Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 24, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-16483 | |
Entity Registrant Name | Mondelēz International, Inc. | |
Entity Incorporation, State or Country Code | VA | |
Entity Tax Identification Number | 52-2284372 | |
Entity Address, Address Line One | 905 West Fulton Market, Suite 200 | |
Entity Address, City or Town | Chicago, | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60607 | |
City Area Code | 847 | |
Local Phone Number | 943-4000 | |
Entity Information [Line Items] | ||
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,427,464,062 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001103982 | |
Current Fiscal Year End Date | --12-31 | |
Class A Common Stock, no par value | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A Common Stock, no par value | |
Trading Symbol | MDLZ | |
Security Exchange Name | NASDAQ | |
2.375% Notes due 2021 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.375% Notes due 2021 | |
Trading Symbol | MDLZ21 | |
Security Exchange Name | NASDAQ | |
1.000% Notes due 2022 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 1.000% Notes due 2022 | |
Trading Symbol | MDLZ22 | |
Security Exchange Name | NASDAQ | |
1.625% Notes due 2023 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 1.625% Notes due 2023 | |
Trading Symbol | MDLZ23 | |
Security Exchange Name | NASDAQ | |
1.625% Notes due 2027 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 1.625% Notes due 2027 | |
Trading Symbol | MDLZ27 | |
Security Exchange Name | NASDAQ | |
2.375% Notes due 2035 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.375% Notes due 2035 | |
Trading Symbol | MDLZ35 | |
Security Exchange Name | NASDAQ | |
4.500% Notes due 2035 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 4.500% Notes due 2035 | |
Trading Symbol | MDLZ35A | |
Security Exchange Name | NASDAQ | |
3.875% Notes due 2045 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 3.875% Notes due 2045 | |
Trading Symbol | MDLZ45 | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net revenues | $ 6,707 | $ 6,538 |
Cost of sales | 4,256 | 3,945 |
Gross profit | 2,451 | 2,593 |
Selling, general and administrative expenses | 1,537 | 1,493 |
Asset impairment and exit costs | 15 | 20 |
Amortization of intangibles | 43 | 44 |
Operating income | 856 | 1,036 |
Benefit plan non-service income | (33) | (17) |
Interest and other expense, net | 190 | 80 |
Earnings before income taxes | 699 | 973 |
Provision for income taxes | (148) | (189) |
Gains on equity method investment transactions | 71 | 23 |
Equity method investment net earnings | 138 | 113 |
Net earnings | 760 | 920 |
Noncontrolling interest earnings | (7) | (6) |
Net earnings attributable to Mondelēz International | $ 753 | $ 914 |
Per share data: | ||
Basic earnings per share attributable to Mondelēz International (in dollars per share) | $ 0.53 | $ 0.63 |
Diluted earnings per share attributable to Mondelēz International (in dollars per share) | $ 0.52 | $ 0.63 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Earnings - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 760 | $ 920 |
Other comprehensive earnings/(losses), net of tax: | ||
Currency translation adjustment | (1,511) | 190 |
Pension and other benefit plans | 79 | 10 |
Derivative cash flow hedges | 60 | (69) |
Total other comprehensive earnings/(losses) | (1,372) | 131 |
Comprehensive earnings/(losses) | (612) | 1,051 |
less: Comprehensive earnings/(losses) attributable to noncontrolling interests | 2 | 5 |
Comprehensive earnings/(losses) attributable to Mondelēz International | $ (614) | $ 1,046 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 1,925 | $ 1,291 |
Trade receivables (net of allowances of $39 at March 31, 2020 and $35 at December 31, 2019) | 2,628 | 2,212 |
Other receivables (net of allowances of $40 at March 31, 2020 and $44 at December 31, 2019) | 670 | 715 |
Inventories, net | 2,441 | 2,546 |
Other current assets | 1,404 | 866 |
Total current assets | 9,068 | 7,630 |
Property, plant and equipment, net | 8,054 | 8,733 |
Operating lease right of use assets | 590 | 568 |
Goodwill | 20,216 | 20,848 |
Intangible assets, net | 17,271 | 17,957 |
Prepaid pension assets | 537 | 516 |
Deferred income taxes | 708 | 726 |
Equity method investments | 6,887 | 7,212 |
Other assets | 267 | 359 |
TOTAL ASSETS | 63,598 | 64,549 |
LIABILITIES | ||
Short-term borrowings | 4,764 | 2,638 |
Current portion of long-term debt | 1,672 | 1,581 |
Accounts payable | 5,554 | 5,853 |
Accrued marketing | 1,848 | 1,836 |
Accrued employment costs | 573 | 769 |
Other current liabilities | 2,593 | 2,645 |
Total current liabilities | 17,004 | 15,322 |
Long-term debt | 13,354 | 14,207 |
Long-term operating lease liabilities | 433 | 403 |
Deferred income taxes | 3,308 | 3,338 |
Accrued pension costs | 1,110 | 1,190 |
Accrued postretirement health care costs | 376 | 387 |
Other liabilities | 2,261 | 2,351 |
TOTAL LIABILITIES | 37,846 | 37,198 |
Commitments and Contingencies (Note 12) | ||
EQUITY | ||
Common Stock, no par value (5,000,000,000 shares authorized and 1,996,537,778 shares issued at March 31, 2020 and December 31, 2019) | 0 | 0 |
Additional paid-in capital | 31,990 | 32,019 |
Retained earnings | 26,961 | 26,653 |
Accumulated other comprehensive losses | (11,625) | (10,258) |
Treasury stock, at cost (569,185,208 shares at March 31, 2020 and 561,531,524 shares at December 31, 2019) | (21,652) | (21,139) |
Total Mondelēz International Shareholders’ Equity | 25,674 | 27,275 |
Noncontrolling interest | 78 | 76 |
TOTAL EQUITY | 25,752 | 27,351 |
TOTAL LIABILITIES AND EQUITY | $ 63,598 | $ 64,549 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowances | $ 39 | $ 35 |
Other receivables, allowances | $ 40 | $ 44 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 5,000,000,000 | 5,000,000,000 |
Common stock, shares issued (in shares) | 1,996,537,778 | 1,996,537,778 |
Treasury stock, at cost (in shares) | 569,185,208 | 561,531,524 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Earnings/(Losses) | Treasury Stock | Non-controlling Interest |
Balance at beginning of period at Dec. 31, 2018 | $ 25,713 | $ 0 | $ 31,961 | $ 24,491 | $ (10,630) | $ (20,185) | $ 76 |
Comprehensive earnings/(losses): | |||||||
Net earnings | 920 | 914 | 6 | ||||
Other comprehensive earnings/(losses), net of income taxes | 131 | 132 | (1) | ||||
Exercise of stock options and issuance of other stock awards | 185 | (28) | (76) | 289 | |||
Common Stock repurchased | (665) | (665) | |||||
Cash dividends declared | (375) | (375) | |||||
Balance at end of period at Mar. 31, 2019 | 25,909 | 0 | 31,933 | 24,954 | (10,498) | (20,561) | 81 |
Balance at beginning of period at Dec. 31, 2019 | 27,351 | 0 | 32,019 | 26,653 | (10,258) | (21,139) | 76 |
Comprehensive earnings/(losses): | |||||||
Net earnings | 760 | 753 | 7 | ||||
Other comprehensive earnings/(losses), net of income taxes | (1,372) | (1,367) | (5) | ||||
Exercise of stock options and issuance of other stock awards | 121 | (29) | (38) | 188 | |||
Common Stock repurchased | (701) | (701) | |||||
Cash dividends declared | (408) | (408) | |||||
Dividends paid on noncontrolling interest and other activities | 1 | 1 | |||||
Balance at end of period at Mar. 31, 2020 | $ 25,752 | $ 0 | $ 31,990 | $ 26,961 | $ (11,625) | $ (21,652) | $ 78 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Retained Earnings | ||
Cash dividends declared (in dollars per share) | $ 0.285 | $ 0.26 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES | ||
Net earnings | $ 760 | $ 920 |
Adjustments to reconcile net earnings to operating cash flows: | ||
Depreciation and amortization | 256 | 258 |
Stock-based compensation expense | 28 | 32 |
Deferred income tax provision/(benefit) | (26) | 2 |
Asset impairments and accelerated depreciation | 0 | 5 |
Gains on equity method investment transactions | (71) | (23) |
Equity method investment net earnings | (138) | (113) |
Distributions from equity method investments | 165 | 160 |
Other non-cash items, net | 126 | 16 |
Change in assets and liabilities, net of acquisitions and divestitures: | ||
Receivables, net | (610) | (570) |
Inventories, net | (48) | (36) |
Accounts payable | 206 | (139) |
Other current assets | (217) | 47 |
Other current liabilities | (71) | (45) |
Change in pension and postretirement assets and liabilities, net | (76) | (49) |
Net cash provided by operating activities | 284 | 465 |
CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES | ||
Capital expenditures | (214) | (265) |
Proceeds from divestitures including equity method investments | 185 | 0 |
Other | (26) | 42 |
Net cash used in investing activities | (55) | (223) |
CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES | ||
Issuances of commercial paper, maturities greater than 90 days | 157 | 610 |
Repayments of commercial paper, maturities greater than 90 days | (497) | (1,549) |
Net issuances of other short-term borrowings | 2,477 | 1,815 |
Long-term debt proceeds | 0 | 597 |
Long-term debt repaid | (670) | (403) |
Repurchase of Common Stock | (720) | (646) |
Dividends paid | (409) | (380) |
Other | 117 | 157 |
Net cash provided by financing activities | 455 | 201 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (60) | (1) |
Cash, cash equivalents and restricted cash: | ||
Increase | 624 | 442 |
Balance at beginning of period | 1,328 | 1,100 |
Balance at end of period | $ 1,952 | $ 1,542 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2019 . 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 are carried at cost as there is no readily determinable fair value for the equity interests. 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 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, with currency remeasurement gains or losses recorded in earnings. As discussed below, beginning on July 1, 2018, we began to apply highly inflationary accounting for our operations in Argentina. 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 Argentinian subsidiaries and changed their functional currency from the Argentinian peso to the U.S. dollar. On July 1, 2018, both monetary and non-monetary assets and liabilities denominated in Argentinian pesos were remeasured into U.S. dollars using the exchange rate as of the balance sheet date, with remeasurement and other transaction gains and losses recorded in net earnings. As of March 31, 2020 , our Argentinian operations had $9 million of Argentinian peso denominated net monetary assets. Our Argentinian operations contributed $98 million , or 1.5% of consolidated net revenues in the three months ended March 31, 2020 . Within selling, general and administrative expenses, we recorded a remeasurement loss of $2 million during the three months ended March 31, 2020 as well as a remeasurement loss of $2 million during the three months ended March 31, 2019 related to the revaluation of the Argentinian peso denominated net monetary position over these periods. Brexit . In the three months ended March 31, 2020 , we generated 9.4% of our consolidated net revenues in the United Kingdom. On January 31, 2020, the United Kingdom began the withdrawal process from the European Union under the European and U.K. Parliament approved Withdrawal Agreement. During a transition period currently scheduled to end on December 31, 2020, the United Kingdom will effectively remain in the E.U.’s customs union and single market while a trade deal with the European Union is negotiated. The deadline for extending the transition period ends on June 30, 2020. If the transition period is not extended, on December 31, 2020, the United Kingdom will either exit the European Union without a trade deal or will begin a new trade relationship with the European Union. During the transition period, we continue to take protective measures in response to the potential impacts on our results of operations and financial condition. Following the Brexit vote in June 2016, there was significant volatility in the global stock markets and currency exchange rates. The value of the British pound sterling relative to the U.S. dollar declined significantly and negatively affected our translated results reported in U.S. dollars. If the ultimate terms of the United Kingdom’s separation from the European Union negatively impact the U.K. economy or result in disruptions to sales or our supply chain, the impact to our results of operations and financial condition could be material. We have taken measures to increase our resources in customer service & logistics together with increasing our inventory levels of imported raw materials, packaging and finished goods in the United Kingdom to help us manage through the Brexit transition and the inherent risks. 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 these exposures, including the impacts related to the global outbreak of the novel coronavirus (“COVID-19”) during the first quarter of 2020. Most countries in which we do business have recently experienced periods of significant economic uncertainty as well as exchange rate volatility. We continue to monitor the COVID-19 and other impacts to our business operations, currencies and net monetary exposures in the countries in which we operate. At this time, except for Argentina which is accounted for as a highly inflationary economy, we do not anticipate any other countries in which we operate to be at risk of becoming highly inflationary countries. 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 and which was $27 million as of March 31, 2020 and $37 million as of December 31, 2019. Total cash, cash equivalents and restricted cash was $1,952 million as of March 31, 2020 and $1,328 million as of December 31, 2019. 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 (in millions) Balance at January 1, 2020 $ (35 ) $ (44 ) $ (14 ) Current period provision for expected credit losses (5 ) 1 (2 ) Currency 1 3 3 Balance at March 31, 2020 $ (39 ) $ (40 ) $ (13 ) 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 $840 million as of March 31, 2020 and $760 million as of December 31, 2019 . 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 $89 million in operating lease and $25 million in finance lease right-of-use assets obtained in exchange for lease obligations during the three months ended March 31, 2020 and $26 million in operating lease and $7 million in finance lease right-of-use assets obtained in exchange for lease obligations during the three months ended March 31, 2019 . New Accounting Pronouncements: In December 2019, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") that removes certain exceptions in accounting for income taxes, improves consistency in application and clarifies existing guidance. This ASU is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We do not expect this ASU to have a material impact on our consolidated financial statements. In August 2018, the FASB issued an ASU that aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs for internal-use software. This ASU is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. On January 1, 2020, we adopted the standard on a prospective basis and the standard did not have a material impact to our first quarter 2020 consolidated financial results. In August 2018, the FASB issued an ASU that modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The ASU is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We will adopt this standard and reflect the changes to our 2020 annual disclosures. This ASU is not expected to have an impact on our consolidated financial statements. In August 2018, the FASB issued an ASU that modifies the disclosure requirements on fair value measurements. The ASU is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. We adopted the standard on January 1, 2020 and there was no material impact to our consolidated financial statements upon adoption. In June 2016, the FASB issued an ASU on the measurement of credit losses on financial instruments. This ASU requires entities to measure the impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. This ASU is effective for fiscal years beginning after December 15, 2019. We adopted the standard on January 1, 2020 using the modified retrospective basis and there was no material impact to our consolidated financial statements. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Note 2. Acquisitions and Divestitures On April 1, 2020, we acquired a significant majority interest in Give & Go, a North American leader in fully-finished sweet baked goods and owners 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 and Go provides access to the in-store bakery channel as well as expands our position in broader snacking. The purchase consideration for Give & Go totaled approximately $1.2 billion . Funding for the acquisition consisted of short-term borrowings and cash on hand. We are currently in the process of determining the allocation of the purchase price, which we expect to predominantly be allocated to identifiable intangible assets and goodwill. During the first quarter of 2020, we incurred $5 million of acquisition-related costs. On July 16, 2019, we acquired a majority interest in a U.S. refrigerated nutrition bar company, Perfect Snacks, within our North America segment for $284 million cash paid, net of cash received, and expanded our position in broader snacking. During the first quarter of 2020, we finalized the purchase price allocation of $31 million to definite-lived intangible assets, $107 million to indefinite-lived intangible assets, $150 million to goodwill, $1 million to property, plant and equipment, $12 million to inventory, $8 million to accounts receivable, $13 million to current liabilities, $3 million to deferred tax liabilities and $9 million to other liabilities. The acquisition added incremental net revenues of $32 million and an immaterial amount of incremental operating income during the three months ended March 31, 2020 . On May 28, 2019, we completed the sale of most of our cheese business in the Middle East and Africa to Arla Foods of Denmark. In 2019, we received cash proceeds of $161 million and divested $19 million of current assets and $96 million of non-current assets. We also recorded a net pre-tax gain of $44 million on the sale. The divestiture resulted in a quarter-over-quarter decline in net revenues of $33 million and an immaterial amount of lost operating income during the three months ended March 31, 2020 . |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3. Inventories Inventories consisted of the following: As of March 31, As of December 31, (in millions) Raw materials $ 702 $ 707 Finished product 1,848 1,953 2,550 2,660 Inventory reserves (109 ) (114 ) Inventories, net $ 2,441 $ 2,546 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 4. Property, Plant and Equipment Property, plant and equipment consisted of the following: As of March 31, As of December 31, (in millions) Land and land improvements $ 402 $ 422 Buildings and building improvements 2,961 3,140 Machinery and equipment 10,669 11,295 Construction in progress 553 680 14,585 15,537 Accumulated depreciation (6,531 ) (6,804 ) Property, plant and equipment, net $ 8,054 $ 8,733 For the three months ended March 31, 2020 , capital expenditures of $214 million excluded $259 million of accrued capital expenditures remaining unpaid at March 31, 2020 and included payment for a portion of the $334 million of capital expenditures that were accrued and unpaid at December 31, 2019 . For the three months ended March 31, 2019 , capital expenditures of $265 million excluded $218 million of accrued capital expenditures remaining unpaid at March 31, 2019 and included payment for a portion of the $331 million of capital expenditures that were accrued and unpaid at December 31, 2018 . In connection with our restructuring program, we recorded non-cash property, plant and equipment write-downs (including accelerated depreciation and asset impairments) 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 2020 2019 (in millions) Latin America $ — $ — AMEA (1 ) 1 Europe 1 1 North America 1 3 Non-cash property, plant and equipment write-downs $ 1 $ 5 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 5. Goodwill and Intangible Assets Goodwill by segment was: As of March 31, As of December 31, (in millions) Latin America $ 662 $ 818 AMEA 2,981 3,151 Europe 7,272 7,523 North America 9,301 9,356 Goodwill $ 20,216 $ 20,848 Intangible assets consisted of the following: As of March 31, As of December 31, (in millions) Non-amortizable intangible assets $ 16,674 $ 17,296 Amortizable intangible assets 2,267 2,374 18,941 19,670 Accumulated amortization (1,670 ) (1,713 ) Intangible assets, net $ 17,271 $ 17,957 Non-amortizable 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. Amortizable intangible assets consist primarily of brands, customer-related intangibles, process technology, licenses and non-compete agreements. Amortization expense for intangible assets was $43 million for the three months ended March 31, 2020 and $44 million for the three months ended March 31, 2019 . For the next five years, we currently estimate annual amortization expense of approximately $170 million in 2020, approximately $90 million in 2021 and approximately $80 million in 2022-2024 (reflecting March 31, 2020 exchange rates). Changes in goodwill and intangible assets consisted of: Goodwill Intangible Assets, at cost (in millions) Balance at January 1, 2020 $ 20,848 $ 19,670 Currency (632 ) (729 ) Balance at March 31, 2020 $ 20,216 $ 18,941 During our 2019 annual testing of non-amortizable intangible assets, we recorded $57 million of impairment charges in the third quarter of 2019 related to nine brands. We recorded charges related to gum, chocolate, biscuits and candy brands of $39 million in Europe, $15 million in AMEA and $3 million in Latin America. We also identified fourteen brands, including the nine impaired brands, with $616 million of aggregate book value as of March 31, 2020 , that each had a fair value in excess of book value of 10% or less. We believe our current plans for each of these brands will allow them to not be impaired, but if the 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. During Q1 2020, we evaluated our goodwill and intangible asset impairment risk using both qualitative and quantitative analysis and in light of the COVID-19 global pandemic. Based on the financial performance of our goodwill reporting units and intangible assets during the first quarter of 2020 and review of other significant fair value assumptions, we concluded that no impairment indicators were present that would require a full impairment assessment. We will continue to monitor the potential for asset impairment risk over coming quarters. |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | 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 Jacobs Douwe Egberts ("JDE"), Keurig Dr Pepper Inc. (NYSE: "KDP"), Dong Suh Foods Corporation and Dong Suh Oil & Fats Co. Ltd. As of March 31, 2020 , we owned 26.4% , 13.1% , 50.0% and 49.0% , respectively, of these companies' outstanding shares. Our investments accounted for under the equity method of accounting totaled $6,887 million as of March 31, 2020 and $7,212 million as of December 31, 2019 . We recorded equity earnings and cash dividends of $138 million and $165 million in the first three months of 2020 and equity earnings and cash dividends of $113 million and $160 million in the first three months of 2019. Keurig Dr Pepper Transactions: On July 9, 2018, Keurig Green Mountain, Inc. ("Keurig") closed on its definitive merger agreement with Dr Pepper Snapple Group, Inc., and formed KDP, a publicly traded company. Following the close of the transaction, our 24.2% investment in Keurig together with our shareholder loan receivable became a 13.8% investment in KDP. During 2018, we recorded a net pre-tax gain of $778 million (or $586 million after-tax). We hold two director positions on the KDP board as well as additional governance rights. As we continue to have significant influence, we 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. In connection with this transaction, we changed our accounting principle during the third quarter of 2018 to reflect our share of Keurig's historical and KDP's ongoing earnings 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 KDP’s ongoing results once KDP has publicly reported its results. The change was retrospectively applied to all prior periods presented. During the first quarter of 2019, we recognized a pre-tax gain of $23 million (or $18 million after-tax) related to the impact of a KDP acquisition that decreased our ownership interest from 13.8% to 13.6% . 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 three months ended March 31, 2020 . We continue to retain significant influence. Based on the quoted closing price as of March 31, 2020 , the fair value of our investment in KDP was $4.5 billion , which exceeded the carrying value of our investment. |
Restructuring Program
Restructuring Program | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Program | 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 million in capital expenditures. 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 $4.4 billion related to the Simplify to Grow Program. We expect to incur the program charges by year-end 2022. Restructuring Costs : The Simplify to Grow Program liability activity for the three months ended March 31, 2020 was: Severance and related costs Asset Write-downs Total (in millions) Liability balance, January 1, 2020 $ 301 $ — $ 301 Charges 14 1 15 Cash spent (37 ) — (37 ) Non-cash settlements/adjustments (2 ) (1 ) (3 ) Currency (11 ) — (11 ) Liability balance, March 31, 2020 $ 265 $ — $ 265 We recorded restructuring charges of $15 million in the first three months of 2020 and $20 million in the first three months of 2019 within asset impairment and exit costs and benefit plan non-service income. We spent $37 million in the first three months of 2020 and $53 million in the first three months of 2019 in cash severance and related costs. We also recognized non-cash pension settlement losses (refer to Note 10, Benefit Plans ), non-cash asset write-downs (including accelerated depreciation and asset impairments) and other non-cash adjustments totaling $3 million in the first three months of 2020 and $29 million in the first three months of 2019 . At March 31, 2020 , $243 million of our net restructuring liability was recorded within other current liabilities and $22 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 $43 million in the first three months of 2020 and $50 million in the first three months of 2019 . We recorded these costs within cost of sales and general corporate expense within selling, general and administrative expenses. Restructuring and Implementation Costs: During the three months ended March 31, 2020 and March 31, 2019 , 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 (1) Corporate (2) Total (in millions) For the Three Months Ended March 31, 2020 Restructuring Costs $ 4 $ (1 ) $ 3 $ 2 $ 7 $ 15 Implementation Costs 7 3 14 10 9 43 Total $ 11 $ 2 $ 17 $ 12 $ 16 $ 58 For the Three Months Ended March 31, 2019 Restructuring Costs $ — $ 6 $ — $ 6 $ 8 $ 20 Implementation Costs 15 7 11 4 13 50 Total $ 15 $ 13 $ 11 $ 10 $ 21 $ 70 Total Project (3) Restructuring Costs $ 521 $ 534 $ 1,079 $ 471 $ 136 $ 2,741 Implementation Costs 276 209 462 394 316 1,657 Total $ 797 $ 743 $ 1,541 $ 865 $ 452 $ 4,398 (1) During 2019 , our North America region implementation costs included incremental costs that we incurred related to renegotiating collective bargaining agreements that expired in February 2016 for eight U.S. facilities and related to executing business continuity plans for the North America business. (2) The Corporate column includes minor adjustments for pension settlement losses and rounding. (3) Includes all charges recorded since program inception on May 6, 2014 through March 31, 2020 . |
Debt and Borrowing Arrangements
Debt and Borrowing Arrangements | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Borrowing Arrangements | Note 8. Debt and Borrowing Arrangements Short-Term Borrowings: Our short-term borrowings and related weighted-average interest rates consisted of: As of March 31, 2020 As of December 31, 2019 Amount Outstanding Weighted- Average Rate Amount Outstanding Weighted- Average Rate (in millions, except percentages) Commercial paper $ 3,695 2.0 % $ 2,581 2.0 % Credit facility borrowings 1,000 1.7 % — — Bank loans 69 5.2 % 57 5.2 % Total short-term borrowings $ 4,764 $ 2,638 As of March 31, 2020 , commercial paper issued and outstanding had between 1 and 80 days remaining to maturity. Commercial paper borrowings since year end increased to finance the payment of long-term debt maturities, share repurchases and dividend payments. Some of our international subsidiaries maintain primarily uncommitted credit lines to meet short-term working capital needs. Collectively, these credit lines amounted to $1.4 billion at March 31, 2020 and $1.7 billion at December 31, 2019 . Borrowings on these lines were $69 million at March 31, 2020 and $57 million at December 31, 2019 . On March 24, 2020, we entered into a $1.75 billion revolving credit agreement for a 364 -day senior unsecured credit facility that expires on March 23, 2021. On April 1, 2020, we increased the credit facility from $1.75 billion to $1.95 billion . The agreement includes terms and conditions similar to our existing $4.5 billion multi-year credit facility discussed below with the exception of a requirement that, once the mandatory repayment obligations of the $2.5 billion revolving credit facility described below are satisfied, any proceeds from additional long-term debt issuances of up to $1.95 billion must be used to repay outstanding borrowings under the credit facility and reduce the remaining capacity. As of March 31, 2020, no amounts were drawn on the facility. On March 6, 2020, we entered into a $2.5 billion revolving credit agreement for a 364 -day unsecured credit facility that expires on March 5, 2021. The agreement includes terms and conditions similar to our existing $4.5 billion multi-year credit facility discussed below with the exception of a requirement that any proceeds from long-term debt issuances of up to $2.5 billion in aggregate must be used to repay outstanding borrowings under the credit facility and reduce the remaining capacity. On March 12, 2020, we borrowed $1.0 billion as a strategic decision to increase cash on hand in light of the uncertainty in the global markets resulting from the COVID-19 outbreak. During April 2020, we drew an additional $1.25 billion on the facility primarily to fund the acquisition of Give & Go. Subsequently, we repaid $1.25 billion of the facility and reduced the size of the credit facility to $1.5 billion resulting in a remaining draw capacity of $0.5 billion . On February 26, 2020, we entered into a $1.5 billion revolving credit agreement for a 364 -day senior unsecured credit facility that expires on February 24, 2021. The agreement replaces our previous credit agreement that was scheduled to expire on February 26, 2020 and includes the same terms and conditions as our existing $4.5 billion multi-year credit facility discussed below. As of March 31, 2020, no amounts were drawn on the facility. We also maintain a $4.5 billion multi-year senior unsecured revolving credit facility for general corporate purposes, including working capital needs, and to support our commercial paper program. The credit facility is scheduled to expire on February 27, 2024 . The revolving credit agreement includes a covenant that we maintain a minimum shareholders' equity of at least $24.6 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 pensions and other retirement plans. At March 31, 2020 , we complied with this covenant as our shareholders' equity, as defined by the covenant, was $37.3 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. As of March 31, 2020 , no amounts were drawn on the facility. Long-Term Debt: On April 13, 2020, we issued $1.0 billion of U.S. dollar denominated notes, consisting of $500 million 2.125% notes that mature on April 13, 2023 and $500 million 2.750% notes that mature on April 13, 2030. We received proceeds of $991.3 million , net of discounts and associated financing costs. The proceeds were used to repay amounts outstanding under our revolving credit agreement. We recorded approximately $8.7 million of deferred financing costs and discounts that will be amortized evenly into interest expense over the life of the notes. On March 30, 2020, fr 225 million (or $235 million ) of our 0.05% Swiss franc notes matured. The notes and accrued interest to date were paid from the amounts drawn on our 364 -day revolving credit facility, commercial paper and cash on hand. On February 10, 2020, $427 million of our 5.375% U.S. dollar notes matured. The bonds and accrued interest to date were paid with the issuance of commercial paper and cash on hand. Fair Value of Our Debt: The fair value of our short-term borrowings at March 31, 2020 and December 31, 2019 reflects current market interest rates and approximates the amounts we have recorded on our condensed 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. At March 31, 2020 , the aggregate fair value of our total debt was $20,410 million and its carrying value was $19,790 million . At December 31, 2019 , the aggregate fair value of our total debt was $19,388 million and its carrying value was $18,426 million . Interest and Other Expense, net: Interest and other expense, net consisted of: For the Three Months Ended 2020 2019 (in millions) Interest expense, debt $ 110 $ 123 Loss related to interest rate swaps 103 — Other (income)/expense, net (23 ) (43 ) Interest and other expense, net $ 190 $ 80 Other income includes amounts excluded from hedge effectiveness related to our net investment hedge derivative contracts and totaled $33 million for the three months ended March 31, 2020 and $33 million for the three months ended March 31, 2019 . |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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 March 31, 2020 As of December 31, 2019 Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives (in millions) Derivatives designated as accounting hedges: Interest rate contracts $ 73 $ 13 $ 19 $ 190 Net investment hedge derivative contracts (1) 641 — 312 65 $ 714 $ 13 $ 331 $ 255 Derivatives not designated as accounting hedges: Currency exchange contracts $ 158 $ 136 $ 67 $ 50 Commodity contracts 180 342 201 120 $ 338 $ 478 $ 268 $ 170 Total fair value $ 1,052 $ 491 $ 599 $ 425 (1) Net investment hedge derivative contracts consist of cross-currency interest rate swaps and forward contracts. We also designate some of our non-U.S. dollar denominated debt to hedge a portion of our net investments in our non-U.S. operations. This debt is not reflected in the table above, but is included in long-term debt discussed in Note 8, Debt and Borrowing Arrangements . Both net investment hedge derivative contracts and non-U.S. dollar denominated debt acting as net investment hedges are also disclosed in the Derivative Volume table and the Hedges of Net Investments in International Operations section appearing later in this footnote. Derivatives designated as accounting hedges include cash flow and net investment hedge derivative contracts. Our currency exchange and commodity derivative 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 the fair value of our liability derivatives is recorded within other current liabilities. The fair values (asset/(liability)) of our derivative instruments were determined using: As of March 31, 2020 Total Fair Value of Net Asset/(Liability) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in millions) Currency exchange contracts $ 22 $ — $ 22 $ — Commodity contracts (162 ) (29 ) (133 ) — Interest rate contracts 60 — 60 — Net investment hedge contracts 641 — 641 — Total derivatives $ 561 $ (29 ) $ 590 $ — As of December 31, 2019 Total Fair Value of Net Asset/(Liability) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in millions) Currency exchange contracts $ 17 $ — $ 17 $ — Commodity contracts 81 27 54 — Interest rate contracts (171 ) — (171 ) — Net investment hedge contracts 247 — 247 — Total derivatives $ 174 $ 27 $ 147 $ — 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; 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 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 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. Derivative Volume: The notional values of our hedging instruments were: Notional Amount As of March 31, 2020 As of December 31, 2019 (in millions) Currency exchange contracts: Intercompany loans and forecasted interest payments $ 2,544 $ 2,474 Forecasted transactions 3,869 3,993 Commodity contracts 7,571 7,238 Interest rate contracts 4,250 5,250 Net investment hedges: Net investment hedge derivative contracts 6,652 6,864 Non-U.S. dollar debt designated as net investment hedges Euro notes 3,381 3,436 British pound sterling notes 327 349 Swiss franc notes 1,223 1,448 Canadian dollar notes 427 462 Cash Flow Hedges: Cash flow hedge activity, net of taxes, within accumulated other comprehensive earnings/(losses) included: For the Three Months Ended 2020 2019 (in millions) Accumulated (loss)/gain at beginning of period $ (212 ) $ (167 ) Transfer of realized losses/(gains) in fair value to earnings 81 — Unrealized (loss)/gain in fair value (21 ) (69 ) Accumulated (loss)/gain at end of period $ (152 ) $ (236 ) After-tax gains/(losses) reclassified from accumulated other comprehensive earnings/(losses) into net earnings were: For the Three Months Ended 2020 2019 (in millions) Interest rate contracts $ (81 ) $ — Within interest and other expense, net, we recognized an after-tax loss of $79 million ( $103 million pre-tax) in the three months ended March 31, 2020 related to certain forward-starting interest rate swaps for which the planned tenor of the related forecasted debt was changed. After-tax gains/(losses) recognized in other comprehensive earnings/(losses) were: For the Three Months Ended 2020 2019 (in millions) Interest rate contracts $ (21 ) $ (69 ) 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 $19 million (net of taxes) for interest rate cash flow hedges to earnings during the next 12 months. Cash Flow Hedge Coverage: As of March 31, 2020 , our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 4 years and 6 months. Hedges of Net Investments in International Operations: Net investment hedge ("NIH") derivative contracts: We enter into cross-currency interest rate swaps and forwards to hedge certain investments in our non-U.S. operations against movements in exchange rates. The aggregate notional value as of March 31, 2020 was $6.7 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 2020 2019 (in millions) After-tax gain/(loss) on NIH contracts (1) $ 332 $ 14 (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 2020 2019 (in millions) Amounts excluded from the assessment of hedge effectiveness (1) $ 33 $ 33 (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. 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 2020 2019 (in millions) Euro notes $ 42 $ 58 British pound sterling notes 17 (6 ) Swiss franc notes (6 ) 13 Canadian notes 27 (7 ) Economic Hedges: Pre-tax gains/(losses) recorded in net earnings for economic hedges were: For the Three Months Ended Location of Gain/(Loss) Recognized in Earnings 2020 2019 (in millions) Currency exchange contracts: Intercompany loans and forecasted interest payments $ (73 ) $ 61 Interest and other expense, net Forecasted transactions 26 5 Cost of sales Forecasted transactions 1 — Interest and other expense, net Forecasted transactions (1 ) — Selling, general and administrative expenses Commodity contracts (197 ) 14 Cost of sales Total $ (244 ) $ 80 |
Benefit Plans
Benefit Plans | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Note 10. Benefit Plans Pension Plans Components of Net Periodic Pension Cost: Net periodic pension cost consisted of the following: U.S. Plans Non-U.S. Plans For the Three Months Ended For the Three Months Ended 2020 2019 2020 2019 (in millions) Service cost $ 1 $ 9 $ 30 $ 31 Interest cost 13 16 37 51 Expected return on plan assets (19 ) (22 ) (99 ) (103 ) Amortization: Net loss from experience differences 4 5 29 38 Prior service cost/(credit) — — (2 ) (2 ) Settlement losses and other expenses 4 4 2 — Net periodic pension cost $ 3 $ 12 $ (3 ) $ 15 Employer Contributions: During the three months ended March 31, 2020 , we contributed $10 million to our U.S. pension plans and $62 million to our non-U.S. pension plans, including $28 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 March 31, 2020 , over the remainder of 2020 , we plan to make further contributions of approximately $6 million to our U.S. plans and approximately $128 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 the 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. We record an immaterial amount of accreted interest each quarter on the long-term liability within interest and other expense, net. As of March 31, 2020 , the remaining discounted withdrawal liability was $387 million , with $14 million recorded in other current liabilities and $373 million recorded in long-term other liabilities. Postretirement Benefit Plans Net periodic postretirement health care benefit consisted of the following: For the Three Months Ended 2020 2019 (in millions) Service cost $ 1 $ 1 Interest cost 3 4 Amortization: Net loss from experience differences 3 2 Prior service credit (8 ) (10 ) Net periodic postretirement health care benefit $ (1 ) $ (3 ) Postemployment Benefit Plans Net periodic postemployment cost consisted of the following: For the Three Months Ended 2020 2019 (in millions) Service cost $ 1 $ 1 Interest cost 1 1 Amortization of net gains (1 ) (1 ) Net periodic postemployment cost $ 1 $ 1 |
Stock Plans
Stock Plans | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Plans | 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 Balance at January 1, 2020 33,855,948 $36.19 5 years $ 640 million Annual grant to eligible employees 2,280,440 59.04 Additional options issued 34,350 54.59 Total options granted 2,314,790 58.97 Options exercised (1) (4,210,414 ) 28.62 $ 120 million Options canceled (262,968 ) 41.20 Balance at March 31, 2020 31,697,356 38.31 6 years $ 378 million (1) Cash received from options exercised was $119 million in the three months ended March 31, 2020 . The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $17 million in the three months ended March 31, 2020 . 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) Balance at January 1, 2020 5,661,945 $46.90 Annual grant to eligible employees: Feb. 20, 2020 Performance share units 825,230 65.83 Deferred stock units 545,550 59.04 Additional shares granted (1) 226,700 Various 57.53 Total shares granted 1,597,480 62.77 $ 100 million Vested (2) (1,585,787 ) 43.10 $ 68 million Forfeited (287,626 ) 44.78 Balance at March 31, 2020 5,386,012 52.84 (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 $3 million in the three months ended March 31, 2020 . (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. 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 . Repurchases under the program are determined by management and are wholly discretionary. Prior to January 1, 2020, we had repurchased $16.5 billion of Common Stock pursuant to this authorization. During the three months ended March 31, 2020 , we repurchased approximately 12.9 million shares of Common Stock at an average cost of $54.25 per share, or an aggregate cost of approximately $0.7 billion , all of which was paid during the period. All share repurchases were funded through available cash and commercial paper issuances. As of March 31, 2020 , we have $2.5 billion in remaining share repurchase capacity. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 has scheduled a conference on June 4, 2020 to discuss the proposed settlement agreement. 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 class action certification; 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 plantiffs' 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. 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. We are cooperating with the investigation and expect to engage further with the European Commission as their investigation proceeds. It is not possible to predict how long the investigation will take or the ultimate outcome of this matter. On August 21, 2018, the Virginia Department of Environmental Quality (“VDEQ”) issued a Notice of Violation (“NOV”) to Mondelēz Global. In the NOV, the VDEQ alleges that in our Richmond bakery, one operating line did not have the proper minimum temperature on its pollution control equipment and that the bakery failed to provide certain observation and training records. The VDEQ indicated that the alleged violations may lead to a fine and/or injunctive relief. We are working with the VDEQ to reach a resolution of this matter. We expect the penalty we will pay related to this matter will be less than $100,000 and thus do not expect this matter to have a material effect on our financial results. 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 March 31, 2020 , 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. |
Reclassifications from Accumula
Reclassifications from Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Reclassifications from Accumulated Other Comprehensive Income | Note 13. Reclassifications from Accumulated Other Comprehensive Income The following table summarizes the changes in the 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 $104 million in the first three months of 2020 and $29 million in the first three months of 2019 . For the Three Months Ended 2020 2019 (in millions) Currency Translation Adjustments: Balance at beginning of period $ (8,302 ) $ (8,603 ) Currency translation adjustments (1,421 ) 168 Tax (expense)/benefit (90 ) 22 Other comprehensive earnings/(losses) (1,511 ) 190 Less: other comprehensive (earnings)/loss attributable to noncontrolling interests 5 1 Balance at end of period (9,808 ) (8,412 ) Pension and Other Benefit Plans: Balance at beginning of period $ (1,744 ) $ (1,860 ) Net actuarial gain/(loss) arising during period (5 ) (24 ) Tax (expense)/benefit on net actuarial gain/(loss) — 6 Losses/(gains) reclassified into net earnings: Amortization of experience losses and prior service costs (1) 25 32 Settlement losses and other expenses (1) 6 4 Tax expense/(benefit) on reclassifications (2) (8 ) (7 ) Currency impact 61 (1 ) Other comprehensive earnings/(losses) 79 10 Balance at end of period (1,665 ) (1,850 ) Derivative Cash Flow Hedges: Balance at beginning of period $ (212 ) $ (167 ) Net derivative gains/(losses) (37 ) (77 ) Tax (expense)/benefit on net derivative gain/(loss) 14 8 Losses/(gains) reclassified into net earnings: Interest rate contracts (3) 105 — Tax expense/(benefit) on reclassifications (2) (24 ) — Currency impact 2 — Other comprehensive earnings/(losses) 60 (69 ) Balance at end of period (152 ) (236 ) Accumulated other comprehensive income attributable to Mondelēz International: Balance at beginning of period $ (10,258 ) $ (10,630 ) Total other comprehensive earnings/(losses) (1,372 ) 131 Less: other comprehensive (earnings)/loss attributable to noncontrolling interests 5 1 Other comprehensive earnings/(losses) attributable to Mondelēz International (1,367 ) 132 Balance at end of period $ (11,625 ) $ (10,498 ) (1) These reclassified losses are included in net periodic benefit costs disclosed in Note 10, Benefit Plans . (2) Taxes reclassified to earnings are recorded within the provision for income taxes. (3) |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14. Income Taxes As of the first quarter of 2020 , our estimated annual effective tax rate, which excludes 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 effective tax rate for the three months ended March 31, 2020 of 21.2% was favorably impacted by discrete net tax benefits of $28 million , primarily driven by a $22 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. As of the first quarter of 2019 , our estimated annual effective tax rate, which excluded discrete tax impacts, was 25.9% . This 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 effective tax rate for the three months ended March 31, 2019 of 19.4% was favorably impacted by discrete net tax benefits of $63 million , primarily driven by $60 million of benefit from the release of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in various jurisdictions. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note 15. Earnings per Share Basic and diluted earnings per share (“EPS”) were calculated as follows: For the Three Months Ended 2020 2019 (in millions, except per share data) Net earnings $ 760 $ 920 Noncontrolling interest earnings (7 ) (6 ) Net earnings attributable to Mondelēz International $ 753 $ 914 Weighted-average shares for basic EPS 1,434 1,449 Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares 11 12 Weighted-average shares for diluted EPS 1,445 1,461 Basic earnings per share attributable to Mondelēz International $ 0.53 $ 0.63 Diluted earnings per share attributable to Mondelēz International $ 0.52 $ 0.63 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 4.0 million in the first three months of 2020 and 6.2 million in the first three months of 2019 . |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | 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. Our operations and management structure are organized into four 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. Our segment net revenues and earnings were: For the Three Months Ended 2020 2019 (in millions) Net revenues: Latin America $ 726 $ 800 AMEA 1,502 1,541 Europe 2,584 2,551 North America 1,895 1,646 Net revenues $ 6,707 $ 6,538 Operating income: Latin America $ 78 $ 98 AMEA 234 256 Europe 472 500 North America 381 319 Unrealized (losses)/gains on hedging activities (mark-to-market impacts) (185 ) 16 General corporate expenses (76 ) (109 ) Amortization of intangibles (43 ) (44 ) Acquisition-related costs (5 ) — Operating income 856 1,036 Benefit plan non-service income 33 17 Interest and other expense, net (190 ) (80 ) Earnings before income taxes $ 699 $ 973 Items impacting our segment operating results are discussed in Note 1, Basis of Presentation , Note 2, Acquisitions and Divestitures , 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. Net revenues by product category were: For the Three Months Ended March 31, 2020 Latin America AMEA Europe North America Total (in millions) Biscuits $ 174 $ 508 $ 746 $ 1,598 $ 3,026 Chocolate 194 543 1,363 56 2,156 Gum & Candy 182 185 173 241 781 Beverages 102 171 25 — 298 Cheese & Grocery 74 95 277 — 446 Total net revenues $ 726 $ 1,502 $ 2,584 $ 1,895 $ 6,707 For the Three Months Ended March 31, 2019 Latin America AMEA Europe North America Total (in millions) Biscuits $ 170 $ 461 $ 734 $ 1,372 $ 2,737 Chocolate 230 557 1,360 59 2,206 Gum & Candy 200 225 173 215 813 Beverages 123 172 26 — 321 Cheese & Grocery 77 126 258 — 461 Total net revenues $ 800 $ 1,541 $ 2,551 $ 1,646 $ 6,538 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
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, 2019 . |
Principles of Consolidation | 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 are carried at cost as there is no readily determinable fair value for the equity interests. |
Currency Translation and Highly Inflationary Accounting | 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 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, with currency remeasurement gains or losses recorded in earnings. As discussed below, beginning on July 1, 2018, we began to apply highly inflationary accounting for our operations in Argentina. 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 Argentinian subsidiaries and changed their functional currency from the Argentinian peso to the U.S. dollar. On July 1, 2018, both monetary and non-monetary assets and liabilities denominated in Argentinian pesos were remeasured into U.S. dollars using the exchange rate as of the balance sheet date, with remeasurement and other transaction gains and losses recorded in net earnings. As of March 31, 2020 , our Argentinian operations had $9 million of Argentinian peso denominated net monetary assets. Our Argentinian operations contributed $98 million , or 1.5% of consolidated net revenues in the three months ended March 31, 2020 . Within selling, general and administrative expenses, we recorded a remeasurement loss of $2 million during the three months ended March 31, 2020 as well as a remeasurement loss of $2 million during the three months ended March 31, 2019 related to the revaluation of the Argentinian peso denominated net monetary position over these periods. Brexit . In the three months ended March 31, 2020 , we generated 9.4% of our consolidated net revenues in the United Kingdom. On January 31, 2020, the United Kingdom began the withdrawal process from the European Union under the European and U.K. Parliament approved Withdrawal Agreement. During a transition period currently scheduled to end on December 31, 2020, the United Kingdom will effectively remain in the E.U.’s customs union and single market while a trade deal with the European Union is negotiated. The deadline for extending the transition period ends on June 30, 2020. If the transition period is not extended, on December 31, 2020, the United Kingdom will either exit the European Union without a trade deal or will begin a new trade relationship with the European Union. During the transition period, we continue to take protective measures in response to the potential impacts on our results of operations and financial condition. Following the Brexit vote in June 2016, there was significant volatility in the global stock markets and currency exchange rates. The value of the British pound sterling relative to the U.S. dollar declined significantly and negatively affected our translated results reported in U.S. dollars. If the ultimate terms of the United Kingdom’s separation from the European Union negatively impact the U.K. economy or result in disruptions to sales or our supply chain, the impact to our results of operations and financial condition could be material. We have taken measures to increase our resources in customer service & logistics together with increasing our inventory levels of imported raw materials, packaging and finished goods in the United Kingdom to help us manage through the Brexit transition and the inherent risks. 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 these exposures, including the impacts related to the global outbreak of the novel coronavirus (“COVID-19”) during the first quarter of 2020. Most countries in which we do business have recently experienced periods of significant economic uncertainty as well as exchange rate volatility. We continue to monitor the COVID-19 and other impacts to our business operations, currencies and net monetary exposures in the countries in which we operate. At this time, except for Argentina which is accounted for as a highly inflationary economy, we do not anticipate any other countries in which we operate to be at risk of becoming highly inflationary countries. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash: |
Allowances for Credit Losses | 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. |
Transfers of Financial Assets | 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 $840 million as of March 31, 2020 and $760 million as of December 31, 2019 . 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. |
New Accounting Pronouncements | New Accounting Pronouncements: In December 2019, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") that removes certain exceptions in accounting for income taxes, improves consistency in application and clarifies existing guidance. This ASU is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We do not expect this ASU to have a material impact on our consolidated financial statements. In August 2018, the FASB issued an ASU that aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs for internal-use software. This ASU is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. On January 1, 2020, we adopted the standard on a prospective basis and the standard did not have a material impact to our first quarter 2020 consolidated financial results. In August 2018, the FASB issued an ASU that modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The ASU is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We will adopt this standard and reflect the changes to our 2020 annual disclosures. This ASU is not expected to have an impact on our consolidated financial statements. In August 2018, the FASB issued an ASU that modifies the disclosure requirements on fair value measurements. The ASU is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. We adopted the standard on January 1, 2020 and there was no material impact to our consolidated financial statements upon adoption. In June 2016, the FASB issued an ASU on the measurement of credit losses on financial instruments. This ASU requires entities to measure the impairment of certain financial instruments, including trade receivables, based on expected losses rather than incurred losses. This ASU is effective for fiscal years beginning after December 15, 2019. We adopted the standard on January 1, 2020 using the modified retrospective basis and there was no material impact to our consolidated financial statements. |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Changes in Allowances for Credit Losses | Changes in allowances for credit losses consisted of: Allowance for Trade Receivables Allowance for Other Current Receivables Allowance for Long-Term Receivables (in millions) Balance at January 1, 2020 $ (35 ) $ (44 ) $ (14 ) Current period provision for expected credit losses (5 ) 1 (2 ) Currency 1 3 3 Balance at March 31, 2020 $ (39 ) $ (40 ) $ (13 ) |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventories | Inventories consisted of the following: As of March 31, As of December 31, (in millions) Raw materials $ 702 $ 707 Finished product 1,848 1,953 2,550 2,660 Inventory reserves (109 ) (114 ) Inventories, net $ 2,441 $ 2,546 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Components of Property, Plant and Equipment | Property, plant and equipment consisted of the following: As of March 31, As of December 31, (in millions) Land and land improvements $ 402 $ 422 Buildings and building improvements 2,961 3,140 Machinery and equipment 10,669 11,295 Construction in progress 553 680 14,585 15,537 Accumulated depreciation (6,531 ) (6,804 ) Property, plant and equipment, net $ 8,054 $ 8,733 |
Schedule of Restructuring Charges Related to Property, Plant and Equipment | In connection with our restructuring program, we recorded non-cash property, plant and equipment write-downs (including accelerated depreciation and asset impairments) 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 2020 2019 (in millions) Latin America $ — $ — AMEA (1 ) 1 Europe 1 1 North America 1 3 Non-cash property, plant and equipment write-downs $ 1 $ 5 During the three months ended March 31, 2020 and March 31, 2019 , 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 (1) Corporate (2) Total (in millions) For the Three Months Ended March 31, 2020 Restructuring Costs $ 4 $ (1 ) $ 3 $ 2 $ 7 $ 15 Implementation Costs 7 3 14 10 9 43 Total $ 11 $ 2 $ 17 $ 12 $ 16 $ 58 For the Three Months Ended March 31, 2019 Restructuring Costs $ — $ 6 $ — $ 6 $ 8 $ 20 Implementation Costs 15 7 11 4 13 50 Total $ 15 $ 13 $ 11 $ 10 $ 21 $ 70 Total Project (3) Restructuring Costs $ 521 $ 534 $ 1,079 $ 471 $ 136 $ 2,741 Implementation Costs 276 209 462 394 316 1,657 Total $ 797 $ 743 $ 1,541 $ 865 $ 452 $ 4,398 (1) During 2019 , our North America region implementation costs included incremental costs that we incurred related to renegotiating collective bargaining agreements that expired in February 2016 for eight U.S. facilities and related to executing business continuity plans for the North America business. (2) The Corporate column includes minor adjustments for pension settlement losses and rounding. (3) Includes all charges recorded since program inception on May 6, 2014 through March 31, 2020 . |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill by Segment | Goodwill by segment was: As of March 31, As of December 31, (in millions) Latin America $ 662 $ 818 AMEA 2,981 3,151 Europe 7,272 7,523 North America 9,301 9,356 Goodwill $ 20,216 $ 20,848 |
Schedule of Intangible Assets Disclosure | Intangible assets consisted of the following: As of March 31, As of December 31, (in millions) Non-amortizable intangible assets $ 16,674 $ 17,296 Amortizable intangible assets 2,267 2,374 18,941 19,670 Accumulated amortization (1,670 ) (1,713 ) Intangible assets, net $ 17,271 $ 17,957 |
Schedule of Changes in Goodwill and Intangible Assets | Changes in goodwill and intangible assets consisted of: Goodwill Intangible Assets, at cost (in millions) Balance at January 1, 2020 $ 20,848 $ 19,670 Currency (632 ) (729 ) Balance at March 31, 2020 $ 20,216 $ 18,941 |
Restructuring Program (Tables)
Restructuring Program (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Program Liability | The Simplify to Grow Program liability activity for the three months ended March 31, 2020 was: Severance and related costs Asset Write-downs Total (in millions) Liability balance, January 1, 2020 $ 301 $ — $ 301 Charges 14 1 15 Cash spent (37 ) — (37 ) Non-cash settlements/adjustments (2 ) (1 ) (3 ) Currency (11 ) — (11 ) Liability balance, March 31, 2020 $ 265 $ — $ 265 |
Schedule of Restructuring and Implementation Costs by Segment | In connection with our restructuring program, we recorded non-cash property, plant and equipment write-downs (including accelerated depreciation and asset impairments) 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 2020 2019 (in millions) Latin America $ — $ — AMEA (1 ) 1 Europe 1 1 North America 1 3 Non-cash property, plant and equipment write-downs $ 1 $ 5 During the three months ended March 31, 2020 and March 31, 2019 , 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 (1) Corporate (2) Total (in millions) For the Three Months Ended March 31, 2020 Restructuring Costs $ 4 $ (1 ) $ 3 $ 2 $ 7 $ 15 Implementation Costs 7 3 14 10 9 43 Total $ 11 $ 2 $ 17 $ 12 $ 16 $ 58 For the Three Months Ended March 31, 2019 Restructuring Costs $ — $ 6 $ — $ 6 $ 8 $ 20 Implementation Costs 15 7 11 4 13 50 Total $ 15 $ 13 $ 11 $ 10 $ 21 $ 70 Total Project (3) Restructuring Costs $ 521 $ 534 $ 1,079 $ 471 $ 136 $ 2,741 Implementation Costs 276 209 462 394 316 1,657 Total $ 797 $ 743 $ 1,541 $ 865 $ 452 $ 4,398 (1) During 2019 , our North America region implementation costs included incremental costs that we incurred related to renegotiating collective bargaining agreements that expired in February 2016 for eight U.S. facilities and related to executing business continuity plans for the North America business. (2) The Corporate column includes minor adjustments for pension settlement losses and rounding. (3) Includes all charges recorded since program inception on May 6, 2014 through March 31, 2020 . |
Debt and Borrowing Arrangemen_2
Debt and Borrowing Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Short-Term Borrowings and Related Weighted-Average Interest Rates | Our short-term borrowings and related weighted-average interest rates consisted of: As of March 31, 2020 As of December 31, 2019 Amount Outstanding Weighted- Average Rate Amount Outstanding Weighted- Average Rate (in millions, except percentages) Commercial paper $ 3,695 2.0 % $ 2,581 2.0 % Credit facility borrowings 1,000 1.7 % — — Bank loans 69 5.2 % 57 5.2 % Total short-term borrowings $ 4,764 $ 2,638 |
Schedule of Interest and Other Expense | Interest and other expense, net consisted of: For the Three Months Ended 2020 2019 (in millions) Interest expense, debt $ 110 $ 123 Loss related to interest rate swaps 103 — Other (income)/expense, net (23 ) (43 ) Interest and other expense, net $ 190 $ 80 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Schedule of Pre-tax Effects of Derivative Instruments | Pre-tax gains/(losses) recorded in net earnings for economic hedges were: For the Three Months Ended Location of Gain/(Loss) Recognized in Earnings 2020 2019 (in millions) Currency exchange contracts: Intercompany loans and forecasted interest payments $ (73 ) $ 61 Interest and other expense, net Forecasted transactions 26 5 Cost of sales Forecasted transactions 1 — Interest and other expense, net Forecasted transactions (1 ) — Selling, general and administrative expenses Commodity contracts (197 ) 14 Cost of sales Total $ (244 ) $ 80 |
Cash flow hedges | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Schedule of Cash Flow Hedges Effect on Accumulated Other Comprehensive Earnings/(Losses), Net of Taxes | Cash flow hedge activity, net of taxes, within accumulated other comprehensive earnings/(losses) included: For the Three Months Ended 2020 2019 (in millions) Accumulated (loss)/gain at beginning of period $ (212 ) $ (167 ) Transfer of realized losses/(gains) in fair value to earnings 81 — Unrealized (loss)/gain in fair value (21 ) (69 ) Accumulated (loss)/gain at end of period $ (152 ) $ (236 ) |
Schedule of Pre-tax Effects of Derivative Instruments | After-tax gains/(losses) reclassified from accumulated other comprehensive earnings/(losses) into net earnings were: For the Three Months Ended 2020 2019 (in millions) Interest rate contracts $ (81 ) $ — Within interest and other expense, net, we recognized an after-tax loss of $79 million ( $103 million pre-tax) in the three months ended March 31, 2020 related to certain forward-starting interest rate swaps for which the planned tenor of the related forecasted debt was changed. After-tax gains/(losses) recognized in other comprehensive earnings/(losses) were: For the Three Months Ended 2020 2019 (in millions) Interest rate contracts $ (21 ) $ (69 ) |
Net investment hedges | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Schedule of Hedges of Net Investments in International Operations | 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 2020 2019 (in millions) Euro notes $ 42 $ 58 British pound sterling notes 17 (6 ) Swiss franc notes (6 ) 13 Canadian notes 27 (7 ) For the Three Months Ended 2020 2019 (in millions) After-tax gain/(loss) on NIH contracts (1) $ 332 $ 14 (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 2020 2019 (in millions) Amounts excluded from the assessment of hedge effectiveness (1) $ 33 $ 33 (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. |
Derivative | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Schedule of Fair Value of Derivatives Instruments | Derivative instruments were recorded at fair value in the condensed consolidated balance sheets as follows: As of March 31, 2020 As of December 31, 2019 Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives (in millions) Derivatives designated as accounting hedges: Interest rate contracts $ 73 $ 13 $ 19 $ 190 Net investment hedge derivative contracts (1) 641 — 312 65 $ 714 $ 13 $ 331 $ 255 Derivatives not designated as accounting hedges: Currency exchange contracts $ 158 $ 136 $ 67 $ 50 Commodity contracts 180 342 201 120 $ 338 $ 478 $ 268 $ 170 Total fair value $ 1,052 $ 491 $ 599 $ 425 (1) Net investment hedge derivative contracts consist of cross-currency interest rate swaps and forward contracts. We also designate some of our non-U.S. dollar denominated debt to hedge a portion of our net investments in our non-U.S. operations. This debt is not reflected in the table above, but is included in long-term debt discussed in Note 8, Debt and Borrowing Arrangements . Both net investment hedge derivative contracts and non-U.S. dollar denominated debt acting as net investment hedges are also disclosed in the Derivative Volume table and the Hedges of Net Investments in International Operations section appearing later in this footnote. |
Schedule of Derivative Instruments Fair Value and Measurement Inputs | The fair values (asset/(liability)) of our derivative instruments were determined using: As of March 31, 2020 Total Fair Value of Net Asset/(Liability) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in millions) Currency exchange contracts $ 22 $ — $ 22 $ — Commodity contracts (162 ) (29 ) (133 ) — Interest rate contracts 60 — 60 — Net investment hedge contracts 641 — 641 — Total derivatives $ 561 $ (29 ) $ 590 $ — As of December 31, 2019 Total Fair Value of Net Asset/(Liability) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in millions) Currency exchange contracts $ 17 $ — $ 17 $ — Commodity contracts 81 27 54 — Interest rate contracts (171 ) — (171 ) — Net investment hedge contracts 247 — 247 — Total derivatives $ 174 $ 27 $ 147 $ — |
Schedule of Notional Values of Derivative Instruments | The notional values of our hedging instruments were: Notional Amount As of March 31, 2020 As of December 31, 2019 (in millions) Currency exchange contracts: Intercompany loans and forecasted interest payments $ 2,544 $ 2,474 Forecasted transactions 3,869 3,993 Commodity contracts 7,571 7,238 Interest rate contracts 4,250 5,250 Net investment hedges: Net investment hedge derivative contracts 6,652 6,864 Non-U.S. dollar debt designated as net investment hedges Euro notes 3,381 3,436 British pound sterling notes 327 349 Swiss franc notes 1,223 1,448 Canadian dollar notes 427 462 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Components of Net Costs | Net periodic pension cost consisted of the following: U.S. Plans Non-U.S. Plans For the Three Months Ended For the Three Months Ended 2020 2019 2020 2019 (in millions) Service cost $ 1 $ 9 $ 30 $ 31 Interest cost 13 16 37 51 Expected return on plan assets (19 ) (22 ) (99 ) (103 ) Amortization: Net loss from experience differences 4 5 29 38 Prior service cost/(credit) — — (2 ) (2 ) Settlement losses and other expenses 4 4 2 — Net periodic pension cost $ 3 $ 12 $ (3 ) $ 15 |
Postretirement Benefit Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Components of Net Costs | Net periodic postretirement health care benefit consisted of the following: For the Three Months Ended 2020 2019 (in millions) Service cost $ 1 $ 1 Interest cost 3 4 Amortization: Net loss from experience differences 3 2 Prior service credit (8 ) (10 ) Net periodic postretirement health care benefit $ (1 ) $ (3 ) |
Postemployment Benefit Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of Components of Net Costs | Net periodic postemployment cost consisted of the following: For the Three Months Ended 2020 2019 (in millions) Service cost $ 1 $ 1 Interest cost 1 1 Amortization of net gains (1 ) (1 ) Net periodic postemployment cost $ 1 $ 1 |
Stock Plans (Tables)
Stock Plans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Stock Options Activity | 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 Balance at January 1, 2020 33,855,948 $36.19 5 years $ 640 million Annual grant to eligible employees 2,280,440 59.04 Additional options issued 34,350 54.59 Total options granted 2,314,790 58.97 Options exercised (1) (4,210,414 ) 28.62 $ 120 million Options canceled (262,968 ) 41.20 Balance at March 31, 2020 31,697,356 38.31 6 years $ 378 million (1) Cash received from options exercised was $119 million in the three months ended March 31, 2020 . The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $17 million in the three months ended March 31, 2020 . |
Performance Share Units and Other Stock-Based Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Performance Share Units and Stock-Based Awards Activity | 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) Balance at January 1, 2020 5,661,945 $46.90 Annual grant to eligible employees: Feb. 20, 2020 Performance share units 825,230 65.83 Deferred stock units 545,550 59.04 Additional shares granted (1) 226,700 Various 57.53 Total shares granted 1,597,480 62.77 $ 100 million Vested (2) (1,585,787 ) 43.10 $ 68 million Forfeited (287,626 ) 44.78 Balance at March 31, 2020 5,386,012 52.84 (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 $3 million in the three months ended March 31, 2020 . (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. |
Reclassifications from Accumu_2
Reclassifications from Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Amounts Reclassified from Accumulated Other Comprehensive Earnings/(Losses) | The following table summarizes the changes in the 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 $104 million in the first three months of 2020 and $29 million in the first three months of 2019 . For the Three Months Ended 2020 2019 (in millions) Currency Translation Adjustments: Balance at beginning of period $ (8,302 ) $ (8,603 ) Currency translation adjustments (1,421 ) 168 Tax (expense)/benefit (90 ) 22 Other comprehensive earnings/(losses) (1,511 ) 190 Less: other comprehensive (earnings)/loss attributable to noncontrolling interests 5 1 Balance at end of period (9,808 ) (8,412 ) Pension and Other Benefit Plans: Balance at beginning of period $ (1,744 ) $ (1,860 ) Net actuarial gain/(loss) arising during period (5 ) (24 ) Tax (expense)/benefit on net actuarial gain/(loss) — 6 Losses/(gains) reclassified into net earnings: Amortization of experience losses and prior service costs (1) 25 32 Settlement losses and other expenses (1) 6 4 Tax expense/(benefit) on reclassifications (2) (8 ) (7 ) Currency impact 61 (1 ) Other comprehensive earnings/(losses) 79 10 Balance at end of period (1,665 ) (1,850 ) Derivative Cash Flow Hedges: Balance at beginning of period $ (212 ) $ (167 ) Net derivative gains/(losses) (37 ) (77 ) Tax (expense)/benefit on net derivative gain/(loss) 14 8 Losses/(gains) reclassified into net earnings: Interest rate contracts (3) 105 — Tax expense/(benefit) on reclassifications (2) (24 ) — Currency impact 2 — Other comprehensive earnings/(losses) 60 (69 ) Balance at end of period (152 ) (236 ) Accumulated other comprehensive income attributable to Mondelēz International: Balance at beginning of period $ (10,258 ) $ (10,630 ) Total other comprehensive earnings/(losses) (1,372 ) 131 Less: other comprehensive (earnings)/loss attributable to noncontrolling interests 5 1 Other comprehensive earnings/(losses) attributable to Mondelēz International (1,367 ) 132 Balance at end of period $ (11,625 ) $ (10,498 ) (1) These reclassified losses are included in net periodic benefit costs disclosed in Note 10, Benefit Plans . (2) Taxes reclassified to earnings are recorded within the provision for income taxes. (3) These reclassified gains or losses are recorded within interest and other expense, net. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Earnings Per Share | Basic and diluted earnings per share (“EPS”) were calculated as follows: For the Three Months Ended 2020 2019 (in millions, except per share data) Net earnings $ 760 $ 920 Noncontrolling interest earnings (7 ) (6 ) Net earnings attributable to Mondelēz International $ 753 $ 914 Weighted-average shares for basic EPS 1,434 1,449 Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares 11 12 Weighted-average shares for diluted EPS 1,445 1,461 Basic earnings per share attributable to Mondelēz International $ 0.53 $ 0.63 Diluted earnings per share attributable to Mondelēz International $ 0.52 $ 0.63 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Net Revenues and Earnings | Our segment net revenues and earnings were: For the Three Months Ended 2020 2019 (in millions) Net revenues: Latin America $ 726 $ 800 AMEA 1,502 1,541 Europe 2,584 2,551 North America 1,895 1,646 Net revenues $ 6,707 $ 6,538 Operating income: Latin America $ 78 $ 98 AMEA 234 256 Europe 472 500 North America 381 319 Unrealized (losses)/gains on hedging activities (mark-to-market impacts) (185 ) 16 General corporate expenses (76 ) (109 ) Amortization of intangibles (43 ) (44 ) Acquisition-related costs (5 ) — Operating income 856 1,036 Benefit plan non-service income 33 17 Interest and other expense, net (190 ) (80 ) Earnings before income taxes $ 699 $ 973 |
Schedule of Net Revenues by Product Category | Net revenues by product category were: For the Three Months Ended March 31, 2020 Latin America AMEA Europe North America Total (in millions) Biscuits $ 174 $ 508 $ 746 $ 1,598 $ 3,026 Chocolate 194 543 1,363 56 2,156 Gum & Candy 182 185 173 241 781 Beverages 102 171 25 — 298 Cheese & Grocery 74 95 277 — 446 Total net revenues $ 726 $ 1,502 $ 2,584 $ 1,895 $ 6,707 For the Three Months Ended March 31, 2019 Latin America AMEA Europe North America Total (in millions) Biscuits $ 170 $ 461 $ 734 $ 1,372 $ 2,737 Chocolate 230 557 1,360 59 2,206 Gum & Candy 200 225 173 215 813 Beverages 123 172 26 — 321 Cheese & Grocery 77 126 258 — 461 Total net revenues $ 800 $ 1,541 $ 2,551 $ 1,646 $ 6,538 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) $ in Millions | 3 Months Ended | |||
Mar. 31, 2020USD ($)country | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Summary of Significant Accounting Policies [Line Items] | ||||
Net revenues | $ 6,707 | $ 6,538 | ||
Number of countries in which products are sold (more than) | country | 150 | |||
Number of countries in which entity operates (more than) | country | 80 | |||
Restricted cash | $ 27 | $ 37 | ||
Cash, cash equivalents and restricted cash | 1,952 | 1,542 | 1,328 | $ 1,100 |
Outstanding principal amount of receivables sold under factoring arrangement | 840 | $ 760 | ||
Operating lease right-of-use assets obtained in exchange for lease obligations | 89 | 26 | ||
Finance lease right-of-use assets in exchange for lease obligations | 25 | 7 | ||
Argentina | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Net monetary assets | 9 | |||
Net revenues | $ 98 | |||
Percentage of consolidated net revenues | 1.50% | |||
Argentina | Selling, general and administrative expenses | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Remeasurement loss due to inflationary accounting | $ 2 | $ 2 | ||
U.K. | Geographic Concentration Risk | Net Revenues | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Concentration risk percentage | 9.40% |
Basis of Presentation - Changes
Basis of Presentation - Changes in Allowances for Credit Losses (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Allowance for Trade Receivables | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance at January 1, 2020 | $ (35) |
Current period provision for expected credit losses | (5) |
Currency | 1 |
Balance at March 31, 2020 | (39) |
Allowance for Other Current Receivables | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance at January 1, 2020 | (44) |
Current period provision for expected credit losses | 1 |
Currency | 3 |
Balance at March 31, 2020 | (40) |
Allowance for Long-Term Receivables | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance at January 1, 2020 | (14) |
Current period provision for expected credit losses | (2) |
Currency | 3 |
Balance at March 31, 2020 | $ (13) |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Details) - USD ($) $ in Millions | Apr. 01, 2020 | Jul. 16, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
Acquisition-related costs | $ 5 | $ 0 | |||
Goodwill | 20,216 | $ 20,848 | |||
North America | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 9,301 | 9,356 | |||
AMEA | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 2,981 | 3,151 | |||
AMEA | Cheese Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Business Acquisition [Line Items] | |||||
Proceeds from divestiture of businesses | 161 | ||||
Current assets divested | 19 | ||||
Non-current assets divested | 96 | ||||
Pre-tax gain on divestiture | $ 44 | ||||
Decline in quarter-over-quarter net revenues due to business divestiture | 33 | ||||
Perfect Snacks | North America | |||||
Business Acquisition [Line Items] | |||||
Payment to acquire business, net of cash received | $ 284 | ||||
Definite-lived intangibles assets acquired | 31 | ||||
Indefinite-lived intangibles assets acquired | 107 | ||||
Goodwill | 150 | ||||
Property, plant, and equipment acquired | 1 | ||||
Inventory acquired | 12 | ||||
Accounts receivable acquired | 8 | ||||
Current liabilities assumed | 13 | ||||
Deferred tax liabilities assumed | 3 | ||||
Other liabilities assumed | 9 | ||||
Incremental revenues from acquisition | 32 | ||||
Give & Go | |||||
Business Acquisition [Line Items] | |||||
Acquisition-related costs | $ 5 | ||||
Subsequent Event | Give & Go | |||||
Business Acquisition [Line Items] | |||||
Payment to acquire business, net of cash received | $ 1,200 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 702 | $ 707 |
Finished product | 1,848 | 1,953 |
Inventories, gross | 2,550 | 2,660 |
Inventory reserves | (109) | (114) |
Inventories, net | $ 2,441 | $ 2,546 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 14,585 | $ 15,537 |
Accumulated depreciation | (6,531) | (6,804) |
Property, plant and equipment, net | 8,054 | 8,733 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 402 | 422 |
Buildings and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,961 | 3,140 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 10,669 | 11,295 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 553 | $ 680 |
Property, Plant and Equipment -
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Capital expenditures | $ 214 | $ 265 |
Accrued capital expenditures unpaid | 259 | 218 |
Payments for capital expenditures accrued in the prior year | $ 334 | $ 331 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Asset Impairment and Exit Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||
Non-cash property, plant and equipment write-downs | $ 0 | $ 5 |
Simplify to Grow Program | ||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||
Non-cash property, plant and equipment write-downs | 1 | 5 |
Simplify to Grow Program | Latin America | ||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||
Non-cash property, plant and equipment write-downs | 0 | 0 |
Simplify to Grow Program | AMEA | ||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||
Non-cash property, plant and equipment write-downs | (1) | 1 |
Simplify to Grow Program | Europe | ||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||
Non-cash property, plant and equipment write-downs | 1 | 1 |
Simplify to Grow Program | North America | ||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||
Non-cash property, plant and equipment write-downs | $ 1 | $ 3 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill by Segment (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Goodwill | $ 20,216 | $ 20,848 |
Latin America | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 662 | 818 |
AMEA | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 2,981 | 3,151 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 7,272 | 7,523 |
North America | ||
Segment Reporting Information [Line Items] | ||
Goodwill | $ 9,301 | $ 9,356 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Non-amortizable intangible assets | $ 16,674 | $ 17,296 |
Amortizable intangible assets | 2,267 | 2,374 |
Total intangible assets, gross | 18,941 | 19,670 |
Accumulated amortization | (1,670) | (1,713) |
Intangible assets, net | $ 17,271 | $ 17,957 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)brand | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($)brand | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense for intangible assets | $ 43 | $ 44 | |
Estimated amortization expense of intangibles in 2020 | 170 | ||
Estimated amortization expense of intangibles in 2021 | 90 | ||
Estimated amortization expense of intangibles in 2022 | 80 | ||
Estimated amortization expense of intangibles in 2023 | 80 | ||
Estimated amortization expense of intangibles in 2024 | $ 80 | ||
Brands | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Impairment of intangible assets | $ 57 | ||
Number of impaired brands | brand | 9 | 9 | |
Number of brands with fair value in excess of book value, 10% or less | brand | 14 | ||
Book value of brands with fair value in excess of book value, 10% or less | $ 616 | ||
Brands | Europe | Gum, Chocolate, Biscuits and Candy | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Impairment of intangible assets | $ 39 | ||
Brands | AMEA | Gum, Chocolate, Biscuits and Candy | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Impairment of intangible assets | 15 | ||
Brands | Latin America | Gum, Chocolate, Biscuits and Candy | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Impairment of intangible assets | $ 3 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Changes in Goodwill and Intangible Assets (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill | |
Balance at January 1, 2020 | $ 20,848 |
Currency | (632) |
Balance at March 31, 2020 | 20,216 |
Intangible Assets, at cost | |
Balance at January 1, 2020 | 19,670 |
Currency | (729) |
Balance at March 31, 2020 | $ 18,941 |
Equity Method Investments (Deta
Equity Method Investments (Details) shares in Millions, $ in Millions | Mar. 04, 2020USD ($)shares | Mar. 31, 2020USD ($)director | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Jul. 09, 2018 |
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investments | $ 6,887 | $ 7,212 | ||||
Equity method investment net earnings | 138 | $ 113 | ||||
Cash dividends received from equity method investments | 165 | 160 | ||||
Pre-tax gain (loss) on equity method investment transaction | $ 71 | $ 23 | ||||
JDE | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investment, ownership percentage | 26.40% | |||||
KDP | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investment, ownership percentage | 13.10% | 13.10% | 13.60% | 13.80% | ||
Number of director positions | director | 2 | |||||
Pre-tax gain on sale of equity method investment | $ 71 | $ 23 | ||||
After-tax gain on sale of equity method investment | 54 | $ 18 | ||||
Number of shares of equity method investment sold (in shares) | shares | 6.8 | |||||
Decrease in equity method investment ownership percentage | 0.50% | |||||
Amount of equity method investment sold | $ 185 | |||||
Fair value of ownership of equity method investment | $ 4,500 | |||||
Dong Suh Foods Corporation | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investment, ownership percentage | 50.00% | |||||
Dong Suh Oil & Fats Co. Ltd. | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investment, ownership percentage | 49.00% | |||||
Keurig | Keurig with Dr Pepper Snapple Group, Inc. | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity method investment, ownership percentage | 24.20% | |||||
Pre-tax gain (loss) on equity method investment transaction | $ 778 | |||||
After-tax gain on equity method investment transaction | $ 586 |
Restructuring Program - Additio
Restructuring Program - Additional Information (Details) - USD ($) $ in Millions | Sep. 06, 2018 | Aug. 31, 2016 | May 06, 2014 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
2014-2018 Restructuring Program | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Approved restructuring program cost | $ 5,700 | $ 3,500 | ||||||
Reallocation of previously approved capital expenditures to be spent on restructuring program cash costs | 600 | |||||||
2014-2018 Restructuring Program | Maximum | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Approved capital expenditures | 1,600 | $ 2,200 | ||||||
2014-2018 Restructuring Program | Restructuring Program Charges | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Approved restructuring program cost | 4,100 | |||||||
2014-2018 Restructuring Program | Cash Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Approved restructuring program cost | 3,100 | |||||||
2014-2018 Restructuring Program | Non-cash Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Approved restructuring program cost | $ 1,000 | |||||||
Simplify to Grow Program | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Approved restructuring program cost | $ 7,700 | |||||||
Restructuring and implementation charges | $ 58 | $ 70 | $ 4,398 | [1] | ||||
Restructuring charges | 15 | 20 | 2,741 | [1] | ||||
Cash spent in restructuring | 37 | |||||||
Non-cash asset write-downs | 3 | 29 | ||||||
Restructuring reserve | 265 | 265 | $ 301 | |||||
Implementation costs | 43 | 50 | 1,657 | [1] | ||||
Simplify to Grow Program | Maximum | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Approved capital expenditures | 2,300 | |||||||
Increase in approved restructuring program costs | 1,300 | |||||||
Increase in approved capital expenditures | 700 | |||||||
Simplify to Grow Program | Other current liabilities | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring reserve | 243 | 243 | ||||||
Simplify to Grow Program | Other liabilities | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring reserve | 22 | 22 | ||||||
Simplify to Grow Program | Restructuring Program Charges | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Approved restructuring program cost | 5,400 | |||||||
Simplify to Grow Program | Cash Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Approved restructuring program cost | 4,100 | |||||||
Simplify to Grow Program | Non-cash Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Approved restructuring program cost | $ 1,300 | |||||||
Simplify to Grow Program | Severance and Related Costs | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring charges | 14 | |||||||
Cash spent in restructuring | 37 | $ 53 | ||||||
Non-cash asset write-downs | 2 | |||||||
Restructuring reserve | $ 265 | $ 265 | $ 301 | |||||
[1] | Includes all charges recorded since program inception on May 6, 2014 through March 31, 2020 . |
Restructuring Program - Restruc
Restructuring Program - Restructuring Liability Activity (Details) - Simplify to Grow Program - USD ($) $ in Millions | 3 Months Ended | 71 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | ||
Restructuring Reserve [Roll Forward] | ||||
Liability balance, January 1, 2020 | $ 301 | |||
Charges | 15 | $ 20 | $ 2,741 | [1] |
Cash spent | (37) | |||
Non-cash settlements/adjustments | (3) | (29) | ||
Currency | (11) | |||
Liability balance, March 31, 2020 | 265 | 265 | ||
Severance and related costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Liability balance, January 1, 2020 | 301 | |||
Charges | 14 | |||
Cash spent | (37) | $ (53) | ||
Non-cash settlements/adjustments | (2) | |||
Currency | (11) | |||
Liability balance, March 31, 2020 | 265 | 265 | ||
Asset Write-downs | ||||
Restructuring Reserve [Roll Forward] | ||||
Liability balance, January 1, 2020 | 0 | |||
Charges | 1 | |||
Cash spent | 0 | |||
Non-cash settlements/adjustments | (1) | |||
Currency | 0 | |||
Liability balance, March 31, 2020 | $ 0 | $ 0 | ||
[1] | Includes all charges recorded since program inception on May 6, 2014 through March 31, 2020 . |
Restructuring Program - Restr_2
Restructuring Program - Restructuring and Implementation Costs by Segments (Details) - Simplify to Grow Program - USD ($) $ in Millions | 3 Months Ended | 71 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | [1] | ||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Costs | $ 15 | $ 20 | $ 2,741 | ||
Implementation Costs | 43 | 50 | 1,657 | ||
Total | 58 | 70 | 4,398 | ||
Operating Segments | Latin America | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Costs | 4 | 0 | 521 | ||
Implementation Costs | 7 | 15 | 276 | ||
Total | 11 | 15 | 797 | ||
Operating Segments | AMEA | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Costs | (1) | 6 | 534 | ||
Implementation Costs | 3 | 7 | 209 | ||
Total | 2 | 13 | 743 | ||
Operating Segments | Europe | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Costs | 3 | 0 | 1,079 | ||
Implementation Costs | 14 | 11 | 462 | ||
Total | 17 | 11 | 1,541 | ||
Operating Segments | North America | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Costs | [2] | 2 | 6 | 471 | |
Implementation Costs | [2] | 10 | 4 | 394 | |
Total | [2] | 12 | 10 | 865 | |
Corporate | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Costs | [3] | 7 | 8 | 136 | |
Implementation Costs | [3] | 9 | 13 | 316 | |
Total | [3] | $ 16 | $ 21 | $ 452 | |
[1] | Includes all charges recorded since program inception on May 6, 2014 through March 31, 2020 . | ||||
[2] | During 2019 , our North America region implementation costs included incremental costs that we incurred related to renegotiating collective bargaining agreements that expired in February 2016 for eight U.S. facilities and related to executing business continuity plans for the North America business. | ||||
[3] | The Corporate column includes minor adjustments for pension settlement losses and rounding. |
Debt and Borrowing Arrangemen_3
Debt and Borrowing Arrangements - Short-Term Borrowings and Related Weighted-Average Interest Rates (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Short-term Debt [Line Items] | ||
Amount Outstanding | $ 4,764 | $ 2,638 |
Commercial paper | ||
Short-term Debt [Line Items] | ||
Amount Outstanding | $ 3,695 | $ 2,581 |
Weighted-Average Rate | 2.00% | 2.00% |
Credit facility borrowings | ||
Short-term Debt [Line Items] | ||
Amount Outstanding | $ 1,000 | $ 0 |
Weighted-Average Rate | 1.70% | 0.00% |
Bank loans | ||
Short-term Debt [Line Items] | ||
Amount Outstanding | $ 69 | $ 57 |
Weighted-Average Rate | 5.20% | 5.20% |
Debt and Borrowing Arrangemen_4
Debt and Borrowing Arrangements - Additional Information (Details) SFr in Millions | Apr. 13, 2020USD ($) | Apr. 01, 2020USD ($) | Mar. 30, 2020USD ($) | Mar. 30, 2020CHF (SFr) | Mar. 24, 2020USD ($) | Mar. 12, 2020USD ($) | Mar. 06, 2020USD ($) | Feb. 26, 2020USD ($) | Feb. 10, 2020USD ($) | Apr. 28, 2020USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Feb. 27, 2019USD ($) |
Debt Instrument [Line Items] | ||||||||||||||
Short-term borrowings | $ 4,764,000,000 | $ 2,638,000,000 | ||||||||||||
Proceeds from issuance of debt | 0 | $ 597,000,000 | ||||||||||||
Long-term debt matured | 670,000,000 | 403,000,000 | ||||||||||||
Fair value of debt | 20,410,000,000 | 19,388,000,000 | ||||||||||||
Carrying value of debt | 19,790,000,000 | 18,426,000,000 | ||||||||||||
Line of Credit | Credit facility borrowings | Multi-year Senior Unsecured Revolving Credit Facility Expiring February 27, 2024 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Credit facility, maximum borrowing capacity | $ 4,500,000,000 | |||||||||||||
Total shareholders' equity, excluding accumulated other comprehensive earnings/(losses) | 37,300,000,000 | $ 24,600,000,000 | ||||||||||||
Borrowings under multi-year credit facility | 0 | |||||||||||||
Notes Payable | 0.05% Swiss Franc Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt interest rate | 0.05% | 0.05% | ||||||||||||
Long-term debt matured | $ 235,000,000 | SFr 225 | ||||||||||||
Notes Payable | 5.375% U.S. Dollar Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt interest rate | 5.375% | |||||||||||||
Long-term debt matured | $ 427,000,000 | |||||||||||||
Commercial paper | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Short-term borrowings | 3,695,000,000 | 2,581,000,000 | ||||||||||||
Line of Credit | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Short-term borrowings | 69,000,000 | 57,000,000 | ||||||||||||
Line of Credit | Credit facility borrowings | 364-day Senior Unsecured Credit Facility Expiring March 23, 2021 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Credit facility, maximum borrowing capacity | $ 1,750,000,000 | |||||||||||||
Credit facility expiration period | 364 days | |||||||||||||
Borrowings under revolving credit agreement | 0 | |||||||||||||
Line of Credit | Credit facility borrowings | 364-day Senior Unsecured Credit Facility Expiring March 5, 2021 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Credit facility, maximum borrowing capacity | $ 2,500,000,000 | |||||||||||||
Credit facility repayment requirements (up to) | $ 2,500,000,000 | |||||||||||||
Credit facility expiration period | 364 days | |||||||||||||
Amounts drawn on revolving credit agreement | $ 1,000,000,000 | |||||||||||||
Line of Credit | Credit facility borrowings | 364-day Senior Unsecured Credit Facility Expiring February 24, 2021 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Credit facility, maximum borrowing capacity | $ 1,500,000,000 | |||||||||||||
Credit facility expiration period | 364 days | |||||||||||||
Borrowings under revolving credit agreement | $ 0 | |||||||||||||
Minimum | Commercial paper | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Commercial paper, maturity period | 1 day | |||||||||||||
Maximum | Commercial paper | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Commercial paper, maturity period | 80 days | |||||||||||||
Net investment hedge derivative contracts | Net investment hedge debt | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Net investment hedge derivative contracts excluded from hedge effectiveness | $ 33,000,000 | $ 33,000,000 | ||||||||||||
Subsequent Event | Notes Payable | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt issued | $ 1,000,000,000 | |||||||||||||
Proceeds from issuance of debt | 991,300,000 | |||||||||||||
Debt discounts and deferred costs | 8,700,000 | |||||||||||||
Subsequent Event | Notes Payable | 2.125% U.S. Dollar-denominated Fixed-rate Notes due April 13, 2023 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt issued | $ 500,000,000 | |||||||||||||
Debt interest rate | 2.125% | |||||||||||||
Subsequent Event | Notes Payable | 2.750% U.S. Dollar-denominated Fixed-rate Notes due April 13, 2030 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt issued | $ 500,000,000 | |||||||||||||
Debt interest rate | 2.75% | |||||||||||||
Subsequent Event | Line of Credit | Credit facility borrowings | 364-day Senior Unsecured Credit Facility Expiring March 23, 2021 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Credit facility, maximum borrowing capacity | $ 1,950,000,000 | |||||||||||||
Credit facility repayment requirements (up to) | $ 1,950,000,000 | |||||||||||||
Subsequent Event | Line of Credit | Credit facility borrowings | 364-day Senior Unsecured Credit Facility Expiring March 5, 2021 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Credit facility, maximum borrowing capacity | $ 1,500,000,000 | |||||||||||||
Amounts drawn on revolving credit agreement | 1,250,000,000 | |||||||||||||
Repayments of credit facility | 1,250,000,000 | |||||||||||||
Remaining draw capacity of credit facility | $ 500,000,000 | |||||||||||||
International Subsidiaries | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Credit facility, maximum borrowing capacity | $ 1,400,000,000 | $ 1,700,000,000 |
Debt and Borrowing Arrangemen_5
Debt and Borrowing Arrangements - Interest and Other Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Interest expense, debt | $ 110 | $ 123 |
Loss related to interest rate swaps | 103 | 0 |
Other (income)/expense, net | (23) | (43) |
Interest and other expense, net | $ 190 | $ 80 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Derivatives, Fair Value [Line Items] | |||
Asset Derivatives | $ 1,052 | $ 599 | |
Liability Derivatives | 491 | 425 | |
Derivatives designated as accounting hedges | |||
Derivatives, Fair Value [Line Items] | |||
Asset Derivatives | 714 | 331 | |
Liability Derivatives | 13 | 255 | |
Derivatives designated as accounting hedges | Interest rate contracts | |||
Derivatives, Fair Value [Line Items] | |||
Asset Derivatives | 73 | 19 | |
Liability Derivatives | 13 | 190 | |
Derivatives designated as accounting hedges | Net investment hedge derivative contracts | |||
Derivatives, Fair Value [Line Items] | |||
Asset Derivatives | [1] | 641 | 312 |
Liability Derivatives | [1] | 0 | 65 |
Derivatives not designated as accounting hedges | |||
Derivatives, Fair Value [Line Items] | |||
Asset Derivatives | 338 | 268 | |
Liability Derivatives | 478 | 170 | |
Derivatives not designated as accounting hedges | Currency exchange contracts | |||
Derivatives, Fair Value [Line Items] | |||
Asset Derivatives | 158 | 67 | |
Liability Derivatives | 136 | 50 | |
Derivatives not designated as accounting hedges | Commodity contracts | |||
Derivatives, Fair Value [Line Items] | |||
Asset Derivatives | 180 | 201 | |
Liability Derivatives | $ 342 | $ 120 | |
[1] | Net investment hedge derivative contracts consist of cross-currency interest rate swaps and forward contracts. We also designate some of our non-U.S. dollar denominated debt to hedge a portion of our net investments in our non-U.S. operations. This debt is not reflected in the table above, but is included in long-term debt discussed in Note 8, Debt and Borrowing Arrangements . Both net investment hedge derivative contracts and non-U.S. dollar denominated debt acting as net investment hedges are also disclosed in the Derivative Volume table and the Hedges of Net Investments in International Operations section appearing later in this footnote. |
Financial Instruments - Derivat
Financial Instruments - Derivative Instruments Fair Value and Measurement Inputs (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Total derivatives | $ 561 | $ 174 |
Currency exchange contracts | ||
Derivative [Line Items] | ||
Total derivatives | 22 | 17 |
Commodity contracts | ||
Derivative [Line Items] | ||
Total derivatives | (162) | 81 |
Interest rate contracts | ||
Derivative [Line Items] | ||
Total derivatives | 60 | (171) |
Net investment hedge contracts | ||
Derivative [Line Items] | ||
Total derivatives | 641 | 247 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Derivative [Line Items] | ||
Total derivatives | (29) | 27 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Currency exchange contracts | ||
Derivative [Line Items] | ||
Total derivatives | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity contracts | ||
Derivative [Line Items] | ||
Total derivatives | (29) | 27 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate contracts | ||
Derivative [Line Items] | ||
Total derivatives | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Net investment hedge contracts | ||
Derivative [Line Items] | ||
Total derivatives | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Derivative [Line Items] | ||
Total derivatives | 590 | 147 |
Significant Other Observable Inputs (Level 2) | Currency exchange contracts | ||
Derivative [Line Items] | ||
Total derivatives | 22 | 17 |
Significant Other Observable Inputs (Level 2) | Commodity contracts | ||
Derivative [Line Items] | ||
Total derivatives | (133) | 54 |
Significant Other Observable Inputs (Level 2) | Interest rate contracts | ||
Derivative [Line Items] | ||
Total derivatives | 60 | (171) |
Significant Other Observable Inputs (Level 2) | Net investment hedge contracts | ||
Derivative [Line Items] | ||
Total derivatives | 641 | 247 |
Significant Unobservable Inputs (Level 3) | ||
Derivative [Line Items] | ||
Total derivatives | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Currency exchange contracts | ||
Derivative [Line Items] | ||
Total derivatives | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Commodity contracts | ||
Derivative [Line Items] | ||
Total derivatives | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Interest rate contracts | ||
Derivative [Line Items] | ||
Total derivatives | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Net investment hedge contracts | ||
Derivative [Line Items] | ||
Total derivatives | $ 0 | $ 0 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
After-tax loss on interest rate swaps included in interest and other expense, net | $ 79 | ||
Pre-tax loss on interest rate swaps included in interest and other expense, net | 103 | $ 0 | |
Net loss on equity method investment transactions | (71) | $ (23) | |
Net investment hedge contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, aggregate notional value | 6,652 | $ 6,864 | |
Net investment hedge contracts | Net investment hedges | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, aggregate notional value | 6,700 | ||
Interest rate contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, aggregate notional value | 4,250 | $ 5,250 | |
Interest rate contracts | Cash flow hedges | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Expected transfers of unrealized losses to earnings, within next 12 months or less | $ 19 | ||
Hedged forecasted transaction period | 4 years 6 months |
Financial Instruments - Notiona
Financial Instruments - Notional Values of Hedging Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Net investment hedge debt | Euro notes | ||
Derivative [Line Items] | ||
Notional Amount | $ 3,381 | $ 3,436 |
Net investment hedge debt | British pound sterling notes | ||
Derivative [Line Items] | ||
Notional Amount | 327 | 349 |
Net investment hedge debt | Swiss franc notes | ||
Derivative [Line Items] | ||
Notional Amount | 1,223 | 1,448 |
Net investment hedge debt | Canadian dollar notes | ||
Derivative [Line Items] | ||
Notional Amount | 427 | 462 |
Currency exchange contracts | Intercompany loans and forecasted interest payments | ||
Derivative [Line Items] | ||
Notional Amount | 2,544 | 2,474 |
Currency exchange contracts | Forecasted transactions | ||
Derivative [Line Items] | ||
Notional Amount | 3,869 | 3,993 |
Commodity contracts | ||
Derivative [Line Items] | ||
Notional Amount | 7,571 | 7,238 |
Interest rate contracts | ||
Derivative [Line Items] | ||
Notional Amount | 4,250 | 5,250 |
Net investment hedge contracts | ||
Derivative [Line Items] | ||
Notional Amount | 6,652 | $ 6,864 |
Net investment hedge contracts | Net investment hedge debt | ||
Derivative [Line Items] | ||
Notional Amount | $ 6,700 |
Financial Instruments - Cash Fl
Financial Instruments - Cash Flow Hedges Effect on Accumulated Other Comprehensive Earnings/(Losses), Net of Tax (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | ||
Balance at beginning of period | $ 27,351 | $ 25,713 |
Transfer of realized losses/(gains) in fair value to earnings | 104 | 29 |
Balance at end of period | 25,752 | 25,909 |
Cash flow hedges | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | ||
Transfer of realized losses/(gains) in fair value to earnings | 81 | 0 |
Unrealized (loss)/gain in fair value | (21) | (69) |
Derivative Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | ||
Balance at beginning of period | (212) | (167) |
Balance at end of period | $ (152) | $ (236) |
Financial Instruments - Cash _2
Financial Instruments - Cash Flow Hedges After-tax Gains/(Losses) (Details) - Cash flow hedges - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
After-tax gains/(losses) recognized in other comprehensive earnings/(losses) | $ (21) | $ (69) |
Interest rate contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
After-tax gains/(losses) reclassified from accumulated other comprehensive income into earnings/(losses) | (81) | 0 |
After-tax gains/(losses) recognized in other comprehensive earnings/(losses) | $ (21) | $ (69) |
Financial Instruments - Net Inv
Financial Instruments - Net Investment Hedge Derivative Contracts (Details) - Net investment hedges - Net investment hedge derivative contracts - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||
After-tax gain/(loss) on NIH contracts | [1] | $ 332 | $ 14 |
Amounts excluded from the assessment of hedge effectiveness | [2] | $ 33 | $ 33 |
[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. | ||
[2] | 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. |
Financial Instruments - Non-U.S
Financial Instruments - Non-U.S. Dollar Debt Designated as Net Investment Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Euro notes | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
After-tax gains/(losses) related to hedges of net investments in international operations | $ 42 | $ 58 |
British pound sterling notes | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
After-tax gains/(losses) related to hedges of net investments in international operations | 17 | (6) |
Swiss franc notes | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
After-tax gains/(losses) related to hedges of net investments in international operations | (6) | 13 |
Canadian dollar notes | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
After-tax gains/(losses) related to hedges of net investments in international operations | $ 27 | $ (7) |
Financial Instruments - Economi
Financial Instruments - Economic Hedges (Details) - Derivatives Not Designated as Hedging Instruments - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives instruments, pre-tax gains/(losses) recognized in earnings | $ (244) | $ 80 |
Currency exchange contracts | Intercompany loans and forecasted interest payments | Interest and other expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives instruments, pre-tax gains/(losses) recognized in earnings | (73) | 61 |
Currency exchange contracts | Forecasted transactions | Interest and other expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives instruments, pre-tax gains/(losses) recognized in earnings | 1 | 0 |
Currency exchange contracts | Forecasted transactions | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives instruments, pre-tax gains/(losses) recognized in earnings | 26 | 5 |
Currency exchange contracts | Forecasted transactions | Selling, general and administrative expenses | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives instruments, pre-tax gains/(losses) recognized in earnings | (1) | 0 |
Commodity contracts | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives instruments, pre-tax gains/(losses) recognized in earnings | $ (197) | $ 14 |
Benefit Plans - Pension Costs (
Benefit Plans - Pension Costs (Details) - Pension Plans - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1 | $ 9 |
Interest cost | 13 | 16 |
Expected return on plan assets | (19) | (22) |
Net loss from experience differences | 4 | 5 |
Prior service cost/(credit) | 0 | 0 |
Settlement losses and other expenses | 4 | 4 |
Net periodic benefit costs | 3 | 12 |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 30 | 31 |
Interest cost | 37 | 51 |
Expected return on plan assets | (99) | (103) |
Net loss from experience differences | 29 | 38 |
Prior service cost/(credit) | (2) | (2) |
Settlement losses and other expenses | 2 | 0 |
Net periodic benefit costs | $ (3) | $ 15 |
Benefit Plans - Additional Info
Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | Jul. 11, 2019 | Mar. 31, 2020 |
U.S. Plans | Multiemployer Plans, Pension | Fund | BCTGM | North America | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Multiemployer plan, withdrawal liability | $ 526 | $ 387 |
Multiemployer plan, withdrawal obligation term | 20 years | |
Pension Plans | U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer contribution | 10 | |
Estimated future employer contributions | 6 | |
Pension Plans | Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer contribution | 62 | |
Estimated future employer contributions | 128 | |
Pension Plans | United Kingdom and Ireland | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer contribution | 28 | |
Other current liabilities | U.S. Plans | Multiemployer Plans, Pension | Fund | BCTGM | North America | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Multiemployer plan, withdrawal liability | 14 | |
Long-term other liabilities | U.S. Plans | Multiemployer Plans, Pension | Fund | BCTGM | North America | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Multiemployer plan, withdrawal liability | $ 373 |
Benefit Plans - Postretirement
Benefit Plans - Postretirement Benefit Plans (Details) - Postretirement Benefit Plans - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1 | $ 1 |
Interest cost | 3 | 4 |
Net loss from experience differences | 3 | 2 |
Prior service credit | (8) | (10) |
Net periodic benefit costs | $ (1) | $ (3) |
Benefit Plans - Postemployment
Benefit Plans - Postemployment Benefit Costs (Details) - Postemployment Benefit Plans - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1 | $ 1 |
Interest cost | 1 | 1 |
Amortization of net gains | (1) | (1) |
Net periodic benefit costs | $ 1 | $ 1 |
Stock Plans - Stock Option Acti
Stock Plans - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | ||
Shares Subject to Option | |||
Balance at January 1, 2020 (in shares) | 33,855,948 | ||
Options granted (in shares) | 2,314,790 | ||
Options exercised (in shares) | [1] | (4,210,414) | |
Options canceled (in shares) | (262,968) | ||
Balance at March 31, 2020 (in shares) | 31,697,356 | 33,855,948 | |
Weighted- Average Exercise or Grant Price Per Share | |||
Balance at January 1, 2020 (in dollars per share) | $ 36.19 | ||
Options granted (in dollars per share) | 58.97 | ||
Options exercised (in dollars per share) | [1] | 28.62 | |
Options canceled (in dollars per share) | 41.20 | ||
Balance at March 31, 2020 (in dollars per share) | $ 38.31 | $ 36.19 | |
Average Remaining Contractual Term | |||
Average remaining contractual term | 6 years | 5 years | |
Aggregate Intrinsic Value | |||
Aggregate intrinsic value | $ 378 | $ 640 | |
Aggregate intrinsic value options exercised | [1] | 120 | |
Cash received from options exercised | 119 | ||
Actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises | $ 17 | ||
Annual grant to eligible employees | |||
Shares Subject to Option | |||
Options granted (in shares) | 2,280,440 | ||
Weighted- Average Exercise or Grant Price Per Share | |||
Options granted (in dollars per share) | $ 59.04 | ||
Additional options issued | |||
Shares Subject to Option | |||
Options granted (in shares) | 34,350 | ||
Weighted- Average Exercise or Grant Price Per Share | |||
Options granted (in dollars per share) | $ 54.59 | ||
[1] | Cash received from options exercised was $119 million in the three months ended March 31, 2020 . The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $17 million in the three months ended March 31, 2020 . |
Stock Plans - Performance Share
Stock Plans - Performance Share Units and Other Stock-Based Awards Activity (Details) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)$ / sharesshares | ||
Number of Shares | ||
Balance at January 1, 2020 (in shares) | shares | 5,661,945 | |
Shares granted (in shares) | shares | 1,597,480 | |
Vested (in shares) | shares | (1,585,787) | [1] |
Forfeited (in shares) | shares | (287,626) | |
Balance at March 31, 2020 (in shares) | shares | 5,386,012 | |
Weighted-average grant date fair value per share | ||
Balance at January 1, 2020 (in dollars per share) | $ / shares | $ 46.90 | [2] |
Shares granted (in dollars per share) | $ / shares | 62.77 | [2] |
Vested (in dollars per share) | $ / shares | 43.10 | [1],[2] |
Forfeited (in dollars per share) | $ / shares | 44.78 | [2] |
Balance at March 31, 2020 (in dollars per share) | $ / shares | $ 52.84 | [2] |
Weighted-Average Aggregate Fair Value | ||
Weighted average grant date fair value of shares granted | $ | $ 100 | [2] |
Weighted average grant date fair value of shares vested | $ | 68 | [1],[2] |
Maximum | ||
Weighted-Average Aggregate Fair Value | ||
Actual tax benefit/(expense) realized for the tax deductions from the shares vested | $ | $ 3 | |
Annual grant to eligible employees | ||
Grant Date | ||
Grant Date | Feb. 20, 2020 | |
Performance share units | ||
Number of Shares | ||
Shares granted (in shares) | shares | 825,230 | |
Weighted-average grant date fair value per share | ||
Shares granted (in dollars per share) | $ / shares | $ 65.83 | [2] |
Deferred stock units | ||
Number of Shares | ||
Shares granted (in shares) | shares | 545,550 | |
Weighted-average grant date fair value per share | ||
Shares granted (in dollars per share) | $ / shares | $ 59.04 | [2] |
Additional shares granted | ||
Number of Shares | ||
Shares granted (in shares) | shares | 226,700 | [3] |
Weighted-average grant date fair value per share | ||
Shares granted (in dollars per share) | $ / shares | $ 57.53 | [2],[3] |
[1] | 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 $3 million in the three months ended March 31, 2020 . | |
[2] | The grant date fair value of performance share units is determined based on the Monte Carlo simulation model for the market-based total shareholder return component and the closing market price of the Company’s stock on the grant date for performance-based components. The Monte Carlo simulation model incorporates the probability of achieving the total shareholder return market condition. Compensation expense is recognized using the grant date fair values regardless of whether the market condition is achieved, so long as the requisite service has been provided. | |
[3] | Includes performance share units and deferred stock units. |
Stock Plans - Share Repurchase
Stock Plans - Share Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Millions | Jan. 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | |||||
Common shares repurchased | $ 701,000,000 | $ 665,000,000 | |||
Repurchase of common stock | 720,000,000 | $ 646,000,000 | |||
Common Stock | Prior to January 1, 2020 | |||||
Class of Stock [Line Items] | |||||
Stock repurchase value | $ 13,700,000,000 | ||||
Common shares repurchased | $ 16,500,000,000 | ||||
Common Stock | Share Repurchase Program Amended January 31, 2018 | |||||
Class of Stock [Line Items] | |||||
Stock repurchase value | $ 19,700,000,000 | ||||
Increase in share repurchase value | $ 6,000,000,000 | ||||
Stock repurchase expiration date | Dec. 31, 2020 | ||||
Common shares repurchased | $ 700,000,000 | ||||
Number of shares repurchased (in shares) | 12.9 | ||||
Average cost of shares repurchased (in dollars per share) | $ 54.25 | ||||
Remaining share repurchase capacity | $ 2,500,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - U.S. Commodity Futures Trading Commission (CFTC) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Loss Contingencies [Line Items] | |
Loss contingency, filing date | Apr. 1, 2015 |
Loss contingency, damages sought | $ 1,000,000 |
Each Additional Violation of the Commodity Exchange Act | |
Loss Contingencies [Line Items] | |
Loss contingency, damages sought | $ 140,000 |
Reclassifications from Accumu_3
Reclassifications from Accumulated Other Comprehensive Income - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Transfer of realized losses/(gains) in fair value to earnings | $ 104 | $ 29 |
Reclassifications from Accumu_4
Reclassifications from Accumulated Other Comprehensive Income - Changes in the Accumulated Balance of Components of Other Comprehensive Earnings/(Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance at beginning of period | $ 27,351 | $ 25,713 | |
Less: other comprehensive (earnings)/loss attributable to noncontrolling interests | 5 | 1 | |
Total other comprehensive earnings/(losses) | (1,372) | 131 | |
Other comprehensive earnings/(losses) | (1,367) | 132 | |
Balance at end of period | 25,752 | 25,909 | |
Currency Translation Adjustments | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (8,302) | (8,603) | |
Tax (expense)/benefit on gains/(losses) | (1,421) | 168 | |
Tax (expense)/benefit | (90) | 22 | |
Less: other comprehensive (earnings)/loss attributable to noncontrolling interests | 5 | 1 | |
Total other comprehensive earnings/(losses) | (1,511) | 190 | |
Balance at end of period | (9,808) | (8,412) | |
Pension and Other Benefits Plans | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (1,744) | (1,860) | |
Tax (expense)/benefit on gains/(losses) | 0 | 6 | |
Net gains/(losses) arising during period | (5) | (24) | |
Tax expense/(benefit) on reclassifications | [1] | (8) | (7) |
Currency impact | [1] | 61 | (1) |
Total other comprehensive earnings/(losses) | 79 | 10 | |
Balance at end of period | (1,665) | (1,850) | |
Amortization of experience losses and prior service costs | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Losses/(gains) reclassified into net earnings | [2] | 25 | 32 |
Settlement losses and other expenses | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Losses/(gains) reclassified into net earnings | [2] | 6 | 4 |
Derivative Cash Flow Hedges | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (212) | (167) | |
Tax (expense)/benefit on gains/(losses) | 14 | 8 | |
Losses/(gains) reclassified into net earnings | [3] | 105 | 0 |
Net gains/(losses) arising during period | (37) | (77) | |
Tax expense/(benefit) on reclassifications | [1] | (24) | 0 |
Currency impact | 2 | 0 | |
Total other comprehensive earnings/(losses) | 60 | (69) | |
Balance at end of period | (152) | (236) | |
Accumulated other comprehensive income attributable to Mondelēz International | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (10,258) | (10,630) | |
Total other comprehensive earnings/(losses) | (1,367) | 132 | |
Balance at end of period | $ (11,625) | $ (10,498) | |
[1] | Taxes reclassified to earnings are recorded within the provision for income taxes | ||
[2] | These reclassified losses are included in net periodic benefit costs disclosed in Note 10, Benefit Plans . | ||
[3] | These reclassified gains or losses are recorded within interest and other expense, net. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Estimated annual effective tax rate | 25.20% | 25.90% |
Effective tax rate | 21.20% | 19.40% |
Net discrete tax benefit | $ 28 | $ 63 |
Net benefit from the release of uncertain tax positions due to the expirations of statutes of limitations and audit settlements | $ 22 | $ 60 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net earnings | $ 760 | $ 920 |
Noncontrolling interest earnings | (7) | (6) |
Net earnings attributable to Mondelēz International | $ 753 | $ 914 |
Weighted-average shares for basic EPS (in shares) | 1,434 | 1,449 |
Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares (in shares) | 11 | 12 |
Weighted-average shares for diluted EPS (in shares) | 1,445 | 1,461 |
Basic earnings per share attributable to Mondelēz International (in dollars per share) | $ 0.53 | $ 0.63 |
Diluted earnings per share attributable to Mondelēz International (in dollars per share) | $ 0.52 | $ 0.63 |
Earnings per Share - Additional
Earnings per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock Options and Performance Share Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Mondelēz International stock options excluded from the calculation of diluted EPS (in shares) | 4 | 6.2 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 4 |
Segment Reporting - Net Revenue
Segment Reporting - Net Revenues and Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Net revenues | $ 6,707 | $ 6,538 |
Operating income | 856 | 1,036 |
Unrealized (losses)/gains on hedging activities (mark-to-market impacts) | (185) | 16 |
General corporate expenses | (76) | (109) |
Amortization of intangibles | (43) | (44) |
Acquisition-related costs | (5) | 0 |
Benefit plan non-service income | 33 | 17 |
Interest and other expense, net | (190) | (80) |
Earnings before income taxes | 699 | 973 |
Latin America | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 726 | 800 |
Operating income | 78 | 98 |
AMEA | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 1,502 | 1,541 |
Operating income | 234 | 256 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 2,584 | 2,551 |
Operating income | 472 | 500 |
North America | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 1,895 | 1,646 |
Operating income | $ 381 | $ 319 |
Segment Reporting - Net Reven_2
Segment Reporting - Net Revenues by Product Category (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Net revenues | $ 6,707 | $ 6,538 |
Biscuits | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 3,026 | 2,737 |
Chocolate | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 2,156 | 2,206 |
Gum & Candy | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 781 | 813 |
Beverages | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 298 | 321 |
Cheese & Grocery | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 446 | 461 |
Latin America | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 726 | 800 |
Latin America | Biscuits | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 174 | 170 |
Latin America | Chocolate | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 194 | 230 |
Latin America | Gum & Candy | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 182 | 200 |
Latin America | Beverages | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 102 | 123 |
Latin America | Cheese & Grocery | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 74 | 77 |
AMEA | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 1,502 | 1,541 |
AMEA | Biscuits | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 508 | 461 |
AMEA | Chocolate | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 543 | 557 |
AMEA | Gum & Candy | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 185 | 225 |
AMEA | Beverages | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 171 | 172 |
AMEA | Cheese & Grocery | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 95 | 126 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 2,584 | 2,551 |
Europe | Biscuits | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 746 | 734 |
Europe | Chocolate | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 1,363 | 1,360 |
Europe | Gum & Candy | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 173 | 173 |
Europe | Beverages | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 25 | 26 |
Europe | Cheese & Grocery | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 277 | 258 |
North America | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 1,895 | 1,646 |
North America | Biscuits | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 1,598 | 1,372 |
North America | Chocolate | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 56 | 59 |
North America | Gum & Candy | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 241 | 215 |
North America | Beverages | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 0 | 0 |
North America | Cheese & Grocery | ||
Segment Reporting Information [Line Items] | ||
Net revenues | $ 0 | $ 0 |