UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


			☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2021~~March 31, 2022


			☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-16483

Mondelēz International, Inc.

(Exact name of registrant as specified in its charter)


Virginia		52-2284372
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

905 West Fulton Market, Suite 200
Chicago,	Illinois	60607
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number, including area code) (847) 943-4000

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Tile of each class

Trading
Symbol(s)

Name of each exchange on which registered

Class A Common Stock, no par value

MDLZ

The Nasdaq Global Select Market

1.625% Notes due 2027

MDLZ27

The Nasdaq Stock Market LLC

0.250% Notes due 2028

MDLZ28

The Nasdaq Stock Market LLC

0.750% Notes due 2033

MDLZ33

The Nasdaq Stock Market LLC

2.375% Notes due 2035

MDLZ35

The Nasdaq Stock Market LLC

4.500% Notes due 2035

MDLZ35A

The Nasdaq Stock Market LLC

1.375% Notes due 2041

MDLZ41

The Nasdaq Stock Market LLC

3.875% Notes due 2045

MDLZ45

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Table of Contents

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

At ~~July 23, 2021,~~April 22, 2022, there were ~~1,397,817,443~~1,383,923,632 shares of the registrant’s Class A Common Stock outstanding.

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Mondelēz International, Inc.

Table of Contents


		Page No.
PART I -	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Statements of Earnings for the Three ~~and Six~~ Months Ended ~~June~~ 3 0 ,March 31, 2022 and 2021 ~~and 2020~~	1

	Condensed Consolidated Statements of Comprehensive Earnings for the Three ~~and Six~~ Months Ended ~~June~~ 3 0 ,March 31, 2022 and 2021 ~~and 2020~~	2

	Condensed Consolidated Balance Sheets at ~~June~~ 3 0 ~~, 2021~~March 31, 2022 and December 31, ~~2020~~2021	3

	Condensed Consolidated Statements of Equity for the Three ~~and Six~~ Months Ended ~~June~~ 3 0 ,March 31, 2022 and 2021 ~~and 2020~~	4

	Condensed Consolidated Statements of Cash Flows for the ~~Six~~ Three Months Ended ~~June 30~~,March 31, 2022 and 2021 ~~and 2020~~	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3029

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	6152

Item 4.	Controls and Procedures	6253

PART II -	OTHER INFORMATION

Item 1.	Legal Proceedings	6354

Item 1A.	Risk Factors	6354

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6354

Item 6.	Exhibits	6456

Signature		6557

In this report, for all periods presented, “we,” “us,” “our,” “the Company” and “Mondelēz International” refer to Mondelēz International, Inc. and subsidiaries. References to “Common Stock” refer to our Class A Common Stock.

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Mondelēz International, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

(in millions of U.S. dollars, except per share data)

(Unaudited)


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Net revenues	Net revenues	$	6,642	$	5,911	$	13,880	$	12,618	Net revenues	$	7,764	$	7,238
Cost of sales	Cost of sales	4,011		3,580		8,283		7,836		Cost of sales	4,781		4,272
Gross profit	Gross profit	2,631		2,331		5,597		4,782		Gross profit	2,983		2,966
Selling, general and administrative expenses	Selling, general and administrative expenses	1,593		1,453		3,157		2,990		Selling, general and administrative expenses	1,693		1,564
Asset impairment and exit costs	Asset impairment and exit costs	134		115		224		130		Asset impairment and exit costs	164		90
Gain on acquisition	Gain on acquisition	0		0		(9)		0		Gain on acquisition	—		(9)
Amortization of intangible assets	Amortization of intangible assets	32		50		70		93		Amortization of intangible assets	32		38
Operating income	Operating income	872		713		2,155		1,569		Operating income	1,094		1,283
Benefit plan non-service income	Benefit plan non-service income	(54)		(31)		(98)		(64)		Benefit plan non-service income	(33)		(44)
Interest and other expense, net	Interest and other expense, net	58		85		276		275		Interest and other expense, net	168		218
Earnings before income taxes	Earnings before income taxes	868		659		1,977		1,358		Earnings before income taxes	959		1,109
Income tax provision	Income tax provision	(398)		(341)		(610)		(489)		Income tax provision	(210)		(212)
Gain on equity method investment transactions		502		121		495		192
Loss on equity method investment transactions										Loss on equity method investment transactions	(5)		(7)
Equity method investment net earnings	Equity method investment net earnings	107		106		185		227		Equity method investment net earnings	117		78
Net earnings	Net earnings	1,079		545		2,047		1,288		Net earnings	861		968
Noncontrolling interest earnings	Noncontrolling interest earnings	(1)		(1)		(8)		(8)		Noncontrolling interest earnings	(6)		(7)
Net earnings attributable to Mondelēz International	Net earnings attributable to Mondelēz International	$	1,078	$	544	$	2,039	$	1,280	Net earnings attributable to Mondelēz International	$	855	$	961
Per share data:	Per share data:									Per share data:
Basic earnings per share attributable to Mondelēz International	Basic earnings per share attributable to Mondelēz International	$	0.77	$	0.38	$	1.45	$	0.89	Basic earnings per share attributable to Mondelēz International	$	0.62	$	0.68
Diluted earnings per share attributable to Mondelēz International	Diluted earnings per share attributable to Mondelēz International	$	0.76	$	0.38	$	1.44	$	0.89	Diluted earnings per share attributable to Mondelēz International	$	0.61	$	0.68

See accompanying notes to the condensed consolidated financial statements.

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Mondelēz International, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Earnings

(in millions of U.S. dollars)

(Unaudited)


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Net earnings	Net earnings	$	1,079	$	545	$	2,047	$	1,288	Net earnings	$	861	$	968
Other comprehensive earnings/(losses), net of tax:	Other comprehensive earnings/(losses), net of tax:									Other comprehensive earnings/(losses), net of tax:
Currency translation adjustment	Currency translation adjustment	157		81		21		(1,290)		Currency translation adjustment	50		(136)
Pension and other benefit plans	Pension and other benefit plans	2		5		71		65		Pension and other benefit plans	93		69
Derivative cash flow hedges	Derivative cash flow hedges	17		1		19		59		Derivative cash flow hedges	52		2
Total other comprehensive earnings/(losses)	Total other comprehensive earnings/(losses)	176		87		111		(1,166)		Total other comprehensive earnings/(losses)	195		(65)
Comprehensive earnings/(losses)	Comprehensive earnings/(losses)	1,255		632		2,158		122		Comprehensive earnings/(losses)	1,056		903
less: Comprehensive earnings/(losses) attributable to noncontrolling interests	less: Comprehensive earnings/(losses) attributable to noncontrolling interests	3		5		1		7		less: Comprehensive earnings/(losses) attributable to noncontrolling interests	2		(2)
Comprehensive earnings/(losses) attributable to Mondelēz International	Comprehensive earnings/(losses) attributable to Mondelēz International	$	1,252	$	627	$	2,157	$	115	Comprehensive earnings/(losses) attributable to Mondelēz International	$	1,054	$	905

See accompanying notes to the condensed consolidated financial statements.

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Mondelēz International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions of U.S. dollars, except share data)

(Unaudited)


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	1,938	$	3,619	Cash and cash equivalents	$	1,946	$	3,546
Trade receivables (net of allowances of $41 at June 30, 2021 and $42 at December 31, 2020)		2,226		2,297
Other receivables (net of allowances of $53 at June 30, 2021 and $42 at December 31, 2020)		687		657
Trade receivables (net of allowances of $55 at March 31, 2022 and $37 at December 31, 2021)						Trade receivables (net of allowances of $55 at March 31, 2022 and $37 at December 31, 2021)	2,943		2,337
Other receivables (net of allowances of $48 at March 31, 2022 and $49 at December 31, 2021)						Other receivables (net of allowances of $48 at March 31, 2022 and $49 at December 31, 2021)	749		851
Inventories, net	Inventories, net	2,925		2,647		Inventories, net	2,838		2,708
Other current assets	Other current assets	878		759		Other current assets	1,143		900
Total current assets	Total current assets	8,654		9,979		Total current assets	9,619		10,342
Property, plant and equipment, net	Property, plant and equipment, net	8,857		9,026		Property, plant and equipment, net	9,015		8,658
Operating lease right of use assets	Operating lease right of use assets	653		638		Operating lease right of use assets	653		613
Goodwill	Goodwill	22,270		21,895		Goodwill	22,618		21,978
Intangible assets, net	Intangible assets, net	18,691		18,482		Intangible assets, net	18,829		18,291
Prepaid pension assets	Prepaid pension assets	802		672		Prepaid pension assets	1,046		1,009
Deferred income taxes	Deferred income taxes	723		790		Deferred income taxes	561		541
Equity method investments	Equity method investments	5,586		6,036		Equity method investments	5,255		5,289
Other assets	Other assets	241		292		Other assets	398		371
TOTAL ASSETS	TOTAL ASSETS	$	66,477	$	67,810	TOTAL ASSETS	$	67,994	$	67,092
LIABILITIES	LIABILITIES					LIABILITIES
Short-term borrowings	Short-term borrowings	$	64	$	29	Short-term borrowings	$	606	$	216
Current portion of long-term debt	Current portion of long-term debt	1,905		2,741		Current portion of long-term debt	754		1,746
Accounts payable	Accounts payable	6,375		6,209		Accounts payable	7,241		6,730
Accrued marketing	Accrued marketing	1,966		2,130		Accrued marketing	2,272		2,097
Accrued employment costs	Accrued employment costs	743		834		Accrued employment costs	721		822
Other current liabilities	Other current liabilities	3,032		3,216		Other current liabilities	2,509		2,397
Total current liabilities	Total current liabilities	14,085		15,159		Total current liabilities	14,103		14,008
Long-term debt	Long-term debt	17,046		17,276		Long-term debt	18,344		17,550
Long-term operating lease liabilities	Long-term operating lease liabilities	489		470		Long-term operating lease liabilities	508		459
Deferred income taxes	Deferred income taxes	3,436		3,346		Deferred income taxes	3,521		3,444
Accrued pension costs	Accrued pension costs	1,135		1,257		Accrued pension costs	645		681
Accrued postretirement health care costs	Accrued postretirement health care costs	346		346		Accrued postretirement health care costs	304		301
Other liabilities	Other liabilities	2,320		2,302		Other liabilities	2,353		2,326
TOTAL LIABILITIES	TOTAL LIABILITIES	38,857		40,156		TOTAL LIABILITIES	39,778		38,769
Commitments and Contingencies (Note 12)	Commitments and Contingencies (Note 12)	0		0		Commitments and Contingencies (Note 12)	0		0
EQUITY	EQUITY					EQUITY
Common Stock, 0 par value (5,000,000,000 shares authorized and 1,996,537,778 shares issued at June 30, 2021 and December 31, 2020)		0		0
Common Stock, no par value (5,000,000,000 shares authorized and 1,996,537,778 shares issued at March 31, 2022 and December 31, 2021)						Common Stock, no par value (5,000,000,000 shares authorized and 1,996,537,778 shares issued at March 31, 2022 and December 31, 2021)	—		—
Additional paid-in capital	Additional paid-in capital	32,042		32,070		Additional paid-in capital	32,053		32,097
Retained earnings	Retained earnings	29,538		28,402		Retained earnings	31,163		30,806
Accumulated other comprehensive losses	Accumulated other comprehensive losses	(10,572)		(10,690)		Accumulated other comprehensive losses	(10,425)		(10,624)
Treasury stock, at cost (597,038,419 shares at June 30, 2021 and 577,363,557 shares at December 31, 2020)		(23,465)		(22,204)
Treasury stock, at cost (612,818,033 shares at March 31, 2022 and 604,907,239 shares at December 31, 2021)						Treasury stock, at cost (612,818,033 shares at March 31, 2022 and 604,907,239 shares at December 31, 2021)	(24,630)		(24,010)
Total Mondelēz International Shareholders’ Equity	Total Mondelēz International Shareholders’ Equity	27,543		27,578		Total Mondelēz International Shareholders’ Equity	28,161		28,269
Noncontrolling interest	Noncontrolling interest	77		76		Noncontrolling interest	55		54
TOTAL EQUITY	TOTAL EQUITY	27,620		27,654		TOTAL EQUITY	28,216		28,323
TOTAL LIABILITIES AND EQUITY	TOTAL LIABILITIES AND EQUITY	$	66,477	$	67,810	TOTAL LIABILITIES AND EQUITY	$	67,994	$	67,092

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

Mondelēz International, Inc. and Subsidiaries

Condensed Consolidated Statements of Equity

(in millions of U.S. dollars, except per share data)

(Unaudited)


		Mondelēz International Shareholders’ Equity															Mondelēz International Shareholders’ Equity
		Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Earnings/ (Losses)		Treasury Stock		Non-controlling Interest		Total Equity			Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Earnings/ (Losses)		Treasury Stock		Non-controlling Interest		Total Equity
Three Months Ended June 30, 2021
Balances at April 1, 2021		$	0	$	32,009	$	28,903	$	(10,746)	$	(23,091)	$	74	$	27,149
Three Months Ended March 31, 2022																Three Months Ended March 31, 2022
Balances at January 1, 2022																Balances at January 1, 2022	$	—	$	32,097	$	30,806	$	(10,624)	$	(24,010)	$	54	$	28,323
Comprehensive earnings/(losses):																Comprehensive earnings/(losses):
Net earnings																Net earnings	—		—		855		—		—		6		861
Other comprehensive earnings/(losses), net of income taxes																Other comprehensive earnings/(losses), net of income taxes	—		—		—		199		—		(4)		195
Exercise of stock options and issuance of other stock awards																Exercise of stock options and issuance of other stock awards	—		(44)		(11)		—		115		—		60
Common Stock repurchased																Common Stock repurchased	—		—		—		—		(735)		—		(735)
Cash dividends declared ($0.350 per share)																Cash dividends declared ($0.350 per share)	—		—		(487)		—		—		—		(487)
Dividends paid on noncontrolling interest and other activities																Dividends paid on noncontrolling interest and other activities	—		—		—		—		—		(1)		(1)
Balances at March 31, 2022																Balances at March 31, 2022	$	—	$	32,053	$	31,163	$	(10,425)	$	(24,630)	$	55	$	28,216

Three Months Ended March 31, 2021																Three Months Ended March 31, 2021
Balances at January 1, 2021																Balances at January 1, 2021	$	—	$	32,070	$	28,402	$	(10,690)	$	(22,204)	$	76	$	27,654
Comprehensive earnings/(losses):	Comprehensive earnings/(losses):															Comprehensive earnings/(losses):
Net earnings	Net earnings	—		—		1,078		—		—		1		1,079		Net earnings	—		—		961		—		—		7		968
Other comprehensive earnings/(losses), net of income taxes	Other comprehensive earnings/(losses), net of income taxes	—		—		—		174		—		2		176		Other comprehensive earnings/(losses), net of income taxes	—		—		—		(56)		—		(9)		(65)
Exercise of stock options and issuance of other stock awards	Exercise of stock options and issuance of other stock awards	—		33		(3)		—		77		—		107		Exercise of stock options and issuance of other stock awards	—		(61)		(15)		—		130		—		54
Common Stock repurchased	Common Stock repurchased	—		—		—		—		(451)		—		(451)		Common Stock repurchased	—		—		—		—		(1,017)		—		(1,017)
Cash dividends declared ($0.315 per share)	Cash dividends declared ($0.315 per share)	—		—		(444)		—		—		—		(444)		Cash dividends declared ($0.315 per share)	—		—		(445)		—		—		—		(445)
Dividends paid on noncontrolling interest and other activities	Dividends paid on noncontrolling interest and other activities	—		—		4		—		—		—		4		Dividends paid on noncontrolling interest and other activities	—		—		—		—		—		—		—
Balances at June 30, 2021		$	0	$	32,042	$	29,538	$	(10,572)	$	(23,465)	$	77	$	27,620
Six Months Ended June 30, 2021
Balances at January 1, 2021		$	0	$	32,070	$	28,402	$	(10,690)	$	(22,204)	$	76	$	27,654
Comprehensive earnings/(losses):
Net earnings		—		—		2,039		—		—		8		2,047
Other comprehensive earnings/(losses), net of income taxes		—		—		—		118		—		(7)		111
Exercise of stock options and issuance of other stock awards		—		(28)		(18)		—		207		—		161
Common Stock repurchased		—		—		—		—		(1,468)		—		(1,468)
Cash dividends declared ($0.630 per share)		—		—		(889)		—		—		—		(889)
Dividends paid on noncontrolling interest and other activities		—		—		4		—		—		—		4
Balances at June 30, 2021		$	0	$	32,042	$	29,538	$	(10,572)	$	(23,465)	$	77	$	27,620
Three Months Ended June 30, 2020
Balances at April 1, 2020		$	0	$	31,990	$	26,906	$	(11,502)	$	(21,652)	$	78	$	25,820
Comprehensive earnings/(losses):
Net earnings		—		—		544		—		—		1		545
Other comprehensive earnings/(losses), net of income taxes		—		—		—		83		—		4		87
Exercise of stock options and issuance of other stock awards		—		32		(3)		—		27		—		56
Balances at March 31, 2021																Balances at March 31, 2021	$	—	$	32,009	$	28,903	$	(10,746)	$	(23,091)	$	74	$	27,149

Cash dividends declared ($0.285 per share)		—		—		(409)		—		—		—		(409)
Dividends paid on noncontrolling interest and other activities		—		—		2		—		—		(4)		(2)
Balances at June 30, 2020		$	0	$	32,022	$	27,040	$	(11,419)	$	(21,625)	$	79	$	26,097
Six Months Ended June 30, 2020
Balances at January 1, 2020		$	0	$	32,019	$	26,615	$	(10,254)	$	(21,139)	$	76	$	27,317
Comprehensive earnings/(losses):
Net earnings		—		—		1,280		—		—		8		1,288
Other comprehensive earnings/(losses), net of income taxes		—		—		—		(1,165)		—		(1)		(1,166)
Exercise of stock options and issuance of other stock awards		—		3		(41)		—		215		—		177
Common Stock repurchased		—		—		—		—		(701)		—		(701)
Cash dividends declared ($0.570 per share)		—		—		(817)		—		—		—		(817)
Dividends paid on noncontrolling interest and other activities		—		—		3		—		—		(4)		(1)
Balances at June 30, 2020		$	0	$	32,022	$	27,040	$	(11,419)	$	(21,625)	$	79	$	26,097

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

Mondelēz International, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions of U.S. dollars)

(Unaudited)


		For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020			2022		2021
CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES	CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES					CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES
Net earnings	Net earnings	$	2,047	$	1,288	Net earnings	$	861	$	968
Adjustments to reconcile net earnings to operating cash flows:	Adjustments to reconcile net earnings to operating cash flows:					Adjustments to reconcile net earnings to operating cash flows:
Depreciation and amortization	Depreciation and amortization	564		528		Depreciation and amortization	275		284
Stock-based compensation expense	Stock-based compensation expense	63		63		Stock-based compensation expense	24		25

Deferred income tax provision/(benefit)		92		(110)
Deferred income tax (benefit)/provision						Deferred income tax (benefit)/provision	(70)		34
Asset impairments and accelerated depreciation	Asset impairments and accelerated depreciation	152		99		Asset impairments and accelerated depreciation	155		43
Loss on early extinguishment of debt	Loss on early extinguishment of debt	110		0		Loss on early extinguishment of debt	38		110
Gain on acquisition	Gain on acquisition	(9)		0		Gain on acquisition	—		(9)
Gain on equity method investment transactions		(495)		(192)
Loss on equity method investment transactions						Loss on equity method investment transactions	5		7
Equity method investment net earnings	Equity method investment net earnings	(185)		(227)		Equity method investment net earnings	(117)		(78)
Distributions from equity method investments	Distributions from equity method investments	94		193		Distributions from equity method investments	107		74
Other non-cash items, net	Other non-cash items, net	(5)		154		Other non-cash items, net	(13)		(23)
Change in assets and liabilities, net of acquisitions:
Change in assets and liabilities, net of acquisitions and divestitures:						Change in assets and liabilities, net of acquisitions and divestitures:
Receivables, net	Receivables, net	42		328		Receivables, net	(517)		(494)
Inventories, net	Inventories, net	(289)		(233)		Inventories, net	(81)		(37)
Accounts payable	Accounts payable	182		75		Accounts payable	397		283
Other current assets	Other current assets	(190)		(62)		Other current assets	(104)		(140)
Other current liabilities	Other current liabilities	(231)		(224)		Other current liabilities	230		(55)
Change in pension and postretirement assets and liabilities, net	Change in pension and postretirement assets and liabilities, net	(150)		(122)		Change in pension and postretirement assets and liabilities, net	(59)		(77)
Net cash provided by operating activities	Net cash provided by operating activities	1,792		1,558		Net cash provided by operating activities	1,131		915
CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES	CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES					CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES
Capital expenditures	Capital expenditures	(410)		(445)		Capital expenditures	(167)		(216)
Acquisitions, net of cash received	Acquisitions, net of cash received	(833)		(1,141)		Acquisitions, net of cash received	(1,418)		(490)
Proceeds from divestitures including equity method investments	Proceeds from divestitures including equity method investments	998		579		Proceeds from divestitures including equity method investments	66		—
Other		25		(30)
Proceeds from sale of property, plant and equipment and other						Proceeds from sale of property, plant and equipment and other	78		16
Net cash used in investing activities	Net cash used in investing activities	(220)		(1,037)		Net cash used in investing activities	(1,441)		(690)
CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES	CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES					CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES
Issuances of commercial paper, maturities greater than 90 days	Issuances of commercial paper, maturities greater than 90 days	0		677		Issuances of commercial paper, maturities greater than 90 days	—		—
Repayments of commercial paper, maturities greater than 90 days	Repayments of commercial paper, maturities greater than 90 days	0		(654)		Repayments of commercial paper, maturities greater than 90 days	—		—
Net issuances of other short-term borrowings		37		109
Net issuances/(repayments) of other short-term borrowings						Net issuances/(repayments) of other short-term borrowings	217		647
Long-term debt proceeds	Long-term debt proceeds	2,378		2,533		Long-term debt proceeds	1,991		2,373
Long-term debt repaid		(3,376)		(1,430)
Long-term debt repayments						Long-term debt repayments	(2,306)		(3,353)
Repurchase of Common Stock	Repurchase of Common Stock	(1,498)		(720)		Repurchase of Common Stock	(751)		(1,046)
Dividends paid	Dividends paid	(896)		(819)		Dividends paid	(491)		(453)
Other	Other	127		123		Other	60		51
Net cash used in financing activities	Net cash used in financing activities	(3,228)		(181)		Net cash used in financing activities	(1,280)		(1,781)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(25)		(37)		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(10)		(35)
Cash, cash equivalents and restricted cash:	Cash, cash equivalents and restricted cash:					Cash, cash equivalents and restricted cash:
(Decrease)/Increase	(Decrease)/Increase	(1,681)		303		(Decrease)/Increase	(1,600)		(1,591)
Balance at beginning of period	Balance at beginning of period	3,650		1,328		Balance at beginning of period	3,553		3,650
Balance at end of period	Balance at end of period	$	1,969	$	1,631	Balance at end of period	$	1,953	$	2,059

See accompanying notes to the condensed consolidated financial statements.

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Mondelēz International, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Basis of Presentation

Our interim condensed consolidated financial statements are unaudited. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted. It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair presentation of our results of operations, financial position and cash flows. Results of operations for any interim period are not necessarily indicative of future or annual results. For a complete set of consolidated financial statements and related notes, refer to our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Principles of Consolidation:

The condensed consolidated financial statements include Mondelēz International, Inc. as well as our wholly owned and majority owned subsidiaries, except our Venezuelan subsidiaries that were deconsolidated in 2015. All intercompany transactions are eliminated. The noncontrolling interest represents the noncontrolling investors' interests in the results of subsidiaries that we control and consolidate. We account for investments over which we exercise significant influence under the equity method of accounting. Investments over which we do not have significant influence or control are not material and as there are no readily determinable fair values for the equity interests, these investments are carried at cost with changes in the investment recognized to the extent cash is received.

War in Ukraine

In February 2022, Russia began a military invasion of Ukraine and we closed our operations and facilities in Ukraine. In March 2022, our 2 Ukrainian manufacturing facilities in Trostyanets and Vyshhorod were significantly damaged. During the first quarter of 2022, we evaluated and impaired these and other assets. We recorded $143 million of total expenses ($145 million after-tax) incurred as a direct result of the war, including $75 million recorded in asset impairment and exit costs, $44 million in cost of sales and $24 million in selling, general and administrative expenses. We recorded $75 million of property, plant and equipment impairments, $33 million of estimated inventory reserves and write-offs, $19 million of increased estimated allowances for trade receivables and $16 million in accrued expenses. We continue to consolidate both our Ukrainian and Russian subsidiaries and continue to evaluate our ability to control our operating activities and businesses on an ongoing basis. In connection with these findings and impacts, we have made estimates and assumptions based on information available to us. We base our estimates on historical experience, expectations of future impacts and other assumptions that we believe are reasonable. Given the uncertainty of the ongoing effects of the war in Ukraine, and its impact on the global economic environment, our estimates could be significantly different than future performance.

Currency Translation and Highly Inflationary Accounting:

We translate the results of operations of our subsidiaries from multiple currencies using average exchange rates during each period and translate balance sheet accounts using exchange rates at the end of each period. We record currency translation adjustments as a component of equity (except for highly inflationary currencies) and realized exchange gains and losses on currency transactions in earnings.

Highly inflationary accounting is triggered when a country’s three-year cumulative inflation rate exceeds 100%. It requires the remeasurement of financial statements of subsidiaries in the country from the functional currency of the subsidiary to our U.S. dollar reporting currency. Local currency monetary assets and liabilities are remeasured into U.S. dollars using exchange rates as of the latest balance sheet date, with ~~currency~~ remeasurement gains orand losses ~~recorded~~recognized in net earnings.

Türkiye. During the first quarter of 2022, primarily based on data published by the Türkiye Statistical Institute that indicated that Türkiye's three-year cumulative inflation rate exceeded 100%, we concluded that Türkiye became a highly inflationary economy for accounting purposes. As ~~discussed below, beginning on July~~of April 1, ~~2018,~~2022, we ~~began~~expect to apply highly inflationary accounting for our subsidiaries operating in Türkiye and change their functional currency from the Turkish lira to the U.S. dollar. Our operations in ~~Argentina.~~Türkiye contributed $43 million, or 0.6% of our condensed consolidated net revenues in the three months ended March 31, 2022. Based on a review of our Turkish lira-denominated monetary assets and liabilities, our operations in Türkiye had an immaterial net monetary liability position as of March 31, 2022.

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Argentina. During the second quarter of 2018, primarily based on published estimates that indicated that Argentina's three-year cumulative inflation rate exceeded 100%, we concluded that Argentina became a highly inflationary economy for accounting purposes. As of July 1, 2018, we began to apply highly inflationary accounting for our Argentinean subsidiaries and changed their functional currency from the Argentinean peso to the U.S. dollar. ~~On July 1, 2018, both monetary and non-monetary assets and liabilities denominated~~Our operations in ~~Argentinean pesos were remeasured into U.S. dollars using~~Argentina contributed $129 million, or 1.7% of our condensed consolidated net revenues in the ~~exchange rate as of the balance sheet date, with remeasurement and other transaction gains and losses recorded in net earnings.~~three months ended March 31, 2022. As of ~~June 30, 2021,~~March 31, 2022, our Argentinean operations had ~~less than $1~~$26 million of Argentinean peso denominated net monetary assets. Our Argentinean operations contributed $96 million, or 1.4% of consolidated net revenues in the three months and $185 million, or 1.3% of consolidated net revenues in the six months ended June 30, 2021. Within selling, general and administrative expenses, we recorded a remeasurement loss of $3$5 million during the three months ~~and $8 million during the six months~~ ended ~~June 30, 2021 as well as a remeasurement loss of $3 million during the three months and $5 million during the six months ended June 30, 2020~~March 31, 2022 related to the revaluation of the Argentinean peso denominated net monetary position over these periods.

~~Brexit~~. Following the separation of the United Kingdom from the European Union ("Brexit") in 2020, a new trade arrangement was reached between the U.K. and E.U. that began on January 1, 2021. The main trade provisions include the continuation of no tariffs or quotas on trade between the U.K. and E.U. subject to prescribed trade terms, including but not limited to meeting product and labeling standards for both the U.K. and E.U. Cross-border trade between the U.K. and E.U. is also subject to new customs regulations, documentation and reviews. To comply with the new requirements, we increased resources in customer service and logistics, in our factories, and on our customs support teams. We adapted our processes and systems for the new and increased number of customs transactions. We continue to closely monitor and manage our inventory levels of imported raw materials, packaging and finished goods in the U.K. We have made investments in resources, systems and processes to meet the new

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ongoing requirements and we have not experienced material disruptions from the transition in 2021 to date. If the U.K.’s separation from, or new trade arrangements with, the E.U. negatively impact the U.K. economy or result in disagreements on trade terms, delays affecting our supply chain or distribution, or disruptions to sales or collections, the impact to our results of operations, financial condition and cash flows could be material. In the six months ended June 30, 2021, we generated 9.1% of our consolidated net revenues in the U.K.

Other Countries. Since we sell our products in over 150 countries and have operations in approximately 80 countries, we monitor economic and currency-related risks and seek to take protective measures in response to potential exposures. We continue to monitor the developments in Ukraine and Russia as well as in the ongoing COVID-19 global pandemic and related impacts to our business operations, currencies and net monetary exposures. Since the global onset of COVID-19 in early 2020, most countries in which we do business experienced periods of significant economic uncertainty as well as exchange rate volatility. At this time, ~~except for~~within our consolidated entities, Argentina ~~which is~~and Türkiyeare or will be accounted for as a highly inflationary ~~economy,~~economies as noted above, and we ~~do not anticipate any other countries in which we operate~~continue to ~~be at risk of becoming~~monitor currency volatility and associated risks, including highly inflationary ~~countries.~~economies.

Cash, Cash Equivalents and Restricted Cash:

Cash and cash equivalents include demand deposits with banks and all highly liquid investments with original maturities of three months or less. We also have restricted cash that is recorded within other current assets of ~~$31~~$7 million as of ~~June 30, 2021~~March 31, 2022 and ~~$31~~$7 million as of December 31, ~~2020.~~2021. Total cash, cash equivalents and restricted cash was ~~$1,969~~$1,953 million as of ~~June 30, 2021~~March 31, 2022 and ~~$3,650~~$3,553 million as of December 31, ~~2020.~~2021.

Allowances for Credit Losses:

The allowances for credit losses are recorded against our receivables. They are developed at a country and region level based on historical collection experiences, current economic condition of specific customers and the forecasted economic condition of countries using various factors such as bond default rates and consumption indexes. We write off receivables once it is determined that the receivables are no longer collectible and as allowed by local laws.

Changes in allowances for credit losses consisted of:


		Allowance for Trade Receivables		Allowance for Other Current Receivables		Allowance for Long-Term Receivables			Allowance for Trade Receivables		Allowance for Other Current Receivables		Allowance for Long-Term Receivables
		(in millions)							(in millions)
Balance at January 1, 2021		$	(42)	$	(42)	$	(12)
Balance at January 1, 2022								Balance at January 1, 2022	$	(37)	$	(49)	$	(10)
Current period provision for expected credit losses	Current period provision for expected credit losses	(3)		(11)		0		Current period provision for expected credit losses	(19)		(2)		(5)
Write-offs charged against the allowance	Write-offs charged against the allowance	1		1		0		Write-offs charged against the allowance	3		—		—

Currency	Currency	3		(1)		0		Currency	(2)		3		(2)
Balance at June 30, 2021		$	(41)	$	(53)	$	(12)
Balance at March 31, 2022								Balance at March 31, 2022	$	(55)	$	(48)	$	(17)

Transfers of Financial Assets:

We account for transfers of financial assets, such as uncommitted revolving non-recourse accounts receivable factoring arrangements, when we have surrendered control over the related assets. Determining whether control has transferred requires an evaluation of relevant legal considerations, an assessment of the nature and extent of our continuing involvement with the assets transferred and any other relevant considerations. We use receivable factoring arrangements periodically when circumstances are favorable to manage liquidity. We have non-recourse factoring arrangements in which we sell eligible trade receivables primarily to banks in exchange for cash. We may then continue to collect the receivables sold, acting solely as a collecting agent on behalf of the banks. The outstanding principal amount of receivables under these arrangements amounted to ~~$719~~$887 million as of ~~June 30, 2021~~March 31, 2022 and ~~$760~~$761 million as of December 31, ~~2020.~~2021. The incremental cost of factoring receivables under this arrangement was not material for all periods presented. The proceeds from the sales of receivables are included in cash from operating activities in the condensed consolidated statements of cash flows.

~~Non-Cash Lease Transactions:~~

We recorded $115 million in operating lease and $44 million in finance lease right-of-use assets obtained in exchange for lease obligations during the six months ended June 30, 2021 and $122 million in operating lease and $68 million in finance lease right-of-use assets obtained in exchange for lease obligations during the six months ended June 30, 2020.

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Non-Cash Lease Transactions:

We recorded $95 million in operating lease and $56 million in finance lease right-of-use assets obtained in exchange for lease obligations during the three months ended March 31, 2022 and $29 million in operating lease and $30 million in finance lease right-of-use assets obtained in exchange for lease obligations during the three months ended March 31, 2021.

New Accounting Pronouncements:

In October 2021, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) which requires companies to recognize and measure customer contract assets and contract liabilities acquired in a business combination as if the acquiring company originated the related revenue contracts. Prior to adopting this ASU, acquired contract assets and liabilities were measured at fair value. This ASU is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted. We are evaluating the timing and effects of adopting this ASU and currently we do not expect this ASU to have a material impact on our consolidated financial statements.

In March 2020 and subsequently in January 2021, the ~~Financial Accounting Standards Board ("FASB")~~FASB issued an ~~Accounting Standards Update ("ASU")~~ASU to provide optional accounting guidance for a limited period of time to ease the potential burden in accounting for reference rate reform. The guidance provides optional expedients and exceptions to existing accounting requirements for contract modifications and hedge accounting related to transitioning from discontinued reference rates, such as LIBOR, to alternative reference rates, if certain criteria are met. The new accounting requirements can be applied as of the beginning of the interim period including March 12, 2020, or any date thereafter, through December 31, 2022. We ~~are currently evaluating~~expect to adopt this standard in the fourth quarter of 2022. Based on our evaluation of our contracts ~~and the optional expedients provided by the new standard.~~to date, we do not expect this ASU to have a material impact on our consolidated financial statements.

Note 2. Acquisitions and Divestitures

On ~~May 26, 2021,~~April 24, 2022, we ~~announced~~entered into an agreement with Grupo Bimbo to acquire Ricolino, its confectionery business located primarily in Mexico for a purchase price of approximately $1.3 billion, subject to closing purchase price adjustments. The transaction, which will be funded through a combination of an issuance of debt and cash on hand, is subject to relevant antitrust approvals and closing conditions and is expected to close in late Q3 or early Q4 2022.

On January 3, 2022, we acquired Chipita S.A. (“Chipita”), a leading croissants and baked snacks company in the Central and Eastern European markets. The acquisition of Chipita offers a strategic complement to our existing portfolio and advances our strategy to become the global leader in broader snacking. The cash consideration paid for Chipita totaled €1.3 billion ($1.4 billion), net of cash received, plus the assumption of Chipita’s debt of €0.4 billion ($0.4 billion) for a total purchase price of €1.7 billion ($1.9 billion).

We ~~expect~~are working to complete the valuation and have recorded a preliminary purchase price allocation of:


	(in millions)
Cash	$	52
Receivables	102
Inventory	62
Other current assets	4
Property, plant and equipment	406
Finance leases right of use assets	8
Definite life intangible assets	48
Indefinite life intangible assets	686
Goodwill	774
Other assets	79
Assets acquired	$	2,221
Current liabilities	131
Deferred tax liability	155
Finance lease liabilities	8
Other liabilities	21
Total purchase price	$	1,906
Less: long-term debt	(436)
Less: cash received	(52)
Net Cash Paid	$	1,418

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Within identifiable intangible assets, we allocated $686 million to trade names which have an indefinite-life. The fair value for the 7 Days trade name, which is the primary asset acquired, was determined using the multi-period excess earnings method under the income approach at the acquisition date. The fair value measurements of intangible assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of intangible assets include forecasted future cash flows and discount rates.

Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired and arises principally as a result of expansion opportunities and synergies across both new and legacy product categories. None of the goodwill recognized is expected to ~~close~~ be deductible for income tax purposes. All of the goodwill was assigned to the Europe segment.

Chipita added incremental net revenues of $152 million and operating income of $4 million in ~~the next nine~~the three months ~~after all regulatory~~ended March 31, 2022. We incurred acquisition-related costs of $21 million and ~~acquisition-related reviews are completed. We expect purchase consideration~~integration costs of ~~approximately €1.7 billion ($2.0 billion). During the second quarter of~~$35 million in the three months ended March 31, 2022.

On November 1, 2021, we ~~incurred $6~~completed the sale of MaxFoods Pty Ltd, an Australian packaged seafood business that we had acquired as part of our acquisition of Gourmet Food Holdings Pty Ltd (“Gourmet Food”). The sales price was $57 million Australian dollars ($41 million), net of ~~acquisition-related costs.~~cash divested with the business, and we recorded an immaterial loss on the transaction.

On April 1, 2021, we acquired Gourmet Food, ~~Holdings Pty Ltd ("Gourmet Food"),~~ a leading Australian food company in the premium biscuit and cracker category, for closing cash consideration of approximately $450 million Australian dollars ($343 million), net of cash received. We ~~are working to complete the valuation and~~ have recorded a ~~preliminary~~ purchase price allocation of net tangible and intangible assets acquired and liabilities assumed of $41 million to indefinite-lived intangible assets, $80 million to definite-lived intangible assets, ~~$176~~$164 million to goodwill, $19 million to property, plant and equipment, $18 million to inventory, $25 million to accounts receivable, $12 million to other assets, $5 million to operating right of use assets, $3 million to other current assets, $19 million to current liabilities and $5 million to long-term operating lease liabilities. ~~During the three months ended June 30, 2021, the~~The acquisition added incremental net revenues of ~~$27~~$14 million, and operating income of ~~$3 million.~~$1 million in the three months ended March 31, 2022. We incurred acquisition-related costs of $6$1 million ~~during~~in the three months ~~and $7 million during the six months~~ ended ~~June 30,~~March 31, 2021.

On March 25, 2021, we acquired a majority interest in Lion/Gemstone Topco Ltd ("Grenade"), a performance nutrition leader in the United Kingdom, for closing cash consideration of £188 million ($261 million), net of cash received. The acquisition of Grenade expands our position into the premium nutrition ~~market.~~segment. We ~~are working to complete the valuation and~~ have recorded a ~~preliminary~~ purchase price allocation of net tangible and intangible assets acquired and liabilities assumed of $82 million to indefinite-lived intangible assets, $28 million to definite-lived intangible assets, $181 million to goodwill, $1 million to property, plant and equipment, $11 million to inventory, $18 million to accounts receivable, $25 million to current liabilities, $20 million to deferred tax liabilities and $15 million to long-term other liabilities. ~~During~~Through the ~~three months ended June 30, 2021,~~one-year anniversary of the acquisition, Grenade added incremental net revenues of ~~$23~~$21 million, and operating income of $2 ~~million.~~million in the three months ended March 31, 2022. We incurred acquisition-related costs of $2 million ~~of acquisition-related costs during~~in the ~~six~~three months ended ~~June 30,~~March 31, 2021.

On January 4, 2021, we acquired the remaining 93% of equity of Hu Master Holdings ("Hu"), a category leader in premium chocolate in the United States, which provides a strategic complement to our snacking portfolio in North America through growth opportunities in chocolate and other categories in the well-being category. The initial cash consideration paid was $229 million, net of cash received, and the Company may be required to pay additional ~~cash~~contingent consideration. The estimated fair value of the contingent consideration obligation at the acquisition date was $132 million and was determined using a Monte Carlo simulation based on forecasted future results. We are unable to provide a range of amounts that could be paid as contingent consideration as it is based primarily on revenue and gross margin of the business for the twelve months ended December 31, 2022 and there is not a minimum or maximum payout. As a result of acquiring the remaining equity interest, we consolidated the operations prospectively from the date of acquisition and recorded a pre-tax gain of $9 million ($7 million after-tax) related to stepping up our previously-held $8 million (7%) investment to fair value. We ~~are working to complete the valuation and~~ have recorded a ~~preliminary~~ purchase price allocation of net tangible and intangible assets acquired and liabilities assumed of $123 million to indefinite-lived intangible assets, $51 million to definite-lived intangible assets, $202 million to goodwill, $1 million to property, plant and equipment, $2 million to inventory, $4 million to accounts receivable, $5 million to current liabilities and $132 million to long-term other liabilities. ~~The acquisition added incremental net revenues of $8 million in the three months and $16 million in the six months ended June 30, 2021, and an operating loss~~ ~~of $7 million~~ ~~in the three months and $13 million in the six months ended June 30, 2021.~~ We incurred acquisition-related costs of $5$4 million during the three months ~~and $9 million during the six months~~ ended ~~June 30,~~March 31, 2021.

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~~On April 1, 2020, we acquired a majority interest in Give & Go, a North American leader in fully-finished sweet baked goods and owner of the famous~~ ~~two-bite~~® ~~brand of brownies and the~~ ~~Create-A-Treat~~® brand, known for cookie and gingerbread house decorating kits. The acquisition of Give & Go provides access to the in-store bakery channel and expands our position in broader snacking. The purchase consideration for Give & Go totaled $1,136 million, net of cash received. We have recorded a purchase price allocation of net tangible and intangible assets acquired and liabilities assumed as follows:


	~~(in millions)~~
~~Receivables~~	$	29
~~Inventory~~	38
~~Other current assets~~	6
~~Property, plant and equipment~~	~~136~~
~~Operating right of use assets~~	61
~~Definite-life intangible assets~~	~~511~~
~~Indefinite-life intangible assets~~	42
~~Goodwill~~	~~531~~
~~Assets acquired~~	$	~~1,354~~
~~Current liabilities~~	42
~~Deferred tax liabilities~~	92
~~Long-term operating lease liabilities~~	56
~~Long-term debt~~	6
~~Long-term other liabilities~~	19
~~Total purchase price~~	$	~~1,139~~
~~Less: cash received~~	3
~~Net Cash Paid~~	$	~~1,136~~

Within definite-life intangible assets, we allocated $416 million to customer relationships which have an estimated useful life of 17 years. Goodwill arises principally as a result of expansion opportunities and synergies across both new and legacy product categories. NaN of the goodwill recognized is expected to be deductible for income tax purposes.

The fair value for customer relationships at the acquisition date was determined using the multi-period excess earnings method under the income approach. The fair value measurements of intangible assets are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of intangible assets include discounted future cash flows, customer attrition rates and discount rates. Through the one-year anniversary of the acquisition, Give & Go added incremental net revenues of $106 million and operating income of $6 million in 2021. We incurred $10 million of acquisition-related costs during the three months and $15 million during the six months ended June 30, 2020.

~~Note 3. Inventories~~

~~Inventories consisted of the following:~~

As of June 30,
2021 As of December 31, 2020
(in millions)
Raw materials $ 812 $ 718
Finished product 2,239 2,059
3,051 2,777
Inventory reserves (126) (130)
Inventories, net $ 2,925 $ 2,647

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Note 3. Inventories

Inventories consisted of the following:


	As of March 31, 2022		As of December 31, 2021
	(in millions)
Raw materials	$	891	$	770
Finished product	2,093		2,054
	2,984		2,824
Inventory reserves	(146)		(116)
Inventories, net	$	2,838	$	2,708

Note 4. Property, Plant and Equipment

Property, plant and equipment consisted of the following:


		As of June 30, 2021		As of December 31, 2020			As of March 31, 2022		As of December 31, 2021
		(in millions)					(in millions)
Land and land improvements	Land and land improvements	$	413	$	422	Land and land improvements	$	405	$	379
Buildings and building improvements	Buildings and building improvements	3,242		3,252		Buildings and building improvements	3,322		3,139
Machinery and equipment	Machinery and equipment	12,194		12,053		Machinery and equipment	12,043		11,842
Construction in progress	Construction in progress	651		628		Construction in progress	669		732
		16,500		16,355			16,439		16,092
Accumulated depreciation	Accumulated depreciation	(7,643)		(7,329)		Accumulated depreciation	(7,424)		(7,434)
Property, plant and equipment, net	Property, plant and equipment, net	$	8,857	$	9,026	Property, plant and equipment, net	$	9,015	$	8,658

For the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, capital expenditures of ~~$410~~$167 million excluded ~~$236~~$244 million of accrued capital expenditures remaining unpaid at ~~June 30,~~March 31, 2022 and included payment for a portion of the $249 million of capital expenditures that were accrued and unpaid at December 31, 2021. For the three months ended March 31, 2021, capital expenditures of $216 million excluded $230 million of accrued capital expenditures remaining unpaid at March 31, 2021 and included payment for a portion of the $275 million of capital expenditures that were accrued and unpaid at December 31, 2020. For the six months ended June 30, 2020, capital expenditures of $445 million excluded $195 million of accrued capital expenditures remaining unpaid at June 30, 2020 and included payment for $334 million of capital expenditures that were accrued and unpaid at December 31, 2019.

In connection with our restructuring program, we recorded non-cash property, plant and equipment write-downs (including accelerated depreciation and asset impairments) and losses/(gains) on disposal in the condensed consolidated statements of earnings within asset impairment and exit costs and within the segment results as follows (refer to Note 7, Restructuring Program).


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(in millions)									(in millions)
Latin America	Latin America	$	0	$	0	$	0	$	0	Latin America	$	—	$	—
AMEA	AMEA	0		5		(16)		4		AMEA	—		(16)
Europe	Europe	3		1		4		2		Europe	1		2
North America	North America	62		1		117		2		North America	1		54
Total	Total	$	65	$	7	$	105	$	8	Total	$	2	$	40

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Note 5. Goodwill and Intangible Assets

Goodwill by segment was:


		As of June 30, 2021		As of December 31, 2020			As of March 31, 2022		As of December 31, 2021
		(in millions)					(in millions)
Latin America	Latin America	$	720	$	706	Latin America	$	738	$	674
AMEA	AMEA	3,400		3,250		AMEA	3,371		3,365
Europe	Europe	8,027		8,038		Europe	8,355		7,830
North America	North America	10,123		9,901		North America	10,154		10,109
Goodwill	Goodwill	$	22,270	$	21,895	Goodwill	$	22,618	$	21,978

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Intangible assets consisted of the following:


		As of June 30, 2021		As of December 31, 2020			As of March 31, 2022		As of December 31, 2021
		(in millions)					(in millions)
Indefinite-life intangible assets	Indefinite-life intangible assets	$	17,615	$	17,492	Indefinite-life intangible assets	$	17,827	$	17,299
Definite-life intangible assets	Definite-life intangible assets	3,059		2,907		Definite-life intangible assets	3,025		2,991
		20,674		20,399			20,852		20,290
Accumulated amortization	Accumulated amortization	(1,983)		(1,917)		Accumulated amortization	(2,023)		(1,999)
Intangible assets, net	Intangible assets, net	$	18,691	$	18,482	Intangible assets, net	$	18,829	$	18,291

Indefinite-life intangible assets consist principally of brand names purchased through our acquisitions of Nabisco Holdings Corp., the Spanish and Portuguese operations of United Biscuits, the global LU biscuit business of Groupe Danone S.A. and Cadbury Limited. Definite-life intangible assets consist primarily of brands, customer-related intangibles, process technology, licenses and non-compete agreements.

Amortization expense for intangible assets was $32 million for the three months ended March 31, 2022 and ~~$70 million for the six months ended June 30, 2021 and $50~~$38 million for the three months ~~and $93 million for the six months~~ ended ~~June 30, 2020.~~March 31, 2021. For the next five years, we currently estimate annual amortization expense of approximately ~~$135 million in 2021, approximately~~ $130 million in 2022-2024, ~~and~~ approximately $105 million in 2025 and approximately $65 million in 2026 (reflecting ~~June 30, 2021~~March 31, 2022 exchange rates).

Changes in goodwill and intangible assets consisted of:


		Goodwill		Intangible Assets, at cost			Goodwill		Intangible Assets, at cost
		(in millions)					(in millions)
Balance at January 1, 2021		$	21,895	$	20,399
Balance at January 1, 2022						Balance at January 1, 2022	$	21,978	$	20,290
Currency	Currency	(184)		(98)		Currency	(134)		(94)

Acquisitions	Acquisitions	559		405		Acquisitions	774		734
Asset impairments	Asset impairments	0		(32)		Asset impairments	—		(78)
Balance at June 30, 2021		$	22,270	$	20,674
Balance at March 31, 2022						Balance at March 31, 2022	$	22,618	$	20,852

Changes to goodwill and intangibles were:

•Acquisitions - In connection with our ~~acquisitions~~acquisition of ~~Gourmet Food, Grenade and the remaining interest in Hu~~Chipita during the first ~~six~~three months of ~~2021,~~2022, we recorded a preliminary purchase price ~~allocations totaling $559~~allocation of $774 million ofto goodwill and ~~$405~~$734 million ofto intangible assets. See Note 2, Acquisitions and Divestitures, for additional information.

•Asset ~~impairments~~impairment - As further described below, during the ~~second~~first quarter of ~~2021,~~2022, we recorded ~~$32~~a $78 million of intangible asset ~~impairments resulting primarily from~~impairment in AMEA due to lower than expected ~~sales~~ growth ~~for 1~~and profitability of a local biscuit brand ~~across our North America segment.~~sold in select markets in AMEA and Europe.

~~Each~~

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During the first quarter of 2022, we ~~evaluate~~evaluated our goodwill and intangible asset impairment risk through an assessment of potential triggering events. In light of the ~~ongoing COVID-19~~war in Ukraine and the overall global ~~pandemic,~~economic environment, we considered qualitative and quantitative information in our assessment ~~over~~of goodwill and indefinite-life intangible assets.

•~~During~~ Based on the ~~first six months~~financial performance of ~~2021 and 2020,~~our goodwill reporting units, we concluded ~~0 goodwill~~there were no impairment indicators ~~were present that would require additional goodwill impairment evaluation and that our goodwill as of June 30, 2021 and June 30, 2020 were fairly stated.~~

•~~With the ongoing COVID-19 global pandemic, we continue to monitor intangible asset impairment risk. During the second quarters of 2021 and 2020, we identified declines in demand~~ for ~~certain of our brands, that prompted additional evaluation~~goodwill. Based on further quantitative analysis of our indefinite-life intangible ~~assets. We~~assets, we concluded that a biscuit brand was impaired. During the first quarter of 2022, we recorded a $78 million impairment charge for the brand within asset impairment and exit costs and based on the excess carrying value over its estimated ~~the~~ fair ~~value of the brands using~~value. During our indefinite-life impairment testing, we use several ~~acceptable~~accepted valuation methods, including relief of royalty, excess earnings and excess margin, ~~models. Those models required us to make assumptions related to the~~that utilize estimates of future sales, ~~and~~ earnings growth rates, ~~for the brands, as well as~~ royalty rates and discount ~~rates. We made our best estimate of those assumptions using the information available; however, given the uncertainty of the~~rates in determining a brand's global ~~economic environment and the impact of COVID-19, those estimates could be significantly different than future performance. In certain instances, the estimated~~ fair ~~value of the brand was below the carrying value, which~~

11value.

~~Table~~During the first quarter of ~~Contents~~

~~resulted~~2021, there were no impairments of goodwill or intangible assets. During our 2021 annual indefinite-life intangible asset testing in ~~impairment charges. Primarily due to lower than original expected sales growth, during~~ the ~~second~~third quarter of 2021, we recorded a $32 million impairment charge in North America related to a small biscuit brand, and during the second quarter of 2020, we recorded $90 million of impairment charges related to 4 gum brands, a small biscuit brand and a small candy brand, with $50 million recorded in Europe, $36 million in North America and $4 million in AMEA. The impairment charges were calculated as the excess of the carrying value over the estimated fair value of the intangible assets on a global basis and were recorded within asset impairment and exit costs. We will continue to monitor the potential for asset impairment risk over coming quarters.

~~In 2020, we recorded a total of $144 million of intangible asset impairment charges related to~~identified 8brands. The ongoing impact of the COVID-19 pandemic resulted in declines in the sales and earnings for certain brands, particularly our gum brands. During our annual impairment testing as of July 1, 2020, we identified 9 brands, including the 8one brand impaired ~~brands,~~during the first quarter of 2022, that each had a fair value in excess of book value of 10% or less. The aggregate book value of the 98 brands was ~~$721~~$1,045 million as of ~~June 30, 2021.~~March 31, 2022. We continue to monitor our brand performance, particularly in light of the significant ~~uncertainty due to the COVID-19 pandemic~~global economic uncertainties and related impacts to our business. If ~~the brand~~a brand's earnings expectations, including the timing of the expected recovery from the ~~COVID-19~~war and the pandemic, ~~impacts,~~ are not met or specific valuation factors outside of our control, such as discount rates, change significantly, then a brand or brands could become impaired in the future.

Note 6. Equity Method Investments

Equity method investments consist of our investments in entities in which we maintain an equity ownership interest and apply the equity method of accounting due to our ability to exert significant influence over decisions relating to their operating and financial affairs. Revenue and expenses of our equity method investees are not consolidated into our financial statements; rather, our proportionate share of the earnings of each investee is reflected as equity method investment net earnings. The carrying values of our equity method investments are also impacted by our proportionate share of items impacting the investee's accumulated other comprehensive income or losses and other items, such as our share of investee dividends.

Our equity method investments include, but are not limited to, our ownership interests in JDE Peet's (Euronext Amsterdam: "JDEP"), Keurig Dr Pepper Inc. (Nasdaq: "KDP"), Dong Suh Foods Corporation and Dong Suh Oil & Fats Co. Ltd. Our ownership interests may change over time due to investee stock-based compensation arrangements, share issuances or other equity-related transactions. As of ~~June 30, 2021,~~March 31, 2022, we owned ~~22.8%~~22.7%, ~~6.4%~~5.3%, 50.0% and 49.0%, respectively, of these companies' outstanding shares.

Our investments accounted for under the equity method of accounting totaled ~~$5,586~~$5,255 million as of ~~June 30, 2021~~March 31, 2022 and ~~$6,036~~$5,289 million as of December 31, ~~2020.~~2021. We recorded equity earnings of ~~$107~~$117 million and cash dividends of ~~$20~~$107 million in the ~~second~~first quarter of ~~2021~~2022 and equity earnings of ~~$106~~$78 million and cash dividends of ~~$28 million in the second quarter of 2020. We recorded equity earnings of $185 million and cash dividends of $94~~$74 million in the first ~~six months~~quarter of ~~2021 and equity earnings of $227 million and cash dividends of $193 million in the first six months of 2020~~.2021.

Based on the quoted closing prices as of ~~June 30, 2021,~~March 31, 2022, the combined fair value of our publicly-traded investments in JDEP and KDP was ~~$7.3~~$6.1 billion, and for each investment, its fair value exceeded its carrying value.

~~Keurig Dr Pepper Transactions:~~

On ~~June 7,~~September 20, 2021, we ~~participated~~issued €300 million exchangeable bonds, which are redeemable at maturity in ~~a secondary offering~~September 2024 at their principal amount in cash or, at our option, through the delivery of ~~KDP~~an equivalent number of JDE Peet’s ordinary shares based on an initial exchange price of €35.40 and, ~~sold~~as the case may be, an additional amount in cash. If all bonds were redeemed in exchange for JDE Peet's shares, this would represent approximately 288.5 million shares ~~which reduced~~or approximately 7% of our ownership interest by 2% of the total outstanding shares. We received $997 million of proceeds and recorded a pre-tax gain of $520 million (or $392 million after-tax) during the second quarter of 2021. As we will continue to have significant influence, we will continue to account for our investment in KDP under the equity method, resulting in recognizing our share of their earnings within our earnings and our share of their dividends within our cash flows. We will continue to have board representation with 1 director on the KDP Board of Directors and we retained certain additional governance rights.

On March 4, 2020, we participated in a secondary offering of KDP shares and sold approximately 6.8 million shares, which reduced our ownership interest by 0.5% of the total outstanding shares. We received $185 million of proceeds and recorded a pre-tax gain of $71 million (or $54 million after-tax) during the first quarter of 2020.

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~~JDE Peet’s Transaction:~~

On May 19, 2020, JDE Peet’s B.V. (renamed JDE Peet’s N.V. immediately prior to Settlement (as defined below), “JDE Peet’s”) announced its intention to launch an offering of its ordinary shares (the “offering”) and to apply for admission to listing and trading of all of its ordinary shares on Euronext Amsterdam, a regulated market operated by Euronext Amsterdam N.V. (the “admission”). On May 26, 2020, JDE Peet’s published a prospectus in connection with the offering and the admission. On May 29, 2020, JDE Peet’s announced the final pricing terms of the offering, and JDE Peet’s and the selling shareholders, including us, agreed to sell at a price of €31.50 per ordinary share a total of approximately 82.1 million ordinary shares, including ordinary shares subject to an over-allotment option. The ordinary shares were listed and first traded on May 29, 2020, and payment for, and delivery of, the ordinary shares sold in the offering (excluding ordinary shares subject to the over-allotment option) took place on June 2, 2020 (“Settlement”).

~~Prior to Settlement, we exchanged our 26.4% ownership interest in Jacobs Douwe Egberts ("JDE") for a 26.5%~~ equity interest in JDE ~~Peet’s. We did not invest new capital in connection with the transaction~~Peet's. Refer to Note 9, Debt and ~~the exchange was accounted~~Borrowing Arrangements, for ~~as a change in interest~~further details on this transaction. Upon Settlement, we sold approximately 9.7 million of our ordinary shares in JDE Peet’s in the offering for gross proceeds of €304 million ($343 million). We subsequently sold approximately 1.4 million additional shares and received gross proceeds of €46 million ($51 million) upon exercise of the over-allotment option. Following Settlement and the exercise of the over-allotment option, we held a 22.9% equity interest in JDE Peet’s. During the second quarter of 2020, we recorded a preliminary gain of $121 million, net of $33 million released from accumulated other comprehensive losses, and $48 million of transaction costs.

As was the case in our ownership interest in JDE, we have significant influence with respect to JDE Peet’s, and we will continue to account for our investment in JDE Peet’s under the equity method, resulting in recognizing our share of JDE Peet’s earnings within our earnings and our share of JDE Peet’s dividends within our cash flows. In the second quarter of 2020, in connection with this transaction, we changed our accounting principle to reflect our share of JDE’s historical and JDE Peet’s ongoing earnings on a one-quarter lag basis, although we continue to record dividends when cash is received. We determined a lag was preferable as it enables us to continue to report our quarterly and annual results on a timely basis, while recording our share of JDE Peet’s ongoing results after JDE Peet’s has publicly reported its results. This change in accounting principle was applied retrospectively to all periods.

Note 7. Restructuring Program

On May 6, 2014, our Board of Directors approved a $3.5 billion 2014-2018 restructuring program and up to $2.2 billion of capital expenditures. On August 31, 2016, our Board of Directors approved a $600 million reallocation between restructuring program cash costs and capital expenditures so the $5.7 billion program consisted of approximately $4.1 billion of restructuring program charges ($3.1 billion cash costs and $1.0 billion non-cash costs) and up to $1.6 billion of capital expenditures. On September 6, 2018, our Board of Directors approved an extension of the restructuring program through 2022, an increase of $1.3 billion in the program charges and an increase of ~~$700~~

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$700 million in capital expenditures. On October 21, 2021, our Board of Directors approved an extension of the restructuring program through 2023. The total $7.7 billion program now consists of $5.4 billion of program charges ($4.1 billion of cash costs and $1.3 billion of non-cash costs) and total capital expenditures of $2.3 billion to be incurred over the life of the program. The current restructuring program, as increased and extended by these actions, is now called the Simplify to Grow Program.

The primary objective of the Simplify to Grow Program is to reduce our operating cost structure in both our supply chain and overhead costs. The program covers severance as well as asset disposals and other manufacturing and procurement-related one-time costs. Since inception, we have incurred total restructuring and implementation charges of ~~$5.0~~$5.1 billion related to the Simplify to Grow Program. We expect to incur the remainder of the program charges by year-end ~~2022.~~2023.

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Restructuring Costs:

The Simplify to Grow Program liability activity for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 was:


		Severance and related costs		Asset Write-downs		Total			Severance and related costs		Asset Write-downs		Total
		(in millions)							(in millions)
Liability balance, January 1, 2021		$	304	$	0	$	304
Liability balance, January 1, 2022								Liability balance, January 1, 2022	$	211	$	—	$	211
Charges	Charges	73		115		188		Charges	9		2		11
Cash spent	Cash spent	(64)		0		(64)		Cash spent	(17)		—		(17)
Non-cash settlements/adjustments	Non-cash settlements/adjustments	(1)		(115)		(116)		Non-cash settlements/adjustments	—		(2)		(2)
Currency	Currency	(5)		0		(5)		Currency	(1)		—		(1)
Liability balance, June 30, 2021		$	307	$	0	$	307
Liability balance, March 31, 2022								Liability balance, March 31, 2022	$	202	$	—	$	202

•We recorded restructuring charges of ~~$100 million in the second quarter of 2021 and $28 million in the second quarter of 2020 and $188~~$11 million in the first ~~six months~~quarter of ~~2021~~2022 and ~~$43~~$88 million in the first ~~six months~~quarter of ~~2020~~2021 within asset impairment and exit costs and benefit plan non-service income.

•We spent ~~$30 million in the second quarter of 2021 and $32 million in the second quarter of 2020 and $64~~$17 million in the first ~~six months~~quarter of ~~2021~~2022 and ~~$69~~$34 million in the first ~~six months~~quarter of ~~2020~~2021 in cash severance and related costs.

•We ~~also~~ recognized non-cash asset write-downs (including accelerated depreciation and asset impairments)., and other adjustments, including any gains on sale of restructuring program assets, ~~non-cash pension settlement losses (refer to~~ ~~Note 10,~~ ~~Benefit Plans) and other adjustments,~~ which totaled ~~$76 million in the second quarter of 2021 and $11 million in the second quarter of 2020 and $116~~$2 million in the first ~~six months~~quarter of ~~2021~~2022 and ~~$14~~$40 million in the first ~~six months~~quarter of ~~2020.~~2021.

•At ~~June 30, 2021, $258~~March 31, 2022, $172 million of our net restructuring liability was recorded within other current liabilities and ~~$49~~$30 million was recorded within other long-term liabilities.

Implementation Costs:

Implementation costs are directly attributable to restructuring activities; however, they do not qualify for special accounting treatment as exit or disposal activities. We believe the disclosure of implementation costs provides readers of our financial statements with more information on the total costs of our Simplify to Grow Program. Implementation costs primarily relate to reorganizing our operations and facilities in connection with our supply chain reinvention program and other identified productivity and cost saving initiatives. The costs include incremental expenses related to the closure of facilities, costs to terminate certain contracts and the simplification of our information systems. Within our continuing results of operations, we recorded implementation costs of ~~$33 million in the second quarter of 2021 and $52 million in the second quarter of 2020 and $67~~$20 million in the first ~~six months~~quarter of ~~2021~~2022 and ~~$95~~$34 million in the first ~~six months~~quarter of ~~2020.~~2021. We recorded these costs within cost of sales and general corporate expense within selling, general and administrative expenses.

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Restructuring and Implementation Costs:

During the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and June 30, 2020,~~ and since inception of the Simplify to Grow Program, we recorded the following restructuring and implementation costs within segment operating income and earnings before income taxes:


		Latin America		AMEA		Europe		North America		Corporate		Total			Latin America		AMEA		Europe		North America		Corporate		Total
		(in millions)													(in millions)
For the Three Months Ended June 30, 2021
For the Three Months Ended March 31, 2022														For the Three Months Ended March 31, 2022
Restructuring Costs	Restructuring Costs	$	0	$	2	$	(1)	$	92	$	7	$	100	Restructuring Costs	$	(1)	$	2	$	2	$	8	$	—	$	11
Implementation Costs	Implementation Costs	4		3		11		17		(2)		33		Implementation Costs	1		1		5		7		6		20
Total	Total	$	4	$	5	$	10	$	109	$	5	$	133	Total	$	—	$	3	$	7	$	15	$	6	$	31
For the Three Months Ended June 30, 2020
For the Three Months Ended March 31, 2021														For the Three Months Ended March 31, 2021
Restructuring Costs	Restructuring Costs	$	14	$	5	$	9	$	(2)	$	2	$	28	Restructuring Costs	$	3	$	(21)	$	6	$	101	$	(1)	$	88
Implementation Costs	Implementation Costs	1		3		11		11		26		52		Implementation Costs	3		2		10		10		9		34
Total	Total	$	15	$	8	$	20	$	9	$	28	$	80	Total	$	6	$	(19)	$	16	$	111	$	8	$	122
For the Six Months Ended June 30, 2021
Restructuring Costs		$	3	$	(19)	$	5	$	193	$	6	$	188
Implementation Costs		7		5		21		27		7		67
Total		$	10	$	(14)	$	26	$	220	$	13	$	255
For the Six Months Ended June 30, 2020
Restructuring Costs		$	18	$	4	$	12	$	0	$	9	$	43
Implementation Costs		8		6		25		21		35		95
Total		$	26	$	10	$	37	$	21	$	44	$	138

Total Project (Inception to Date)	Total Project (Inception to Date)													Total Project (Inception to Date)
Restructuring Costs	Restructuring Costs	$	550	$	539	$	1,148	$	685	$	148	$	3,070	Restructuring Costs	$	553	$	543	$	1,149	$	653	$	149	$	3,047
Implementation Costs	Implementation Costs	294		234		532		483		345		1,888		Implementation Costs	297		240		549		560		362		2,008
Total	Total	$	844	$	773	$	1,680	$	1,168	$	493	$	4,958	Total	$	850	$	783	$	1,698	$	1,213	$	511	$	5,055

Note 8. Debt and Borrowing Arrangements

Short-Term Borrowings:

Our short-term borrowings and related weighted-average interest rates consisted of:


		As of June 30, 2021				As of December 31, 2020					As of March 31, 2022				As of December 31, 2021
		Amount Outstanding		Weighted- Average Rate		Amount Outstanding		Weighted- Average Rate			Amount Outstanding		Weighted- Average Rate		Amount Outstanding		Weighted- Average Rate
		(in millions, except percentages)									(in millions, except percentages)
Commercial paper	Commercial paper	$	13	0.1	%	$	0	0	%	Commercial paper	$	463	0.9	%	$	192	0.2	%
Bank loans	Bank loans	51		8.6	%	29		4.8	%	Bank loans	143		3.5	%	24		8.6	%
Total short-term borrowings	Total short-term borrowings	$	64			$	29			Total short-term borrowings	$	606			$	216

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Our uncommitted credit lines and committed credit lines available as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 include:


		As of June 30, 2021				As of December 31, 2020					As of March 31, 2022				As of December 31, 2021
		Facility Amount		Borrowed Amount		Facility Amount		Borrowed Amount			Facility Amount		Borrowed Amount		Facility Amount		Borrowed Amount
		(in millions)									(in millions)
Uncommitted credit facilities	Uncommitted credit facilities	$	1,496	$	51	$	1,487	$	29	Uncommitted credit facilities	$	1,435	$	143	$	1,367	$	24
Credit facility expiry(1):	Credit facility expiry(1):									Credit facility expiry(1):
February 24, 2021		0		0		1,500		0
November 30, 2022(2)										November 30, 2022(2)	2,000		—		—		—
February 23, 2022	February 23, 2022	2,500		0		0		0		February 23, 2022	—		—		2,500		—
February 22, 2023										February 22, 2023	2,500		—		—		—
February 27, 2024	February 27, 2024	4,500		0		4,500		0		February 27, 2024	—		—		4,500		—
February 23, 2027										February 23, 2027	4,500		—		—		—

(1) We maintain a multi-year senior unsecured revolving credit facility for general corporate purposes, including working capital needs, and to support our commercial paper program. The revolving credit agreement includes a covenant that we maintain a minimum shareholders' equity of at least ~~$24.6~~$25.0 billion, excluding accumulated other comprehensive earnings/(losses), the cumulative effects of any changes in accounting principles and earnings/(losses) recognized in connection with the ongoing application of any mark-to-market accounting for

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pensions and other retirement plans. At ~~June 30, 2021,~~March 31, 2022, we complied with this covenant as our shareholders' equity, as defined by the covenant, was ~~$38.1~~$38.6 billion. The revolving credit facility also contains customary representations, covenants and events of default. There are no credit rating triggers, provisions or other financial covenants that could require us to post collateral as security.

(2) On March 31, 2022, we entered into a supplemental term loan credit facility that can be utilized for general corporate purposes, including acquisitions. Under this agreement we may draw up to a total of $2.0 billion in term loans from the facility. The maturity dates of any loans drawn under this facility will be three years after the funding date of the applicable loan(s).

Long-Term Debt:

~~Redemptions:~~Tender Offers:

On March ~~31, 2021,~~18, 2022, we completed ~~an early redemption of Euro~~a tender offer in cash and redeemed long term U.S. dollar denominated notes for the following amounts (in millions):

Interest Rate Maturity Date Amount Redeemed USD Equivalent
1.000% March 2022 €500 $587
1.625% January 2023 €700 $821
2.125% April 2023 $500 $500
4.000% February 2024 $492 $492


Interest Rate	Redemption Date	Maturity Date	Amount Redeemed	USD Equivalent
3.625%	March 2022	February 2026	$130	$130
4.125%	March 2022	May 2028	$211	$211
2.750%	March 2022	April 2030	$500	$500
6.500%	March 2022	November 2031	$17	$17
7.000%	March 2022	August 2037	$10	$10
6.875%	March 2022	February 2038	$21	$21
6.875%	March 2022	January 2039	$8	$8
6.500%	March 2022	February 2040	$36	$36
4.625%	March 2022	May 2048	$54	$54

We recorded ~~$137~~a $129 million ofloss on debt extinguishment ~~loss~~ and ~~debt-related~~related expenses within interest and other expense, net, ~~related to $110~~consisting of $38 million paid in excess of carrying value of the debt and from recognizing unamortized discounts and deferred financing costs in earnings and ~~$27~~$91 million ~~foreign currency derivative loss related to the redemption payment~~from recognizing unamortized forward starting swap losses in earnings at the time of the debt extinguishment. The cash payments related to the ~~redemption~~debt extinguishment were classified as cash outflows from financing activities in the consolidated statement of cash flows.

~~Repayments:~~Redemptions:

~~During the six months ended June 30, 2021,~~On March 18, 2022, we ~~repaid~~completed a redemption of long term U.S. dollar denominated notes for the following ~~notes or term loans~~amounts (in millions):

Interest Rate

Maturity Date

Amount

USD Equivalent

Interest Rate

Redemption Date

Maturity Date

Amount Redeemed

USD Equivalent

2.375%

January 2021

€679

$827

0.625%

March 2022

July 2022

$1,000

Debt Repayments

On January 3, 2022, we closed on our acquisition of Chipita and assumed and entirely paid down €0.4 billion ($0.4 billion) of Chipita's debt during the three months ended March 31, 2022.

Issuances:

During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, we issued the following notes (in millions):

Issuance Date Interest Rate Maturity Date
Gross Proceeds (1)
Gross Proceeds USD Equivalent
March 2021 1.375% March 2041 €650 $777
March 2021 0.750% March 2033 €600 $717
March 2021 0.250% March 2028 €750 $896


Issuance Date	Interest Rate	Maturity Date	Gross Proceeds (1)	Gross Proceeds USD Equivalent
March 2022	2.125%	March 2024	$500	$500
March 2022	2.625%	March 2027	$750	$750
March 2022	3.000%	March 2032	$750	$750

(1) Represents gross proceeds from the issuance of notes excluding debt issuance costs, discounts and premiums.

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Fair Value of Our Debt:

The fair value of our short-term borrowings at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 reflects current market interest rates and approximates the amounts we have recorded on our consolidated balance sheets. The fair value of our long-term debt was determined using quoted prices in active markets (Level 1 valuation data) for the publicly traded debt obligations.


		As of June 30, 2021		As of December 31, 2020			As of March 31, 2022		As of December 31, 2021
		(in millions)					(in millions)
Fair Value	Fair Value	$	19,949	$	21,568	Fair Value	$	19,009	$	20,249
Carrying Value	Carrying Value	$	19,015	$	20,046	Carrying Value	$	19,704	$	19,512

Interest and Other Expense, net:

Interest and other expense, net consisted of:


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(in millions)									(in millions)
Interest expense, debt	Interest expense, debt	$	90	$	108	$	188	$	218	Interest expense, debt	$	91	$	98
Loss on debt extinguishment and related expenses	Loss on debt extinguishment and related expenses	0		0		137		0		Loss on debt extinguishment and related expenses	129		137
Loss related to interest rate swaps		0		0		0		103
Other (income)/expense, net	Other (income)/expense, net	(32)		(23)		(49)		(46)		Other (income)/expense, net	(52)		(17)
Interest and other expense, net	Interest and other expense, net	$	58	$	85	$	276	$	275	Interest and other expense, net	$	168	$	218

Other income includes amounts excluded from hedge effectiveness related to our net investment hedge derivative contracts that totaled ~~$19 million and $40~~$22 million in the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~$31~~$20 million ~~and $64 million for~~in the three ~~and six~~ months ended ~~June 30, 2020.~~March 31, 2021.

Early settlement of forecasted currency exchange contracts comprise $20 million in other (income)/expense, net due to changes in related forecasted future cash flows in the three months ended March 31, 2022. Refer to Note 9, Financial Instruments.

Note 9. Financial Instruments

Fair Value of Derivative Instruments:

Derivative instruments were recorded at fair value in the condensed consolidated balance sheets as follows:


		As of June 30, 2021				As of December 31, 2020					As of March 31, 2022				As of December 31, 2021
		Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives			Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
		(in millions)									(in millions)
Derivatives designated as accounting hedges:	Derivatives designated as accounting hedges:									Derivatives designated as accounting hedges:
Currency exchange contracts										Currency exchange contracts	$	1	$	3	$	—	$	—
Interest rate contracts	Interest rate contracts	$	13	$	236	$	12	$	340	Interest rate contracts	27		3		27		17
Net investment hedge derivative contracts (1)	Net investment hedge derivative contracts (1)	104		62		114		129		Net investment hedge derivative contracts (1)	137		51		117		45
		$	117	$	298	$	126	$	469		$	165	$	57	$	144	$	62
Derivatives not designated as accounting hedges:	Derivatives not designated as accounting hedges:									Derivatives not designated as accounting hedges:
Currency exchange contracts	Currency exchange contracts	$	113	$	82	$	134	$	119	Currency exchange contracts	$	135	$	124	$	156	$	40
Commodity contracts	Commodity contracts	340		147		205		128		Commodity contracts	589		220		387		137
Equity method investment contracts(2)										Equity method investment contracts(2)	—		3		—		3
		$	453	$	229	$	339	$	247		$	724	$	347	$	543	$	180
Total fair value	Total fair value	$	570	$	527	$	465	$	716	Total fair value	$	889	$	404	$	687	$	242

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(1)Net investment hedge derivative contracts consist of cross-currency interest rate swaps, forward contracts and options. 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.

(2)

17Equity method investment contracts consist of the bifurcated embedded derivative option that was a component of the September 20, 2021 €300 million exchangeable bonds issuance. Refer to Note 8, Debt and Borrowing Arrangements.

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Derivatives designated as accounting hedges include cash flow and net investment hedge derivative contracts. Our currency exchange, ~~and~~ commodity derivative and equity method investment contracts are economic hedges that are not designated as accounting hedges. We record derivative assets and liabilities on a gross basis on our condensed consolidated balance sheets. The fair value of our asset derivatives is recorded within other current assets and other assets and the fair value of our liability derivatives is recorded within other current liabilities and other liabilities.

The fair values (asset/(liability)) of our derivative instruments were determined using:


		As of June 30, 2021									As of March 31, 2022
		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)			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)									(in millions)
Currency exchange contracts	Currency exchange contracts	$	31	$	0	$	31	$	0	Currency exchange contracts	$	9	$	—	$	9	$	—
Commodity contracts	Commodity contracts	193		108		85		0		Commodity contracts	369		213		156		—
Interest rate contracts	Interest rate contracts	(223)		0		(223)		0		Interest rate contracts	24		—		24		—
Net investment hedge contracts	Net investment hedge contracts	42		0		42		0		Net investment hedge contracts	86		—		86		—
Equity method investment contracts										Equity method investment contracts	(3)		—		(3)		—
Total derivatives	Total derivatives	$	43	$	108	$	(65)	$	0	Total derivatives	$	485	$	213	$	272	$	—


		As of December 31, 2020									As of December 31, 2021
		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)			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)									(in millions)
Currency exchange contracts	Currency exchange contracts	$	15	$	0	$	15	$	0	Currency exchange contracts	$	116	$	—	$	116	$	—
Commodity contracts	Commodity contracts	77		46		31		0		Commodity contracts	251		161		90		—
Interest rate contracts	Interest rate contracts	(328)		0		(328)		0		Interest rate contracts	10		—		10		—
Net investment hedge contracts	Net investment hedge contracts	(15)		0		(15)		0		Net investment hedge contracts	71		—		71		—
Equity method investment contracts										Equity method investment contracts	(3)		—		(3)		—
Total derivatives	Total derivatives	$	(251)	$	46	$	(297)	$	0	Total derivatives	$	445	$	161	$	284	$	—

Level 1 financial assets and liabilities consist of exchange-traded commodity futures and listed options. The fair value of these instruments is determined based on quoted market prices on commodity exchanges.

Level 2 financial assets and liabilities consist primarily of over-the-counter (“OTC”) currency exchange forwards, options and swaps; commodity forwards and options; net investment hedge contracts; and interest rate swaps. Our currency exchange contracts are valued using an income approach based on observable market forward rates less the contract rate multiplied by the notional amount. Commodity derivatives are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied by the notional amount or based on pricing models that rely on market observable inputs such as commodity prices. Our bifurcated exchange options are valued, as derivative instrument liabilities, using the Black-Scholes option pricing model. This model requires assumptions related to the market price of the underlying note and associated credit spread combined with the share of price, expected dividend yield, and expected volatility of the JDE Peet’s shares over the life of the option.Our calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the observable market interest rate curve. Our calculation of the fair value of financial instruments takes into consideration the risk of nonperformance, including counterparty credit risk. Our OTC derivative transactions are governed by International Swap Dealers Association agreements and other

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standard industry contracts. Under these agreements, we do not post nor require collateral from our counterparties. The majority of our derivative contracts do not have a legal right of set-off. We manage the credit risk in connection with these and all our derivatives by entering into transactions with counterparties with investment grade credit ratings, limiting the amount of exposure with each counterparty and monitoring the financial condition of our counterparties.

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Derivative Volume:

The notional values of our hedging instruments were:


		Notional Amount					Notional Amount
		As of June 30, 2021		As of December 31, 2020			As of March 31, 2022		As of December 31, 2021
		(in millions)					(in millions)
Currency exchange contracts:	Currency exchange contracts:					Currency exchange contracts:
Intercompany loans and forecasted interest payments	Intercompany loans and forecasted interest payments	$	2,228	$	2,184	Intercompany loans and forecasted interest payments	$	3,073	$	1,891
Forecasted transactions	Forecasted transactions	4,098		4,169		Forecasted transactions	4,822		4,831
Commodity contracts	Commodity contracts	7,259		7,947		Commodity contracts	10,281		9,694
Interest rate contracts	Interest rate contracts	3,500		3,500		Interest rate contracts	1,850		1,850
Net investment hedges:	Net investment hedges:					Net investment hedges:
Net investment hedge derivative contracts	Net investment hedge derivative contracts	4,623		4,551		Net investment hedge derivative contracts	7,306		3,915
Non-U.S. dollar debt designated as net investment hedges	Non-U.S. dollar debt designated as net investment hedges					Non-U.S. dollar debt designated as net investment hedges
Euro notes	Euro notes	3,777		3,744		Euro notes	3,525		3,622
British pound sterling notes	British pound sterling notes	364		360		British pound sterling notes	346		356
Swiss franc notes	Swiss franc notes	1,124		1,175		Swiss franc notes	802		811
Canadian dollar notes	Canadian dollar notes	484		472		Canadian dollar notes	480		475

Cash Flow Hedges:

Cash flow hedge activity, net of taxes, within accumulated other comprehensive earnings/(losses) included:


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(in millions)									(in millions)
Accumulated (loss)/gain at beginning of period	Accumulated (loss)/gain at beginning of period	$	(159)	$	(155)	$	(161)	$	(213)	Accumulated (loss)/gain at beginning of period	$	(148)	$	(161)
Transfer of realized losses/(gains) in fair value to earnings	Transfer of realized losses/(gains) in fair value to earnings	4		7		9		88		Transfer of realized losses/(gains) in fair value to earnings	25		5
Unrealized (loss)/gain in fair value	Unrealized (loss)/gain in fair value	13		(6)		10		(29)		Unrealized (loss)/gain in fair value	27		(3)
Accumulated (loss)/gain at end of period	Accumulated (loss)/gain at end of period	$	(142)	$	(154)	$	(142)	$	(154)	Accumulated (loss)/gain at end of period	$	(96)	$	(159)

After-tax gains/(losses) reclassified from accumulated other comprehensive earnings/(losses) ~~into~~to net earnings were:

For the Three Months Ended
June 30, For the Six Months Ended
June 30,
2021 2020 2021 2020
(in millions)
Interest rate contracts $ (4) $ (7) $ (9) $ (88)

Within interest and other expense, net, due to changes in forecasted debt, we recognized losses related to forward-starting interest rate swaps of $79 million ($103 million pre-tax) in the first quarter of 2020 and in the six months ended June 30, 2020.

~~After-tax gains/(losses) recognized in other comprehensive earnings/(losses) were:~~

For the Three Months Ended
June 30, For the Six Months Ended
June 30,
2021 2020 2021 2020
(in millions)
Currency exchange contracts – forecasted transactions $ 7 $ (1) $ 6 $ (1)
Interest rate contracts 6 (5) 4 (28)
Total $ 13 $ (6) $ 10 $ (29)


	For the Three Months Ended March 31,
	2022		2021
	(in millions)
Currency exchange contracts – forecasted transactions	$	(2)	$	—
Interest rate contracts	(23)		(5)
Total	$	(25)	$	(5)

1918

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After-tax gains/(losses) recognized in other comprehensive earnings/(losses) were:


	For the Three Months Ended March 31,
	2022		2021
	(in millions)
Currency exchange contracts – forecasted transactions	$	2	$	(1)
Interest rate contracts	25		(2)
Total	$	27	$	(3)

Cash flow hedge ineffectiveness was not material for all periods presented.

We record pre-tax (i) gains or losses reclassified from accumulated other comprehensive earnings/(losses) into earnings, (ii) gains or losses on ineffectiveness and (iii) gains or losses on amounts excluded from effectiveness testing in interest and other expense, net for interest rate contracts.

Based on current market conditions, we would expect to transfer losses of ~~$134~~$9 million (net of taxes) for interest rate cash flow hedges to earnings during the next 12 months.

Cash Flow Hedge Coverage:

As of ~~June 30, 2021,~~March 31, 2022, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 34 years, ~~and 3~~5 months.

Hedges of Net Investments in International Operations:

Net investment hedge ("NIH") derivative contracts:

We enter into cross-currency interest rate swaps, forwards and options to hedge certain investments in our non-U.S. operations against movements in exchange rates. The aggregate notional value as of ~~June 30, 2021~~March 31, 2022 was ~~$4.6~~$7.3 billion.

The impacts of the net investment hedge derivative contracts on other comprehensive earnings and net earnings were as follows:

For the Three Months Ended
June 30, For the Six Months Ended
June 30,
2021 2020 2021 2020
(in millions)
After-tax gain/(loss) on NIH contracts(1)
$ (36) $ (115) $ 23 $ 217


	For the Three Months Ended March 31,
	2022		2021
	(in millions)
After-tax gain/(loss) on NIH contracts(1)	$	41	$	59

(1)Amounts recorded for unsettled and settled NIH derivative contracts are recorded in the cumulative translation adjustment within other comprehensive earnings. The cash flows from the settled contracts are reported within other investing activities in the condensed consolidated statement of cash flows.

For the Three Months Ended
June 30, For the Six Months Ended
June 30,
2021 2020 2021 2020
(in millions)
Amounts excluded from the assessment of
hedge effectiveness(1)
$ 19 $ 31 $ 40 $ 64


	For the Three Months Ended March 31,
	2022		2021
	(in millions)
Amounts excluded from the assessment of hedge effectiveness(1)	$	22	$	20

(1)We elected to record changes in the fair value of amounts excluded from the assessment of effectiveness in net earnings within interest and other expense, net.

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Non-U.S. dollar debt designated as net investment hedges:

After-tax gains/(losses) related to hedges of net investments in international operations in the form of euro, British pound sterling, Swiss franc and Canadian dollar-denominated debt were recorded within the cumulative translation adjustment section of other comprehensive income and were:

For the Three Months Ended
June 30, For the Six Months Ended
June 30,
2021 2020 2021 2020
(in millions)
Euro notes $ (31) $ (55) $ 92 $ (13)
British pound sterling notes (1) 0 (3) 17
Swiss franc notes (17) (14) 39 (20)
Canadian notes (5) (12) (9) 15


	For the Three Months Ended March 31,
	2022		2021
	(in millions)
Euro notes	$	74	$	124
British pound sterling notes	8		(2)
Swiss franc notes	6		56
Canadian notes	(4)		(5)

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Economic Hedges:

Pre-tax gains/(losses) recorded in net earnings for economic hedges were:


		For the Three Months Ended June 30,				For the Six Months Ended June 30,				Location of Gain/(Loss) Recognized in Earnings		For the Three Months Ended March 31,				Location of Gain/(Loss) Recognized in Earnings
		2021		2020		2021		2020				2022		2021
		(in millions)										(in millions)
Currency exchange contracts:	Currency exchange contracts:										Currency exchange contracts:
Intercompany loans and forecasted interest payments	Intercompany loans and forecasted interest payments	$	2	$	(7)	$	72	$	(80)	Interest and other expense, net	Intercompany loans and forecasted interest payments	$	(11)	$	70		Interest and other expense, net
Forecasted transactions	Forecasted transactions	(38)		(4)		12		22		Cost of sales	Forecasted transactions	(7)		50			Cost of sales
Forecasted transactions	Forecasted transactions	14		(10)		(2)		(9)		Interest and other expense, net	Forecasted transactions	21		(16)			Interest and other expense, net
Forecasted transactions	Forecasted transactions	(1)		0		1		(1)		Selling, general and administrative expenses	Forecasted transactions	2		2			Selling, general and administrative expenses
Commodity contracts	Commodity contracts	117		14		211		(183)		Cost of sales	Commodity contracts	237		94			Cost of sales
Equity method investment contracts											Equity method investment contracts	—		—			Gain on equity method investment transactions
Total	Total	$	94	$	(7)	$	294	$	(251)		Total	$	242	$	200

Early settlement of forecasted currency exchange contracts comprise $74 million in cost of sales, $5 million in selling, general and administrative expenses and $20 million in interest and other expense, net in the three months ended March 31, 2022.

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Note 10. Benefit Plans

Pension Plans

Components of Net Periodic Pension Cost:

Net periodic pension cost/(benefit) consisted of the following:

U.S. Plans Non-U.S. Plans
For the Three Months Ended
June 30, For the Three Months Ended
June 30,
2021 2020 2021 2020
(in millions)
Service cost $ 2 $ 2 $ 35 $ 29
Interest cost 10 13 30 36
Expected return on plan assets (18) (20) (107) (96)
Amortization:
Net loss from experience differences 5 4 33 28
Prior service benefit 0 0 (1) (1)
Curtailment credit (1)
0 0 (14) 0
Settlement losses and other expenses (2)
6 8 0 0
Net periodic pension cost/(benefit) $ 5 $ 7 $ (24) $ (4)
U.S. Plans Non-U.S. Plans
For the Six Months Ended
June 30, For the Six Months Ended
June 30,
2021 2020 2021 2020
(in millions)
Service cost $ 4 $ 3 $ 70 $ 59
Interest cost 20 26 59 73
Expected return on plan assets (36) (39) (213) (195)
Amortization:
Net loss from experience differences 9 8 66 57
Prior service benefit 0 0 (3) (3)
Curtailment credit (1)
0 0 (14) 0
Settlement losses and other expenses (2)
9 12 0 2
Net periodic pension cost/(benefit) $ 6 $ 10 $ (35) $ (7)

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~~(1)~~During the second quarter of 2021, we made a decision to freeze our Defined Benefit Pension Scheme in the United Kingdom. As a result, we recognized a curtailment credit of $(14 million) for the three and six months ended June 30, 2021 recorded within benefit plan non-service income. We also incurred incentive payment charges and other expenses related to this decision of $44 million for the three months ended June 30, 2021 and $45 million for the six months ended June 30, 2021 included in operating income.

~~(2)~~In connection with our Simplify to Grow Program, settlement losses and other expenses were $1 million for the three and six months ended June 30, 2021 and $4 million for the three and six months ended June 30, 2020. These losses were recorded within benefit plan non-service income.


	U.S. Plans				Non-U.S. Plans
	For the Three Months Ended March 31,				For the Three Months Ended March 31,
	2022		2021		2022		2021
	(in millions)
Service cost	$	1	$	2	$	39	$	35
Interest cost	11		10		41		29
Expected return on plan assets	(18)		(18)		(93)		(106)
Amortization:
Net loss from experience differences	3		4		19		33
Prior service cost/(benefit)	—		—		(1)		(2)
Settlement losses and other expenses	3		3		—		—
Net periodic pension cost/(benefit)	$	—	$	1	$	5	$	(11)

Employer Contributions:

During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, we contributed $4less than $1 million to our U.S. pension plans and ~~$117~~$64 million to our non-U.S. pension plans, including ~~$59~~$25 million to plans in the United Kingdom and Ireland. We make contributions to our pension plans in accordance with local funding arrangements and statutory minimum funding requirements. Discretionary contributions are made to the extent that they are tax deductible and do not generate an excise tax liability.

As of ~~June 30, 2021,~~March 31, 2022, over the remainder of ~~2021,~~2022, we plan to make further contributions of approximately $4$3 million to our U.S. plans and approximately ~~$111~~$121 million to our non-U.S. plans. Our actual contributions may be different due to many factors, including changes in tax and other benefit laws, significant differences between expected and actual pension asset performance or interest rates.

Multiemployer Pension Plans:

On July 11, 2019, we received an undiscounted withdrawal liability assessment related to our complete withdrawal from the Bakery and Confectionery Union and Industry International Pension Fund totaling $526 million requiring pro-rata monthly payments over 20 years. We began making monthly payments during the third quarter of 2019. In connection with the discounted long-term liability, we recorded accreted interest of $3 million in the three months ended March 31, 2022 and $6$3 million in the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 ~~and $3 million and $6 million in the three and six months ended June 30, 2020~~ within interest and other expense, net. As of ~~June 30, 2021,~~March 31, 2022, the remaining discounted withdrawal liability was ~~$368~~$356 million, with ~~$14~~$15 million recorded in other current liabilities and ~~$354~~$341 million recorded in long-term other liabilities.

Postretirement Benefit Plans

Net periodic postretirement health care cost/(benefit) consisted of the following:


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(in millions)									(in millions)
Service cost	Service cost	$	1	$	2	$	2	$	3	Service cost	$	1	$	1
Interest cost	Interest cost	2		3		4		6		Interest cost	2		2
Amortization:	Amortization:									Amortization:
Net loss from experience differences	Net loss from experience differences	0		1		1		4		Net loss from experience differences	—		1
Prior service credit	Prior service credit	0		(7)		0		(15)		Prior service credit	—		—
Net periodic postretirement health care cost/(benefit)	Net periodic postretirement health care cost/(benefit)	$	3	$	(1)	$	7	$	(2)	Net periodic postretirement health care cost/(benefit)	$	3	$	4

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Postemployment Benefit Plans

Net periodic postemployment cost consisted of the following:


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(in millions)									(in millions)
Service cost	Service cost	$	2	$	2	$	3	$	3	Service cost	$	1	$	1
Interest cost	Interest cost	0		1		1		2		Interest cost	1		1
Amortization of net gains	Amortization of net gains	0		(1)		(1)		(2)		Amortization of net gains	(1)		(1)
Net periodic postemployment cost	Net periodic postemployment cost	$	2	$	2	$	3	$	3	Net periodic postemployment cost	$	1	$	1

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Note 11. Stock Plans

Stock Options:

Stock option activity is reflected below:


		Shares Subject to Option	Weighted- Average Exercise or Grant Price Per Share	Average Remaining Contractual Term	Aggregate Intrinsic Value				Shares Subject to Option	Weighted- Average Exercise or Grant Price Per Share	Average Remaining Contractual Term	Aggregate Intrinsic Value
Balance at January 1, 2021		27,751,894	$39.51	5 years	$	527	million
Balance at January 1, 2022								Balance at January 1, 2022	23,503,759	$42.65	5 years	$	556	million
Annual grant to eligible employees	Annual grant to eligible employees	2,412,710	56.13					Annual grant to eligible employees	2,180,540	64.65
Additional options issued	Additional options issued	148,660	58.00					Additional options issued	1,710	65.97
Total options granted	Total options granted	2,561,370	56.24					Total options granted	2,182,250	64.65
Options exercised (1)	Options exercised (1)	(4,342,186)	34.15		$	110	million	Options exercised (1)	(2,329,139)	34.61		$	74	million
Options canceled	Options canceled	(347,906)	47.57					Options canceled	(208,761)	53.50
Balance at June 30, 2021		25,623,172	41.98	5 years	$	524	million
Balance at March 31, 2022								Balance at March 31, 2022	23,148,109	45.43	6 years	$	406	million

(1)Cash received from options exercised was ~~$73~~$70 million in the three months ~~and $140 million in the six months~~ ended ~~June 30, 2021.~~March 31, 2022. The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $7$10 million in the three months ~~and $14 million in the six months~~ ended ~~June 30, 2021.~~March 31, 2022.

Performance Share Units and Other Stock-Based Awards:

Our performance share unit, deferred stock unit and historically granted restricted stock activity is reflected below:


		Number of Shares	Grant Date	Weighted-Average Fair Value Per Share (3)	Weighted-Average Aggregate Fair Value (3)				Number of Shares	Grant Date	Weighted-Average Fair Value Per Share (3)	Weighted-Average Aggregate Fair Value (3)
Balance at January 1, 2021		4,896,990		$53.80
Balance at January 1, 2022								Balance at January 1, 2022	4,668,046		$57.04
Annual grant to eligible employees:	Annual grant to eligible employees:		Feb 18, 2021					Annual grant to eligible employees:		Feb 24, 2022
Performance share units	Performance share units	903,250		59.35				Performance share units	806,590		61.87
Deferred stock units	Deferred stock units	550,090		56.13				Deferred stock units	505,090		64.65
Additional shares granted (1)	Additional shares granted (1)	1,122,130	Various	53.50				Additional shares granted (1)	653,365	Various	60.17
Total shares granted	Total shares granted	2,575,470		56.11	$	145	million	Total shares granted	1,965,045		62.02	$	122	million
Vested (2)	Vested (2)	(2,351,013)		49.72	$	117	million	Vested (2)	(1,670,302)		55.34	$	92	million
Forfeited	Forfeited	(198,602)		56.66				Forfeited	(187,367)		61.42
Balance at June 30, 2021		4,922,845		56.84
Balance at March 31, 2022								Balance at March 31, 2022	4,775,422		59.51

(1)Includes performance share units and deferred stock units.

(2)The actual tax benefit/(expense) realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled ~~less than $1~~$5 million in the three months ~~and $6 million in the six months~~ ended ~~June 30, 2021.~~March 31, 2022.

(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.

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Share Repurchase Program:

Between 2013 and 2017, our Board of Directors authorized the repurchase of a total of $13.7 billion of our Common Stock 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. On December 2, 2020, our Board of Directors approved an increase of $4.0 billion in the share repurchase program, raising the authorization to $23.7 billion of Common Stock repurchases, and extended the program through December 31, 2023. Repurchases under the program are determined by management and are wholly discretionary. Prior to January 1, ~~2021,~~2022, we had repurchased approximately ~~$18.0~~$20.0 billion of Common Stock pursuant to this authorization. During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, we repurchased approximately ~~25.0~~11 million shares of Common Stock at an average cost of ~~$57.89~~$65.96 per share, or an aggregate cost of approximately ~~$1.5~~$0.8 billion, all of which was paid during the period. All share repurchases were funded through available cash and commercial paper issuances. As of ~~June 30, 2021,~~March 31, 2022, we have approximately ~~$4.3~~$2.9 billion in remaining share repurchase capacity.

Note 12. Commitments and Contingencies

Legal Proceedings:

We routinely are involved in legal proceedings, claims, disputes, regulatory matters and governmental inspections or investigations arising in the ordinary course of or incidental to our business, including those noted below in this section. We record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. For matters we have not provided for that are reasonably possible to result in an unfavorable outcome, management is unable to estimate the possible loss or range of loss or such amounts have been determined to be immaterial. At present we believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position, results of operations or cash flows. However, legal proceedings and government investigations are subject to inherent uncertainties, and unfavorable rulings or other events could occur. Unfavorable resolutions could involve substantial monetary damages. In addition, in matters for which conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in particular ways, precluding particular business practices or requiring other remedies. An unfavorable outcome might result in a material adverse impact on our business, results of operations or financial position.

On April 1, 2015, the U.S. Commodity Futures Trading Commission ("CFTC") filed a complaint against Kraft Foods Group and Mondelēz Global LLC (“Mondelēz Global”) in the U.S. District Court for the Northern District of Illinois (the "District Court"), Eastern Division (the “CFTC action”) following its investigation of activities related to the trading of December 2011 wheat futures contracts that occurred prior to the spin-off of Kraft Foods Group. The complaint alleges that Kraft Foods Group and Mondelēz Global (1) manipulated or attempted to manipulate the wheat markets during the fall of 2011; (2) violated position limit levels for wheat futures and (3) engaged in non-competitive trades by trading both sides of exchange-for-physical Chicago Board of Trade wheat contracts. The CFTC seeks civil monetary penalties of either triple the monetary gain for each violation of the Commodity Exchange Act (the “Act”) or $1 million for each violation of Section 6(c)(1), 6(c)(3) or 9(a)(2) of the Act and $140,000 for each additional violation of the Act, plus post-judgment interest; an order of permanent injunction prohibiting Kraft Foods Group and Mondelēz Global from violating specified provisions of the Act; disgorgement of profits; and costs and fees. On August 15, 2019, the District Court approved a settlement agreement between the CFTC and Mondelēz Global. The terms of the settlement, which are available in the District Court’s docket, had an immaterial impact on our financial position, results of operations and cash flows. On October 23, 2019, following a ruling by the United States Court of Appeals for the Seventh Circuit regarding Mondelēz Global's allegations that the CFTC and its Commissioners violated certain terms of the settlement agreement and the CFTC's argument that the Commissioners were not bound by the terms of the settlement agreement, the District Court vacated the settlement agreement and reinstated all pending motions that the District Court had previously mooted as a result of the settlement. The parties have reached a new agreement in principle to resolve the CFTC action and have submitted the settlement to the District Court for approval. The District Court cancelled a scheduled conference on June 4, 2020 to discuss the proposed settlement agreement but indicated that it would rule on pending motions in due course. Additionally, several class action complaints were filed against Kraft Foods Group and Mondelēz Global in the District Court by investors in wheat futures and options on behalf of themselves and others similarly situated. The complaints make similar allegations as those made in the CFTC action, and the plaintiffs are seeking monetary damages, interest and unjust enrichment; costs and fees; and injunctive, declaratory and other unspecified relief. In June 2015, these suits were consolidated in the District Court. On January 3, 2020, the District Court granted

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~~plantiffs'~~plaintiffs' request to certify a class. It is not possible to predict the outcome of these matters; however, based on our Separation and Distribution Agreement with Kraft Foods Group dated as of September 27, 2012, we expect to bear any monetary penalties or other payments in connection with the CFTC action and the class action. Although the CFTC action and the class action complaints involve the same alleged conduct, a resolution or decision with respect to one of the matters may not be dispositive as to the outcome of the other matter.

In November 2019, the European Commission informed us that it has initiated an investigation into our alleged infringement of European Union competition law through certain practices restricting cross-border trade within the European Economic Area. On January 28, 2021, the European Commission announced it has taken the next procedural step in its investigation and opened formal proceedings. We are cooperating with the investigation and expect to continue to engage with the European Commission as its investigation proceeds. It is not possible to predict how long the investigation will take or the ultimate outcome of this matter.

Third-Party Guarantees:

We enter into third-party guarantees primarily to cover long-term obligations of our vendors. As part of these transactions, we guarantee that third parties will make contractual payments or achieve performance measures. At ~~June 30, 2021,~~March 31, 2022, we had no material third-party guarantees recorded on our condensed consolidated balance sheet.

Tax Matters:

We are a party to various tax matter proceedings incidental to our business. These proceedings are subject to inherent uncertainties, and unfavorable outcomes could subject us to additional tax liabilities and could materially adversely impact our business, results of operations or financial position.

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Note 13. Reclassifications from Accumulated Other Comprehensive Income

The following table summarizes the changes in accumulated balances of each component of accumulated other comprehensive earnings/(losses) attributable to Mondelēz International. Amounts reclassified from accumulated other comprehensive earnings/(losses) to net earnings (net of tax) were net losses of ~~$25 million in the second quarter of 2021 and $62 million in the second quarter of 2020 and $59~~$42 million in the first ~~six months~~quarter of ~~2021~~2022 and ~~$166~~$34 million in the first ~~six months~~quarter of ~~2020.~~2021.


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(in millions)									(in millions)
Currency Translation Adjustments:	Currency Translation Adjustments:									Currency Translation Adjustments:
Balance at beginning of period	Balance at beginning of period	$	(8,782)	$	(9,686)	$	(8,655)	$	(8,320)	Balance at beginning of period	$	(9,097)	$	(8,655)
Currency translation adjustments	Currency translation adjustments	165		26		31		(1,255)		Currency translation adjustments	6		(134)
Reclassification to earnings related to:
Equity method investment transactions (1)		0		29		0		29

Tax (expense)/benefit	Tax (expense)/benefit	(8)		26		(10)		(64)		Tax (expense)/benefit	44		(2)
Other comprehensive earnings/(losses)	Other comprehensive earnings/(losses)	157		81		21		(1,290)		Other comprehensive earnings/(losses)	50		(136)
Less: other comprehensive (earnings)/loss attributable to noncontrolling interests	Less: other comprehensive (earnings)/loss attributable to noncontrolling interests	(2)		(4)		7		1		Less: other comprehensive (earnings)/loss attributable to noncontrolling interests	4		9
Balance at end of period	Balance at end of period	(8,627)		(9,609)		(8,627)		(9,609)		Balance at end of period	(9,043)		(8,782)
Pension and Other Benefit Plans:	Pension and Other Benefit Plans:									Pension and Other Benefit Plans:
Balance at beginning of period	Balance at beginning of period	$	(1,805)	$	(1,661)	$	(1,874)	$	(1,721)	Balance at beginning of period	$	(1,379)	$	(1,874)
Net actuarial gain/(loss) arising during period	Net actuarial gain/(loss) arising during period	(1)		(2)		(2)		(24)		Net actuarial gain/(loss) arising during period	44		(1)
Tax (expense)/benefit on net actuarial gain/(loss)	Tax (expense)/benefit on net actuarial gain/(loss)	0		(1)		0		(1)		Tax (expense)/benefit on net actuarial gain/(loss)	—		—
Losses/(gains) reclassified into net earnings:	Losses/(gains) reclassified into net earnings:									Losses/(gains) reclassified into net earnings:
Amortization of experience losses and prior service costs (2)	Amortization of experience losses and prior service costs (2)	37		24		72		49		Amortization of experience losses and prior service costs (2)	20		35
Settlement losses and other expenses ~~(1)~~(2)	Settlement losses and other expenses ~~(1)~~(2)	6		9		9		15		Settlement losses and other expenses ~~(1)~~(2)	3		3
Curtailment credit (2)		(14)		0		(14)		0

Tax expense/(benefit) on reclassifications (3)	Tax expense/(benefit) on reclassifications (3)	(8)		(7)		(17)		(15)		Tax expense/(benefit) on reclassifications (3)	(6)		(9)
Currency impact	Currency impact	(18)		(18)		23		41		Currency impact	32		41
Other comprehensive earnings/(losses)	Other comprehensive earnings/(losses)	2		5		71		65		Other comprehensive earnings/(losses)	93		69
Balance at end of period	Balance at end of period	(1,803)		(1,656)		(1,803)		(1,656)		Balance at end of period	(1,286)		(1,805)
Derivative Cash Flow Hedges:	Derivative Cash Flow Hedges:									Derivative Cash Flow Hedges:
Balance at beginning of period	Balance at beginning of period	$	(159)	$	(155)	$	(161)	$	(213)	Balance at beginning of period	$	(148)	$	(161)
Net derivative gains/(losses)	Net derivative gains/(losses)	16		(16)		9		(56)		Net derivative gains/(losses)	26		(7)
Tax (expense)/benefit on net derivative gain/(loss)	Tax (expense)/benefit on net derivative gain/(loss)	(2)		11		(1)		26		Tax (expense)/benefit on net derivative gain/(loss)	(1)		1
Losses/(gains) reclassified into net earnings:	Losses/(gains) reclassified into net earnings:									Losses/(gains) reclassified into net earnings:
Interest rate contracts (1)(4)		5		8		11		113
Interest rate contracts (2)(4)										Interest rate contracts (2)(4)	48		6
Tax expense/(benefit) on reclassifications (3)	Tax expense/(benefit) on reclassifications (3)	(1)		(1)		(2)		(25)		Tax expense/(benefit) on reclassifications (3)	(23)		(1)
Currency impact	Currency impact	(1)		(1)		2		1		Currency impact	2		3
Other comprehensive earnings/(losses)	Other comprehensive earnings/(losses)	17		1		19		59		Other comprehensive earnings/(losses)	52		2
Balance at end of period	Balance at end of period	(142)		(154)		(142)		(154)		Balance at end of period	(96)		(159)
Accumulated other comprehensive income attributable to Mondelēz International:	Accumulated other comprehensive income attributable to Mondelēz International:									Accumulated other comprehensive income attributable to Mondelēz International:
Balance at beginning of period	Balance at beginning of period	$	(10,746)	$	(11,502)	$	(10,690)	$	(10,254)	Balance at beginning of period	$	(10,624)	$	(10,690)
Total other comprehensive earnings/(losses)	Total other comprehensive earnings/(losses)	176		87		111		(1,166)		Total other comprehensive earnings/(losses)	195		(65)
Less: other comprehensive (earnings)/loss attributable to noncontrolling interests	Less: other comprehensive (earnings)/loss attributable to noncontrolling interests	(2)		(4)		7		1		Less: other comprehensive (earnings)/loss attributable to noncontrolling interests	4		9
Other comprehensive earnings/(losses) attributable to Mondelēz International	Other comprehensive earnings/(losses) attributable to Mondelēz International	174		83		118		(1,165)		Other comprehensive earnings/(losses) attributable to Mondelēz International	199		(56)
Balance at end of period	Balance at end of period	$	(10,572)	$	(11,419)	$	(10,572)	$	(11,419)	Balance at end of period	$	(10,425)	$	(10,746)

(1)~~These amounts include equity method investment transactions recorded within gain on equity method investment transactions.~~

~~(2)~~These reclassified losses are included in net periodic benefit costs disclosed in Note 10, Benefit Plans.

(2)These amounts include equity method investment transactions recorded within gain on equity method investment transactions.

(3)Taxes reclassified to earnings are recorded within the provision for income taxes.

(4)These reclassified gains or losses are recorded within interest and other expense, net.

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Note 14. Income Taxes

As of the ~~second~~first quarter of ~~2021,~~2022, our estimated annual effective tax rate, which excludes discrete tax impacts, was ~~23.7%~~24.8%. This rate reflected the impact of unfavorable foreign provisions under U.S. tax laws and our tax related to earnings from equity method investments (the earnings are reported separately on our statement of earnings and thus not included in earnings before income taxes), partially offset by favorable impacts from the mix of pre-tax income in various non-U.S. jurisdictions. The estimated annual effective tax rate also considers the impact of the establishment of a valuation allowance related to a deferred tax asset arising from the anticipated 2022 Ukraine loss. Our effective tax rate for the three months ended March 31, 2022 of 21.9% was favorably impacted by discrete net tax benefits of $62 million primarily driven by the Chipita acquisition, which resulted in the release of a portion of the valuation allowance recorded against the deferred tax asset for the step-up of intangible assets in Switzerland.

As of the first quarter of 2021, our estimated annual effective tax rate, which excluded discrete tax impacts, was 25.2%. This rate reflected the impact of unfavorable foreign provisions under U.S. tax laws and our tax related to earnings from equity method investments (the earnings are reported separately on our statement of earnings and thus not included in earnings before income taxes), partially offset by favorable impacts from the mix of pre-tax income in various non-U.S. jurisdictions. Our 2021 second quarter effective tax rate of 45.9% was unusually high due to a $128 million tax expense incurred in connection with the KDP share sale that occurred during the second quarter (the related gain is reported separately in our statement of earnings and thus not included in earnings before income taxes). Excluding this impact, our second quarter effective tax rate was 31.1%, reflecting a discrete net tax expense of $81 million. The discrete net tax expense primarily consisted of a $95 million net tax expense from the increase of our deferred tax liabilities resulting from tax legislation enacted during the second quarter (mainly in the United Kingdom), partially offset by a $11 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions. Our effective tax rate for the ~~six~~three months ended ~~June 30,~~March 31, 2021 of ~~30.9%~~19.1% was also unusually high due to the $128 million net tax expense incurred in connection with the KDP share sale. Excluding this impact, our effective tax rate for the six months ended June 30, 2021 was 24.5%, which was unfavorablyfavorably impacted by discrete net tax ~~expense~~benefits of ~~$15~~$65 million, primarily driven by ~~$99 million net tax expense from the increase of our deferred tax liabilities resulting from enacted tax legislation (mainly in the United Kingdom) partially offset by~~ a ~~$43~~$32 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions and a $27 million benefit from a U.S. amended tax return filed to reflect new guidance from the U.S. Treasury Department.

As of the second quarter of 2020, our estimated annual effective tax rate, which excluded discrete tax impacts, was 27.5%. This rate reflected the impact of unfavorable foreign provisions under U.S. tax laws and our tax related to earnings from equity method investments (the earnings are reported separately on our statement of earnings and thus not included in earnings before income taxes), partially offset by favorable impacts from the mix of pre-tax income in various non-U.S. jurisdictions. Our 2020 second quarter effective tax rate of 51.7% was unusually high due to a $261 million tax expense incurred in connection with the JDE Peet's transaction (the related gains are reported separately in our statement of earnings and thus not included in earnings before income taxes). Excluding this impact, our second quarter effective tax rate was 12.1% reflecting a discrete net tax benefit of $72 million. The discrete net tax benefit primarily consisted of a $70 million net benefit from the release of a valuation allowance in China as we now expect to utilize prior-year carryforward tax benefits to offset future taxable income. Our effective tax rate for the six months ended June 30, 2020 of 36.0% was also unusually high due to the $261 million net tax expense incurred in connection with the JDE Peet's transaction. Excluding this impact, our effective tax rate for the six months ended June 30, 2020 was 16.8%, which was favorably impacted by discrete net tax benefits of $100 million, primarily driven by the $70 million net benefit from the release of the China valuation allowance and a $24 million net benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions.

~~Table of Contents~~

Note 15. Earnings per Share

Basic and diluted earnings per share (“EPS”) were calculated as follows:


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(in millions, except per share data)									(in millions, except per share data)
Net earnings	Net earnings	$	1,079	$	545	$	2,047	$	1,288	Net earnings	$	861	$	968
Noncontrolling interest earnings	Noncontrolling interest earnings	(1)		(1)		(8)		(8)		Noncontrolling interest earnings	(6)		(7)
Net earnings attributable to Mondelēz International	Net earnings attributable to Mondelēz International	$	1,078	$	544	$	2,039	$	1,280	Net earnings attributable to Mondelēz International	$	855	$	961
Weighted-average shares for basic EPS	Weighted-average shares for basic EPS	1,407		1,431		1,410		1,432		Weighted-average shares for basic EPS	1,389		1,412
Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares	Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares	9		8		9		10		Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares	9		10
Weighted-average shares for diluted EPS	Weighted-average shares for diluted EPS	1,416		1,439		1,419		1,442		Weighted-average shares for diluted EPS	1,398		1,422
Basic earnings per share attributable to Mondelēz International	Basic earnings per share attributable to Mondelēz International	$	0.77	$	0.38	$	1.45	$	0.89	Basic earnings per share attributable to Mondelēz International	$	0.62	$	0.68
Diluted earnings per share attributable to Mondelēz International	Diluted earnings per share attributable to Mondelēz International	$	0.76	$	0.38	$	1.44	$	0.89	Diluted earnings per share attributable to Mondelēz International	$	0.61	$	0.68

We exclude antidilutive Mondelēz International stock options from our calculation of weighted-average shares for diluted EPS. We excluded antidilutive stock options and performance share units of ~~3.4~~2.1 million in the ~~second quarter~~first three months of ~~2021and 5.6 million in the second quarter of 2020~~2022 and 3.6 million in the first ~~six~~three months of ~~2021 and 4.8 million in the first six months of 2020.~~2021.

Note 16. Segment Reporting

We manufacture and market primarily snack food products, including biscuits, ~~(cookies, crackers and salted snacks),~~ chocolate, gum & candy and various cheese & grocery products, as well as powdered beverage products.

We manage our global business and report operating results through geographic units. We manage our operations by region to leverage regional operating scale, manage different and changing business environments more effectively and pursue growth opportunities as they arise across our key markets. Our regional management teams have responsibility for the business, product categories and financial results in the regions.

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Our operations and management structure are organized into 4 operating segments:

• Latin America

• AMEA

• Europe

• North America

We use segment operating income to evaluate segment performance and allocate resources. We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends. Segment operating income excludes unrealized gains and losses on hedging activities (which are a component of cost of sales), general corporate expenses (which are a component of selling, general and administrative expenses), amortization of intangibles, gains and losses on divestitures and acquisition-related costs (which are a component of selling, general and administrative expenses) in all periods presented. We exclude these items from segment operating income in order to provide better transparency of our segment operating results. Furthermore, we centrally manage benefit plan non-service income and interest and other expense, net. Accordingly, we do not present these items by segment because they are excluded from the segment profitability measure that management reviews.

~~Table of Contents~~

Our segment net revenues and earnings were:


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(in millions)									(in millions)
Net revenues:	Net revenues:									Net revenues:
Latin America	Latin America	$	669	$	511	$	1,338	$	1,237	Latin America	$	826	$	669
AMEA	AMEA	1,452		1,237		3,197		2,739		AMEA	1,867		1,745
Europe	Europe	2,474		2,138		5,321		4,722		Europe	2,935		2,847
North America	North America	2,047		2,025		4,024		3,920		North America	2,136		1,977
Net revenues	Net revenues	$	6,642	$	5,911	$	13,880	$	12,618	Net revenues	$	7,764	$	7,238
Earnings before income taxes:	Earnings before income taxes:									Earnings before income taxes:
Operating income:	Operating income:									Operating income:
Latin America	Latin America	$	54	$	(6)	$	130	$	72	Latin America	$	103	$	76
AMEA	AMEA	213		171		575		405		AMEA	272		362
Europe	Europe	413		297		970		769		Europe	377		557
North America	North America	299		424		569		805		North America	418		270
Unrealized gains/(losses) on hedging activities (mark-to-market impacts)	Unrealized gains/(losses) on hedging activities (mark-to-market impacts)	20		(2)		138		(187)		Unrealized gains/(losses) on hedging activities (mark-to-market impacts)	27		118
General corporate expenses	General corporate expenses	(78)		(111)		(142)		(187)		General corporate expenses	(50)		(64)
Amortization of intangible assets	Amortization of intangible assets	(32)		(50)		(70)		(93)		Amortization of intangible assets	(32)		(38)
Gain on acquisition	Gain on acquisition	0		0		9		0		Gain on acquisition	—		9
Acquisition-related costs	Acquisition-related costs	(17)		(10)		(24)		(15)		Acquisition-related costs	(21)		(7)
Operating income	Operating income	872		713		2,155		1,569		Operating income	1,094		1,283
Benefit plan non-service income	Benefit plan non-service income	54		31		98		64		Benefit plan non-service income	33		44
Interest and other expense, net	Interest and other expense, net	(58)		(85)		(276)		(275)		Interest and other expense, net	(168)		(218)
Earnings before income taxes	Earnings before income taxes	$	868	$	659	$	1,977	$	1,358	Earnings before income taxes	$	959	$	1,109

Items impacting our segment operating results are discussed in Note 1, Basis of Presentation, Note 2, Acquisitions and Divestitures, Note 3, Inventories, Note 4, Property, Plant and Equipment, Note 5, Goodwill and Intangible Assets, and Note 7, Restructuring Program. Also see Note 8, Debt and Borrowing Arrangements, and Note 9, Financial Instruments, for more information on our interest and other expense, net for each period.

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Net revenues by product category were:


		For the Three Months Ended June 30, 2021											For the Three Months Ended March 31, 2022
		Latin America		AMEA		Europe		North America		Total			Latin America		AMEA		Europe		North America		Total
		(in millions)											(in millions)
Biscuits	Biscuits	$	197	$	509	$	843	$	1,778	$	3,327	Biscuits	$	224	$	657	$	951	$	1,799	$	3,631
Chocolate	Chocolate	181		475		1,143		54		1,853		Chocolate	248		706		1,512		77		2,543
Gum & Candy	Gum & Candy	129		215		154		215		713		Gum & Candy	172		203		152		260		787
Beverages	Beverages	82		146		27		0		255		Beverages	102		197		32		—		331
Cheese & Grocery	Cheese & Grocery	80		107		307		0		494		Cheese & Grocery	80		104		288		—		472
Total net revenues	Total net revenues	$	669	$	1,452	$	2,474	$	2,047	$	6,642	Total net revenues	$	826	$	1,867	$	2,935	$	2,136	$	7,764

		For the Three Months Ended June 30, 2020											Three Months Ended March 31, 2021 (1)
		Latin America		AMEA		Europe		North America		Total			Latin America		AMEA		Europe		North America		Total
		(in millions)											(in millions)
Biscuits	Biscuits	$	154	$	458	$	694	$	1,804	$	3,110	Biscuits	$	177	$	583	$	810	$	1,736	$	3,306
Chocolate	Chocolate	119		361		1,001		39		1,520		Chocolate	192		670		1,544		63		2,469
Gum & Candy	Gum & Candy	65		153		135		182		535		Gum & Candy	131		194		148		178		651
Beverages	Beverages	90		157		20		0		267		Beverages	94		180		33		—		307
Cheese & Grocery	Cheese & Grocery	83		108		288		0		479		Cheese & Grocery	75		118		312		—		505
Total net revenues	Total net revenues	$	511	$	1,237	$	2,138	$	2,025	$	5,911	Total net revenues	$	669	$	1,745	$	2,847	$	1,977	$	7,238

		For the Six Months Ended June 30, 2021
		Latin America		AMEA		Europe		North America		Total
		(in millions)
Biscuits		$	374	$	1,092	$	1,645	$	3,514	$	6,625
Chocolate		373		1,145		2,695		117		4,330
Gum & Candy		260		409		302		393		1,364
Beverages		176		326		60		0		562
Cheese & Grocery		155		225		619		0		999
Total net revenues		$	1,338	$	3,197	$	5,321	$	4,024	$	13,880

		For the Six Months Ended June 30, 2020
		Latin America		AMEA		Europe		North America		Total
		(in millions)
Biscuits		$	328	$	966	$	1,440	$	3,402	$	6,136
Chocolate		313		904		2,364		95		3,676
Gum & Candy		247		338		308		423		1,316
Beverages		192		328		45		0		565
Cheese & Grocery		157		203		565		0		925
Total net revenues		$	1,237	$	2,739	$	4,722	$	3,920	$	12,618

(1) Our snack product categories include biscuits, chocolate and gum & candy. During 2022, we realigned some of our products between our biscuits and chocolate categories; as such, we reclassified the product category net revenues on a basis consistent with the 2022 presentation.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Description of the Company

We make and sell primarily snacks, including biscuits, ~~(cookies, crackers and salted snacks),~~ chocolate, gum & candy as well as various cheese & grocery and powdered beverage ~~products. We have operations in approximately 80 countries and sell our~~ products ~~in over 150 countries.~~around the world.

We aim to be the global leader in snacking. Our strategy is to drive long-term growth by focusing on three strategic priorities: accelerating consumer-centric growth, driving operational excellence and creating a winning growth culture. We believe the successful implementation of our strategic priorities and leveraging of our strong foundation of iconic global and local brands, an attractive global footprint, our market leadership in developed and emerging markets, our deep innovation, marketing and distribution capabilities, and our efficiency and sustainability efforts, will drive top- and bottom-line growth, enabling us to continue to create long-term value for our shareholders.

Recent Developments and Significant Items Affecting Comparability

~~COVID-19~~War in Ukraine

~~As the COVID-19 global pandemic continues, our main priority continues to be~~

In February 2022, Russia began a military invasion of Ukraine. For the safety of our employees, we stopped production and ~~helping~~closed our facilities in Ukraine. We are providing all of our employees with compensation and with help in securing shelter in neighboring countries. We have also made cash and in-kind donations to several humanitarian aid organizations in the region.

In March 2022, our two Ukrainian manufacturing facilities in Trostyanets and Vyshhorod were significantly damaged. In connection with the damage to these plants and impairment of other assets, primarily inventory, other plant, property and equipment, as well as increased allowances on our receivables, we recorded $143 million of total charges directly incurred as a result of the war in Ukraine, including an accrual for continued compensation for our employees in Ukraine (see Note 1, Basis of Presentation, to the condensed consolidated financial statements, and refer to Items Affecting Comparability of Financial Results for additional information.) We are increasing operations and providing resources in other primarily European manufacturing and distribution facilities to seek to continue supplying our Ukraine business's customers and consumers across Europe.

As a food company, we continue to work to support the continuity of food supply and provide packaged foods to consumers. We have discontinued new capital investments and suspended our advertising spending in Russia, but as a food company with more than 2,500 employees in Russia, we have not ceased operations given we believe we play a role in the continuity of the food supply. We are required to comply with applicable international sanctions and other measures that have been imposed on Russian entities and additional sanctions and measures are under consideration. We continue to evaluate the situation in Ukraine and Russia and our ability to control our operating activities and businesses on an ongoing basis, and we continue to consolidate both our Ukrainian and Russian subsidiaries. Prior to the onset of the war, Ukraine generated 0.5% and Russia generated 2.9% of 2021 consolidated net revenues.

We provide more information on risks related to the war in Ukraine in our Financial Outlook section and under Item 1A, Risk Factors.

COVID-19

In the third year of the COVID-19 global pandemic, our main priority remains the safety of our employees as well as continuing to help maintain the global food supply. ~~Together with our employees, customers, suppliers and other partners, we are working to emerge from~~During the pandemic, ~~stronger.~~

~~During~~particularly in 2020 and also in 2021, we experienced ~~a significant~~an overall increase in demand and revenue growth ~~in certain markets~~ as consumers increased their food purchases for in-home ~~consumption. Results were particularly strong~~consumption in ~~modern trade (such as large grocery supermarkets and retail chains), digital commerce and especially for categories such as biscuits. However, other~~many markets, while parts of our business were negatively affected by ~~mandated~~related lockdowns and ~~other related~~ restrictions. ~~This was especially so during the second quarter of 2020 for some of our emerging markets due to store closures, particularly in our Latin America region as well as parts of our AMEA region~~In late 2021, global supply chain, transportation and labor issues escalated and we experienced significantly higher operating costs, including higher overall raw material, transportation, labor and energy costs that have ~~a greater concentration of traditional trade (such~~continued to rise in 2022 as small family-run stores), our world travel retail (such as international duty-free stores), and our foodservice businesses as well as in categories like gum and candy, which are more traditionally purchased and consumed out of home. The negative impacts experienced in the ~~second quarter of 2020 began~~pandemic continues to ~~subside in the second half of 2020, as demand grew in both developed and emerging~~affect global markets and a number of our key markets returned to higher growth; however, our gum and candy, world travel retail and foodservice businesses as well as parts of our traditional trade business in parts of emerging markets continued to be negatively affected by the ongoing pandemic.operations.

During the first ~~half~~quarter of ~~2021, many~~2022, our net revenues continued to grow with net revenue growth of 7.3% and Organic Net Revenue growth of 8.6%, compared to the ~~trends~~first quarter of 2021. In the first quarter of 2022, we ~~saw~~continued to see increased demand primarily for our snack category products and revenue growth in ~~late 2020 were still in place.~~both our emerging and

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developed markets relative to the first quarter of 2021. We continued to ~~see~~also experience significantly higher operating costs. See additional details on our results in our Discussion and Analysis of Historical Results.

During the pandemic, we continued to closely monitor our cash position and cash flows and worked to increase our access to financing. As of March 31, 2022, our liquidity remains strong. During the first quarter of 2022, we funded our acquisition of Chipita (see additional information below) and issued $2 billion of long-term debt, refinancing approximately $2 billion of tendered and redeemed debt (refer to Note 8, Debt and Borrowing Arrangements for details) ahead of a 2022 rising interest rate environment. We generated $1.1 billion of cash from operations, ending the quarter with cash and cash equivalents of $1.9 billion as of March 31, 2022. We also have $9 billion of unused credit facilities available as well as ongoing access to additional financing. Our JDE Peet's and KDP equity method investments also give us additional financial flexibility.

We will continue to proactively manage our business in response to the evolving global economic environment and related uncertainty and business risks as well as prioritize and support our employees and customers. We continue to take steps to mitigate impacts to our supply chain, operations, technology and assets. We intend to continue to execute on our strategic operating plans as the situation evolves. We seek to further our strategic priorities and position the Company to withstand the current uncertainties and emerge stronger.

Chipita Acquisition

On January 3, 2022, we closed on our acquisition of Chipita S.A., which is a strategic complement to our existing snacks portfolio and advances our strategy to become the global leader in broader snacking. We paid cash consideration of €1.3 billion ($1.4 billion), net of cash received, and we assumed and paid down €0.4 billion ($0.4 billion) of Chipita's debt in January for a total purchase price of approximately €1.7 billion ($1.9 billion). Refer to our Discussion and Analysis of Historical Results for more information on the impact of the acquisition on our first quarter 2022 results and refer to Note 2, Acquisitions and Divestitures, for additional details on the acquisition.

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Summary of Results

•Net revenues increased 7.3% to $7.8 billion in the first three months of 2022 as compared to the same period in the prior year. In the first quarter of 2022, our net revenue growth continued to reflect increased demand for most of our snack category products in both our emerging and developed markets relative to ~~2020; however, revenue from parts of~~2021. Overall, our ~~business were not yet back to pre-pandemic levels. In the second quarter of 2021,~~ net revenue growth was 12.4% and Organic Net Revenue growth was 6.2%, compared to the second quarter of 2020 when the most significant negative impacts from the COVID-19 pandemic adversely affected parts of our business, particularly with more traditional trade and gum and candy sales as well as our foodservice and world travel retail businesses. While in the second quarter of 2021, we experienced double-digit revenue growth in gum and candy as well as significant growth in other areas such as foodservice and world travel retail, revenues in these businesses were not fully recovered to pre-pandemic levels. Our outlook for future snacks revenue growth remains strong, but as the pandemic continues, we anticipate some volatility in revenues until snacks consumption stabilizes to a more normal growth level.

In addition to tracking new developments, we continue to monitor ongoing impacts from the pandemic. To date, disruptions we experienced in operations due to the pandemic have been temporary and not material to our consolidated results. We discuss these and other ongoing impacts of COVID-19 below.

~~Our Employees, Customers and Communities~~

~~We have taken a number of actions to promote the health and safety of our employees, customers and consumers, which is our first priority:~~

•We implemented enhanced protocols to provide a safe and sanitary working environment for our employees. In many locations, our employees have worked remotely whenever possible. For employees who were unable to work remotely, we adopted a number of heightened protocols, consistent with those

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prescribed by the World Health Organization, related to social distancing (including staggering lunchtimes and shifts where possible and restricting in-person gatherings and non-essential travel) and enhanced hygiene and workplace sanitation. At a local level, we also provided additional flexibility and support to employees in our manufacturing facilities, distribution and logistics operations and sales organization. As our office-based employees begin to return to the workplace over coming months, we will follow enhanced safety protocols related to shared workspaces while also encouraging continued flexible and virtual work arrangements wherever possible.

•~~We have hired frontline employees in the U.S. and other locations to meet additional marketplace demand and promote uninterrupted functioning of our manufacturing, distribution and sales network.~~

•~~We have donated over $30 million to assist those impacted by COVID-19 and to support local and global organizations responding to food instability and providing emergency relief.~~

~~Our Supply Chain and Operations~~

We operate in the food and beverages industry and are part of the global food supply chain. One of our main objectives during the pandemic has been to maintain the availability of our products to meet the needs of our consumers. In response to increased demand, we increased production and, to date, we have not experienced material disruptions in our supply chain or operations:

•We leveraged learnings from our timely response to the initial outbreak in China, and we put in place procedures across our supply chain to help mitigate the risk that our manufacturing sites experience material closures or disruptions. We have worked with governments and healthcare providers to help provide access to vaccines for our frontline and office employees when and where possible at a local level.

•~~We have not experienced material disruptions in our workforce; however, mandatory or voluntary stay-at-home restrictions have resulted in increased levels of absenteeism.~~

•We continue to source raw ingredients, packaging, energy and transportation and deliver our products to our customers. Transportation and commodity costs have continued to increase. Although we monitor these costs and our exposure to commodity prices and hedge against input price increases, we cannot fully hedge against all cost increases and changes in costs, and our hedging strategies may not protect us from increases in specific raw material costs. We anticipate continued transportation, commodity and other cost volatility as the pandemic continues.

•While to date, the temporary disruptions in operations we experienced were not material to our consolidated results, the ongoing COVID-19 outbreak may still disrupt our global supply chain, operations and routes to market or those of our suppliers, their suppliers, or our co-manufacturers or distributors. These disruptions or our failure to effectively respond to them could increase product or distribution costs, prices and potentially affect the availability of our products.

•In 2020, a generally stronger U.S. dollar relative to other currencies in which we operate negatively affected our net revenue and net earnings reported in U.S. dollars. In the first six months of 2021, other currencies, such as the euro, British pound sterling and Australian dollar, strengthened relative to the U.S. dollar, which had a favorable effect on net revenues and net earnings.

•During the second quarter of 2020 especially, we incurred higher operating costs primarily for labor, customer service and logistics, security, personal protective equipment and cleaning. In the second half of 2020 and first half of 2021, our spending in these areas was significantly less but still above pre-COVID levels. Most other aspects of our global supply chain and operations did not change materially to date. While we have not had material disruptions, we do not know whether or how our supply chain or operations may be negatively affected if the pandemic persists for an extended period or worsens. We intend to continue to execute on our strategic operating plans as the situation evolves. Disruptions, higher operating costs or uncertainties like those noted above could result in delays or modifications to our plans and initiatives.

~~Our Liquidity~~

~~We believe the steps we have taken to enhance our capital structure and liquidity, prior to and during the pandemic, strengthened our ability to operate during the pandemic:~~

•~~During both 2020 and 2019, we generated $4.0 billion of cash from operations, or approximately $3 billion each year after deducting capital expenditures.~~

•Within cash provided by other investing activities, in 2021, we received approximately $1 billion of cash proceeds from the sale of KDP shares. We received $185 million of cash proceeds from our participation in the KDP secondary offering during the first quarter of 2020 and $1.9 billion from subsequent KDP share sales over the third and fourth quarters of 2020. During the second quarter of 2020, we received €350 million ($394 million) from our participation in the JDE Peet's public share offerings. (Refer to our Annual

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~~Report on Form 10-K for the year ended December 31, 2020 and Note 6,~~ ~~Equity Method Investments, for additional information).~~

•As of June 30, 2021, we had $1.9 billion, and as of December 31, 2020, we had $3.6 billion, of cash and cash equivalents on hand. Based on our current available cash and access to financing markets, we do not anticipate any issue funding our next long-term debt maturities of approximately $1.5 billion in October 2021, approximately $0.3 billion in December 2021 and approximately $1.2 billion in July 2022.

•We also have access to short-term and long-term financing markets and actively utilized these markets in 2020 and the first half of 2021. We continue to utilize the commercial paper markets in the United States and Europe for flexible, low-cost, short-term financing. We issued additional long-term debt several times since the beginning of 2020 due to favorable market conditions and opportunities to shift a portion of our funding mix from short-term to long-term debt at a low cost. We renewed one of our credit facilities during the first quarter of 2021 and now have $7.0 billion of undrawn credit facilities as well as other forms of short-term and long-term financing options available. As of June 30, 2021, we were, and we expect to continue to be, in compliance with our debt covenants (refer to the ~~Liquidity and Capital Resources~~ ~~section and Note 8,~~ ~~Debt and Borrowing Arrangements~~).

•In connection with various legislatively authorized 2020 tax payment deferral mechanisms available for income tax, indirect tax (such as value-added tax) and payroll tax in a number of jurisdictions, we were able to defer certain of these tax payments in 2020, which provided a cash benefit that reverses when the payments come due. Some of these payments were made in the first half of 2021; the remainder will come due in the second half of 2021 and in 2022. The benefits associated with the deferral of these tax payments were not material to our financial statements.

•~~After suspending our share repurchase program in March 2020 as a precautionary measure following the onset of the pandemic, we resumed the program in the fourth quarter of 2020.~~

~~Our Financial Position~~

•We continue to evaluate the realizability of our assets and indicators of potential impairment. We reviewed our receivables, inventory, right-of-use lease assets, long-lived assets, equity method and other long-term investments, deferred tax assets, goodwill and intangible assets.

•In connection with the ongoing pandemic, we identified a decline in demand for certain of our brands, primarily in the gum category, that prompted additional evaluation of our indefinite-life intangible assets. During the second quarter of 2021, we concluded that one small biscuit brand was impaired and we recorded a $32 million impairment charge. During the second and third quarters of 2020, we concluded that eight brands were impaired and we recorded $144 million of impairment charges in 2020, including $90 million in the second quarter of 2020 and $54 million in the third quarter of 2020. While we did not identify impairment triggers for other brands, there continues to be significant uncertainty due to the pandemic. If brand earnings expectations are not met or specific valuation factors outside of our control, such as discount rates, change significantly, then a brand or brands could become impaired in the future. Refer to Note 5, ~~Goodwill and Intangible Assets, for additional details on our intangible asset impairment evaluation.~~

•~~Restructuring and implementation activities continued to be in line with our Simplify to Grow Program strategic objectives.~~

•~~Our equity investments in JDE Peet's and KDP give us additional financial flexibility.~~

•~~We continue to monitor the quality of our assets and our overall financial position.~~

•~~We also continue to maintain oversight over our core process controls through our centralized shared service model, with key controls operating as designed.~~

Some of the initial impacts of the pandemic on our business moderated in the second half of 2020 and first half of 2021. While we have seen some improvements in business and economic conditions across many markets in which we do business, additional adverse impacts could arise that we cannot currently anticipate. Barring material business disruptions or other negative developments, we expect to continue to meet the demand of consumers for our snacks, food and beverage products. Our outlook for future snacks revenue growth remains strong, but as the pandemic continues, we anticipate some volatility in revenues until snacks consumption stabilizes to a more normal growth level. Also, different markets and parts of our business may also recover from the COVID-19 outbreak at different rates depending on many factors including vaccination levels or new COVID-19 variants and related outbreaks. As we continue to proactively manage our business in response to the evolving impacts of the pandemic, we will continue to communicate with and support our employees and customers; monitor and take steps to further safeguard our supply chain, operations, technology and assets; protect our liquidity and financial position; work toward our strategic priorities and monitor our financial performance. We seek to position the Company to withstand the current uncertainties related to this pandemic and to emerge stronger.

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~~KDP and JDE Peet's Equity Method Investment Transactions~~

~~KDP~~

On June 7, 2021, we participated in a secondary offering of KDP shares and sold approximately 28 million shares, which reduced our ownership interest to 6.4% of the total outstanding shares. We received $997 million of proceeds and recorded a pre-tax gain of $520 million (or $392 million after-tax) during the second quarter of 2021. The cash taxes associated with the KDP share sales are expected to be paid in 2021.

On March 4, 2020, we participated in a secondary offering of KDP shares and sold approximately 6.8 million shares, which reduced our ownership interest by 0.5% to 13.1% of the total outstanding shares. We received $185 million of proceeds and recorded a pre-tax gain of $71 million (or $54 million after-tax) during the first quarter of 2020. Subsequently, on August 3, 2020, we sold approximately 14.1 million shares and on September 9, 2020, we sold approximately 12.5 million shares, which in the aggregate reduced our KDP ownership interest to 11.2% of total outstanding shares. During the third quarter of 2020, we received $777 million of proceeds and recorded pre-tax gains of $335 million (or $258 million after-tax). On November 17, 2020, we also sold approximately 40.0 million shares, which reduced our ownership interest by 2.8% to 8.4%. We received $1,132 million of proceeds and recorded a pretax gain of $459 million (or $350 million after tax) during the fourth quarter of 2020. The cash taxes associated with the KDP share sales were paid in 2020.

~~JDE Peet's~~

During the second quarter of 2020, in connection with the JDE Peet's offering of its ordinary shares, we exchanged our 26.4% ownership interest in JDE for a 26.5% equity interest in JDE Peet’s. On May 29, 2020, we participated in the JDE Peet's offering and, with the subsequent exercise of the over-allotment option, we sold a total of approximately 11.1 million shares during the second quarter of 2020, retaining a 22.9% ownership interest in JDE Peet's. We received €350 million ($394 million) of total proceeds from the sales of JDE Peet's shares and we recorded a preliminary pre-tax gain of $121 million during the second quarter of 2020. We also incurred a $261 million tax expense that is payable in 2020 and 2021. During the third quarter of 2020, we increased our preliminary gain by $10 million to $131 million. During the fourth quarter of 2020, we reduced our tax expense by $11 million to $250 million. Consistent with our accounting for KDP and in connection with JDE Peet's becoming a public company, during the second quarter of 2020, we changed our accounting principle to reflect our share of JDE historical results and JDE Peet's ongoing results on a one-quarter lag basis while we continue to record dividends when cash is received. We determined a lag was preferable as it enables us to continue to report our quarterly and annual results on a timely basis and to record our share of JDE Peet's ongoing results once JDE Peet's has publicly reported its results. This change was applied retrospectively to all periods presented.

~~Refer to our Annual Report on Form 10-K for the year ended December 31, 2020 (Note 7,~~ ~~Equity Method Investments, and Note 16,~~ ~~Income Taxes) and Note 6,~~ ~~Equity Method Investments, within this report for additional information.~~

~~Summary of Results~~

•Net revenues increased 12.4% to $6.6 billion in the second quarter of 2021 and increased 10.0% to $13.9 billion in the first six months of 2021 as compared to the same period in the prior year. Our net revenue growth in the second quarter and first six months of 2021 reflects a year-over-year partial recovery from the most significant impacts of the pandemic to date. In developed markets, increased food purchases for in-home consumption continued to drive net revenue growth, though revenue declined in some markets as they lapped the prior-year periods' strong volume growth resulting from increased consumer demand last year due to the pandemic. In our emerging markets, the initial negative impacts from the pandemic that we experienced in the prior-year periods began to subside in many markets, though some markets were still challenged. In addition, our out-of-home consumption businesses, which experienced significant negative impacts from the pandemic in the prior-year periods, began to recover, particularly gum and candy and our foodservice and world travel retail businesses. Net revenue increased in the second quarter of 2021 and the first six months of 2021, driven by ~~the significant impact of favorable currency translation, favorable volume/mix,~~ higher net pricing, favorable volume/mix and incremental net revenues from ~~our acquisitions. Refer to our~~ ~~Discussion and Analysis of Historical Results~~ ~~below for additional information.~~acquisitions, partially offset by unfavorable currency translation.

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•Organic Net Revenue, a non-GAAP financial measure, increased ~~6.2%~~8.6% to ~~$6.3 billion in the second quarter of 2021 and increased 5.0% to $13.2~~$7.9 billion in the first ~~six~~three months of ~~2021~~2022 as compared to same period in the prior year. During the first three months of 2022, Organic Net Revenue ~~increased in the second quarter of 2021 and the first six months of 2021~~grew due to ~~favorable volume/mix and~~ higher net ~~pricing.~~pricing and favorable volume/mix. Refer to our Discussion and Analysis of Historical Results below 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 100.0%~~decreased (10.3)% to ~~$0.76 in the second quarter of 2021 and increased 61.8% to $1.44~~$0.61 in the first ~~six~~three months of ~~2021~~2022 as compared to the same period in the prior year.

–~~Diluted EPS increased in the second quarter of 2021,~~ The decrease was primarily driven by ~~lapping prior-year~~incremental costs ~~associated with~~incurred due to the ~~JDE Peet's transaction, a higher gain this quarter on equity method investment transactions, an increase~~war in ~~Adjusted EPS, lower intangible asset impairment charges and favorable year-over-year mark-to-market impacts from currency and commodity derivatives. These factors were partially offset by~~Ukraine, unfavorable ~~initial impacts from enacted tax law changes, higher Simplify to Grow program costs and the negative impact from pension participation changes.~~

–~~Diluted EPS increased during the first six months of 2021, primarily driven by lapping prior-year costs associated with the JDE Peet's transaction, favorable~~ year-over-year mark-to-market impacts from currency and commodity derivatives and intangible asset impairment charges incurred in 2022, partially offset by an increase in Adjusted EPS ~~a higher gain on equity method investment transactions, lapping the prior-year loss on interest rate swaps~~ and lower intangible asset impairment charges. These factors were partially offset by a loss on debt extinguishment and related expenses as we refinanced to lower-cost long-term debt in the first quarter of 2021, unfavorable initial impacts from enacted tax law changes, higher Simplify to Grow program ~~costs and the negative impact from pension participation changes.~~costs.

•Adjusted EPS, a non-GAAP financial measure, increased ~~8.2%~~6.3% to ~~$0.66 in the second quarter of 2021 and increased 14.1% to $1.46~~$0.84 in the first ~~six~~three months of ~~2021~~2022 as compared to the same period in the prior year. On a constant currency basis, Adjusted EPS increased ~~1.6%~~13.9% to ~~$0.62 in the second quarter of 2021 and increased 8.6% to $1.39~~$0.90 in the first ~~six~~three months of ~~2021~~2022 as compared to the same periods in the prior year.

– The increase in Adjusted EPS ~~increased in the second quarter of 2021,~~was driven by operating ~~activities, favorable currency translation,~~gains, lower interest expense and fewer shares outstanding, ~~and lower interest expense,~~ partially offset by unfavorable currency translation, higher taxes primarily due to a lower net ~~benefit~~benefits from non-recurring discrete tax ~~items.~~

–~~Adjusted EPS increased in the first six months of 2021, driven by operating activities, favorable currency translation,~~items and lower ~~interest expense, fewer shares outstanding, higher equity method investment earnings and higher~~ benefit plan non-service ~~income, partially offset by higher taxes due to changes in our mix of earnings and a lower net benefit from non-recurring discrete tax items.~~

income. 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).

Financial Outlook

We seek to achieve profitable, long-term growth and manage our business to attain this goal using our key operating metrics: Organic Net Revenue, Adjusted Operating Income and Adjusted EPS. We use these non-GAAP financial metrics and related computations, particularly growth in profit dollars, to evaluate and manage our business and to plan and make near- and long-term operating and strategic decisions. As such, we believe these metrics are useful to investors as they provide supplemental information in addition to our U.S. Generally Accepted Accounting Principles ("U.S. GAAP") financial results. We believe it is useful to provide investors with the same financial information that we use internally to make comparisons of our historical operating results, identify trends in our underlying operating results and evaluate our business. We believe our non-GAAP financial measures should always be considered in relation to our GAAP results. We have provided reconciliations between our GAAP and non-GAAP financial measures in Non-GAAP Financial Measures, which appears later in this section.

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In addition to monitoring our key operating metrics, we monitor developments and trends that could impact our revenue and profitability objectives, similar to those we highlighted in our most recently filed Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 and discussed in the footnotes to our financial statements.

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•Market conditions. Snack categories ~~grew~~continued to grow in the first ~~half~~quarter of ~~2021 due to increased~~2022. This is consistent with the latest findings in the third annual State of Snacking report, commissioned by Mondelēz International and issued in January 2022. The research report was conducted in conjunction with consumer ~~demand for snacks purchases during~~poll specialist The Harris Poll and summarizes the findings from interviews with thousands of consumers across 12 countries. The report underscores the growth of snacking worldwide and how behavior, sentiment and routines surrounding food are being reshaped by factors such as the COVID-19 pandemic. Snacking, which was already increasing among consumers, continues to grow as we noted in our latest Annual Report on Form 10-K. Our outlook for future snacks revenue growth remains strong, but we anticipate some volatility in revenues while current events and conditions continue. As ~~further discussed below,~~the COVID-19 pandemic, war in Ukraine and related impacts continue, we could see shifts in consumer demand and in our sales and product mix that could have a negative impact on our results. We continue to monitor volatility across markets, including global consumer, energy and other commodity, transportation, labor, currency and capital markets. We expect greater inflation, including input cost volatility and a higher aggregate cost environment in 2022, as the war in Ukraine, the pandemic, supply chain disruptions (affecting the availability of raw materials, packaging, transportation and other costs), rising energy costs, labor shortages, adverse weather events and conditions and other factors are expected to continue. Refer also to Commodity Trends and in Item 3, Quantitative and Qualitative Disclosures about Market ~~Risk~~Risk.

•,War in Ukraine. We expect to experience increased volatility and higher costs in international supply chains and global markets (including energy and other commodities, currencies and capital markets) in connection with the war in Ukraine with related negative impacts to our operating results that we cannot fully predict. We also expect increased inflationary pressures that will adversely impact our operating costs, particularly as the war continues. Demand for our products may also be negatively impacted, particularly in those markets closest to Ukraine or other markets that are more vulnerable to consumer price increases. We have also been expanding operations in other European facilities to continue supplying the majority of our Ukraine business's customers and consumers across Europe. We continue to take action and evaluate additional ways to mitigate risks, including executing business continuity plans to cover products produced in Ukraine and taking actions to adjust product offerings, package sizes and pricing to help address rising costs. While we are working to mitigate negative effects on our business, we may not be able to fully predict or respond to all impacts on a timely basis to prevent adverse impacts to our results. We also continue to monitor ~~volatility~~the situation in ~~global consumer, commodity, currency~~Russia and ~~capital markets that may continue until~~any risks to our employees, operations or assets. Any ongoing or new developments in the ~~COVID-19 pandemic is largely resolved. We expect input cost volatility~~war could have a material negative effect on our business and ~~a higher aggregate cost environment to continue for~~results in the ~~remainder of 2021 and while the pandemic and related recovery continue.~~future.

•~~COVID-19.~~ COVID-19. As described above, we continue to monitor and respond to the COVID-19 pandemic. While its impact is not ~~yet~~ fully known, it has had a material negative effect on the global and local economies and could have a material negative effect on our business and results in the future, particularly if there are significant adverse changes to consumer demand, product mix or operating costs; significant disruptions to the supply, production or distribution of our ~~products~~products; or deterioration of the credit or financial stability of our customers and other business partners. While we have seen some improvements in ~~overall economic conditions and the business climate in~~ many markets where we sell and operate, ~~new~~ COVID-19 variants and spikes in infections continue across a number of markets. Disruptions or our failure to effectively respond to them could further increase product or distribution costs and prices and negatively affect operations and results. Although we hedge to mitigate exposures to commodity and other input cost increases, we cannot fully hedge against all cost increases and changes in costs, and our hedging strategies may not protect us from increases in specific raw materials or other costs. We also may not be able to adjust pricing timely or fully, and this may negatively affect our revenue, margins or earnings. If ~~an unexpected~~a significant economic or credit deterioration occurs, it could impair credit availability and our ability to raise capital when needed. A significant disruption in the financial markets may also have a negative effect on our derivative counterparties and could impair our banking or other business partners, on whom we rely for access to capital and as counterparties for a number of our derivative contracts. ~~Any of these and other developments could materially harm our business, results of~~As we continue to manage operations ~~and financial condition. We~~during the pandemic, we will continue to prioritize the safety of our employees and ~~consumers. As we continue to manage operations during the pandemic,~~consumers and we may continue to incur increased labor, customer service, commodity, transportation and other costs. ~~As consumer demand for our products evolves, we could see continued shifts in product mix that could have a negative impact on results. As discussed in~~ ~~Recent Developments and Significant Items Affecting Comparability, we~~We are working to mitigate ~~any~~ negative impacts to our business from the COVID-19 ~~outbreak,~~pandemic, but we may not be able to fully predict or respond to all impacts on a timely basis to prevent adverse impacts to our results. Any of these and other developments could materially harm our business, results of operations and financial condition.

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•~~Brexit~~Ricolino acquisition.~~. Following the separation~~ On April 24, 2022, we entered into an agreement with Grupo Bimbo to acquire Ricolino, its confectionery business located primarily in Mexico for a purchase price of the United Kingdom from the European Union in 2020, a new trade arrangement was reached between the U.K. and E.U. that began on January 1, 2021. The main trade provisions include the continuation of no tariffs or quotas on trade between the U.K. and E.U.approximately $1.3 billion, subject to ~~prescribed trade terms, including but not limited to meeting product~~closing purchase price adjustments. The transaction, which will be funded through a combination of an issuance of debt and ~~labeling standards for both the U.K. and E.U. Cross-border trade between the U.K. and E.U.~~cash on hand, is ~~also~~ subject to ~~new customs regulations, documentation~~relevant antitrust approvals and ~~reviews. Our supply chain~~closing conditions and is expected to close in this market relies on imports of raw and packaging materials as well as finished goods. To date, we have not experienced significant delays at U.K.-E.U. border crossings. To comply with the new requirements, we increased resources in customer service and logistics, in our factories, and on our customs support teams. We adapted our processes and systems for the new and increased number of customs transactions. We continue to closely monitor and manage our inventory levels of imported raw materials, packaging and finished goods in the U.K. We have made investments in resources, systems and processes to meet the new ongoing requirements and we have not experienced material disruptions from the transition in 2021 to date. If the U.K.’s separation from,late Q3 or new trade arrangements with, the E.U. negatively impact the U.K. economy or result in disagreements on trade terms, delays affecting our supply chain or distribution, or disruptions to sales or collections, the impact to our results of operations, financial condition and cash flows could be material. In the six months ended June 30, 2021, we generated 9.1% of our consolidated net revenues in the U.K.early Q4 2022.

•Taxes. We continue to monitor existing and potential future tax ~~reform. During 2019, we recorded~~reform around the ~~impact~~world. In March 2022, President Biden sent a proposed 2023 budget to Congress and in November 2021, the U.S. House of ~~Swiss tax reform and we will continue to monitor for any additional interpretative guidance~~Representatives passed a bill that ~~could result in~~has not yet been acted on by the Senate; both proposals contain significant changes to ~~the amounts we have recorded. In the United States, while the 2017~~currently enacted U.S. tax ~~reform reduced~~rules. In addition, the Organization of Economic Cooperation and Development (OECD) continues to work toward agreement regarding model rules for a global minimum tax. These proposed U.S. ~~corporate tax rate~~ and ~~included some beneficial provisions, other provisions~~global legislative changes could have ~~and will continue to have, an adverse~~a material effect on ~~our results. Refer to our Annual Report on Form 10-K for the year ended December 31, 2020 for more information on Swiss and U.S. tax reform.~~us if enacted.

•Türkiye, Argentina and currency volatility. During the first quarter of 2022, currency exchange rate volatility increased. We discuss currency impacts on our results in our Discussion and Analysis of Historical Results. As further discussed in Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting, during the first quarter of 2022, we concluded that Türkiye became a highly inflationary economy for accounting purposes. As of April 1, 2022, we expect to apply highly inflationary accounting for our subsidiaries operating in Türkiye and change their functional currency from the Turkish lira to the U.S. dollar. Our operations in Türkiye contributed $43 million, or 0.6% of our condensed consolidated net revenues in the three months ended March 31, 2022. Based on a review of our Turkish lira-denominated monetary assets and liabilities, our operations in Türkiye had an immaterial net monetary liability position as of March 31, 2022. We also continue to apply highly inflationary accounting for our Argentinean subsidiaries. During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, we recorded a remeasurement loss of $8$5 million within selling, general and administrative expenses related to the revaluation of our Argentinean peso denominated net monetary position. The mix of monetary assets and liabilities and the exchange rate to convert Turkish lira and Argentinean pesos to U.S. dollars could change over time, so it is difficult to predict the overall impact of the TürkiyeandArgentina highly inflationary accounting on future net earnings.

•Gum Portfolio Review. During 2021, we began to conduct a strategic review of our developed market gum business. We continue to conduct the review and expect to have more information to share in mid-2022.

•U.K. advertising and promotion ban. In the United Kingdom, a ban on specific types of TV and online advertising of food containing levels of fat, sugar or salt above specified thresholds is expected to go into effect in 2023, and new measures restricting certain promotions and in-store placement of some of those products are expected to go into effect in October 2022. Although we are unable to estimate precisely the impact of the restrictions, they could significantly negatively affect our U.K. results of operations in 2022 and thereafter. In the three months ended March 31, 2022, we generated 9.3% of our consolidated net revenues in the U.K.

•Cybersecurity Risks. Global cybersecurity risks continue to increase and we continue to be on heightened alert and dedicate focused resources to network security, backup and disaster recovery and to provide ongoing workforce training and employ security measures to protect our systems and data. We also continue to monitor threats in our environment, including but not limited to the manufacturing environment and operational technologies, as well as adjusting information security controls based on updated threats. While we have taken security measures to protect our systems and data, security measures cannot provide absolute certainty or guarantee that we will be successful in preventing or responding to every breach or disruption on a timely basis.

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Discussion and Analysis of Historical Results

Items Affecting Comparability of Financial Results

The following table includes significant income or (expense) items that affected the comparability of our results of operations and our effective tax rates. Please refer to the notes to the condensed consolidated financial statements indicated below for more information. Refer also to the Consolidated Results of Operations – Net Earnings and Earnings per Share Attributable to Mondelēz International table for the after-tax per share impacts of these items.


			For the Three Months Ended June 30,						For the Six Months Ended June 30,								For the Three Months Ended March 31,
		See Note	2021			2020			2021			2020				See Note	2022			2021
			(in millions, except percentages)														(in millions, except percentages)
Simplify to Grow Program	Simplify to Grow Program	Note 7													Simplify to Grow Program	Note 7
Restructuring charges	Restructuring charges		$	(100)		$	(28)		$	(188)		$	(43)		Restructuring charges		$	(11)		$	(88)
Implementation charges	Implementation charges		(33)			(52)			(67)			(95)			Implementation charges		(20)			(34)
Intangible asset impairment charges	Intangible asset impairment charges	Note 5	(32)			(90)			(32)			(90)			Intangible asset impairment charges	Note 5	(78)			—
Mark-to-market gains/(losses) from derivatives (1)	Mark-to-market gains/(losses) from derivatives (1)	Note 9	17			(2)			134			(186)			Mark-to-market gains/(losses) from derivatives (1)	Note 9	28			117
Acquisitions:		Note 2
Acquisition integration costs			(2)			(2)			(3)			(2)
Acquisitions and divestiture-related costs:															Acquisitions and divestiture-related costs:	Note 2
Acquisition integration costs and contingent consideration adjustments (1)															Acquisition integration costs and contingent consideration adjustments (1)		(35)			(1)
Acquisition-related costs	Acquisition-related costs		(17)			(10)			(24)			(15)			Acquisition-related costs		(21)			(7)
Gain on acquisition	Gain on acquisition		—			—			9			—			Gain on acquisition		—			9
Divestiture-related costs	Divestiture-related costs		—			2			—			2			Divestiture-related costs		(1)			—
Costs associated with JDE Peet's transaction		Note 6	—			(48)			—			(48)
Incremental costs due to war in Ukraine (2)															Incremental costs due to war in Ukraine (2)	Note 1	(143)			—

Remeasurement of net monetary position	Remeasurement of net monetary position	Note 1	(3)			(3)			(8)			(5)			Remeasurement of net monetary position	Note 1	(5)			(5)
Impact from pension participation changes (1)	Impact from pension participation changes (1)	Note 10	(33)			(3)			(37)			(6)			Impact from pension participation changes (1)	Note 10	(3)			(4)
Impact from resolution of tax matters (1)		Note 12	7			—			7			—

Loss related to interest rate swaps		Note 8 & 9	—			—			—			(103)
Loss on debt extinguishment		Note 8	—			—			(137)			—

Loss on debt extinguishment and related expenses															Loss on debt extinguishment and related expenses	Note 8	(129)			(137)
Initial impacts from enacted tax law changes	Initial impacts from enacted tax law changes	Note 14	(95)			—			(99)			—			Initial impacts from enacted tax law changes	Note 14	—			(4)

Gain on equity method investment transactions (2)		Note 6	502			121			495			192
Equity method investee items (3)			(8)			(23)			(67)			(39)
Loss on equity method investment transactions (3)															Loss on equity method investment transactions (3)		(5)			(7)
Equity method investee items (4)															Equity method investee items (4)		1			(57)
Effective tax rate	Effective tax rate	Note 14	45.9		%	51.7		%	30.9		%	36.0		%	Effective tax rate	Note 14	21.9		%	19.1		%

(1)Includes impacts recorded in operating income and interest expense and other, net. Mark-to-market gains/(losses) above also include our equity method investment-related derivative contract mark-to-market gains/(losses) (refer to Note 9, Financial Instruments) that are recorded in the gain on equity method investment transactions on our condensed consolidated statement of earnings.

(2)~~Gain~~Incremental costs due to the war in Ukraine include direct charges such as asset impairments due to damaged facilities and inventory, higher expected allowances for uncollectible accounts receivable and committed compensation. Please see the Non-GAAP Financial Measures section at the end of this item and Note 1, Basis of Presentation – War in Ukraine, for additional information.

(3)Loss on equity method investment transactions is recorded outside pre-tax operating results on the condensed consolidated statement of earnings. See footnote (1) as mark-to-market gains/(losses) on our equity method-investment-related derivative contracts are presented in the table above within mark-to-market gains/(losses) from derivatives.

~~(3)~~(4)Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peet's and KDP equity method investees, including acquisition and divestiture-related costs and restructuring program costs.

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Consolidated Results of Operations

Three Months Ended ~~June 30:~~March 31:


		For the Three Months Ended June 30,									For the Three Months Ended March 31,
		2021		2020		$ change		% change			2022		2021		$ change		% change
		(in millions, except per share data)									(in millions, except per share data)
Net revenues	Net revenues	$	6,642	$	5,911	$	731	12.4	%	Net revenues	$	7,764	$	7,238	$	526	7.3	%
Operating income	Operating income	872		713		159		22.3	%	Operating income	1,094		1,283		(189)		(14.7)	%
Net earnings attributable to Mondelēz International	Net earnings attributable to Mondelēz International	1,078		544		534		98.2	%	Net earnings attributable to Mondelēz International	$	855	$	961	$	(106)	(11.0)	%
Diluted earnings per share attributable to Mondelēz International	Diluted earnings per share attributable to Mondelēz International	0.76		0.38		0.38		100.0	%	Diluted earnings per share attributable to Mondelēz International	$	0.61	$	0.68	$	(0.07)	(10.3)	%

Net Revenues – Net revenues increased ~~$731~~$526 million ~~(12.4%~~(7.3%) to ~~$6,642~~$7,764 million in the ~~second~~first quarter of ~~2021,~~2022, and Organic Net Revenue (1) increased ~~$368~~$619 million ~~(6.2%~~(8.6%) to ~~$6,279~~$7,857 million. Developed markets net ~~revenue~~revenues increased ~~8.9%~~2.7% and developed markets Organic Net Revenue increased ~~1.3%~~4.2% (1). Emerging markets net revenues increased ~~19.6%~~15.6% and emerging markets Organic Net Revenue increased 16.5% (1). The underlying changes in net revenues and Organic Net Revenue are detailed below:


	~~2021~~2022
Change in net revenues (by percentage point)
Total change in net revenues	~~12.4~~7.3	%
~~Add back~~Remove the following items affecting comparability:
~~Favorable~~Unfavorable currency	~~(5.3)~~4.1	pp

Impact of acquisitions	~~(0.9)~~(2.8)	pp
Total change in Organic Net Revenue (1)	~~6.2~~8.6	%
~~Favorable volume/mix~~	~~4.0~~	pp
Higher net pricing	~~2.2~~4.8	pp
Favorable volume/mix	3.8	pp

(1)Please see the Non-GAAP Financial Measures section at the end of this item.

Net revenue increase of ~~12.4%~~7.3% was driven by our underlying Organic Net Revenue growth of ~~6.2%, favorable currency~~8.6% and the impact of ~~acquisitions.~~acquisitions, partially offset by unfavorable currency translation. Overall, ~~our net revenues~~we continued to ~~be affected by the COVID-19 pandemic. In developed markets,~~see increased ~~food purchases~~demand for ~~in-home consumption continued to drive net revenue growth,~~our snack category products, though some markets ~~declined as they lapped the prior-year period's strong volume growth resulting from increased consumer demand last year~~are still challenged due to the pandemic. In emerging markets, the negative initial impacts we experienced from COVID-19 began to subside, resulting in strong revenue growth across most of our key markets, though some markets were still challenged. In addition, our sales of our gum and candy products grew as out-of-home consumption began to recover, as did our world travel business as the sharp reduction in global travel due to the pandemic began to subside. Incremental net revenues from acquisitions and favorable currency translation also added to revenue growth in the quarter.

Organic Net Revenue growth was driven by ~~favorable volume/mix and~~ higher net ~~pricing. Favorable~~pricing and favorable volume/~~mix in Latin America, Europe and AMEA, driven by strong volume gains, was partially offset by unfavorable volume/mix in North America.~~mix. Higher net pricing in all regions was due to the benefit of carryover pricing from ~~2020~~2021 as well as the effects of input cost-driven pricing actions taken during the first ~~six~~three months of ~~2021.~~2022. Favorable volume/mix across all regions was driven primarily by strong volume gains primarily across our snack category products. The January 3, 2022 acquisition of Chipita added incremental net revenues of $169 million (constant currency basis), the April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $15 million (constant currency basis) and the March 25, 2021 acquisition of Grenade added incremental net revenues of $22 million (constant currency basis). Refer to Note 2, Acquisitions and Divestitures, for additional information. Unfavorable currency impacts ~~increased~~decreased net revenues by ~~$311~~$299 million, due primarily to the strength of the U.S. dollar relative to several currencies, including the euro, Turkish lira, Russian ruble, Argentinean peso, British pound sterling and Australian dollar, partially offset by the strength of several currencies relative to the U.S. dollar, including the ~~euro, British pound sterling, Australian dollar,~~Brazilian real and Chinese yuan, Canadian dollar, Mexican peso and South African rand, partially offset by the strength of the U.S. dollar relative to several currencies, including the Argentinean peso, Turkish lira and Russian ruble. The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $23 million (constant currency basis), the March 25, 2021 acquisition of Grenade added incremental net revenues of $21 million (constant currency basis) and the January 4, 2021 acquisition of Hu Master Holdings added incremental net revenues of $8 million. Refer to Note 2, ~~Acquisitions and Divestitures,~~ ~~for additional information.~~yuan.

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Operating Income – Operating income ~~increased $159~~decreased $189 million ~~(22.3%~~(14.7%) to ~~$872~~$1,094 million in the ~~second~~first quarter of ~~2021.~~2022. Adjusted Operating Income (1) increased ~~$135~~$86 million ~~(14.3%~~(6.7%) to ~~$1,077~~$1,378 million and Adjusted Operating Income on a constant currency basis (1) increased ~~$68~~$175 million ~~(7.2%~~(13.5%) to ~~$1,010~~$1,467 million due to the following:

Operating
Income % Change
(in millions)
Operating Income for the Three Months Ended June 30, 2020 $ 713
   Simplify to Grow Program (2)
76
   Intangible asset impairment charges (3)
90
   Mark-to-market losses from derivatives (4)
2
   Acquisition integration costs (5)
2
   Acquisition-related costs (5)
10
   Divestiture-related costs (5)
(2)
   Costs associated with JDE Peet's transaction (6)
48
Remeasurement of net monetary position (7)
3
Adjusted Operating Income (1) for the
   Three Months Ended June 30, 2020
$ 942
   Higher net pricing 130
   Higher input costs (20)
Favorable volume/mix 45
   Higher selling, general and administrative expenses (101)
   Lower amortization of intangible assets 20
   Impact from acquisitions (5)
(3)
   Other
(3)
Total change in Adjusted Operating Income (constant currency) (1)
68 7.2 %
Favorable currency translation 67
Total change in Adjusted Operating Income (1)
135 14.3 %
Adjusted Operating Income (1) for the
   Three Months Ended June 30, 2021
$ 1,077
   Simplify to Grow Program (2)
(132)
   Intangible asset impairment charges (3)
(32)
   Mark-to-market gains from derivatives (4)
20
   Acquisition integration costs (5)
(2)
   Acquisition-related costs (5)
(17)
Remeasurement of net monetary position (7)
(3)
   Impact from pension participation changes (8)
(44)
   Impact from resolution of tax matters (9)
5
Operating Income for the Three Months Ended June 30, 2021 $ 872 22.3 %


	Operating Income		% Change
	(in millions)
Operating Income for the Three Months Ended March 31, 2021	$	1,283
Simplify to Grow Program (2)	122

Mark-to-market gains from derivatives (3)	(118)

Acquisition integration costs and contingent consideration adjustments (4)	1
Acquisition-related costs (4)	7


Gain on acquisition (4)	(9)


Remeasurement of net monetary position (5)	5
Impact from pension participation changes (6)	1









Adjusted Operating Income (1) for the Three Months Ended March 31, 2021	$	1,292
Higher net pricing	349
Higher input costs	(191)
Favorable volume/mix	79
Higher selling, general and administrative expenses	(77)
Lower amortization of intangible assets	7
Impact from acquisitions (4)	7


Other	1
Total change in Adjusted Operating Income (constant currency) (1)	175		13.5	%
Unfavorable currency translation	(89)
Total change in Adjusted Operating Income (1)	86		6.7	%
Adjusted Operating Income (1) for the Three Months Ended March 31, 2022	$	1,378
Simplify to Grow Program (2)	(31)
Intangible asset impairment charges (7)	(78)
Mark-to-market gains from derivatives (3)	27

Acquisition integration costs and contingent consideration adjustments (4)	(32)
Acquisition-related costs (4)	(21)
Divestiture-related costs (4)	(1)




Incremental costs due to war in Ukraine (5)	(143)
Remeasurement of net monetary position (5)	(5)










Operating Income for the Three Months Ended March 31, 2022	$	1,094	(14.7)	%

(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.~~

~~(4)Refer to Note~~ 9, Financial Instruments, ~~Note 16,~~ ~~Segment Reporting~~, and the 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)~~(4)Refer to Note 2, Acquisitions and Divestitures, for more information on the January 3, 2022 acquisition of Chipita, the April 1, 2021 acquisition of Gourmet Food Holdings Pty Ltd, the March 25, 2021 acquisition of a majority interest in Grenade and the January 4, 2021 acquisition of the remaining 93% of equity in Hu Master Holdings and the April 1, 2020 acquisition of a significant majority interest in Give & Go. Refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for more information on the May 28, 2019 divestiture of most of our cheese business in the Middle East and Africa.Holdings.

~~(6)Refer to Note 6,~~ ~~Equity Method Investments,~~ ~~for more information on the JDE Peet's transaction.~~

~~(7)~~(5)Refer to Note 1, Basis of Presentation ~~– Currency Translation and Highly Inflationary Accounting~~, for information on our accounting for the war in Ukraine and our application of highly inflationary accounting for Argentina.

~~(8)~~(6)Refer to Note 10, Benefit Plans, for more information.

~~(9)~~(7)Refer to Note ~~12,~~5, ~~Commitments~~Goodwill and ~~Contingencies~~Intangible Assets, for more information.

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During the ~~second~~first quarter of ~~2021,~~2022, we realized higher net pricing and favorable volume/mix, which was partially offset by increased input costs. Higher net pricing, which included the carryover impact of pricing actions taken in ~~2020~~2021 as well as the effects of input cost-driven pricing actions taken during the first ~~six~~three months of ~~2021,~~2022, was reflected across all regions. Favorable volume/mix was driven by Europe, Latin America and AMEA, partially offset by unfavorable volume/mix in North America. Overall volume/mix benefited from ~~volume gains as we lapped the significant negative impacts of the pandemic in many of our key markets, while in North America, we lapped high~~strong volume growth ~~in the prior-year quarter from increased consumer demand~~ due to ~~the pandemic.~~continued increased demand for our snack category products. The increase in input costs was driven by higher raw material costs, partially offset by lower manufacturing costs driven by ~~productivity and lower incremental COVID-19 related costs.~~productivity. Higher raw material costs were in part due to ~~increased~~higher packaging, edible oils, dairy, energy, grains, sugar and other ingredient costs, partially offset by favorable year-over-year currency exchange transaction costs on imported materials ~~as well as higher packaging, oils, sugar,~~and lower cocoa ~~energy, nuts, grains and other ingredients costs, partially offset by lower dairy~~ costs.

Total selling, general and administrative expenses increased ~~$140~~$129 million from the ~~second~~first quarter of ~~2020,~~2021, due to a number of factors noted in the table above, including in part, ~~an unfavorable currency impact related to expenses,~~ the impact ~~from pension participation changes,~~of acquisitions, higher acquisition integration costs, incremental ~~expenses from acquisitions~~costs incurred due to the war in Ukraine and higher acquisition-related costs, which were partially offset by ~~lapping prior-year costs associated with the JDE Peet's transaction,~~a favorable currency impact related to expenses and lower implementation costs incurred for the Simplify to Grow ~~Program and the favorable impact from the resolution of a tax matter.~~Program. Excluding these factors, selling, general and administrative expenses increased ~~$101~~$77 million from the ~~second~~first quarter of ~~2020.~~2021. The increase was driven primarily by higher advertising and consumer promotion costs and higher overhead ~~costs.~~costs reflecting increased investments in route-to-market capabilities.

~~Favorable~~Unfavorable currency changes ~~increased~~decreased operating income by ~~$67~~$89 million due primarily to the strength of ~~several~~the U.S. dollar relative to most currencies, including the Russian ruble, euro, Argentinean peso, British pound sterling, Turkish lira and Australian dollar, partially offset by the strength of a few currencies relative to the U.S. dollar, including the ~~euro, British pound sterling, Australian dollar,~~Brazilian real and Chinese ~~yuan and Canadian dollar, partially offset by the strength of the U.S. dollar relative to several currencies, including the Argentinean peso, Turkish lira and Swiss franc.~~yuan.

Operating income margin ~~increased~~decreased from ~~12.1%~~17.7% in the ~~second~~first quarter of ~~2020~~2021 to ~~13.1%~~14.1% in the ~~second~~first quarter of ~~2021.~~2022. The ~~increase~~decrease was driven primarily by ~~lower intangible asset impairment charges, lapping prior-year~~incremental costs ~~associated with~~incurred due to the ~~JDE Peet's transaction, a favorable~~war in Ukraine, unfavorable year-over-year change in mark-to-market gains/(losses) from currency and commodity hedging activities, ~~and~~intangible asset impairment charges incurred in 2022, higher acquisition integration costs, lower Adjusted Operating Income margin, higher acquisition-related costs and lapping a prior-year gain on acquisition, partially offset by ~~higher~~lower Simplify to Grow program ~~costs and the impact of pension participation changes.~~costs. Adjusted Operating Income margin ~~increased~~decreased from ~~15.9%~~17.9% for the ~~second~~first quarter of ~~2020~~2021 to ~~16.2%~~17.7% for the ~~second~~first quarter of ~~2021.~~2022. The ~~increase~~decrease was driven primarily by ~~lower manufacturing~~higher raw material costs and unfavorable product mix, partially offset by higher net pricing and overhead ~~leverage, partially offset by higher raw material costs, unfavorable product mix and higher advertising and consumer promotion costs.~~cost leverage.

3937

Table of Contents

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of ~~$1,078~~$855 million ~~increased~~decreased by ~~$534~~$106 million ~~(98.2%~~(11.0%) in the ~~second~~first quarter of ~~2021.~~2022. Diluted EPS attributable to Mondelēz International was ~~$0.76~~$0.61 in the ~~second~~first quarter of ~~2021, up $0.38 (100.0%~~2022, down $0.07 (10.3%) from the ~~second~~first quarter of ~~2020.~~2021. Adjusted EPS (1) was ~~$0.66~~$0.84 in the ~~second~~first quarter of ~~2021,~~2022, up $0.05 ~~(8.2%~~(6.3%) from the ~~second~~first quarter of ~~2020.~~2021. Adjusted EPS on a constant currency basis (1) was ~~$0.62~~$0.90 in the ~~second~~first quarter of ~~2021,~~2022, up ~~$0.01 (1.6%~~$0.11 (13.9%) from the ~~second~~first quarter of ~~2020.~~2021.


	Diluted EPS

Diluted EPS Attributable to Mondelēz International for the Three Months Ended ~~June 30, 2020~~March 31, 2021	$	~~0.38~~0.68
Simplify to Grow Program (2)	~~0.04~~0.07

~~Intangible asset impairment charges~~Mark-to-market gains from derivatives (2)	~~0.05~~ (0.07)



Acquisition-related costs (2)	0.01

Net earnings from divestitures (3)	(0.01)








~~Costs associated with JDE Peet's transaction~~Loss on debt extinguishment and related expenses (4)	0.07



Equity method investee items (5)	0.04

Adjusted EPS (1) for the Three Months Ended March 31, 2021	$	0.79
Increase in operations	0.09




Changes in benefit plan non-service income	(0.01)
Changes in interest and other expense, net (6)	0.03
Changes in income taxes (7)	(0.02)
Changes in shares outstanding (8)	0.02
Adjusted EPS (constant currency) (1) for the Three Months Ended March 31, 2022	$	0.90
Unfavorable currency translation	(0.06)
Adjusted EPS (1) for the Three Months Ended March 31, 2022	$	0.84
Simplify to Grow Program (2)	~~0.21~~ (0.02)
Intangible asset impairment charges (2)	(0.04)
Mark-to-market gains from derivatives (2)	0.02

Acquisition integration costs and contingent consideration adjustments (2)	0.01
Acquisition-related costs (2)	(0.02)










~~Gain on equity method investment transaction~~Incremental costs due to war in Ukraine ~~(4)~~(2)	~~(0.08)~~(0.11)
~~Equity method investee items~~Loss on debt extinguishment and related expenses ~~(5)~~(4)	~~0.01~~

~~Adjusted EPS~~ ~~(1)~~ ~~for the Three Months Ended June 30, 2020~~	$	~~0.61~~
~~Increase in operations~~	~~0.04~~ (0.07)





~~Changes in interest and other expense, net~~ ~~(6)~~	~~0.01~~
~~Changes in income taxes~~ ~~(7)~~	~~(0.05)~~
~~Changes in shares outstanding~~ ~~(8)~~	~~0.01~~
~~Adjusted EPS (constant currency)~~ ~~(1)~~ ~~for the Three Months Ended June 30, 2021~~	$	~~0.62~~
~~Favorable currency translation~~	~~0.04~~
~~Adjusted EPS~~ ~~(1)~~ ~~for the Three Months Ended June 30, 2021~~	$	~~0.66~~
~~Simplify to Grow Program~~ ~~(2)~~	~~(0.07)~~
~~Intangible asset impairment charges~~ ~~(2)~~	~~(0.02)~~
~~Mark-to-market gains from derivatives~~ ~~(2)~~	~~0.02~~


~~Acquisition-related costs~~ ~~(2)~~	~~(0.01)~~






~~Impact from pension participation changes~~ ~~(2)~~	~~(0.02)~~




~~Initial impacts from enacted tax law changes~~ ~~(7)~~	~~(0.07)~~

~~Gain on equity method investment transactions~~ ~~(4)~~	~~0.27~~


Diluted EPS Attributable to Mondelēz International for the Three Months Ended ~~June 30, 2021~~March 31, 2022	$	~~0.76~~0.61

(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)Includes the impact from ~~last-year's~~2021 partial sales of our equity method ~~investments~~investment in KDP ~~and JDE Peet’s~~ as if the sales occurred at the beginning of all periods presented. ~~The second quarter 2021 sales of KDP shares will be reflected on a lag basis in the third quarter of 2021.~~

(4)Refer to Note ~~6, Equity Method Investments,~~8, Debt and Borrowing Arrangements, for more information on the ~~gain~~loss on ~~equity method investment transactions.~~debt extinguishment and related expenses.

(5)Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peet's and KDP equity method investees, such as acquisition and divestiture-related costs and restructuring program costs.

(6)Excludes the currency impact on interest expense related to non-U.S. dollar-denominated debt, which is included in currency translation.

(7)Refer to Note 14, Income Taxes, for more information on the items affecting income taxes.

(8)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.

~~Table of Contents~~

~~Six Months Ended June 30:~~

For the Six Months Ended
June 30,
2021 2020 $ change % change
(in millions, except per share data)
Net revenues $ 13,880 $ 12,618 $ 1,262 10.0 %
Operating income 2,155 1,569 586 37.3 %
Net earnings attributable to
Mondelēz International 2,039 1,280 759 59.3 %
Diluted earnings per share attributable to
Mondelēz International 1.44 0.89 0.55 61.8 %

~~Net Revenues~~ ~~– Net revenues increased $1,262 million (10.0%) to $13,880 million in the first six months of 2021, and Organic Net Revenue~~ ~~(1)~~ ~~increased $625 million (5.0%) to $13,243 million. Developed markets net revenue increased 8.9% and developed markets Organic Net Revenue increased 0.8%. Emerging markets net revenues increased12.0% and emerging markets Organic Net Revenue increased12.8%~~ ~~(1). The underlying changes in net revenues and Organic Net Revenue are detailed below:~~


	~~2021~~
~~Change in net revenues (by percentage point)~~
~~Total change in net revenues~~	~~10.0~~	%
~~Add back the following items affecting comparability:~~
~~Favorable currency~~	~~(3.7)~~	pp

~~Impact of acquisitions~~	~~(1.3)~~	pp
~~Total change in Organic Net Revenue~~ ~~(1)~~	~~5.0~~	%
~~Favorable volume/mix~~	~~2.8~~	pp
~~Higher net pricing~~	~~2.2~~	pp

~~(1)Please see the~~ ~~Non-GAAP Financial Measures~~ ~~section at the end of this item.~~

Net revenue increase of 10.0% was driven by our underlying Organic Net Revenue growth of 5.0%, favorable currency and the impact of acquisitions. Overall net revenues were higher in developed markets, as demand for our products grew in certain markets as increased food purchases for in-home consumption continued, though some markets declined as they lapped the prior-year period's strong volume growth resulting from increased consumer demand last year due to the pandemic. In emerging markets, the negative initial impacts we experienced from COVID-19 began to subside, resulting in strong revenue growth across most of our key markets, though some markets were still challenged. In addition, our sales of our gum and candy products improved as out-of-home consumption began to recover, as did our world travel business as the sharp reduction in global travel due to the pandemic began to subside. Incremental net revenues from acquisitions and favorable currency translation also added to revenue growth in the quarter.

Organic Net Revenue growth was driven by favorable volume/mix and higher net pricing. Favorable volume/mix in AMEA, Europe and Latin America, driven by strong volume gains, was partially offset by unfavorable volume/mix in North America. Net pricing was up, which includes the benefit of carryover pricing from 2020 as well as the effects of input cost-driven pricing actions taken during the first six months of 2021. Higher net pricing was reflected in all regions. Favorable currency impacts increased net revenues by $471 million, due primarily to the strength of several currencies relative to the U.S. dollar, including the euro, British pound sterling, Australian dollar, Chinese yuan, Canadian dollar, South African rand, Swedish Krona and Mexican peso, partially offset by the strength of the U.S. dollar relative to several currencies, including the Argentinean peso, Brazilian real, Russian ruble and Turkish lira. The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $23 million (constant currency basis), the March 25, 2021 acquisition of Grenade added incremental net revenues of $21 million (constant currency basis), the January 4, 2021 acquisition of Hu Master Holdings added incremental net revenues of $16 million and the April 1, 2020 acquisition of Give & Go added incremental net revenues of $106 million. Refer to Note 2, ~~Acquisitions and Divestitures, for additional information.~~

~~Table of Contents~~

~~Operating Income~~ ~~– Operating income increased $586 million (37.3%) to $2,155 million in the first six months of 2021. Adjusted Operating Income~~ ~~(1)~~ ~~increased $321 million (15.7%) to $2,369 million and Adjusted Operating Income on a constant currency basis~~ ~~(1)~~ ~~increased $210 million (10.3%) to $2,258 million due to the following:~~

Operating
Income % Change
(in millions)
Operating Income for the Six Months Ended June 30, 2020 $ 1,569
   Simplify to Grow Program (2)
134
   Intangible asset impairment charges (3)
90
   Mark-to-market losses from derivatives (4)
187
   Acquisition integration costs (5)
2
   Acquisition-related costs (5)
15
   Divestiture-related costs (5)
(2)
   Costs associated with JDE Peet's transaction (6)
48
Remeasurement of net monetary position (7)
5
Adjusted Operating Income (1) for the
   Six Months Ended June 30, 2020
$ 2,048
   Higher net pricing 281
   Higher input costs (70)
   Favorable volume/mix 52
   Higher selling, general and administrative expenses (82)
   Lower amortization of intangible assets 36
   Impact from acquisitions (5)
(3)
   Other
(4)
Total change in Adjusted Operating Income (constant currency) (1)
210 10.3 %
   Favorable currency translation 111
Total change in Adjusted Operating Income (1)
321 15.7 %
Adjusted Operating Income (1) for the
   Six Months Ended June 30, 2021
$ 2,369
   Simplify to Grow Program (2)
(254)
   Intangible asset impairment charges (3)
(32)
   Mark-to-market gains from derivatives (4)
138
   Acquisition integration costs (5)
(3)
   Acquisition-related costs (5)
(24)
   Gain on acquisition (5)
9
   Remeasurement of net monetary position (7)
(8)
   Impact from pension participation changes (8)
(45)
   Impact from resolution of tax matters (9)
5
Operating Income for the Six Months Ended June 30, 2021 $ 2,155 37.3 %

~~(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.~~

~~(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,~~ ~~Acquisitions and Divestitures~~, for more information on the April 1, 2021 acquisition of Gourmet Food Holdings Pty Ltd, the March 25, 2021 acquisition of a majority interest in Grenade, the January 4, 2021 acquisition of the remaining 93% of equity in Hu Master Holdings and the April 1, 2020 acquisition of a significant majority interest in Give & Go. Refer to our Annual Report on Form 10-K for the year ended December 31, 2020, for more information on the May 28, 2019 divestiture of most of our cheese business in the Middle East and Africa.

~~(6)Refer to Note 6,~~ ~~Equity Method Investments,~~ ~~for more information on the JDE Peet's transaction.~~

~~(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.~~

~~(8)Refer to Note 10,~~ ~~Benefit Plans, for more information.~~

~~(9)Refer to Note 12,~~ ~~Commitments and Contingencies, for more information.~~

~~Table of Contents~~

During the first six months of 2021, we realized higher net pricing and favorable volume/mix, which was partially offset by increased input costs. Higher net pricing, which included the carryover impact of pricing actions taken in 2020 as well as the effects of input cost-driven pricing actions taken during the first six months of 2021, was reflected in all regions. Favorable volume/mix was driven by Europe, AMEA and Latin America, partially offset by unfavorable volume/mix in North America. Overall, volume/mix benefited from volume gains as we lapped the significant negative impacts of the pandemic in many of our key markets, while in North America, we lapped high volume growth in the prior-year period from increased consumer demand due to the pandemic. The increase in input costs was driven by higher raw material costs, partially offset by lower manufacturing costs driven by productivity and lower incremental COVID-19 related costs. Higher raw material costs were in part due to increased currency exchange transaction costs on imported materials, as well as higher packaging, sugar, cocoa, oils, grains, nuts and other ingredients costs, partially offset by lower dairy costs.

Total selling, general and administrative expenses increased $167 million from the first six months of 2020, due to a number of factors noted in the table above, including in part, an unfavorable currency impact related to expenses, incremental expenses from acquisitions, the impact from pension participation changes and higher acquisition-related costs, which were partially offset by lapping prior-year costs associated with the JDE Peet's transaction, lower implementation costs incurred for the Simplify to Grow Program and the favorable impact from the resolution of a tax matter. Excluding these factors, selling, general and administrative expenses increased $82 million from the first six months of 2020. The increase was driven primarily by higher advertising and consumer promotion costs.

Favorable currency changes increased operating income by $111 million due primarily to the strength of several currencies relative to the U.S. dollar, including the euro, British pound sterling, Australian dollar, Chinese yuan and Canadian dollar, partially offset by the strength of the U.S. dollar relative to several currencies, including the Brazilian real, Russian ruble, Argentinean peso, Swiss franc and Turkish lira.

Operating income margin increased from 12.4% in the first six months of 2020 to 15.5% in the first six months of 2021. The increase was driven primarily by a favorable year-over-year change in mark-to-market gains/(losses) from currency and commodity hedging activities, higher Adjusted Operating Income margin, lower intangible asset impairment charges and lapping prior-year costs associated with the JDE Peet's transaction, partially offset by higher Simplify to Grow program costs and the impact of pension participation changes. Adjusted Operating Income margin increased from 16.2% for the first six months of 2020 to 17.1% for the first six months of 2021. The increase was driven primarily by lower manufacturing costs, higher net pricing and overhead leverage, partially offset by higher raw material costs, unfavorable product mix and higher advertising and consumer promotion costs.

~~Table of Contents~~

~~Net Earnings and Earnings per Share Attributable to Mondelēz International~~ – Net earnings attributable to Mondelēz International of $2,039 million increased by $759 million (59.3%) in the first six months of 2021. Diluted EPS attributable to Mondelēz International was $1.44 in the first six months of 2021, up $0.55 (61.8%) from the first six months of 2020. Adjusted EPS ~~(1)~~ ~~was $1.46 in the first six months of 2021, up $0.18 (14.1%) from the first six months of 2020. Adjusted EPS on a constant currency basis~~ ~~(1)~~ ~~was $1.39 in the first six months of 2021, up $0.11 (8.6%) from the first six months of 2020.~~


	~~Diluted EPS~~

Diluted EPS Attributable to Mondelēz International for the Six Months Ended June 30, 2020	$	~~0.89~~
~~Simplify to Grow Program~~ ~~(2)~~	~~0.07~~
~~Intangible asset impairment charges~~ ~~(2)~~	~~0.05~~
~~Mark-to-market losses from derivatives~~ ~~(2)~~	~~0.11~~


~~Acquisition-related costs~~ ~~(2)~~	~~0.01~~

~~Net earnings from divestiture~~ ~~(2) (3)~~	~~(0.02)~~


~~Costs associated with JDE Peet's transaction~~ ~~(2)~~	~~0.21~~




~~Loss related to interest rate swaps~~ ~~(4)~~	~~0.06~~



~~Gain on equity method investment transactions~~ ~~(5)~~	~~(0.12)~~
~~Equity method investee items~~ ~~(6)~~	~~0.02~~

~~Adjusted EPS~~ ~~(1)~~ ~~for the Six Months Ended June 30, 2020~~	$	~~1.28~~
~~Increase in operations~~	~~0.11~~
~~Increase in equity method investment net earnings~~	~~0.01~~



~~Changes in benefit plan non-service income~~	~~0.01~~
~~Changes in interest and other expense, net~~ ~~(7)~~	~~0.02~~
~~Changes in income taxes~~ ~~(8)~~	~~(0.06)~~
~~Changes in shares outstanding~~ ~~(9)~~	~~0.02~~
~~Adjusted EPS (constant currency)~~ ~~(1)~~ ~~for the Six Months Ended June 30, 2021~~	$	~~1.39~~
~~Favorable currency translation~~	~~0.07~~
~~Adjusted EPS~~ ~~(1)~~ ~~for the Six Months Ended June 30, 2021~~	$	~~1.46~~
~~Simplify to Grow Program~~ ~~(2)~~	~~(0.13)~~
~~Intangible asset impairment charges~~ ~~(2)~~	~~(0.02)~~
~~Mark-to-market gains from derivatives~~ ~~(2)~~	~~0.08~~


~~Acquisition-related costs~~ ~~(2)~~	~~(0.01)~~






~~Impact from pension participation changes~~ ~~(2)~~	~~(0.02)~~



~~Loss on debt extinguishment~~ ~~(10)~~	~~(0.07)~~
~~Initial impacts from enacted tax law changes~~ ~~(8)~~	~~(0.07)~~

~~Gain on equity method investment transactions~~ ~~(5)~~	~~0.26~~
~~Equity method investee items~~ ~~(6)~~	~~(0.04)~~

Diluted EPS Attributable to Mondelēz International for the Six Months Ended June 30, 2021	$	~~1.44~~

~~(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. Within earnings per share, taxes related to the JDE Peet's transaction are included in costs associated with the JDE Peet's transaction.~~

~~(3)~~Includes the impact from last-year's partial sales of our equity method investments in KDP and JDE Peet’s as if the sales occurred at the beginning of all periods presented. The second quarter 2021 sales of KDP shares will be reflected on a lag basis in the third quarter of 2021.

~~(4)Refer to Note 9,~~ ~~Financial Instruments, for information on our interest swaps that we no longer designate as cash flow hedges.~~

~~(5)Refer to Note 6,~~ ~~Equity Method Investments, for more information on the gain on equity method investment transactions.~~

~~(6)~~Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peet's and KDP equity method investees, such as acquisition and divestiture-related costs and restructuring program costs.

~~(7)Excludes the currency impact on interest expense related to non-U.S. dollar-denominated debt, which is included in currency translation.~~

~~(8)Refer to Note 14,~~ ~~Income Taxes, for more information on the items affecting income taxes.~~

~~(9)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.~~

~~(10)Refer to Note 8,~~ ~~Debt and Borrowing Arrangements, for more information on the loss on debt extinguishment and related expenses.~~

4438

Table of Contents

Results of Operations by Reportable Segment

Our operations and management structure are organized into four operating segments:

•Latin America

•AMEA

•Europe

•North America

We manage our operations by region to leverage regional operating scale, manage different and changing business environments more effectively and pursue growth opportunities as they arise across our key markets. Our regional management teams have responsibility for the business, product categories and financial results in the regions.

We use segment operating income to evaluate segment performance and allocate resources. We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends. See Note 16, Segment Reporting, for additional information on our segments and Items Affecting Comparability of Financial Results earlier in this section for items affecting our segment operating results.

Our segment net revenues and earnings were:


		For the Three Months Ended June 30,				For the Six Months Ended June 30,					For the Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
		(in millions)									(in millions)
Net revenues:	Net revenues:									Net revenues:
Latin America	Latin America	$	669	$	511	$	1,338	$	1,237	Latin America	$	826	$	669
AMEA	AMEA	1,452		1,237		3,197		2,739		AMEA	1,867		1,745
Europe	Europe	2,474		2,138		5,321		4,722		Europe	2,935		2,847
North America	North America	2,047		2,025		4,024		3,920		North America	2,136		1,977
Net revenues	Net revenues	$	6,642	$	5,911	$	13,880	$	12,618	Net revenues	$	7,764	$	7,238
Earnings before income taxes:	Earnings before income taxes:									Earnings before income taxes:
Operating income:	Operating income:									Operating income:
Latin America	Latin America	$	54	$	(6)	$	130	$	72	Latin America	$	103	$	76
AMEA	AMEA	213		171		575		405		AMEA	272		362
Europe	Europe	413		297		970		769		Europe	377		557
North America	North America	299		424		569		805		North America	418		270
Unrealized gains/(losses) on hedging activities (mark-to-market impacts)	Unrealized gains/(losses) on hedging activities (mark-to-market impacts)	20		(2)		138		(187)		Unrealized gains/(losses) on hedging activities (mark-to-market impacts)	27		118
General corporate expenses	General corporate expenses	(78)		(111)		(142)		(187)		General corporate expenses	(50)		(64)
Amortization of intangible assets	Amortization of intangible assets	(32)		(50)		(70)		(93)		Amortization of intangible assets	(32)		(38)
Gain on acquisition	Gain on acquisition	—		—		9		—		Gain on acquisition	—		9
Acquisition-related costs	Acquisition-related costs	(17)		(10)		(24)		(15)		Acquisition-related costs	(21)		(7)
Operating income	Operating income	872		713		2,155		1,569		Operating income	1,094		1,283
Benefit plan non-service income	Benefit plan non-service income	54		31		98		64		Benefit plan non-service income	33		44
Interest and other expense, net	Interest and other expense, net	(58)		(85)		(276)		(275)		Interest and other expense, net	(168)		(218)
Earnings before income taxes	Earnings before income taxes	$	868	$	659	$	1,977	$	1,358	Earnings before income taxes	$	959	$	1,109

4539

Table of Contents

Latin America

For the Three Months Ended
June 30,
2021 2020 $ change % change
(in millions)
Net revenues $ 669 $ 511 $ 158 30.9 %
Segment operating income 54 (6) 60
++% (1)
For the Six Months Ended
June 30,
2021 2020 $ change % change
(in millions)
Net revenues $ 1,338 $ 1,237 $ 101 8.2 %
Segment operating income 130 72 58 80.6 %

~~(1) Due to a negative value in the prior-year quarter, the percentage change is not meaningful. We note the favorable increase in segment operating income.~~


	For the Three Months Ended March 31,
	2022		2021		$ change		% change
	(in millions)
Net revenues	$	826	$	669	$	157	23.5	%
Segment operating income	103		76		27		35.5	%

Three Months Ended ~~June 30:~~March 31:

Net revenues increased ~~$158~~$157 million ~~(30.9%~~(23.5%), due to ~~favorable volume/mix (18.8 pp) and~~ higher net pricing ~~(14.9~~(17.0 pp) and favorable volume/mix (8.7 pp), partially offset by unfavorable currency (2.8 pp). Favorable volume/mix reflected strong volume growth as the region lapped a weak prior-year quarter impacted by pandemic-related lockdowns. Favorable volume/mix was driven by gains in chocolate, gum, biscuits and candy, partially offset by declines in cheese & grocery and refreshment beverages. Higher net pricing was reflected across all categories, driven primarily by Argentina, Brazil and Mexico. Unfavorable currency impacts were due primarily to the strength of the U.S. dollar relative to several currencies in the region, primarily the Argentinean peso, partially offset by the strength of several currencies relative to the U.S. dollar, primarily the Mexican peso and Brazilian real.

Segment operating income increased $60 million, primarily due to higher net pricing, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), favorable volume/mix, lower costs incurred for the Simplify to Grow Program and the favorable impact from the resolution of a tax matter. These favorable items were partially offset by higher raw material costs and higher advertising and consumer promotion costs.

~~Six Months Ended June 30:~~

~~Net revenues increased $101 million (8.2%), due to higher net pricing (12.1 pp) and favorable volume/mix (6.0 pp), partially offset by unfavorable currency (9.9~~(2.2 pp). Higher net pricing was reflected across all categories, driven primarily by Argentina, Brazil and Mexico. Favorable volume/mix reflected strong volume growth as the region lapped a weak prior-year period impacted by pandemic-related lockdowns. Favorable volume/mix was driven by gains in chocolate, biscuits and gum, partially offset by declines in cheese & grocery, refreshment beverages and candy. Unfavorable currency impacts were due primarilycontinued to the strength of the U.S. dollar relative to several currencies in the region including the Argentinian peso and Brazilian real, partially offset by the strength of several currencies relative to the U.S. dollar, primarily the Mexican peso.

~~Segment operating income~~see increased ~~$58 million (80.6%), primarily due to higher net pricing, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), lower costs incurred~~demand for the Simplify to Grow Program, lower other selling, general and administrative expenses, the favorable impact from the resolution of a tax matter and favorable volume/mix. These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs and unfavorable currency.

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~~AMEA~~

For the Three Months Ended
June 30,
2021 2020 $ change % change
(in millions)
Net revenues $ 1,452 $ 1,237 $ 215 17.4 %
Segment operating income 213 171 42 24.6 %

For the Six Months Ended
June 30,
2021 2020 $ change % change
(in millions)
Net revenues $ 3,197 $ 2,739 $ 458 16.7 %
Segment operating income 575 405 170 42.0 %

~~Three Months Ended June 30:~~

Net revenues increased $215 million (17.4%), due to favorable currency (8.6 pp), favorable volume/mix (5.1 pp), higher net pricing (1.9 pp) and the impact of an acquisition (1.8 pp). Favorable currency impacts were due to the strength of most currencies relative to the U.S. dollar, including the Australian dollar, Chinese yuan and South African rand. Favorable volume/mix reflected overall volume gains as the negative impacts from the pandemic that we experienced in the prior-year quarter subsided across most of the region, though some markets were still challenged. Favorable volume/mix was driven by gains in chocolate, gum, candy and biscuits, partially offset by declines in cheese & grocery and refreshment beverages. Higher net pricing was reflected across all categories except cheese & grocery. The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of $23 million (constant currency basis) in the second quarter of 2021.

Segment operating income increased $42 million (24.6%), primarily due to lower manufacturing costs (productivity and lower incremental COVID-19 related costs), higher net pricing, favorable currency, favorable volume/mix and lapping prior-year intangible asset impairment charges. These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs and higher other selling, general and administrative expenses.

~~Six Months Ended June 30:~~

Net revenues increased $458 million (16.7%), due to favorable currency (6.8 pp), favorable volume/mix (6.7 pp), higher net pricing (2.4 pp) and the impact of an acquisition (0.8 pp). Favorable currency impacts were due to the strength of most currencies relative to the U.S. dollar, including the Australian dollar, Chinese yuan, South African rand, New Zealand dollar and Philippine peso. Favorable volume/mix reflected overall volume gains as the negative impacts from the pandemic that we experienced in the prior-year period subsided across most of the region, though some markets were still challenged.our snack category products. Favorable volume/mix was driven by gains in chocolate, biscuits, gum and candy, partially offset by declines in refreshment beverages and cheese & grocery. Unfavorable currency impacts were due primarily to the strength of the U.S. dollar relative to most currencies in the region, primarily the Argentinean peso, partially offset by the strength of a few currencies relative to the U.S. dollar, primarily the Brazilian real.

Segment operating income increased $27 million (35.5%), primarily due to higher net pricing, favorable volume/mix, lower manufacturing costs due to productivity and lower costs incurred for the Simplify to Grow Program. These favorable items were partially offset by higher raw material costs, higher advertising and consumer promotion costs, unfavorable currency and higher other selling, general and administrative expenses.

AMEA


	For the Three Months Ended March 31,
	2022		2021		$ change		% change
	(in millions)
Net revenues	$	1,867	$	1,745	$	122	7.0	%
Segment operating income	272		362		(90)		(24.9)	%

Three Months Ended March 31:

Net revenues increased $122 million (7.0%), due to favorable volume/mix (6.4 pp), higher net pricing (2.5 pp) and the impact of an acquisition (0.9 pp), partially offset by unfavorable currency (2.8 pp). Favorable volume/mix reflected overall volume gains from increased demand for our snack category products, though some markets were still challenged due to the pandemic. Favorable volume/mix was driven by gains in chocolate, biscuits, refreshment beverages, gum and candy, partially offset by declines in cheese & grocery. Higher net pricing was reflected across all ~~categories.~~categories except gum. The April 1, 2021 acquisition of Gourmet Food added incremental net revenues of ~~$23~~$15 million (constant currency basis) in the first ~~six months~~quarter of ~~2021.~~2022. Unfavorable currency impacts were due to the strength of the U.S. dollar relative to most currencies in the region, including the Australian dollar, Indian rupee and Philippine peso, partially offset by the strength of a few currencies relative to the U.S. dollar, primarily the Chinese yuan.

Segment operating income ~~increased $170~~decreased $90 million ~~(42.0%~~(24.9%), primarily due to intangible asset impairment charges incurred in the first quarter of 2022, higher ~~net pricing, lower manufacturing~~raw material costs, ~~(productivity and lower incremental COVID-19 related costs), favorable volume/mix, favorable currency, lower~~higher costs incurred for the Simplify to Grow Program, ~~and lapping prior-year intangible asset impairment charges. These favorable items were partially offset by~~ higher advertising and consumer promotion costs, ~~higher raw material costs~~unfavorable currency and higher other selling, general and administrative expenses. These unfavorable items were partially offset by higher net pricing, favorable volume/mix and lower manufacturing costs driven by productivity.

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Europe


		For the Three Months Ended June 30,									For the Three Months Ended March 31,
		2021		2020		$ change		% change			2022		2021		$ change		% change
		(in millions)									(in millions)
Net revenues	Net revenues	$	2,474	$	2,138	$	336	15.7	%	Net revenues	$	2,935	$	2,847	$	88	3.1	%
Segment operating income	Segment operating income	413		297		116		39.1	%	Segment operating income	377		557		(180)		(32.3)	%


		For the Six Months Ended June 30,
		2021		2020		$ change		% change
		(in millions)
Net revenues		$	5,321	$	4,722	$	599	12.7	%
Segment operating income		970		769		201		26.1	%

Three Months Ended ~~June 30:~~March 31:

Net revenues increased ~~$336~~$88 million ~~(15.7%~~(3.1%), due to ~~favorable currency (9.3~~the impact of acquisitions (6.4 pp), favorable volume/mix ~~(4.2~~(3.4 pp), and higher net pricing ~~(1.2~~(1.5 pp) and the impact of an acquisition (1.0 pp). Favorable currency impacts reflected the strength of most currencies in the region relative to the U.S. dollar, including the euro, British pound sterling, Swedish krona, Norwegian krone and Polish zloty,, partially offset by ~~the strength~~unfavorable currency (8.2 pp). The January 3, 2022 acquisition of ~~the U.S. dollar relative to a few currencies, including the Turkish lira~~Chipita added incremental net revenues of $162 million (constant currency basis) and Russian ruble. Favorable volume/mix was driven by strong volume growth as increased food purchases for in-home consumption continued and out-of-home consumption began to recover, as did our world travel business as the sharp reduction in global travel due to the pandemic began to subside. Favorable volume/mix was driven by gains in biscuits, gum, candy, chocolate and cheese & grocery, partially offset by declines in refreshment beverages. Higher net pricing was driven by chocolate, gum and candy, partially offset by lower net pricing in cheese & grocery, biscuits and refreshment beverages. The March 25, 2021 acquisition of Grenade added incremental net revenues of ~~$21~~$22 million (constant currency basis) in the ~~second~~first quarter of ~~2021.~~

~~Segment operating income~~2022. Favorable volume/mix was driven by strong volume growth as we experienced increased ~~$116 million (39.1%), primarily due~~demand for our snack category products and our world travel business grew as global travel continued to ~~lapping prior-year intangible asset impairment charges, favorable currency, lower manufacturing costs (productivity~~improve though still below pre-pandemic levels. Favorable volume/mix was driven by gains in chocolate, biscuits, candy and ~~lower incremental COVID-19 related costs), favorable volume/mix, higher net pricing and lower Simplify to Grow Program costs. These favorable items were~~gum, partially offset by ~~the impact of pension participation changes, higher raw materials~~declines in cheese & grocery and ~~higher advertising and consumer promotion costs.~~

~~Six Months Ended June 30:~~

~~Net revenues increased $599 million (12.7%), due to favorable currency (8.0 pp), favorable volume/mix (3.2 pp), higher~~refreshment beverages. Higher net pricing ~~(1.1 pp) and the impact of an acquisition (0.4 pp). Favorable~~was reflected across all categories except refreshment beverages. Unfavorable currency impacts reflected ~~the strength of most currencies in the region relative to the U.S. dollar, including the euro, British pound sterling, Swedish krona, Norwegian krone and Polish zloty, partially offset by~~ the strength of the U.S. dollar relative to ~~a few~~most currencies across the region, including the euro, Turkish lira, Russian ruble, British pound sterling, Polish zloty and ~~Turkish lira. Favorable volume/mix reflected strong volume growth as increased food purchases for in-home consumption continued and out-of-home consumption began~~Swedish krona.

Segment operating income decreased $180 million (32.3%), primarily due to ~~recover, as did our world travel business as the sharp reduction in global travel~~incremental costs incurred due to the ~~pandemic began~~war in Ukraine, unfavorable currency, acquisition integration costs incurred in the first quarter of 2022, higher advertising and consumer promotion costs and higher other selling, general and administrative expenses. These unfavorable items were partially offset by higher net pricing, favorable volume/mix, lower Simplify to ~~subside.~~Grow program costs, the impact of acquisitions and lower manufacturing costs due to productivity.

North America


	For the Three Months Ended March 31,
	2022		2021		$ change		% change
	(in millions)
Net revenues	$	2,136	$	1,977	$	159	8.0	%
Segment operating income	418		270		148		54.8	%

Three Months Ended March 31:

Net revenues increased $159 million (8.0%), due to higher net pricing (7.5 pp), the impact of an acquisition (0.3 pp) and favorable volume/mix (0.2 pp). Higher net pricing was reflected across all categories driven by pricing actions taken in the first three months of 2022. The January 3, 2022 acquisition of Chipita added incremental net revenues of $7 million in the first quarter of 2022. Favorable volume/mix was driven by gains in ~~biscuits,~~candy, chocolate ~~cheese & grocery,~~ and ~~refreshment beverages, partially~~gum, mostly offset by ~~declines~~a decline in ~~gum and candy. Higher net pricing was driven by chocolate, candy, gum and refreshment beverages, partially offset by higher net pricing in cheese & grocery and biscuits. The March 25, 2021 acquisition~~biscuits which primarily reflected the impact of ~~Grenade added incremental net revenues of $21 million (constant currency basis) in the first six months of 2021.~~supply chain constraints on volume.

Segment operating income increased ~~$201~~$148 million ~~(26.1%~~(54.8%), primarily due to ~~favorable currency, favorable volume/mix, lower manufacturing costs (productivity and lower incremental COVID-19 related costs),~~ higher net pricing ~~lapping prior-year intangible asset impairment charges~~ and lower Simplify to Grow Program costs. These favorable items were partially offset by higher raw material costs, ~~the impact of pension participation changes~~unfavorable volume/mix and higher ~~advertising and consumer promotion costs.~~manufacturing costs net of productivity.

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~~North America~~

For the Three Months Ended
June 30,
2021 2020 $ change % change
(in millions)
Net revenues $ 2,047 $ 2,025 $ 22 1.1 %
Segment operating income 299 424 (125) (29.5) %

For the Six Months Ended
June 30,
2021 2020 $ change % change
(in millions)
Net revenues $ 4,024 $ 3,920 $ 104 2.7 %
Segment operating income 569 805 (236) (29.3) %

~~Three Months Ended June 30:~~

Net revenues increased $22 million (1.1%), due to favorable currency (1.0 pp), the impact of an acquisition (0.4 pp), and higher net pricing (0.2 pp), partially offset by unfavorable volume/mix (0.5 pp). Favorable currency impact was due to the strength of the Canadian dollar relative to the U.S. dollar. The January 4, 2021 acquisition of Hu Master Holdings added incremental net revenues of $8 million in the second quarter of 2021. Higher net pricing was driven by chocolate, candy and gum, partially offset by lower net pricing in biscuits. Unfavorable volume mix reflected volume declines as the region lapped a very strong prior-year quarter that reflected significantly increased food purchases for in-home consumption due to the pandemic. Unfavorable volume/mix was driven by a decline in biscuits, partially offset by gains in gum, candy and chocolate.

Segment operating income decreased $125 million (29.5%), primarily due to higher Simplify to Grow Program costs, unfavorable volume/mix, higher raw material costs, higher advertising and consumer promotion costs and the impact of an acquisition. These unfavorable items were partially offset by lower other selling, general and administrative expenses, lower manufacturing costs (primarily lower incremental COVID-19 related costs), favorable currency, higher net pricing and lower intangible asset impairment charges.

~~Six Months Ended June 30:~~

Net revenues increased $104 million (2.7%), due to the impact of acquisitions (3.2 pp), favorable currency (0.8 pp), and higher net pricing (0.4 pp), partially offset by unfavorable volume/mix (1.7 pp). The April 1, 2020 acquisition of Give & Go added incremental net revenues of $106 million and the January 4, 2021 acquisition of Hu Master Holdings added incremental net revenues of $16 million in the first six months of 2021. Favorable currency impact was due to the strength of the Canadian dollar relative to the U.S. dollar. Higher net pricing was driven by biscuits and chocolate, partially offset by lower net pricing in candy and gum. Unfavorable volume mix reflected volume declines as the region lapped a very strong prior-year period that reflected significantly increased food purchases for in-home consumption due to the pandemic. Unfavorable volume/mix was driven by declines in biscuits, candy, gum and chocolate.

Segment operating income decreased $236 million (29.3%), primarily due to higher Simplify to Grow Program costs, unfavorable volume/mix, higher advertising and consumer promotion costs and higher raw material costs. These unfavorable items were partially offset by lower other selling, general and administrative expenses, lower manufacturing costs (productivity and lower incremental COVID-19 related costs), higher net pricing, favorable currency, lower intangible asset impairment charges and the impact of acquisitions.

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Liquidity and Capital Resources

We believe that cash from operations, our revolving credit and term loan facilities, short-term borrowings and our authorized long-term financing will continue to provide sufficient liquidity for our working capital needs, planned capital expenditures, future payments of our contractual, tax and benefit plan obligations and payments for acquisitions, share repurchases and quarterly dividends. ~~In light of the ongoing uncertainty related~~We expect to the COVID-19 outbreak, however, an economic or credit crisis could occur and impair credit availability and our ability to raise capital when needed. A disruption in the financial markets could also impair our banking and other business partners, on whom we rely for access to capital and as counterparties for a number of our derivative contracts. Any of these and other developments could materially harm our access to capital or financial condition. We carry $7.0 billion of undrawn credit facilities, continue to utilize our commercial paper program and available international credit lines ~~and we secured and continue to~~as needed. We continually evaluate long-term debt issuances to meet our short- and longer-term funding requirements. We also use intercompany loans with our international subsidiaries to improve financial flexibility. ~~In addition, our publicly-traded~~Our investments in JDE Peet's and KDP ~~and JDEP had a fair value of~~ ~~$7.3 billion~~ ~~as of June 30, 2021 and are available as a source of~~also provide us additional liquidity. In 2020, we sold portions of our stakes in these businesses worth $2.5 billion in total, and in the first half of 2021, we sold an additional $1.0 billion worth of KDP shares. In connection with various legislatively authorized tax payment deferral mechanisms available for income tax, indirect tax (such as value-added tax) and payroll tax in a number of jurisdictions, we were able to defer certain of these tax payments in 2020, which provided a cash benefit that reverses when the cash tax payments become due. Some of these payments were made during the first half of 2021; the remainder will come due in the second half of 2021 and in 2022. The benefits associated with the deferral of these tax payments were not material to our financial statements.flexibility. Overall, ~~at this time,~~ we do not expect ~~any~~ negative effects to our funding sources that would have a material effect on our ~~liquidity; however,~~liquidity, and we continue to monitor our operations in Europe and effects from the war in Ukraine. To date, we have been successful in generating cash and raising financing as needed. However, in connection with the COVID-19 pandemic, war in Ukraine or other circumstances, if a serious economic or credit market crisis ~~were to occur,~~ensues, it could have a material adverse effect on our liquidity, results of operations and financial condition.

Our most significant ongoing short-term cash requirements relate primarily to funding operations (including expenditures for raw materials, labor, manufacturing and distribution, trade and promotions, advertising and marketing, tax liabilities, benefit plan obligations and lease expenses) as well as periodic expenditures for acquisitions, shareholder returns (such as dividend payments and share repurchases) and property, plant and equipment.

Long-term cash requirements primarily relate to funding long-term debt repayments (refer to Note 8, Debt and Borrowing Arrangements), our U.S. tax reform transition tax liability which is payable through 2026 and deferred taxes (refer to Note 16, Income Taxes, in our Annual Report on Form 10-K), our long-term benefit plan obligations (refer to Note 10, Benefit Plans, andNote 11, Benefit Plans, in our Annual report on Form 10-K) and commodity-related purchase commitments and derivative contracts (refer to Note 9, Financial Instruments).

We generally fund short- and long-term cash requirements with cash from operating activities as well as cash proceeds from short- and long-term debt financing (refer to Debt below). We generally do not use equity to fund our ongoing obligations.

Cash Flow:

We believe our ability to generate substantial cash from operating activities and readily access capital markets and secure financing at competitive rates are key strengths and give us significant flexibility to meet our short and long-term financial commitments. Our cash flow activity is noted below:


Three months ended March 31,	2022		2021
Net cash provided by operating activities	$	1,131	$	915
Net cash used in investing activities	$	(1,441)	$	(690)
Net cash used in financing activities	$	(1,280)	$	(1,781)

Net Cash Provided by Operating Activities:

~~Net cash provided by operating activities was $1,792 million in the first six months of 2021 and $1,558 million in the first six months of 2020.~~ The increase in net cash provided by operating activities was due primarily to ~~higher earnings and~~ lower year-over-year working capital requirements, ~~partially offset by~~ higher cash earnings, lower tax payments and ~~lower~~higher dividends received from our equity method ~~investments.~~investments, partially offset by higher acquisition integration-related costs.

Net Cash Used in Investing Activities:

~~Net cash used in investing activities was $220 million in the first six months of 2021 and $1,037 million in the first six months of 2020.~~ The ~~decrease~~increase in net cash used in investing activities was ~~due primarily to~~largely driven by higher cash ~~proceeds from~~payments for acquisitions, including $1.4 billion cash consideration paid for the ~~sale~~Chipita acquisition during January 2022 relative to $490 million paid to acquire a majority interest in Grenade and the remaining equity of ~~shares in our equity method investments (refer to Note 6,~~ ~~Equity Method Investments) as well as lower cash expenditures for acquisitions~~Hu Master Holdings during the first quarter of 2021 (refer to Note 2, Acquisitions and Divestitures)., partially offset by proceeds related to a sale of an acquired Chipita equity method investment and lower capital expenditures. We continue to make capital expenditures primarily to modernize manufacturing facilities and support new product and productivity initiatives. We expect ~~2021~~2022 capital expenditures to be approximately ~~$1.0~~$1.2 billion, including capital expenditures in connection with our Simplify to Grow Program. We expect to continue to fund these expenditures with cash from operations.

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Net Cash Used in Financing Activities:

~~Net cash used in financing activities was $3,228 million in the first six months of 2021 and $181 million in the first six months of 2020.~~ The ~~increase~~decrease in cash used in financing activities was primarily due to lower share repurchases as well as lower net debt repayments as we largely refinanced debt during the first quarter of 2022 with lower interest rate debt (refer to Note 8, Debt and Borrowing Arrangements) and we lapped higher amounts of net long-term debt repayments in the prior-year first ~~six~~quarter. The decrease in cash used in financing activities was partially offset by higher dividends paid in the first three months of 2022 than in the same prior-year period.

Supply Chain Financing

As part of our continued efforts to improve our working capital efficiency, we have worked with our suppliers over the past several years to optimize our terms and conditions, which include the extension of payment terms. Our current payment terms with a majority of our suppliers are from 30 to 180 days, which we deem to be commercially reasonable. We also facilitate voluntary supply chain financing (“SCF”) programs through several participating financial institutions. Under these programs, our suppliers, at their sole discretion, determine invoices that they want to sell to participating financial institutions. Our suppliers’ voluntary inclusion of invoices in SCF programs has no bearing on our payment terms or amounts due. Our responsibility is limited to making payments based upon the agreed-upon contractual terms. No guarantees are provided by the Company or any of our subsidiaries under the SCF programs and we have no economic interest in the suppliers’ decision to participate in the SCF programs. Amounts due to our suppliers that elected to participate in the SCF program are included in accounts payable in our consolidated balance sheet. We have been informed by the participating financial institutions that as of March 31, 2022, and March 31, 2021, ~~higher share repurchases~~$2.5 billion and ~~higher dividends paid.~~$2.3 billion, respectively, of our accounts payable to suppliers that participate in the SCF programs are outstanding.

Guarantees:

As discussed in Note 12, Commitments and Contingencies, we enter into third-party guarantees primarily to cover the long-term obligations of our vendors. As part of these transactions, we guarantee that third parties will make contractual payments or achieve performance measures. At March 31, 2022, we had no material third-party guarantees recorded on our condensed consolidated balance sheet. Guarantees do not have, and we do not expect them to have, a material effect on our liquidity.

Debt:

~~From time to time we refinance long-term and short-term debt. Refer to Note 8,~~ ~~Debt and Borrowing Arrangements, for details of our debt activity during the first six months of 2021.~~ The nature and amount of our long-term and short-term debt and the proportionate amount of each varies as a result of current and expected business requirements, market conditions and other factors. Due to seasonality, in the first and second quarters of the year, our working capital requirements grow, increasing the need for short-term financing. The second half of the year typically generates higher cash flows. As such, we may issue commercial paper or secure other forms of financing throughout the year to meet short-term working capital or other financing needs.

Refer to Note 8, Debt and Borrowing Arrangements, for details of our debt activity during the first three months of 2022. In the next 12 months, we expect to repay approximately $0.7 billion of maturing long-term debt including $0.2 billion in July 2022 and $0.5 billion in September 2022. We fund ongoing debt maturities and other long-term obligations using cash on hand or we may refinance obligations with long-term debt or short-term financing (such as our commercial paper borrowings) depending on financing available, timing considerations, flexibility to raise funding and the cost of financing.

During December 2021, our Board of Directors approved a new $7.0 billion long-term financing authority to replace the prior $6.0 billion authority. As of March 31, 2022, $5 billion of the long-term financing authorization remained available, with $2 billion of this amount allocated for any borrowings that we may make under the term loan facility we entered into in March 2022. Refer to Note 8, Debt and Borrowing Arrangements.

Our total debt was $19.7 billion at March 31, 2022 and $19.5 billion at December 31, 2021. Our debt-to-capitalization ratio was 0.41 at March 31, 2022 and 0.41 at December 31, 2021. At March 31, 2022, the weighted-average term of our outstanding long-term debt was 9.4 years. Our average daily commercial paper borrowings outstanding were $1.2 billion in the first three months of 2022 and $0.2 billion in the first three months of 2021. We had commercial paper outstanding totaling $0.5 billion as of March 31, 2022 and $0.2 billion as of December 31, 2021. We expect to continue to use cash or commercial paper to finance various short-term financing needs. Through March 31, 2022, we continue to comply with our debt covenants.

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One of our subsidiaries, Mondelez International Holdings Netherlands B.V. (“MIHN”), has outstanding debt. The operations held by MIHN generated approximately ~~72.7%~~74.4% (or ~~$10.1~~$5.8 billion) of the ~~$13.9~~$7.8 billion of consolidated net revenue in the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. The operations held by MIHN represented approximately ~~80.8%~~81.6% (or ~~$22.3~~$23.0 billion) of the ~~$27.6~~$28.2 billion of net assets as of ~~June 30, 2021~~March 31, 2022 and ~~76.2%~~79.2% (or ~~$21.1~~$22.4 billion) of the ~~$27.7~~$28.3 billion of net assets as of December 31, ~~2020.~~

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During December 2020, our Board of Directors approved a new $6.0 billion long-term financing authority to replace the prior $8.0 billion authority. As of June 30, 2021, we had $3.6 billion of long-term financing authority remaining.

In the next 12 months, we expect to repay approximately $3.0 billion of maturing long-term debt: $1.5 billion in October 2021, $0.3 billion in December 2021 and $1.2 billion in July 2022. We expect to fund these repayments with cash on hand, as well as short-term and long-term debt.2021.

Our total debt was $19.0 billion at June 30, 2021 and $20.0 billion at December 31, 2020. Our debt-to-capitalization ratio was 0.41 at June 30, 2021 and 0.42 at December 31, 2020. At June 30, 2021, the weighted-average term of our outstanding long-term debt was 8.6 years. Our average daily commercial paper borrowings outstanding were $0.6 billion in the first six months of 2021 and $3.6 billion in the first six months of 2020. We had commercial paper outstanding totaling $13 million as of June 30, 2021 and no commercial paper borrowings outstanding at December 31, 2020. We expect to continue to use cash or commercial paper to finance various short-term financing needs. We continue to comply with our debt covenants. Refer to Note 8, Debt and Borrowing Arrangements,.for more information on our debt and debt covenants.

Commodity Trends

We regularly monitor worldwide supply, commodity cost and currency trends so we can cost-effectively secure ingredients, packaging and fuel required for production. During the first ~~six~~three months of ~~2021,~~2022, the primary drivers of the increase in our aggregate commodity costs were higher packaging, edible oils, dairy, energy, grains, sugar and other ingredient costs, partially offset by favorable year-over-year currency exchange transaction costs on imported materials ~~as well as increased costs for packaging, sugar,~~and lower cocoa ~~oils, grains, nuts and other ingredients costs, partially offset by lower costs for dairy.~~costs.

A number of external factors such as the ~~current~~ COVID-19 global pandemic, effects of the war in Ukraine, climate and weather conditions, commodity, transportation and labor market conditions, currency fluctuations and the effects of governmental agricultural or other programs affect the cost and availability of raw materials and agricultural materials used in our products. We address higher commodity costs and currency impacts primarily through hedging, higher pricing and manufacturing and overhead cost control. We use hedging techniques to limit the impact of fluctuations in the cost of our principal raw materials; however, we may not be able to fully hedge against commodity cost changes, such as dairy, where there is a limited ability to hedge, and our hedging strategies may not protect us from increases in specific raw material costs. Due to competitive or market conditions, planned trade or promotional incentives, fluctuations in currency exchange rates or other factors, our pricing actions may also lag commodity cost changes temporarily.

WeAs a result of international supply chain, transportation and labor market disruptions and generally higher commodity, transportation and labor costs in the first quarter of 2022, we expect price volatility and a higher aggregate cost environment to continue in the remainder of ~~2021.~~2022. While the costs of our principal raw materials fluctuate, we believe there will continue to be an adequate supply of the raw materials we use and that they will generally remain ~~available from numerous sources.~~

~~Off-Balance Sheet Arrangements and Aggregate Contractual Obligations~~

~~See Note 8,~~ ~~Debt and Borrowing Arrangements~~, for information on debt transactions during 2021. There were no other material developments or changes to our off-balance sheet arrangements and aggregate contractual obligations disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.available.

Equity and Dividends

Stock Plans and Share Repurchases:

See Note 11, Stock Plans, to our condensed consolidated financial statements and Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for more information on our stock plans, grant activity and share repurchase program for the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022.

As of ~~June 30, 2021,~~March 31, 2022, our Board of Directors has authorized share repurchases up to $23.7 billion through December 31, 2023. Under this program, we have repurchased approximately ~~$19.5~~$20.8 billion of shares through ~~June 30, 2021~~March 31, 2022 ($~~1.5~~0.8 billion in the first ~~six~~three months of 2022, $2.1 billion in 2021, $1.4 billion in 2020, $1.5 billion in 2019, $2.0 billion in 2018, $2.2 billion in 2017, $2.6 billion in 2016, $3.6 billion in 2015, $1.9 billion in 2014 and $2.7 billion in 2013), at a weighted-average cost of ~~$41.51~~$42.50 per share.

The number of shares that we ultimately repurchase under our share repurchase program may vary depending on numerous factors, including share price and other market conditions, our ongoing capital allocation planning, levels of cash and debt balances, other demands for cash, such as acquisition activity, general economic or business

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conditions and Board and management discretion. Additionally, our share repurchase activity during any particular period may fluctuate. We may accelerate, suspend, delay or discontinue our share repurchase program at any time, without notice.

Dividends:

We paid dividends of ~~$896~~$491 million in the first ~~six~~three months of ~~2021~~2022 and ~~$819~~$453 million in the first ~~six~~three months of ~~2020.~~2021. The ~~second~~first quarter ~~2021~~2022 dividend of ~~$0.315~~$0.35 per share, declared on ~~May 19, 2021~~February 3, 2022 for shareholders of record as of ~~June 30, 2021,~~March 31, 2022, was paid on ~~July~~April 14, 2021. On July 27, 2021, the Finance Committee, with authorization delegated from our Board of Directors, declared a quarterly cash dividend of $0.35 per share of Class A Common Stock, an increase of 11 percent. This dividend is payable on October 14, 2021, to shareholders of record as of September 30, 2021.2022. The declaration of dividends is subject to the discretion of our Board of Directors and depends on various factors, including our net earnings, financial condition, cash requirements, future prospects and other factors that our Board of Directors deems relevant to its analysis and decision making.

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We anticipate that the ~~2021~~2022 distributions will be characterized as dividends under U.S. federal income tax rules. The final determination will be made on an IRS Form 1099–DIV issued in early ~~2022.~~2023.

Significant Accounting Estimates

We prepare our condensed consolidated financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. Our significant accounting policies are described in Note 1 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. Our significant accounting estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. See also Note 1, Basis of Presentation, ~~for a discussion of the impact of new accounting standards.~~in this report.

New Accounting Guidance:

See Note 1, Basis of Presentation, for a discussion of new accounting standards.

Contingencies:

See Note 12, Commitments and Contingencies, and Part II, Item 1. Legal Proceedings, for a discussion of contingencies.

Forward-Looking Statements

This report contains a number of forward-looking statements. Words, and variations of words, such as “will,” “may,” “expect,” “would,” “could,” “might,” “intend,” “plan,” “believe,” “likely,” “estimate,” “anticipate,” “objective,” “predict,” “project,” “seek,” “aim,” “potential,” “outlook” and similar expressions are intended to identify our forward-looking statements, including but not limited to statements about: the impact on our business of the war in Ukraine and current and future sanctions imposed by governments or other authorities, including the impact on matters such as costs, markets, the global economic environment, availability of commodities, demand, supplying our Ukraine business's customers and consumers, impairments, continuation of and our ability to control our operating activities and businesses in Russia and Ukraine, and our operating results; the impact of the COVID-19 pandemic and related disruptions on our business including consumer demand, costs, product mix, ~~the availability of our products,~~ our strategic initiatives, our and our partners’ global supply chains, operations, technology ~~assets~~ and ~~routes to market,~~assets, and our financial performance; our future performance, including our future revenue and earnings growth; our strategy to accelerate consumer-centric growth, drive operational excellence and create a winning growth culture; our leadership position in snacking; volatility in global consumer, commodity, transportation, labor, currency and capital markets; price volatility, inflation and pricing actions; the cost environment, including higher labor, customer service, commodity, transportation, operating, and other costs, factors affecting costs and measures we are taking to address increased costs; ~~snack~~supply, transportation and labor disruptions and constraints; consumer behavior, consumption and demand trends and our ~~ability to meet demand for~~business in developed and emerging markets, our ~~products;~~channels, our brands and our categories; our tax rate, tax positions, tax proceedings, tax liabilities, valuation allowances and the impact on us of potential U.S. and ~~Swiss~~global tax ~~reform on our results;~~reform; advertising and promotion bans and restrictions in the U.K.'s separation from the E.U. and its impact on our business and results, including in connection with disagreements on trade terms, delays affecting our supply chain or distribution, or disruptions to sales or collections;; the costs of, timing of expenditures under and completion of our restructuring program; consumer snacking behaviors; commodity prices, supply and ~~supply;~~availability; our investments and our ownership interests in those investments, including in JDE Peet's and KDP; ~~strategic transactions;~~ innovation; political, business and economic conditions and volatility; currency exchange rates, controls and restrictions, volatility in foreign currencies and the effect of currency translation on our results of operations; the application of highly inflationary accounting for our ~~Argentinean~~ subsidiaries in Argentina and Türkiye and the potential for and impacts from currency devaluation in other countries; the outcome and effects on us of legal proceedings and government investigations; the estimated value of goodwill and intangible assets; amortization expense for intangible assets; impairment of goodwill and intangible assets and our projections of operating results and other factors that may affect our impairment testing; our accounting estimates and judgments and the impact of new accounting pronouncements; pension expenses, contributions and

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assumptions; our ability to prevent and respond to cybersecurity breaches and disruptions; our liquidity, funding sources and uses of funding, including debt issuances and our use of commercial ~~paper;~~paper and international credit lines; our capital structure, ~~and liquidity,~~ credit availability and our ability to raise capital, and the impact of market disruptions on us, our counterparties and our business partners; the planned phase out of London Interbank Offered ~~Rates;~~Rates and transition to any other interest rate benchmark; our risk management program, including the use of financial instruments and the impacts and effectiveness of our hedging activities; working capital; capital expenditures and funding; funding of debt ~~maturities;~~maturities, acquisitions and other

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obligations; share repurchases; dividends; long-term value for our shareholders; guarantees; the characterization of ~~2021~~2022 distributions as dividends; compliance with our debt covenants; and our contractual and other obligations.

These forward-looking statements involve risks and uncertainties, many of which are beyond our control, and many of these risks and uncertainties are currently amplified by and may continue to be amplified by the COVID-19 ~~pandemic.~~pandemic, including the spread of new variants of COVID-19 such as Omicron. Important factors that could cause our actual results to differ materially from those described in our forward-looking statements include, but are not limited to, the impact of ongoing or new developments in the war in Ukraine, related current and future sanctions imposed by governments and other authorities, and related impacts on our business, growth, reputation, prospects, financial condition, operating results (including components of our financial results), cash flows and liquidity; uncertainty about the effectiveness of efforts by health officials and governments to control the spread of COVID-19 and inoculate and treat populations impacted by COVID-19; uncertainty about the reimposition or lessening of restrictions imposed by governments intended to mitigate the spread of COVID-19 and the magnitude, duration, geographic reach and impact on the global economy ~~and related current and potential travel restrictions~~ of COVID-19; the ~~COVID-19 pandemic; the current,~~ongoing, and uncertain future, impact of the COVID-19 pandemic on our business, growth, reputation, prospects, financial condition, operating results (including components of our financial results), cash flows and liquidity; risks from operating globally including in emerging markets; changes in currency exchange rates, controls and restrictions; volatility of commodity and other input ~~costs;~~costs and availability of commodities; weakness in economic conditions; weakness in consumer spending; pricing actions; tax matters including changes in tax laws and rates, disagreements with taxing authorities and imposition of new taxes; use of information technology and third party service providers; unanticipated disruptions to our business, such as ~~the~~ malware ~~incident,~~incidents, cyberattacks or other security ~~breaches;~~breaches, and our compliance with privacy and data security laws; global or regional health pandemics or epidemics, including COVID-19; ~~competition;~~competition and our response to channel shifts and pricing and other competitive pressures; promotion and protection of our reputation and brand image; changes in consumer preferences and demand and our ability to innovate and differentiate our products; the restructuring program and our other transformation initiatives not yielding the anticipated benefits; changes in the assumptions on which the restructuring program is based; management of our ~~workforce;~~workforce and shifts in labor availability; consolidation of retail customers and competition with retailer and other economy brands; changes in our relationships with customers, suppliers or distributors; compliance with legal, regulatory, tax orand benefit ~~law~~laws and related changes, claims or actions; the impact of climate change on our supply chain and operations; strategic transactions; significant changes in valuation factors that may adversely affect our impairment testing of goodwill and intangible assets; perceived or actual product quality issues or product recalls; failure to maintain effective internal control over financial ~~reporting;~~reporting or disclosure controls and procedures; volatility of and access to capital or other markets, the effectiveness of our cash management programs and our liquidity; pension costs; the expected discontinuance of London Interbank Offered Rates and transition to any other interest rate benchmark; and our ability to protect our intellectual property and intangible assets. There may be other factors not presently known to us or which we currently consider to be immaterial that could cause our actual results to differ materially from those projected in any forward-looking statements we make. We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this report except as required by applicable law or regulation.

Non-GAAP Financial Measures

We use non-GAAP financial information and believe it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results and provide additional insight and transparency on how we evaluate our business. We use non-GAAP financial measures to budget, make operating and strategic decisions and evaluate our performance. We have detailed the non-GAAP adjustments that we make in our non-GAAP definitions below. The adjustments generally fall within the following categories: acquisition & divestiture activities, gains and losses on intangible asset sales and non-cash impairments, major program restructuring activities, constant currency and related adjustments, major program financing and hedging activities and other major items affecting comparability of operating results. We believe the non-GAAP measures should always be considered along with the related U.S. GAAP financial measures. We have provided the reconciliations between the GAAP and non-GAAP financial measures below, and we also discuss our underlying GAAP results throughout our Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-Q.

Our primary non-GAAP financial measures are listed below and reflect how we evaluate our current and prior-year operating results. As new events or circumstances arise, these definitions could change. When our definitions change, we provide the updated definitions and present the related non-GAAP historical results on a comparable basis (1).

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•“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 developed markets.

•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,~~Türkiye, Kazakhstan, 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.

•“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~~divestiture-related costs (2), acquisition-related costs, and acquisition ~~and~~ integration costs and contingent consideration adjustments (2); the operating results of divestitures (2); remeasurement of net monetary position (5); mark-to-market impacts from commodity, ~~and~~ forecasted currency and equity method investment transaction derivative contracts (6); impact from resolution of tax matters (7); ~~CEO transition remuneration~~incremental costs due to the war in Ukraine (8); impact from pension participation changes (9)~~; initial impacts from enacted tax law changes~~ ~~(10)~~; and costs associated with the JDE Peet's transaction. 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; gains or losses on ~~equity method investment transactions; net earnings from divestitures~~ ~~(2); and gains or losses on~~ interest rate swaps no longer designated as accounting cash flow hedges due to changed financing and hedging ~~plans.~~plans; net earnings from divestitures (2); initial impacts from enacted tax law changes (10); and gains or losses on equity method investment transactions. Similarly, within Adjusted EPS, our equity method investment net earnings exclude our proportionate share of our investees’ significant operating and non-operating items (11). 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. In the ~~second~~first quarter of ~~2021,~~2022, we added to the non-GAAP definitions the exclusion of ~~initial impacts from enacted tax law changes. Refer~~incremental costs due to the war in Ukraine (refer to footnote ~~(10) below.~~(8) below).

(2)Divestitures include completed sales of businesses (including the partial or full sale of an equity method investment) and exits of major product lines upon completion of a sale or licensing agreement. As we record our share of KDP and JDE Peet’s ongoing earnings on a one-quarter lag basis, any KDP or JDE Peet’s ownership reductions are reflected as divestitures within our non-GAAP results the following quarter. Related to acquisitions, we exclude the impact of adjustments made to our acquisition contingent consideration liabilities that were recorded at the date of acquisition. We made this adjustment to better facilitate comparisons of our underlying operating performance across periods. See Note 2, Acquisitions and Divestitures, and Note 6, Equity Method Investments, for information on acquisitions and divestitures 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 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 deconsolidation in 2015.

(6)We exclude unrealized gains and losses (mark-to-market impacts) from outstanding commodity and forecasted currency and equity method investment transaction ~~derivatives~~derivative contracts from our non-GAAP earnings ~~measures~~measures. The mark-to-market impacts of commodity and forecasted currency transaction derivatives are excluded 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~~make 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~~exclude equity method investment transaction ~~derivatives~~derivative contract settlements as they represent protection of value 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.~~future divestitures.

(7)Refer to Note 12, Commitments and Contingencies – Tax Matters, in this report, and Note 14, Commitments and Contingencies ~~– Tax~~–Tax Matters, in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

(8)~~On November 20, 2017, Dirk Van de Put succeeded Irene Rosenfeld~~In February 2022, Russia began a military invasion of Ukraine and we stopped our production and closed our facilities in Ukraine. We began to incur incremental costs directly related to the war including asset impairments, such as ~~CEO~~property and inventory losses, higher expected allowances for uncollectible accounts receivable and committed compensation. We have isolated and exclude these costs from our operating results to facilitate evaluation and comparisons of ~~Mondelēz International~~our ongoing results. Incremental costs related to increasing operations 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~~other primarily European facilities are not included 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~~costs.

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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. In 2019, we excluded amounts related to the partial vesting of Mr. Van de Put’s equity grants. During the first quarter of 2020, Mr. Van de Put's equity grants became fully vested.

(9)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 withdrawal.

(10)We have excluded the initial impacts from enacted tax law changes. Initial impacts include items such as the remeasurement of deferred tax balances and the transition tax from the 2017 U.S. tax reform. ~~Previously, we only excluded the initial impacts from more material tax reforms, specifically the impacts of the 2019 Swiss tax reform and 2017 U.S. tax reform.~~ We exclude initial impacts from enacted tax law changes from our Adjusted EPS as they do not reflect our ongoing tax obligations under the enacted tax law changes. Refer to our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for more information on the impact of Swiss and U.S. tax reform.

(11)We have excluded our proportionate share of our equity method investees’ significant operating and non-operating items such as acquisition and divestiture related costs, restructuring program costs and initial impacts from enacted tax law changes, 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 significant operating and non-operating items 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’ significant operating and non-operating items.

We believe that the presentation of these non-GAAP financial measures, when considered together with our U.S. GAAP financial measures and the reconciliations to the corresponding U.S. GAAP financial measures, provides you with a more complete understanding of the factors and trends affecting our business than could be obtained absent these disclosures. Because non-GAAP financial measures vary among companies, the non-GAAP financial measures presented in this report may not be comparable to similarly titled measures used by other companies. Our use of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for any U.S. GAAP financial measures. A limitation of these non-GAAP financial measures is they exclude items detailed below that have an impact on our U.S. GAAP reported results. The best way this limitation can be addressed is by evaluating our non-GAAP financial measures in combination with our U.S. GAAP reported results and carefully evaluating the following tables that reconcile U.S. GAAP reported figures to the non-GAAP financial measures in this Form 10-Q.

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Organic Net Revenue:

Applying the definition of “Organic Net Revenue,” the adjustments made to “net revenues” (the most comparable U.S. GAAP financial measure) were to exclude the impact of currency and acquisitions. We believe that Organic Net Revenue reflects the underlying growth from the ongoing activities of our business and provides improved comparability of results. We also evaluate our Organic Net Revenue growth from emerging markets and developed markets, and these underlying measures are also reconciled to U.S. GAAP below.


		For the Three Months Ended June 30, 2021						For the Three Months Ended June 30, 2020							For the Three Months Ended March 31, 2022						For the Three Months Ended March 31, 2021
		Emerging Markets		Developed Markets		Total		Emerging Markets		Developed Markets		Total			Emerging Markets		Developed Markets		Total		Emerging Markets		Developed Markets		Total
		(in millions)						(in millions)							(in millions)						(in millions)
Net Revenue		$	2,293	$	4,349	$	6,642	$	1,917	$	3,994	$	5,911
Net Revenues														Net Revenues	$	2,964	$	4,800	$	7,764	$	2,563	$	4,675	$	7,238
Impact of currency	Impact of currency	(60)		(251)		(311)		—		—		—		Impact of currency	139		160		299		—		—		—
Impact of acquisition		—		(52)		(52)		—		—		—
Impact of acquisitions														Impact of acquisitions	(116)		(90)		(206)		—		—		—

Organic Net Revenue	Organic Net Revenue	$	2,233	$	4,046	$	6,279	$	1,917	$	3,994	$	5,911	Organic Net Revenue	$	2,987	$	4,870	$	7,857	$	2,563	$	4,675	$	7,238

For the Six Months Ended June 30, 2021 For the Six Months Ended June 30, 2020
Emerging
Markets Developed
Markets Total Emerging
Markets Developed
Markets Total
(in millions) (in millions)
Net Revenue $ 4,856 $ 9,024 $ 13,880 $ 4,334 $ 8,284 $ 12,618
Impact of currency 34 (505) (471) — — —
Impact of acquisitions — (166) (166) — — —
Organic Net Revenue $ 4,890 $ 8,353 $ 13,243 $ 4,334 $ 8,284 $ 12,618

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Adjusted Operating Income:

Applying the definition of “Adjusted Operating Income,” the adjustments made to “operating income” (the most comparable U.S. GAAP financial measure) were to exclude Simplify to Grow Program; intangible asset impairment ~~charges,~~charges; mark-to-market impacts from commodity, ~~and~~ forecasted currency and equity method investment transaction derivative contracts; acquisition integration ~~costs;~~costs and contingent consideration adjustments; acquisition-related costs; divestiture-related ~~costs,~~costs; gain on an acquisition; incremental costs ~~associated with JDE Peet's transaction;~~due to the war in Ukraine; the remeasurement of net monetary position; and impact from pension participation ~~changes and impact from resolution of tax matters.~~changes. We also evaluate Adjusted Operating Income on a constant currency basis. We believe these measures provide improved comparability of underlying operating results.


		For the Three Months Ended June 30,									For the Three Months Ended March 31,
		2021		2020		$ Change		% Change			2022		2021		$ Change		% Change
		(in millions)									(in millions)
Operating Income	Operating Income	$	872	$	713	$	159	22.3	%	Operating Income	$	1,094	$	1,283	$	(189)	(14.7)	%
Simplify to Grow Program (1)	Simplify to Grow Program (1)	132		76		56				Simplify to Grow Program (1)	31		122		(91)
Intangible asset impairment charges (2)	Intangible asset impairment charges (2)	32		90		(58)				Intangible asset impairment charges (2)	78		—		78
Mark-to-market (gains)/losses from derivatives (3)		(20)		2		(22)
Mark-to-market gains from derivatives (3)										Mark-to-market gains from derivatives (3)	(27)		(118)		91

Acquisition integration costs (4)		2		2		—
Acquisition integration costs and contingent consideration adjustments (4)										Acquisition integration costs and contingent consideration adjustments (4)	32		1		31
Acquisition-related costs (4)	Acquisition-related costs (4)	17		10		7				Acquisition-related costs (4)	21		7		14
Divestiture-related costs (4)	Divestiture-related costs (4)	—		(2)		2				Divestiture-related costs (4)	1		—		1

Gain on acquisition (4)										Gain on acquisition (4)	—		(9)		9

Costs associated with JDE Peet's transaction (5)		—		48		(48)

Remeasurement of net monetary position (6)		3		3		—
Impact from pension participation changes (7)		44		—		44
Impact from resolution of tax matters (8)		(5)		—		(5)
Incremental costs due to war in Ukraine (5)										Incremental costs due to war in Ukraine (5)	143		—		143
Remeasurement of net monetary position (5)										Remeasurement of net monetary position (5)	5		5		—
Impact from pension participation changes (6)										Impact from pension participation changes (6)	—		1		(1)

Adjusted Operating Income	Adjusted Operating Income	$	1,077	$	942	$	135	14.3	%	Adjusted Operating Income	$	1,378	$	1,292	$	86	6.7	%
Favorable currency translation		(67)		—		(67)
Unfavorable currency translation										Unfavorable currency translation	89		—		89
Adjusted Operating Income (constant currency)	Adjusted Operating Income (constant currency)	$	1,010	$	942	$	68	7.2	%	Adjusted Operating Income (constant currency)	$	1,467	$	1,292	$	175	13.5	%

For the Six Months Ended
June 30,
2021 2020 $ Change % Change
(in millions)
Operating Income $ 2,155 $ 1,569 $ 586 37.3 %
Simplify to Grow Program (1)
254 134 120
Intangible asset impairment charges (2)
32 90 (58)
Mark-to-market (gains)/losses from derivatives (3)
(138) 187 (325)
Acquisition integration costs (4)
3 2 1
Acquisition-related costs (4)
24 15 9
Divestiture-related costs (4)
— (2) 2
Gain on acquisition (4)
(9) — (9)
Costs associated with JDE Peet's transaction (5)
— 48 (48)
Remeasurement of net monetary position (6)
8 5 3
Impact from pension participation changes (7)
45 — 45
Impact from resolution of tax matters (8)
(5) — (5)
Adjusted Operating Income $ 2,369 $ 2,048 $ 321 15.7 %
Favorable currency translation (111) — (111)
Adjusted Operating Income (constant currency) $ 2,258 $ 2,048 $ 210 10.3 %

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(1)Refer to Note 7, Restructuring Program, for more information.

(2)Refer to Note 5, Goodwill and Intangible Assets, for more information.

(3)Refer to Note 9, Financial Instruments, ~~Note 16,~~ ~~Segment Reporting~~, and the Non-GAAP Financial Measures section for more information on the unrealized gains/losses on commodity, ~~and~~ forecasted currency and equity method investment transaction derivatives.

(4)Refer to Note 2, Acquisitions and Divestitures, for more information on the January 3, 2022 acquisition of Chipita, the April 1, 2021 acquisition of Gourmet Food Holdings Pty Ltd, the March 25, 2021 acquisition of a majority interest in Grenade and the January 4, 2021 acquisition of the remaining 93% of equity in Hu Master ~~Holdings and the April 1, 2020 acquisition of a significant majority interest in Give & Go.~~Holdings.

(5)~~Refer to Note 6,~~ ~~Equity Method Investments,~~ ~~for more information on the JDE Peet's transaction.~~

~~(6)~~Refer to Note 1, Basis of Presentation ~~– Currency Translation and Highly Inflationary Accounting~~, for information on our accounting for the war in Ukraine and our application of highly inflationary accounting for Argentina.

~~(7)~~(6)Refer to Note 10, Benefit Plans~~, for more information.~~

~~(8)Refer to Note 12,~~ ~~Commitments and Contingencies~~, for more information.

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Adjusted EPS:

Applying the definition of “Adjusted EPS,” (1) the adjustments made to “diluted EPS attributable to Mondelēz International” (the most comparable U.S. GAAP financial measure) were to exclude the impacts of the items listed in the Adjusted Operating Income tables above as well as net earnings from divestitures; ~~a loss related to interest rate swaps; a loss~~losses on debt extinguishment and related expenses; initial impacts from enacted tax law ~~changes, gain~~changes; losses on equity method investment transactions; and our proportionate share of significant operating and non-operating items recorded by our JDE Peet's and KDP equity method investees. We also evaluate Adjusted EPS on a constant currency basis. We believe Adjusted EPS provides improved comparability of underlying operating results.


		For the Three Months Ended June 30,									For the Three Months Ended March 31,
		2021		2020		$ Change		% Change			2022		2021		$ Change		% Change
Diluted EPS attributable to Mondelēz International	Diluted EPS attributable to Mondelēz International	$	0.76	$	0.38	$	0.38	100.0	%	Diluted EPS attributable to Mondelēz International	$	0.61	$	0.68	$	(0.07)	(10.3)	%
Simplify to Grow Program (2)	Simplify to Grow Program (2)	0.07		0.04		0.03				Simplify to Grow Program (2)	0.02		0.07		(0.05)
Intangible asset impairment charges (2)	Intangible asset impairment charges (2)	0.02		0.05		(0.03)				Intangible asset impairment charges (2)	0.04		—		0.04
Mark-to-market (gains)/losses from derivatives (2)		(0.02)		—		(0.02)
Mark-to-market gains from derivatives (2)										Mark-to-market gains from derivatives (2)	(0.02)		(0.07)		0.05

Acquisition integration costs and contingent consideration adjustments (2)										Acquisition integration costs and contingent consideration adjustments (2)	(0.01)		—		(0.01)
Acquisition-related costs (2)	Acquisition-related costs (2)	0.01		0.01		—				Acquisition-related costs (2)	0.02		0.01		0.01

Net earnings from divestitures (3)	Net earnings from divestitures (3)	—		(0.01)		0.01				Net earnings from divestitures (3)	—		(0.01)		0.01

Costs associated with JDE Peet's transaction (2)		—		0.21		(0.21)

Impact from pension participation changes (2)		0.02		—		0.02

Initial impacts from enacted tax law changes (4)		0.07		—		0.07

Gain on equity method investment transactions (5)		(0.27)		(0.08)		(0.19)
Equity method investee items (6)		—		0.01		(0.01)

Incremental costs due to war in Ukraine (2)										Incremental costs due to war in Ukraine (2)	0.11		—		0.11
Loss on debt extinguishment and related expenses (4)										Loss on debt extinguishment and related expenses (4)	0.07		0.07		—

Equity method investee items (5)										Equity method investee items (5)	—		0.04		(0.04)

Adjusted EPS	Adjusted EPS	$	0.66	$	0.61	$	0.05	8.2	%	Adjusted EPS	$	0.84	$	0.79	$	0.05	6.3	%
Favorable currency translation		(0.04)		—		(0.04)
Unfavorable currency translation										Unfavorable currency translation	0.06		—		0.06
Adjusted EPS (constant currency)	Adjusted EPS (constant currency)	$	0.62	$	0.61	$	0.01	1.6	%	Adjusted EPS (constant currency)	$	0.90	$	0.79	$	0.11	13.9	%

For the Six Months Ended
June 30,
2021 2020 $ Change % Change
Diluted EPS attributable to Mondelēz International $ 1.44 $ 0.89 $ 0.55 61.8 %
Simplify to Grow Program (2)
0.13 0.07 0.06
Intangible asset impairment charges (2)
0.02 0.05 (0.03)
Mark-to-market (gains)/losses from derivatives (2)
(0.08) 0.11 (0.19)
Acquisition-related costs (2)
0.01 0.01 —
Net earnings from divestiture (2)
— (0.02) 0.02
Costs associated with JDE Peet's transaction (2)
— 0.21 (0.21)
Impact from pension participation changes (2)
0.02 — 0.02
Loss related to interest rate swaps (7)
— 0.06 (0.06)
Loss on debt extinguishment (8)
0.07 — 0.07
Initial impacts from enacted tax law changes (4)
0.07 — 0.07
Gain on equity method investment transactions (5)
(0.26) (0.12) (0.14)
Equity method investee items (6)
0.04 0.02 0.02
Adjusted EPS $ 1.46 $ 1.28 $ 0.18 14.1 %
Favorable currency translation (0.07) — (0.07)
Adjusted EPS (constant currency) $ 1.39 $ 1.28 $ 0.11 8.6 %

~~Table of Contents~~

(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 ~~June 30,~~March 31, 2022, taxes for the: Simplify to Grow Program were $(7) million, intangible asset impairment charges were $(19) million, mark-to-market gains from derivatives were $(5) million, acquisition integration costs and contingent consideration adjustments were $(50) million, acquisition-related costs were $(1) million, incremental costs due to the war in Ukraine were $2 million and loss on debt extinguishment and related expenses were $(31) million.

•For the three months ended March 31, 2021, taxes for the: Simplify to Grow Program were ~~$(35) million, intangible asset impairment charges were $(8)~~$(31) million, mark-to-market gains from derivatives were ~~$(4)~~$22 million, acquisition-related costs were ~~$(3)~~$(1) million, ~~impact~~net earnings from ~~pension participation changes~~divestitures were ~~$(7)~~$3 million, ~~impact from enacted tax changes~~loss on debt extinguishment and related expenses were ~~$95 million, gain on equity method transactions were $125~~$(34) million and equity method investee items were ~~$(3) million.~~

•~~For the three months ended June 30, 2020, taxes for the: Simplify to Grow Program were $(20) million, intangible asset impairment charges were $(21) million, acquisition-related costs were~~ $(2) ~~million, net earnings from divestitures were $1 million, costs associated with the JDE Peet's transaction were $261 million and equity method investee items were $(4) million.~~

•For the six months ended June 30, 2021, taxes for the: Simplify to Grow Program were $(66) million, intangible asset impairment charges were $(8) million, mark-to-market gains from derivatives were $18 million, acquisition-related costs were $(4) million, impact from pension participation changes were $(8) million, loss on debt extinguishment were $(34) million, impact from enacted tax changes were $99 million, gain on equity method investment transactions were $125 million and equity method investee items were $(4) million.

•For the six months ended June 30, 2020, taxes for the: Simplify to Grow Program were $(33) million, intangible asset impairment charges were $(21) million, mark-to-market losses from derivatives were $(32) million, acquisition-related costs were $(3) million, net earnings from divestitures were $6 million, costs associated with the JDE Peet's transaction were $261 million, loss related to interest rate swaps were $(24) million, gain on equity method investment transactions were $17 million and equity method investee items were $(5) million.

(2)See the Adjusted Operating Income table above and the related footnotes for more information.

(4)Refer to Note ~~14,~~8, ~~Income Taxes~~Debt and Borrowing Arrangements, ~~and~~ ~~Non-GAAP Financial Measures~~ ~~section~~ for more information on the ~~impact.~~loss on debt extinguishment and related expenses.

(5)~~Refer to Note 6,~~ ~~Equity Method Investments,~~ ~~for more information on the gains and losses on equity method investment transactions.~~

~~(7)Refer to Note 9,~~ ~~Financial Instruments, for information on our interest rate swaps that we no longer designate as cash flow hedges.~~

~~(8)Refer to Note 8,~~ ~~Debt and Borrowing Arrangements, for more information on the loss on debt extinguishment and related expenses.~~

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

As we operate globally, we are primarily exposed to currency exchange rate, commodity price and interest rate market risks. We monitor and manage these exposures as part of our overall risk management program. Our risk management program focuses on the unpredictability of financial markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on our operating results.

The COVID-19 pandemic and related global response significantly impacted economic activity and markets around the world. National and local governments imposed preventative or protective restrictions on travel and business operations and advised or required citizens to remain at home. Temporary closures of businesses were ordered and numerous other businesses temporarily closed voluntarily. The impact of the global pandemic and response as well as the war in Ukraine has had a material unfavorable impact on global and local markets, including commodity, currency and capital markets. ~~While some of these markets such as the U.S. and other major stock markets and certain currencies have rebounded significantly in recent quarters, these~~These markets are likely to continue to remain volatile while ~~the situation continues.~~these situations continue. An economic or credit crisis could occur and impair credit availability and our ability to raise capital when needed. A disruption in the financial markets may have a negative effect on our derivative counterparties and could impair our banking or other business partners, on whom we rely for access to capital and as counterparties for a number of our derivative contracts. We work to mitigate these risks and we largely employ existing strategies that are described below to mitigate currency, commodity and interest rate market risks.

We principally utilize derivative instruments to reduce significant, unanticipated earnings fluctuations that may arise from volatility in currency exchange rates, commodity prices and interest rates. For additional information on our derivative activity and the types of derivative instruments we use to hedge our currency exchange, commodity price and interest rate exposures, see Note 9, Financial Instruments.

Many of our non-U.S. subsidiaries operate in functional currencies other than the U.S. dollar. Fluctuations in currency exchange rates create volatility in our reported results as we translate the balance sheets, operating results and cash flows of these subsidiaries into the U.S. dollar for consolidated reporting purposes. The translation of non-U.S. dollar denominated balance sheets and statements of earnings of our subsidiaries into the U.S. dollar for consolidated reporting generally results in a cumulative translation adjustment to other comprehensive income within equity. A stronger U.S. dollar relative to other functional currencies adversely affects our consolidated earnings and net assets while a weaker U.S. dollar benefits our consolidated earnings and net assets. While we hedge significant forecasted currency exchange transactions as well as certain net assets of non-U.S. operations and other currency impacts, we cannot fully predict or eliminate volatility arising from changes in currency exchange rates on our consolidated financial results. See Consolidated Results of Operations and Results of Operations by Reportable Segment under Discussion and Analysis of Historical Results for currency exchange effects on our financial results during the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. Throughout our discussion and analysis of results, we isolate currency impacts and supplementally provide net revenues, operating income and diluted earnings per share on a constant currency basis. For additional information on the impact of currency policies, recent currency devaluations and highly inflationary accounting on our financial condition and results of operations, also see Note 1, Basis of Presentation – Currency Translation and Highly Inflationary Accounting,. including our discussion of Türkiyebecoming a highly inflationary economy with currency remeasurement impacts expected to start on April 1, 2022.

We also continually monitor the market for commodities that we use in our products. Input costs may fluctuate widely due to international demand, weather conditions, government policy and regulation and unforeseen conditions such as the current COVID-19 global ~~pandemic.~~pandemic and war in Ukraine. Refer to Recent Developments and Significant Items Affecting Comparability and Financial Outlook above for updates on recent supply chain, transportation, labor and other disruptions that are increasing operating costs and impacting our results. To manage input cost volatility and inflation, we enter into forward purchase agreements and other derivative financial instruments. We also pursue productivity and cost saving measures and take pricing actions when necessary to mitigate the impact of higher input costs on earnings.

We regularly evaluate our variable and fixed-rate debt as well as current and expected interest rates in the markets in which we raise capital. Our primary exposures include movements in U.S. Treasury rates, corporate credit spreads and commercial paper rates as well as limited debt tied to London Interbank Offered Rates (“LIBOR”). The Financial Conduct Authority in the United Kingdom plans to initiate the phase-out of many term LIBOR rates by the end of 2021 and to phase out the remaining LIBOR rates by June 30, 2023. We do not anticipate a significant impact to our financial position from the planned phase out of LIBOR given our current mix of variable and fixed-rate debt.rates. We periodically use interest rate swaps and forward interest rate contracts to achieve a desired proportion of variable versus fixed rate debt based on current and projected market conditions. For more information on our ~~2021~~2022 debt activity, see Note 8, Debt and Borrowing Arrangements.

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See Note 9, Financial Instruments, for more information on our ~~2021~~2022 derivative activity. For additional information on our hedging strategies, policies and practices on an ongoing basis, also refer to our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure. Management, together with our CEO and CFO, evaluated the effectiveness of the Company’s disclosure controls and procedures as of ~~June 30, 2021.~~March 31, 2022. Based on this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of ~~June 30, 2021.~~March 31, 2022.

Changes in Internal Control Over Financial Reporting

Management, together with our CEO and CFO, evaluated the changes in our internal control over financial reporting during the quarter ended June 30, 2021. Many of our employees and those of our outsourcing partners and other accounting service providers continued to work remotely as a significant number of our and their offices were closed in response to the COVID-19 pandemic.March 31, 2022. There were no material changes in our internal ~~controls~~control over ~~financial reporting as we were able to continue to maintain our existing controls and procedures over our~~ financial reporting during the quarter ended ~~June 30, 2021.~~March 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Information regarding legal proceedings is available in Note 12, Commitments and Contingencies, to the condensed consolidated financial statements in this report.

Item 1A. Risk Factors.

~~There were no~~The following represents a material ~~changes~~change in our risk factors to ~~the risk factors~~those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

The war in Ukraine has negatively impacted our business operations, financial performance and results of operations, and we are unable to predict the full extent to which the war in Ukraine will negatively impact our business, operations, financial condition, results of operations and stock price in the future.

The scope and duration of the war in Ukraine is uncertain, rapidly changing and hard to predict. Our business operations, financial performance and results of operations have been negatively impacted by the war, as discussed above in Recent Developments and Significant Items Affecting Comparability – War in Ukraine under Management’s Discussion and Analysis of Financial Condition and Results of Operations. We have discontinued new capital investments and suspended our advertising spending in Russia. Other potential consequences include but are not limited to those outlined below:

•As the business and geopolitical environment continues to change, we may further scale back our operations in Russia, which accounted for 2.9% of 2021 consolidated net revenues, or Ukraine, which accounted for 0.5% of 2021 consolidated net revenues.

•Our Russian assets may be partially or fully impaired in future periods based on actions taken by Russia, other parties or us.

•The war has materially disrupted commodity markets, including for wheat and energy, and is contributing to supply chain disruption and inflation. We expect continued volatility with respect to these costs, and our hedging activities might not sufficiently offset this volatility.

•Our operations may be subject to increased risk of cyber threats as a result of the war.

•International sanctions and other measures that have been imposed on Russian entities make it more difficult to operate in Russia, and failure to comply with applicable sanctions and measures could subject us to regulatory penalties and reputational risk.

•We might face continued questions from stakeholders about our operations in Russia despite our role as a food company and our public statements about Ukraine and Russia.

These and other impacts of the war in Ukraine could have the effect of heightening many of the other risks described in the “Risk Factors” section of our Annual Report on Form 10-K, such as those relating to our reputation, brands, product sales, sanctions, trade relations in countries in which we operate, input price inflation and volatility, results of operations and financial condition. We might not be able to predict or respond to all impacts on a timely basis to prevent near- or long-term adverse impacts to our results. The ultimate impact of these disruptions also depends on events beyond our knowledge or control, including the scope and duration of the war and actions taken by parties other than us to respond to them. Any of these disruptions could have a negative impact on our business operations, financial performance, results of operations and stock price, and this impact could be material. Additionally, the war in Ukraine may also materially adversely affect our operating results and financial position in a manner that is not currently known to us or that we do not currently consider to be a significant risk.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Our stock repurchase activity for each of the three months in the quarter ended ~~June 30, 2021~~March 31, 2022 was:

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)(3)
April 1-30, 2021 39,383 $ 56.79 37,515 $ 4,732
May 1-31, 2021 1,613,513 60.65 1,611,302 4,632
June 1-30, 2021 5,568,617 63.72 5,557,972 4,282
For the Quarter Ended June 30, 2021 7,221,513 62.38 7,206,789

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	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)
January 1-31, 2022	4,463,391	$	67.23	4,462,207	$	3,354
February 1-28, 2022	4,760,384	66.45		4,280,007	3,069
March 1-31, 2022	2,403,672	62.48		2,400,087	2,919
For the Quarter Ended March 31, 2022	11,627,447	$	65.93	11,142,301

(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 deferred stock that vested, totaling ~~1,868~~1,184 shares, ~~2,211~~480,377 shares and ~~10,645~~3,585 shares for the fiscal months of ~~April, May~~January, February and ~~June 2021,~~March 2022, respectively.

(2)Dollar values stated in millions. Our Board of Directors has authorized the repurchase of $23.7 billion of our Common Stock through December 31, 2023. Authorizations to increase and extend the program duration included: $4.0 billion on December 2, 2020, $6.0 billion on January 31, 2018, $6.0 billion on July 29, 2015, $1.7 billion on December 3, 2013, and $6.0 billion on August 6, 2013 (cumulatively including ~~amounts~~the amount authorized on March 12, ~~2013) and~~2013, which was the lesser of 40 million shares and $1.2 ~~billion on March 12, 2013.~~billion). Since the program inception on March 12, 2013 through ~~June 30, 2021,~~March 31, 2022, we have repurchased ~~$19.5~~$20.8 billion, and as of ~~June 30, 2021,~~March 31, 2022, we had approximately ~~$4.3~~$2.9 billion share repurchase authorization remaining. See related information in Note 11, Stock Plans.

~~(3)Dollar values stated in millions.~~

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Item 6. Exhibits.


Exhibit Number						Description
4.1						The Registrant agrees to furnish to the SEC upon request copies of any instruments defining the rights of holders of long-term debt of the Registrant and its consolidated subsidiaries that does not exceed 10 percent of the total assets of the Registrant and its consolidated subsidiaries.
10.1						364-Day Revolving Credit Agreement, dated February 23, 2022, by and among Mondelēz International, Inc., the lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 23, 2022).
10.2						Five-Year Revolving Credit Agreement, dated February 23, 2022, by and among Mondelēz International, Inc., the lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 23, 2022).
10.3						Term Credit Agreement, dated March 31, 2022, by and among Mondelēz International, Inc., the lenders named therein and Mizuho Bank, Ltd., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 31, 2022).
10.4						2022 Form of Mondelēz International, Inc. Amended and Restated 2005 Performance Incentive Plan Non-Qualified Global Stock Option Agreement.+
10.5						2022 Form of Mondelēz International, Inc. Amended and Restated 2005 Performance Incentive Plan Global Long-Term Incentive Grant Agreement.+
10.6						2022 Form of Mondelēz International, Inc. Amended and Restated 2005 Performance Incentive Plan Global Deferred Stock Unit Agreement.+
31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1						Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101						The following materials from Mondelēz International’s Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2021~~March 31, 2022 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.
104						The cover page from Mondelēz International’s Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2021,~~March 31, 2022, formatted in Inline XBRL (included as Exhibit 101).
						+Indicates a management contract or compensatory plan or arrangement.

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



MONDELĒZ INTERNATIONAL, INC.

By: /s/ LUCA ZARAMELLA
Luca Zaramella
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer)

~~July 27, 2021~~April 26, 2022

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