. As further detailed in Note 14, Income Taxes, our accounting for the new legislation is not complete and we have made reasonable estimates for some tax provisions. We exclude the discrete U.S. tax reform impacts from our Adjusted EPS as they do not reflect our ongoing tax obligations under U.S. tax reform.
|
(10)
|
We have excluded our proportionate share of our equity method investees’ unusual or infrequent items such as acquisition and divestiture related costs, restructuring program costs and discrete U.S. tax reform impacts, in order to provide investors with a comparable view of our performance across periods. Although we have shareholder rights and board representation commensurate with our ownership interests in our equity method investees and review the underlying operating results and unusual or infrequent items with them each reporting period, we do not have direct control over their operations or resulting revenue and expenses. Our use of equity method investment net earnings on an adjusted basis is not intended to imply that we have any such control. Our GAAP “diluted EPS attributable to Mondelēz International from continuing operations” includes all of the investees’ unusual and infrequent items.
|
|
For the Three Months Ended September 30, 2018
|
|
For the Three Months Ended September 30, 2017
|
||||||||||||||||||||
|
Emerging
Markets
|
|
Developed
Markets
|
|
Total
|
|
Emerging
Markets
|
|
Developed
Markets
|
|
Total
|
||||||||||||
|
(in millions)
|
|
(in millions)
|
||||||||||||||||||||
Net Revenue
|
$
|
2,325
|
|
|
$
|
3,963
|
|
|
$
|
6,288
|
|
|
$
|
2,444
|
|
|
$
|
4,086
|
|
|
$
|
6,530
|
|
Impact of currency
|
266
|
|
|
57
|
|
|
323
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impact of acquisition
|
—
|
|
|
(23
|
)
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impact of divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
||||||
Organic Net Revenue
|
$
|
2,591
|
|
|
$
|
3,997
|
|
|
$
|
6,588
|
|
|
$
|
2,444
|
|
|
$
|
4,068
|
|
|
$
|
6,512
|
|
|
For the Three Months Ended September 30, 2018
|
|
For the Three Months Ended September 30, 2017 (1)
|
||||||||||||||||||||
|
Power
Brands
|
|
Non-Power
Brands
|
|
Total
|
|
Power
Brands
|
|
Non-Power
Brands
|
|
Total
|
||||||||||||
|
(in millions)
|
|
(in millions)
|
||||||||||||||||||||
Net Revenue
|
$
|
4,675
|
|
|
$
|
1,613
|
|
|
$
|
6,288
|
|
|
$
|
4,802
|
|
|
$
|
1,728
|
|
|
$
|
6,530
|
|
Impact of currency
|
229
|
|
|
94
|
|
|
323
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impact of acquisition
|
—
|
|
|
(23
|
)
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impact of divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
||||||
Organic Net Revenue
|
$
|
4,904
|
|
|
$
|
1,684
|
|
|
$
|
6,588
|
|
|
$
|
4,802
|
|
|
$
|
1,710
|
|
|
$
|
6,512
|
|
|
For the Nine Months Ended September 30, 2018
|
|
For the Nine Months Ended September 30, 2017
|
||||||||||||||||||||
|
Emerging
Markets
|
|
Developed
Markets
|
|
Total
|
|
Emerging
Markets
|
|
Developed
Markets
|
|
Total
|
||||||||||||
|
(in millions)
|
|
(in millions)
|
||||||||||||||||||||
Net Revenue
|
$
|
7,218
|
|
|
$
|
11,947
|
|
|
$
|
19,165
|
|
|
$
|
7,150
|
|
|
$
|
11,780
|
|
|
$
|
18,930
|
|
Impact of currency
|
321
|
|
|
(361
|
)
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impact of acquisition
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impact of divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(264
|
)
|
|
(264
|
)
|
||||||
Organic Net Revenue
|
$
|
7,539
|
|
|
$
|
11,556
|
|
|
$
|
19,095
|
|
|
$
|
7,150
|
|
|
$
|
11,516
|
|
|
$
|
18,666
|
|
|
For the Nine Months Ended September 30, 2018
|
|
For the Nine Months Ended September 30, 2017 (1)
|
||||||||||||||||||||
|
Power
Brands
|
|
Non-Power
Brands
|
|
Total
|
|
Power
Brands
|
|
Non-Power
Brands
|
|
Total
|
||||||||||||
|
(in millions)
|
|
(in millions)
|
||||||||||||||||||||
Net Revenue
|
$
|
14,360
|
|
|
$
|
4,805
|
|
|
$
|
19,165
|
|
|
$
|
13,872
|
|
|
$
|
5,058
|
|
|
$
|
18,930
|
|
Impact of currency
|
(49
|
)
|
|
9
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impact of acquisition
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impact of divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(264
|
)
|
|
(264
|
)
|
||||||
Organic Net Revenue
|
$
|
14,311
|
|
|
$
|
4,784
|
|
|
$
|
19,095
|
|
|
$
|
13,872
|
|
|
$
|
4,794
|
|
|
$
|
18,666
|
|
(1)
|
Each year we reevaluate our Power Brands and confirm the brands in which we will continue to make disproportionate investments. As such, we may make changes in our planned investments in primarily regional Power Brands following our annual review cycles. For 2018, we made limited changes to our list of regional Power Brands and as such, we reclassified 2017 Power Brand net revenues on a basis consistent with the current list of Power Brands.
|
|
For the Three Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Operating Income
|
$
|
737
|
|
|
$
|
1,171
|
|
|
$
|
(434
|
)
|
|
(37.1
|
)%
|
Simplify to Grow Program (1)
|
139
|
|
|
175
|
|
|
(36
|
)
|
|
|
||||
Intangible asset impairment charges (2)
|
68
|
|
|
71
|
|
|
(3
|
)
|
|
|
||||
Mark-to-market (gains)/losses from derivatives (3)
|
112
|
|
|
(28
|
)
|
|
140
|
|
|
|
||||
Malware incident incremental expenses
|
—
|
|
|
47
|
|
|
(47
|
)
|
|
|
||||
Acquisition integration costs (4)
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
|
||||
Acquisition-related costs (5)
|
1
|
|
|
—
|
|
|
1
|
|
|
|
||||
Operating income from divestitures (5)
|
—
|
|
|
(5
|
)
|
|
5
|
|
|
|
||||
Gain on divestiture (5)
|
—
|
|
|
(187
|
)
|
|
187
|
|
|
|
||||
Remeasurement of net monetary position (6)
|
13
|
|
|
—
|
|
|
13
|
|
|
|
||||
Impact from resolution of tax matters (7)
|
—
|
|
|
(155
|
)
|
|
155
|
|
|
|
||||
CEO transition remuneration (8)
|
4
|
|
|
—
|
|
|
4
|
|
|
|
||||
Other/rounding
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
|
||||
Adjusted Operating Income
|
$
|
1,074
|
|
|
$
|
1,089
|
|
|
$
|
(15
|
)
|
|
(1.4
|
)%
|
Unfavorable currency translation
|
60
|
|
|
—
|
|
|
60
|
|
|
|
||||
Adjusted Operating Income (constant currency)
|
$
|
1,134
|
|
|
$
|
1,089
|
|
|
$
|
45
|
|
|
4.1
|
%
|
|
For the Nine Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
(in millions)
|
|
|
|||||||||||
Operating Income
|
$
|
2,442
|
|
|
$
|
2,632
|
|
|
$
|
(190
|
)
|
|
(7.2
|
)%
|
Simplify to Grow Program (1)
|
432
|
|
|
585
|
|
|
(153
|
)
|
|
|
||||
Intangible asset impairment charges (2)
|
68
|
|
|
109
|
|
|
(41
|
)
|
|
|
||||
Mark-to-market (gains)/losses from derivatives (3)
|
(181
|
)
|
|
69
|
|
|
(250
|
)
|
|
|
||||
Malware incident incremental expenses
|
—
|
|
|
54
|
|
|
(54
|
)
|
|
|
||||
Acquisition integration costs (4)
|
2
|
|
|
2
|
|
|
—
|
|
|
|
||||
Acquisition-related costs (5)
|
14
|
|
|
—
|
|
|
14
|
|
|
|
||||
Divestiture-related costs (5)
|
(3
|
)
|
|
23
|
|
|
(26
|
)
|
|
|
||||
Operating income from divestitures (5)
|
—
|
|
|
(60
|
)
|
|
60
|
|
|
|
||||
Gain on divestiture (5)
|
—
|
|
|
(184
|
)
|
|
184
|
|
|
|
||||
Remeasurement of net monetary position (6)
|
13
|
|
|
—
|
|
|
13
|
|
|
|
||||
Impact from pension participation changes (9)
|
408
|
|
|
—
|
|
|
408
|
|
|
|
||||
Impact from resolution of tax matters (7)
|
11
|
|
|
(201
|
)
|
|
212
|
|
|
|
||||
CEO transition remuneration (8)
|
18
|
|
|
—
|
|
|
18
|
|
|
|
||||
Other/rounding
|
1
|
|
|
(1
|
)
|
|
2
|
|
|
|
||||
Adjusted Operating Income
|
$
|
3,225
|
|
|
$
|
3,028
|
|
|
$
|
197
|
|
|
6.5
|
%
|
Favorable currency translation
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|
|
||||
Adjusted Operating Income (constant currency)
|
$
|
3,206
|
|
|
$
|
3,028
|
|
|
$
|
178
|
|
|
5.9
|
%
|
(1)
|
Refer to Note 7, Restructuring Program, for more information.
|
(2)
|
Refer to Note 5, Goodwill and Intangible Assets, for more information on trademark impairments.
|
(3)
|
Refer to Note 9, Financial Instruments, Note 16, Segment Reporting, and Non-GAAP Financial Measures section at the end of this item for more information on the unrealized gains/losses on commodity and forecasted currency transaction derivatives.
|
(4)
|
Refer to our Annual Report on Form 10-K for the year ended December 31, 2017 for more information on the acquisition of a biscuit business in Vietnam.
|
(5)
|
Refer to Note 2, Divestitures and Acquisitions, for more information on prior-year divestitures and the June 7, 2018 acquisition of Tate's Bake Shop.
|
(6)
|
Refer to Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting, for information on our application of highly inflationary accounting for Argentina.
|
(7)
|
Refer to Note 12, Commitments and Contingencies – Tax Matters, for more information.
|
(8)
|
Refer to the Non-GAAP Financial Measures definition and related table notes.
|
(9)
|
Refer to Note 10, Benefit Plans, for more information.
|
|
For the Three Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Diluted EPS attributable to Mondelēz International
|
$
|
0.81
|
|
|
$
|
0.64
|
|
|
$
|
0.17
|
|
|
26.6
|
%
|
Simplify to Grow Program (2)
|
0.07
|
|
|
0.08
|
|
|
(0.01
|
)
|
|
|
||||
Intangible asset impairment charges (2)
|
0.03
|
|
|
0.04
|
|
|
(0.01
|
)
|
|
|
||||
Mark-to-market (gains)/losses from derivatives (2)
|
0.07
|
|
|
(0.02
|
)
|
|
0.09
|
|
|
|
||||
Malware incident incremental expenses
|
—
|
|
|
0.02
|
|
|
(0.02
|
)
|
|
|
||||
Acquisition integration costs (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||
Acquisition-related costs (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||
Divestiture-related costs (2)
|
—
|
|
|
0.01
|
|
|
(0.01
|
)
|
|
|
||||
Net earnings from divestitures (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||
Gain on divestiture (2)
|
—
|
|
|
(0.12
|
)
|
|
0.12
|
|
|
|
||||
Remeasurement of net monetary position (2)
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
|
||||
Impact from resolution of tax matters (2)
|
—
|
|
|
(0.09
|
)
|
|
0.09
|
|
|
|
||||
CEO transition remuneration (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||
U.S. tax reform discrete net tax expense (3)
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
|
||||
Gain on equity method investment transaction (4)
|
(0.39
|
)
|
|
—
|
|
|
(0.39
|
)
|
|
|
||||
Equity method investee acquisition-related and
other adjustments (5)
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
|
||||
Adjusted EPS
|
$
|
0.62
|
|
|
$
|
0.56
|
|
|
$
|
0.06
|
|
|
10.7
|
%
|
Unfavorable currency translation
|
0.04
|
|
|
—
|
|
|
0.04
|
|
|
|
||||
Adjusted EPS (constant currency)
|
$
|
0.66
|
|
|
$
|
0.56
|
|
|
$
|
0.10
|
|
|
17.9
|
%
|
|
For the Nine Months Ended
September 30, |
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Diluted EPS attributable to Mondelēz International
|
$
|
1.72
|
|
|
$
|
1.39
|
|
|
$
|
0.33
|
|
|
23.7
|
%
|
Simplify to Grow Program (2)
|
0.22
|
|
|
0.29
|
|
|
(0.07
|
)
|
|
|
||||
Intangible asset impairment charges (2)
|
0.03
|
|
|
0.05
|
|
|
(0.02
|
)
|
|
|
||||
Mark-to-market (gains)/losses from derivatives (2)
|
(0.10
|
)
|
|
0.04
|
|
|
(0.14
|
)
|
|
|
||||
Malware incident incremental expenses
|
—
|
|
|
0.02
|
|
|
(0.02
|
)
|
|
|
||||
Acquisition integration costs (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||
Acquisition-related costs (2)
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
|
||||
Divestiture-related costs (2)
|
—
|
|
|
0.02
|
|
|
(0.02
|
)
|
|
|
||||
Net earnings from divestitures (2)
|
—
|
|
|
(0.03
|
)
|
|
0.03
|
|
|
|
||||
Net gain on divestitures (2)
|
—
|
|
|
(0.11
|
)
|
|
0.11
|
|
|
|
||||
Remeasurement of net monetary position (2)
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
|
||||
Impact from pension participation changes (2)
|
0.21
|
|
|
—
|
|
|
0.21
|
|
|
|
||||
Impact from resolution of tax matters (2)
|
—
|
|
|
(0.13
|
)
|
|
0.13
|
|
|
|
||||
CEO transition remuneration (2)
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
|
||||
Net gain related to interest rate swaps (6)
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
|
|
||||
Loss on debt extinguishment (7)
|
0.07
|
|
|
0.01
|
|
|
0.06
|
|
|
|
||||
U.S. tax reform discrete net tax expense (3)
|
0.06
|
|
|
—
|
|
|
0.06
|
|
|
|
||||
Gain on equity method investment transaction (4)
|
(0.39
|
)
|
|
—
|
|
|
(0.39
|
)
|
|
|
||||
Equity method investee acquisition-related and
other adjustments (5)
|
(0.04
|
)
|
|
0.03
|
|
|
(0.07
|
)
|
|
|
||||
Adjusted EPS
|
$
|
1.80
|
|
|
$
|
1.58
|
|
|
$
|
0.22
|
|
|
13.9
|
%
|
Favorable currency translation
|
(0.02
|
)
|
|
—
|
|
|
(0.02
|
)
|
|
|
||||
Adjusted EPS (constant currency)
|
$
|
1.78
|
|
|
$
|
1.58
|
|
|
$
|
0.20
|
|
|
12.7
|
%
|
(1)
|
The tax expense/(benefit) of each of the pre-tax items excluded from our GAAP results was computed based on the facts and tax assumptions associated with each item, and such impacts have also been excluded from Adjusted EPS.
|
•
|
For the three months ended September 30, 2018, taxes for the: Simplify to Grow Program were $(34) million, intangible asset impairment charges were $(16) million, mark-to-market losses from derivatives were $(12) million, U.S. tax reform were $9 million, gain on equity method investment transaction were $184 million and equity method investee and other adjustments were $(2) million.
|
•
|
For the three months ended September 30, 2017, taxes for the: Simplify to Grow Program were $(49) million, intangible asset impairment charges were $(16) million, mark-to-market gains from derivatives were $3 million, malware incident incremental expenses were $(15) million, divestiture-related costs were $18 million, gain on divestiture were $8 million and impact from resolution of tax matters were $72 million.
|
•
|
For the nine months ended September 30, 2018, taxes for the: Simplify to Grow Program were $(111) million, intangible asset impairment charges were $(16) million, mark-to-market gains from derivatives were $27 million, acquisition-related costs were $(3) million, impact from pension participation changes were $(104) million, CEO transition remuneration were $(4) million, net gain related to interest rate swaps were $2 million, loss on debt extinguishment were $(35) million, U.S. tax reform were $96 million, gain on equity method investment transaction were $184 million and equity method investee and other adjustments were $24 million.
|
•
|
For the nine months ended September 30, 2017, taxes for the: Simplify to Grow Program were $(155) million, intangible asset impairment charges were $(30) million, malware incremental expenses were $(17) million, divestiture-related costs were $13 million, net earnings from divestitures were $15 million, net gain on divestitures were $12 million, benefits from resolution of tax matters were $72 million, loss on debt extinguishment were $(4) million and equity method investee adjustments were $(8) million.
|
(2)
|
See the Adjusted Operating Income table above and the related footnotes for more information.
|
(3)
|
Refer to Note 14, Income Taxes, for more information on the impact of U.S. tax reform.
|
(4)
|
Refer to Note 6, Equity Method Investments, for more information on the KDP transaction.
|
(5)
|
Includes our proportionate share of unusual or infrequent items, such as acquisition and divestiture-related costs, restructuring program costs and discrete U.S. tax reform impacts recorded by our JDE and Keurig equity method investees.
|
(6)
|
Refer to Note 9, Financial Instruments, for information on our interest rate swaps that we no longer designate as cash flow hedges.
|
(7)
|
Refer to Note 8, Debt and Borrowing Arrangements, for more information on losses on debt extinguishment.
|
|
Issuer Purchases of Equity Securities
|
||||||||||||
Period
|
Total
Number
of Shares
Purchased (1)
|
|
Average
Price Paid
per Share (1)
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs (2)
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2)
|
||||||
July 1-31, 2018
|
644,203
|
|
|
$
|
43.11
|
|
|
640,022
|
|
|
$
|
5,466,084,049
|
|
August 1-31, 2018
|
7,459,152
|
|
|
42.56
|
|
|
7,457,342
|
|
|
5,148,723,331
|
|
||
September 1-30, 2018
|
3,260,864
|
|
|
43.24
|
|
|
3,247,882
|
|
|
5,008,286,688
|
|
||
For the Quarter Ended September 30, 2018
|
11,364,219
|
|
|
42.78
|
|
|
11,345,246
|
|
|
|
(1)
|
The total number of shares purchased (and the average price paid per share) reflects: (i) shares purchased pursuant to the repurchase program described in (2) below; and (ii) shares tendered to us by employees who used shares to exercise options and to pay the related taxes for grants of restricted and deferred stock that vested, totaling 4,181 shares, 1,810 shares and 12,982 shares for the fiscal months of July, August and September 2018, respectively.
|
(2)
|
Our Board of Directors has authorized the repurchase of $19.7 billion of our Common Stock through December 31, 2020. Specifically, on March 12, 2013, our Board of Directors authorized the repurchase of up to the lesser of 40 million shares or $1.2 billion of our Common Stock through March 12, 2016. On August 6, 2013, our Audit Committee, with authorization delegated from our Board of Directors, increased the repurchase program capacity to $6.0 billion of Common Stock repurchases and extended the expiration date to December 31, 2016. On December 3, 2013, our Board of Directors approved an increase of $1.7 billion to the program related to a new accelerated share repurchase program, which concluded in May 2014. On July 29, 2015, our Finance Committee, with authorization delegated from our Board of Directors, approved a $6.0 billion increase that raised the repurchase program capacity to $13.7 billion and extended the program through December 31, 2018. On January 31, 2018, our Finance Committee, with authorization delegated from our Board of Directors, approved an increase of $6.0 billion in the share repurchase program, raising the authorization to $19.7 billion of Common Stock repurchases, and extended the program through December 31, 2020. See related information in Note 11, Stock Plans.
|
Exhibit
Number
|
|
Description
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
18.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
101.1
|
|
The following materials from Mondelēz International’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 are formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Earnings, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Equity, (v) the Condensed Consolidated Statements of Cash Flows and (vi) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
|
+ Indicates a management contract or compensatory plan or arrangement.
|
|
MONDELĒZ INTERNATIONAL, INC.
|
|
By: /s/ LUCA ZARAMELLA
|
Luca Zaramella
|
Executive Vice President and
|
Chief Financial Officer
|
|
October 29, 2018
|
Very truly yours,
|
|
/s/ PRICEWATERHOUSECOOPERS LLP
|
|
PricewaterhouseCoopers LLP
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Mondelēz International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ DIRK VAN DE PUT
|
Dirk Van de Put
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Mondelēz International, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ LUCA ZARAMELLA
|
Luca Zaramella
Executive Vice President and Chief Financial Officer |
|
/s/ DIRK VAN DE PUT
|
Dirk Van de Put
|
Chairman and Chief Executive Officer
|
October 29, 2018
|
|
/s/ LUCA ZARAMELLA
|
Luca Zaramella
|
Executive Vice President and
|
Chief Financial Officer
|
October 29, 2018
|