Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 27, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MDLZ | |
Entity Registrant Name | Mondelez International, Inc. | |
Entity Central Index Key | 1,103,982 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,494,388,598 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net revenues | $ 6,530 | $ 6,396 | $ 18,930 | $ 19,153 |
Cost of sales | 3,978 | 3,908 | 11,529 | 11,614 |
Gross profit | 2,552 | 2,488 | 7,401 | 7,539 |
Selling, general and administrative expenses | 1,330 | 1,552 | 4,254 | 4,835 |
Asset impairment and exit costs | 183 | 190 | 536 | 510 |
Net gain on divestitures | (187) | (184) | ||
Amortization of intangibles | 45 | 44 | 133 | 132 |
Operating income | 1,181 | 702 | 2,662 | 2,062 |
Interest and other expense, net | 19 | 145 | 262 | 540 |
Earnings before income taxes | 1,162 | 557 | 2,400 | 1,522 |
Provision for income taxes | (272) | (40) | (510) | (207) |
Gain on equity method investment exchange | 43 | |||
Equity method investment net earnings | 103 | 31 | 236 | 218 |
Net earnings | 993 | 548 | 2,126 | 1,576 |
Noncontrolling interest earnings | (1) | (6) | (10) | |
Net earnings attributable to Mondelez International | $ 992 | $ 548 | $ 2,120 | $ 1,566 |
Per share data: | ||||
Basic earnings per share attributable to Mondelez International | $ 0.66 | $ 0.35 | $ 1.40 | $ 1 |
Diluted earnings per share attributable to Mondelez International | 0.65 | 0.35 | 1.38 | 0.99 |
Dividends declared | $ 0.22 | $ 0.19 | $ 0.60 | $ 0.53 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Earnings - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net earnings | $ 993 | $ 548 | $ 2,126 | $ 1,576 |
Other comprehensive earnings/(losses), net of tax: | ||||
Currency translation adjustment | 337 | 28 | 1,260 | 131 |
Pension and other benefit plans | (10) | 37 | (42) | 141 |
Derivative cash flow hedges | (19) | 2 | 11 | 12 |
Total other comprehensive earnings/(losses) | 308 | 67 | 1,229 | 284 |
Comprehensive earnings | 1,301 | 615 | 3,355 | 1,860 |
less: Comprehensive earnings/(losses) attributable to noncontrolling interests | 9 | (2) | 30 | 7 |
Comprehensive earnings attributable to Mondelez International | $ 1,292 | $ 617 | $ 3,325 | $ 1,853 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 844 | $ 1,741 |
Trade receivables (net of allowances of $48 at September 30, 2017 and $58 at December 31, 2016) | 2,981 | 2,611 |
Other receivables (net of allowances of $101 at September 30, 2017 and $93 at December 31, 2016) | 932 | 859 |
Inventories, net | 2,781 | 2,469 |
Other current assets | 617 | 800 |
Total current assets | 8,155 | 8,480 |
Property, plant and equipment, net | 8,538 | 8,229 |
Goodwill | 21,071 | 20,276 |
Intangible assets, net | 18,638 | 18,101 |
Prepaid pension assets | 148 | 159 |
Deferred income taxes | 332 | 358 |
Equity method investments | 6,060 | 5,585 |
Other assets | 349 | 350 |
TOTAL ASSETS | 63,291 | 61,538 |
LIABILITIES | ||
Short-term borrowings | 4,551 | 2,531 |
Current portion of long-term debt | 1,164 | 1,451 |
Accounts payable | 5,139 | 5,318 |
Accrued marketing | 1,651 | 1,745 |
Accrued employment costs | 699 | 736 |
Other current liabilities | 2,831 | 2,636 |
Total current liabilities | 16,035 | 14,417 |
Long-term debt | 12,918 | 13,217 |
Deferred income taxes | 4,664 | 4,721 |
Accrued pension costs | 1,684 | 2,014 |
Accrued postretirement health care costs | 395 | 382 |
Other liabilities | 1,496 | 1,572 |
TOTAL LIABILITIES | 37,192 | 36,323 |
Commitments and Contingencies (Note 11) | ||
EQUITY | ||
Common Stock, no par value (5,000,000,000 shares authorized and 1,996,537,778 shares issued at September 30, 2017 and December 31, 2016) | 0 | 0 |
Additional paid-in capital | 31,886 | 31,847 |
Retained earnings | 22,296 | 21,149 |
Accumulated other comprehensive losses | (9,917) | (11,122) |
Treasury stock, at cost (501,158,385 shares at September 30, 2017 and 468,172,237 shares at December 31, 2016) | (18,234) | (16,713) |
Total Mondelez International Shareholders' Equity | 26,031 | 25,161 |
Noncontrolling interest | 68 | 54 |
TOTAL EQUITY | 26,099 | 25,215 |
TOTAL LIABILITIES AND EQUITY | $ 63,291 | $ 61,538 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Trade receivables, allowances | $ 48 | $ 58 |
Other receivables, allowances | $ 101 | $ 93 |
Common Stock, no par value | ||
Common stock, shares authorized | 5,000,000,000 | 5,000,000,000 |
Common Stock, shares issued | 1,996,537,778 | 1,996,537,778 |
Treasury stock, shares | 501,158,385 | 468,172,237 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Equity - USD ($) $ in Millions | Total | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Earnings/(Losses) | Treasury Stock | Noncontrolling Interest | [1] |
Balances at Dec. 31, 2015 | $ 28,100 | $ 31,760 | $ 20,700 | $ (9,986) | $ (14,462) | $ 88 | |
Comprehensive earnings/(losses): | |||||||
Net earnings | 1,576 | ||||||
Other comprehensive earnings/(losses), net of income taxes | 284 | ||||||
Balances at Sep. 30, 2016 | (9,699) | ||||||
Balances at Dec. 31, 2015 | 28,100 | 31,760 | 20,700 | (9,986) | (14,462) | 88 | |
Comprehensive earnings/(losses): | |||||||
Net earnings | 1,669 | 1,659 | 10 | ||||
Other comprehensive earnings/(losses), net of income taxes | (1,153) | (1,136) | (17) | ||||
Exercise of stock options and issuance of other stock awards | 343 | 87 | (94) | 350 | |||
Common Stock repurchased | (2,601) | (2,601) | |||||
Cash dividends declared | (1,116) | (1,116) | |||||
Dividends paid on noncontrolling interest and other activities | (27) | (27) | |||||
Balances at Dec. 31, 2016 | 25,215 | 31,847 | 21,149 | (11,122) | (16,713) | 54 | |
Balances at Jun. 30, 2016 | (9,768) | ||||||
Comprehensive earnings/(losses): | |||||||
Net earnings | 548 | ||||||
Other comprehensive earnings/(losses), net of income taxes | 67 | ||||||
Balances at Sep. 30, 2016 | (9,699) | ||||||
Balances at Dec. 31, 2016 | 25,215 | 31,847 | 21,149 | (11,122) | (16,713) | 54 | |
Comprehensive earnings/(losses): | |||||||
Net earnings | 2,126 | 2,120 | 6 | ||||
Other comprehensive earnings/(losses), net of income taxes | 1,229 | 1,205 | 24 | ||||
Exercise of stock options and issuance of other stock awards | 272 | 39 | (63) | 296 | |||
Common Stock repurchased | (1,817) | (1,817) | |||||
Cash dividends declared | (910) | (910) | |||||
Dividends paid on noncontrolling interest and other activities | (16) | (16) | |||||
Balances at Sep. 30, 2017 | 26,099 | 31,886 | 22,296 | (9,917) | (18,234) | 68 | |
Balances at Jun. 30, 2017 | (10,217) | ||||||
Comprehensive earnings/(losses): | |||||||
Net earnings | 993 | ||||||
Other comprehensive earnings/(losses), net of income taxes | 308 | ||||||
Balances at Sep. 30, 2017 | $ 26,099 | $ 31,886 | $ 22,296 | $ (9,917) | $ (18,234) | $ 68 | |
[1] | Noncontrolling interest as of September 30, 2016 was $68 million, as compared to $88 million as of January 1, 2016. The change of $(20) million during the nine months ended September 30, 2016 was due to $(27) million of dividends paid, $(3) million of other comprehensive losses, net of taxes offset by $10 million of net earnings. |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Equity (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash dividends declared, per share | $ 0.22 | $ 0.19 | $ 0.60 | $ 0.53 | $ 0.72 | |
Noncontrolling interest | $ 68 | $ 68 | $ 68 | $ 68 | $ 54 | $ 88 |
Change in noncontrolling interest | (20) | |||||
Other comprehensive losses, net of taxes | 8 | $ (2) | 24 | (3) | ||
Net earnings | $ 1 | $ 6 | 10 | |||
Dividends paid | $ 27 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES | ||
Net earnings | $ 2,126 | $ 1,576 |
Adjustments to reconcile net earnings to operating cash flows: | ||
Depreciation and amortization | 604 | 615 |
Stock-based compensation expense | 104 | 102 |
Deferred income tax provision/(benefit) | 77 | (163) |
Asset impairments and accelerated depreciation | 287 | 262 |
Loss on early extinguishment of debt | 11 | |
Gain on equity method investment exchange | (43) | |
Net gain on divestitures | (184) | |
Equity method investment net earnings | (236) | (218) |
Distributions from equity method investments | 143 | 75 |
Other non-cash items, net | (238) | 10 |
Change in assets and liabilities, net of acquisitions and divestitures: | ||
Receivables, net | (387) | (265) |
Inventories, net | (236) | (121) |
Accounts payable | (426) | (143) |
Other current assets | 68 | 79 |
Other current liabilities | (604) | (266) |
Change in pension and postretirement assets and liabilities, net | (312) | (362) |
Net cash provided by operating activities | 797 | 1,138 |
CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES | ||
Capital expenditures | (721) | (909) |
Proceeds from divestitures, net of disbursements | 516 | |
Proceeds from sale of property, plant and equipment and other assets | 77 | 113 |
Net cash used in investing activities | (128) | (521) |
CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES | ||
Issuances of commercial paper, maturities greater than 90 days | 1,375 | 1,028 |
Repayments of commercial paper, maturities greater than 90 days | (1,681) | (337) |
Net issuances of other short-term borrowings | 2,266 | 1,533 |
Long-term debt proceeds | 350 | 1,149 |
Long-term debt repaid | (1,468) | (1,757) |
Repurchase of Common Stock | (1,786) | (1,727) |
Dividends paid | (869) | (801) |
Other | 165 | 82 |
Net cash used in financing activities | (1,648) | (830) |
Effect of exchange rate changes on cash and cash equivalents | 82 | 29 |
Cash and cash equivalents: | ||
Decrease | (897) | (184) |
Balance at beginning of period | 1,741 | 1,870 |
Balance at end of period | $ 844 | 1,686 |
JDE | ||
CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES | ||
Proceeds from divestitures, net of disbursements | $ 275 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
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, 2016. 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. As of the close of the 2015 fiscal year, we deconsolidated and changed to the cost method of accounting for our Venezuelan operations. As such, for all periods presented, we have excluded the results of operations, financial position and cash flows of our Venezuelan subsidiaries from our condensed consolidated financial statements. Segment Change: On October 1, 2016, we integrated our Eastern Europe, Middle East, and Africa (“EEMEA”) operating segment into our Europe and Asia Pacific operating segments to further leverage and optimize the operating scale built within the Europe and Asia Pacific regions. Russia, Ukraine, Turkey, Belarus, Georgia and Kazakhstan were combined within our Europe region, while the remaining Middle East and African countries were combined within our Asia Pacific region to form a new Asia, Middle East and Africa (“AMEA”) operating segment. We have reflected the segment change as if it had occurred in all periods presented. As of October 1, 2016, our operations and management structure were organized into four reportable operating segments: • Latin America • AMEA • Europe • North America See Note 15, Segment Reporting 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 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 of September 30, 2017, none of our consolidated subsidiaries were subject to highly inflationary accounting. Argentina. Ukraine Other Countries. 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 a factoring arrangement with a major global bank for a maximum combined capacity of $1.0 billion. Under the program, we may sell eligible short-term trade receivables to the bank in exchange for cash. We then continue to collect the receivables sold, acting solely as a collecting agent on behalf of the bank. The outstanding principal amount of receivables under this arrangement amounted to $650 million as of September 30, 2017 and $644 million as of December 31, 2016. 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: In August 2017, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) to better align hedge accounting with an entity’s risk management activities and improve disclosures surrounding hedging. For cash flow and net investment hedges as of the adoption date, the ASU requires a modified retrospective transition approach. Presentation and disclosure requirements related to this ASU are required prospectively. The ASU is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently assessing the impact on our consolidated financial statements. In May 2017, the FASB issued an ASU to clarify when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The ASU is applied prospectively to awards that are modified on or after the adoption date. The ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We do not anticipate a material impact to our consolidated financial statements. In March 2017, the FASB issued an ASU to amend the amortization period for certain purchased callable debt securities held at a premium, shortening the period to the earliest call date instead of the maturity date. The standard does not impact securities held at a discount as the discount continues to be amortized to maturity. The ASU is applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The ASU is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We do not anticipate a material impact to our consolidated financial statements. In March 2017, the FASB issued an ASU to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The standard requires employers to disaggregate the service cost component from the other components of net benefit cost and disclose the amount and location where the net benefit cost is recorded in the income statement or capitalized in assets. The standard is to be applied on a retrospective basis for the change in presentation in the income statement and prospectively for the change in presentation on the balance sheet. The ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We will adopt the standard on January 1, 2018. For information on our service cost and other components of net periodic benefit cost for pension, postretirement benefit and post-employment plans, see Note 9, Benefit Plans Benefit Plans In January 2017, the FASB issued an ASU that clarifies the definition of a business with the objective of adding guidance to assist companies with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business may affect many areas of accounting including acquisitions, disposals, goodwill and consolidation. The ASU is applied on a prospective basis and is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We continue to assess the ASU based on any pending or new transactions that may arise prior to the January 1, 2018 adoption date. At this time, we do not anticipate early adopting nor a material impact on our consolidated financial statements. In November 2016, the FASB issued an ASU that requires the change in restricted cash or cash equivalents to be included with other changes in cash and cash equivalents in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We anticipate adopting this standard at the same time as the cash flow statement classification changes described below go into effect on January 1, 2018. This ASU is not expected to have a material impact on our consolidated statement of cash flows. In October 2016, the FASB issued an ASU that requires the recognition of tax consequences of intercompany asset transfers other than inventory when the transfer occurs and removes the exception to postpone recognition until the asset has been sold to an outside party. The standard is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings. The ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We anticipate adopting on January 1, 2018 and do not expect the ASU to have a material impact on our consolidated financial statements. In August 2016, the FASB issued an ASU to provide guidance on eight specific cash flow classification issues and reduce diversity in practice in how some cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We anticipate adopting this standard on January 1, 2018. This ASU is not expected to have a material impact on our consolidated financial statements. In February 2016, the FASB issued an ASU on lease accounting. The ASU revises existing U.S. GAAP and outlines a new model for lessors and lessees to use in accounting for lease contracts. The guidance requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases, with the exception of short-term leases. In the statement of earnings, lessees will classify leases as either operating (resulting in straight-line expense) or financing (resulting in a front-loaded expense pattern). The ASU is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We anticipate adopting the new standard on January 1, 2019. We continue to make progress in our due diligence and assess the impact of the new standard across our operations and on our consolidated financial statements, which will consist primarily of recording lease assets and liabilities on our balance sheet for our operating leases. In January 2016, the FASB issued an ASU that provides updated guidance for the recognition, measurement, presentation and disclosure of financial assets and liabilities. The standard requires that equity investments (other than those accounted for under equity method of accounting or those that result in consolidation of the investee) be measured at fair value, with changes in fair value recognized in net income. The standard also impacts financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The ASU is effective for fiscal years beginning after December 15, 2017. This ASU is not expected to have a material impact on our consolidated financial statements. In May 2014, the FASB issued an ASU on revenue recognition from contracts with customers. The ASU outlines a new, single comprehensive model for companies to use in accounting for revenue. The core principle is that an entity should recognize revenue to depict the transfer of control over promised goods or services to a customer in an amount that reflects the consideration the entity expects to be entitled to receive in exchange for the goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows from customer contracts, including significant judgments made in recognizing revenue. In 2016 and early 2017, the FASB issued several ASUs that clarified principal versus agent (gross versus net) revenue presentation considerations, confirmed the accounting for certain prepaid stored-value products and clarified the guidance for identifying performance obligations within a contract, the accounting for licenses and partial sales of nonfinancial assets. The FASB also issued two ASUs providing technical corrections, narrow scope exceptions and practical expedients to clarify and improve the implementation of the new revenue recognition guidance. The revenue guidance is effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted as of the original effective date (annual reporting periods beginning after December 15, 2016). The ASU may be applied retrospectively to historical periods presented or as a cumulative-effect adjustment as of the date of adoption. We plan to adopt the new standard on January 1, 2018 on a full retrospective basis. We are finalizing reviews and working on implementing the process, policy and disclosure changes that will go into effect on January 1, 2018. At this time, we do not expect a material financial impact from adopting the new revenue standards. Reclassifications: Certain amounts previously reported have been reclassified to conform to current-year presentation. In connection with the October 1, 2016 segment change described above, prior-period segment information was updated to reflect the new segment structure. See Note 5, Goodwill and Intangible Assets 2014-2018 Restructuring Program; Segment Reporting Reclassifications from Accumulated Other Comprehensive Income, |
Divestitures and Acquisitions
Divestitures and Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Divestitures and Acquisitions | Note 2. Divestitures and Acquisitions JDE Coffee Business Transactions: On July 2, 2015, we completed transactions to combine our wholly owned coffee businesses with those of D.E Master Blenders 1753 B.V. (“DEMB”) to create a new company, Jacobs Douwe Egberts (“JDE”). Following the exchange of a portion of our investment in JDE for an interest in Keurig Green Mountain, Inc. (“Keurig”) in March 2016, we held a 26.5% equity interest in JDE. (See discussion under Keurig Transaction JDE Stock-Based Compensation Arrangements On July 5, 2016, we received an expected cash payment of $275 million from JDE to settle the receivable related to tax formation costs that were part of the initial sales price. On July 19, 2016, the Supreme Court of Spain reached a final resolution on a challenged JDE tax position held by a predecessor DEMB company that resulted in an unfavorable tax expense of € € JDE Stock-Based Compensation Arrangements: On June 30, 2016, we entered into agreements with AHBV and its affiliates to establish a new stock-based compensation arrangement tied to the issuance of JDE equity compensation awards to JDE employees. This arrangement replaced a temporary equity compensation program tied to the issuance of AHBV equity compensation to JDE employees. New Class C, D and E JDE shares were authorized and issued for investments made by, and vested stock-based compensation awards granted to, JDE employees. Under these arrangements, share ownership dilution from the JDE Class C, D and E shareholders is limited to 2%. We retained our 26.5% voting rights and have a slightly lower portion of JDE’s profits and dividends than our shareholder ownership interest as certain employee shareholders receive a slightly larger share. Upon execution of the agreements and the creation of the Class C, D and E JDE shares, as a percentage of the total JDE issued shares, our Class B shares decreased from 26.5% to 26.4% and AHBV’s Class A shares decreased from 73.5% to 73.22%, while the Class C, D and E shares, held by AHBV and its affiliates until the JDE employee awards vest, comprised 0.38% of JDE’s shares. Additional Class C shares are available to be issued when planned long-term incentive plan (“JDE LTIP”) awards vest, generally over the next five years. When the JDE Class C shares are issued in connection with the vested JDE LTIP awards, the Class A and B relative ownership interests will decrease. Based on estimated achievement and forfeiture assumptions, we do not expect our JDE ownership interest to decrease below 26.27%. Keurig Transaction: On March 3, 2016, a subsidiary of AHBV completed a $13.9 billion acquisition of all of the outstanding common stock of Keurig through a merger transaction. On March 7, 2016, we exchanged with a subsidiary of AHBV a portion of our equity interest in JDE with a carrying value of € Other Divestitures and Acquisitions On October 2, 2017, we completed the sale of one of our equity method investments and received cash proceeds of $65 million. In connection with the 2012 spin-off of Kraft Foods Group, Inc. (now a part of The Kraft Heinz Company (“KHC”)), Kraft Foods Group and we each granted the other various licenses to use certain trademarks in connection with particular product categories in specified jurisdictions. On August 17, 2017, we entered into two agreements with KHC to terminate the licenses of certain KHC-owned brands used in our grocery business within our Europe region and to transfer to KHC inventory and certain other assets. On August 17, 2017, the first transaction closed and we received cash proceeds of € € On July 4, 2017, we completed the sale of most of our grocery business in Australia and New Zealand to Bega Cheese Limited for $456 million Australian dollars ($347 million as of July 4, 2017) and we expect to make a final working capital adjustment next quarter. We divested $27 million of current assets, $135 million of non-current assets and $4 million of current liabilities based on the July 4, 2017 exchange rate. We recorded a pre-tax gain of $247 million Australian dollars ($187 million as of July 4, 2017) on the sale during the three months ended September 30, 2017. We incurred divestiture-related costs of $2 million in the six months ended June 30, 2017. We also had a gain on a foreign currency hedge of $2 million in the three months and a net loss of $3 million in the nine months ended September 30, 2017. On April 28, 2017, we completed the sale of several manufacturing facilities in France and the sale or license of several local confectionery brands. We received net cash of approximately € On November 2, 2016, we purchased from Burton’s Biscuit Company certain intangibles, which included the license to manufacture, market and sell Cadbury-branded biscuits in additional key markets around the world, including in the United Kingdom, France, Ireland, North America and Saudi Arabia. The transaction was accounted for as a business combination. Total cash paid for the acquired assets was £199 million ($245 million as of November 2, 2016). During the third quarter of 2017, we completed the valuation work and finalized the purchase price allocation of $66 million to definite-lived intangible assets, $173 million to goodwill, $2 million to property, plant and equipment and $4 million to inventory, reflecting a November 2, 2016 exchange rate. On May 2, 2016, we completed the sale of certain local biscuit brands in Finland as part of our strategic decision to exit select small and local brands and shift investment toward our Power Brands. The sales price was € € € Sales of Property: In the third quarter of 2016, we sold property in North America that generated cash proceeds of $10 million and a pre-tax gain of $6 million and we sold a corporate aircraft hangar that generated cash proceeds of $3 million and a pre-tax gain of $1 million. In the second quarter of 2016, we also sold property within our North America segment and from our centrally held corporate assets. The North America sale generated cash proceeds of $40 million and a pre-tax gain of $33 million. The corporate aircraft sale generated cash proceeds of $20 million and a pre-tax gain of $6 million. The gains were recorded within selling, general and administrative expenses and cash proceeds were recorded in cash flows from other investing activities in the nine months ended September 30, 2016. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventories | Note 3. Inventories Inventories consisted of the following: As of September 30, As of December 31, 2017 2016 (in millions) Raw materials $ 764 $ 722 Finished product 2,154 1,865 2,918 2,587 Inventory reserves (137 ) (118 ) Inventories, net $ 2,781 $ 2,469 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment | Note 4. Property, Plant and Equipment Property, plant and equipment consisted of the following: As of September 30, As of December 31, 2017 2016 (in millions) Land and land improvements $ 469 $ 471 Buildings and building improvements 2,971 2,801 Machinery and equipment 11,179 10,302 Construction in progress 1,014 1,113 15,633 14,687 Accumulated depreciation (7,095 ) (6,458 ) Property, plant and equipment, net $ 8,538 $ 8,229 For the nine months ended September 30, 2017, capital expenditures of $721 million excluded $220 million of accrued capital expenditures remaining unpaid at September 30, 2017 and included payment for a portion of the $343 million of capital expenditures that were accrued and unpaid at December 31, 2016. For the nine months ended September 30, 2016, capital expenditures of $909 million excluded $274 million of accrued capital expenditures remaining unpaid at September 30, 2016 and included payment for $322 million of capital expenditures that were accrued and unpaid at December 31, 2015. In connection with our restructuring program, we recorded non-cash asset write-downs (including accelerated depreciation and asset impairments) of $46 million in the three months and $164 million in the nine months ended September 30, 2017 and $120 million in the three months and $233 million in the nine months ended September 30, 2016 (see Note 6, 2014-2018 Restructuring Program For the Three Months Ended For the Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (in millions) Latin America $ 13 $ 3 $ 25 $ 16 AMEA 20 9 62 30 Europe 10 49 52 87 North America 3 59 25 98 Corporate – – – 2 Total non-cash asset write-downs $ 46 $ 120 $ 164 $ 233 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets | Note 5. Goodwill and Intangible Assets Goodwill by segment reflects our current segment structure for both periods presented: As of September 30, As of December 31, 2017 2016 (in millions) Latin America $ 947 $ 897 AMEA 3,349 3,324 Europe 7,837 7,170 North America 8,938 8,885 Goodwill $ 21,071 $ 20,276 Intangible assets consisted of the following: As of September 30, As of December 31, 2017 2016 (in millions) Non-amortizable intangible assets $ 17,625 $ 17,004 Amortizable intangible assets 2,414 2,315 20,039 19,319 Accumulated amortization (1,401 ) (1,218 ) Intangible assets, net $ 18,638 $ 18,101 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 Amortization expense for intangible assets was $45 million for the three months and $133 million for the nine months ended September 30, 2017 and $44 million for the three months and $132 million for the nine months ended September 30, 2016. For the next five years, we currently estimate annual amortization expense of approximately $180 million for the next four years and approximately $90 million in year five, reflecting September 30, 2017 exchange rates. Changes in goodwill and intangible assets consisted of: Goodwill Intangible (in millions) Balance at January 1, 2017 $ 20,276 $ 19,319 Currency 889 898 Divestitures (109 ) (62 ) Acquisition 15 (7 ) Asset impairments – (109 ) Balance at September 30, 2017 $ 21,071 $ 20,039 Changes to goodwill and intangibles were: • Divestitures – During 2017, we divested several manufacturing facilities, primarily in France, and as a result of the divestiture, $23 million of goodwill and $62 million of amortizable and non-amortizable intangible assets. In the third quarter, we also completed a sale of most of our grocery business in Australia and New Zealand resulting in a goodwill decrease of $86 million. See Note 2, Divestitures and Acquisitions • Acquisition – During 2017, we recorded a $15 million adjustment to goodwill and a $7 million adjustment to indefinite lived assets in connection with finalizing the valuation and purchase price allocation for the Burton’s Biscuit Company purchase completed in the fourth quarter of 2016. See Note 2, Divestitures and Acquisitions • Asset impairments – During the third quarter of 2017, we recorded $70 million of intangible asset impairments related to our annual testing of non-amortizable intangible assets as described further below and a $1 million impairment related to a transaction. During the second quarter of 2017, we recorded a $38 million intangible asset impairment charge resulting from a category decline and lower than expected product growth related to a gum trademark in our North America segment. We have historically annually tested goodwill and non-amortizable intangible assets for impairment as of October 1. This year, we voluntarily changed the annual impairment assessment date from October 1 to July 1. We believe this measurement date, which represents a change in the method of applying an accounting principle, is preferable because it better aligns with our strategic business planning process and financial forecasts which are key components of the annual impairment tests. The change in the measurement date did not delay, accelerate or prevent an impairment charge. Each quarter, we have evaluated goodwill and intangible asset impairment risks and recognized any related impairments to date. As such, the change in the annual test date was applied on July 1, 2017. As part of our goodwill quantitative annual impairment testing, we compare a reporting unit’s estimated fair value with its carrying value to evaluate the risk of potential goodwill impairment. We estimate a reporting unit’s fair value using a discounted cash flow method which incorporates planned growth rates, market-based discount rates and estimates of residual value. This year, for our Europe and North America reporting units, we used a market-based, weighted-average cost of capital of 7.2% to discount the projected cash flows of those operations. For our Latin America and AMEA reporting units, we used a risk-rated discount rate of 10.2%. Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding our future plans and industry and economic conditions, and our actual results and conditions may differ over time. If the carrying value of a reporting unit’s net assets exceeds its fair value, we would record an impairment based on the difference between the carrying value and fair value of the reporting unit. In 2017 and 2016, there were no goodwill impairments and each of our reporting units had sufficient fair value in excess of its carrying value. While all reporting units passed our annual impairment testing, if planned business performance expectations are not met or specific valuation factors outside of our control, such as discount rates, change significantly, then the estimated fair values of a reporting unit or reporting units might decline and lead to a goodwill impairment in the future. During our 2017 annual testing of non-amortizable intangible assets, we recorded $70 million of impairment charges in the third quarter of 2017 related to five trademarks. The impairments arose due to lower than expected product growth in part driven by decisions to redirect support from these trademarks to other regional and global brands. We recorded charges related to candy and gum trademarks of $52 million in AMEA, $11 million in Europe, $5 million in Latin America and $2 million in North America. The impairment charges were calculated as the excess of the carrying value over the estimated fair value of the intangible assets on a global basis and were recorded within asset impairment and exit costs. We primarily use a relief of royalty valuation method, which utilizes estimates of future sales, growth rates, royalty rates and discount rates in determining a brand’s global fair value. We also noted thirteen brands, including the five impaired trademarks, with $965 million of aggregate book value as of September 30, 2017 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 continue to not be impaired, but if the product line 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. |
2014-2018 Restructuring Program
2014-2018 Restructuring Program | 9 Months Ended |
Sep. 30, 2017 | |
2014-2018 Restructuring Program | Note 6. 2014-2018 Restructuring Program On May 6, 2014, our Board of Directors approved a $3.5 billion 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 that now the $5.7 billion program consists of approximately $4.1 billion of restructuring program costs ($3.1 billion cash costs and $1 billion non-cash costs) and up to $1.6 billion of capital expenditures. The primary objective of the 2014-2018 Restructuring Program is to reduce our operating cost structure in both our supply chain and overhead costs. The program is intended primarily to cover severance as well as asset disposals and other manufacturing-related one-time costs. Since inception, we have incurred total restructuring and related implementation charges of $3.1 billion related to the 2014-2018 Restructuring Program. We expect to incur the full $4.1 billion of program charges by year-end 2018. Restructuring Costs We recorded restructuring charges of $113 million in the three months and $418 million in the nine months ended September 30, 2017 and $187 million in the three months and $480 million in the nine months ended September 30, 2016 within asset impairment and exit costs. The 2014-2018 Restructuring Program liability activity for the nine months ended September 30, 2017 was: Severance Asset Write-downs Total (in millions) Liability balance, January 1, 2017 $ 464 $ – $ 464 Charges 250 168 418 Cash spent (245 ) – (245 ) Non-cash settlements/adjustments (6 ) (168 ) (174 ) Currency 30 – 30 Liability balance, September 30, 2017 $ 493 $ – $ 493 We spent $83 million in the three months and $245 million in the nine months ended September 30, 2017 and $89 million in the three months and $249 million in the nine months ended September 30, 2016 in cash severance and related costs. We also recognized non-cash pension settlement losses (See Note 9, Benefit Plans) 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 2014-2018 Restructuring 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 $62 million in the three months and $179 million in the nine months ended September 30, 2017 and $114 million in the three months and $286 million in the nine months ended September 30, 2016. We recorded these costs within cost of sales and general corporate expense within selling, general and administrative expenses. Restructuring and Implementation Costs in Operating Income: During the three and nine months ended September 30, 2017 and September 30, 2016, and since inception of the 2014-2018 Restructuring Program, we recorded restructuring and implementation costs within operating income by segment (as revised to reflect our current segment structure) as follows: Latin North America AMEA Europe America (1) Corporate (2) Total (in millions) For the Three Months Ended Restructuring Costs $ 45 $ 32 $ 30 $ 7 $ (1 ) $ 113 Implementation Costs 8 11 18 13 12 62 Total $ 53 $ 43 $ 48 $ 20 $ 11 $ 175 For the Nine Months Ended Restructuring Costs $ 76 $ 106 $ 149 $ 79 $ 8 $ 418 Implementation Costs 28 30 49 38 34 179 Total $ 104 $ 136 $ 198 $ 117 $ 42 $ 597 For the Three Months Ended Restructuring Costs $ 27 $ 9 $ 76 $ 75 $ – $ 187 Implementation Costs 15 9 45 30 15 114 Total $ 42 $ 18 $ 121 $ 105 $ 15 $ 301 For the Nine Months Ended Restructuring Costs $ 71 $ 72 $ 188 $ 144 $ 5 $ 480 Implementation Costs 34 27 78 101 46 286 Total $ 105 $ 99 $ 266 $ 245 $ 51 $ 766 Total Project 2014-2017 (3) Restructuring Costs $ 413 $ 413 $ 798 $ 433 $ 60 $ 2,117 Implementation Costs 137 116 253 233 209 948 Total $ 550 $ 529 $ 1,051 $ 666 $ 269 $ 3,065 (1) During 2017 and 2016, our North America region implementation costs included incremental costs that we incurred related to re-negotiating collective bargaining agreements that expired at the end of February 2016 for eight U.S. facilities and related to executing business continuity plans for the North America business. (2) Includes adjustment for rounding. (3) Includes all charges recorded since program inception on May 6, 2014 through September 30, 2017. |
Debt and Borrowing Arrangements
Debt and Borrowing Arrangements | 9 Months Ended |
Sep. 30, 2017 | |
Debt and Borrowing Arrangements | Note 7. Debt and Borrowing Arrangements Short-Term Borrowings: Our short-term borrowings and related weighted-average interest rates consisted of: As of September 30, 2017 As of December 31, 2016 Amount Weighted- Amount Weighted- Outstanding Average Rate Outstanding Average Rate (in millions) (in millions) Commercial paper $ 4,370 1.3% $ 2,371 1.0% Bank loans 181 10.6% 160 10.6% Total short-term borrowings $ 4,551 $ 2,531 As of September 30, 2017, commercial paper issued and outstanding had between 2 and 66 days remaining to maturity. Commercial paper borrowings increased since year-end primarily as a result of issuances to finance the payment of long-term debt maturities, dividend payments and share repurchases during the year. Some of our international subsidiaries maintain primarily uncommitted credit lines to meet short-term working capital needs. Collectively, these credit lines amounted to $1.9 billion at September 30, 2017 and $1.8 billion at December 31, 2016. Borrowings on these lines were $181 million at September 30, 2017 and $160 million at December 31, 2016. Borrowing Arrangements: On March 1, 2017, to supplement our commercial paper program, we entered into a $1.5 billion revolving credit agreement for a 364-day senior unsecured credit facility that is scheduled to expire on February 28, 2018. The agreement includes the same terms and conditions as our existing $4.5 billion multi-year credit facility discussed below. As of September 30, 2017, 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. On October 14, 2016, the revolving credit agreement, which was scheduled to expire on October 11, 2018, was extended through October 11, 2021. 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) and the cumulative effects of any changes in accounting principles. At September 30, 2017, we complied with this covenant as our shareholders’ equity, as defined by the covenant, was $35.9 billion. The revolving credit facility agreement 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 September 30, 2017, no amounts were drawn on the facility. Long-Term Debt: On April 12, 2017, we discharged $488 million of our 6.500% U.S. dollar-denominated debt. We paid $504 million, representing principal as well as past and future interest accruals from February 2017 through the August 2017 maturity date. We recorded an $11 million loss on debt extinguishment within interest expense and a $5 million reduction in accrued interest. On March 30, 2017, fr. fr On March 13, 2017, we launched an offering of fr • fr • fr On March 30, 2017, we received net proceeds of fr. On January 26, 2017, € Our weighted-average interest rate on our total debt was 2.0% as of September 30, 2017 and 2.2% as of December 31, 2016, down from 3.7% as of December 31, 2015. Fair Value of Our Debt: The fair value of our short-term borrowings at September 30, 2017 and December 31, 2016 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 September 30, 2017, the aggregate fair value of our total debt was $19,367 million and its carrying value was $18,633 million. At December 31, 2016, the aggregate fair value of our total debt was $17,882 million and its carrying value was $17,199 million. Interest and Other Expense, net: Interest and other expense, net within our results of continuing operations consisted of: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (in millions) Interest expense, debt $ 89 $ 129 $ 295 $ 400 Loss on debt extinguishment – – 11 – Loss related to interest rate swaps – – – 97 Other (income)/expense, net (70 ) 16 (44 ) 43 Interest and other expense, net $ 19 $ 145 $ 262 $ 540 See Note 8, Financial Instruments Commitments and Contingencies |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Financial Instruments | Note 8. Financial Instruments Fair Value of Derivative Instruments: Derivative instruments were recorded at fair value in the condensed consolidated balance sheets as follows: As of September 30, 2017 As of December 31, 2016 Asset Liability Asset Liability Derivatives Derivatives Derivatives Derivatives (in millions) Derivatives designated as Currency exchange contracts $ – $ 2 $ 19 $ 8 Commodity contracts 1 – 17 22 Interest rate contracts 33 421 108 19 $ 34 $ 423 $ 144 $ 49 Derivatives not designated Currency exchange contracts $ 70 $ 45 $ 29 $ 43 Commodity contracts 35 169 112 167 Interest rate contracts 15 10 27 19 $ 120 $ 224 $ 168 $ 229 Total fair value $ 154 $ 647 $ 312 $ 278 Derivatives designated as accounting hedges include cash flow and fair value hedges and derivatives not designated as accounting hedges include economic hedges. Non-U.S. dollar denominated debt, designated as a hedge of our net investments in non-U.S. operations, is not reflected in the table above, but is included in long-term debt summarized in Note 7, Debt and Borrowing Arrangements The fair values (asset/(liability)) of our derivative instruments were determined using: As of September 30, 2017 Total Quoted Prices in Significant Significant (in millions) Currency exchange contracts $ 23 $ – $ 23 $ – Commodity contracts (133 ) (133 ) – – Interest rate contracts (383 ) – (383 ) – Total derivatives $ (493 ) $ (133 ) $ (360 ) $ – As of December 31, 2016 Total Quoted Prices in Significant Significant (in millions) Currency exchange contracts $ (3 ) $ – $ (3 ) $ – Commodity contracts (60 ) (86 ) 26 – Interest rate contracts 97 – 97 – Total derivatives $ 34 $ (86 ) $ 120 $ – 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. Our exchange-traded derivatives are generally subject to master netting arrangements that permit net settlement of transactions with the same counterparty when certain criteria are met, such as in the event of default. We also are required to maintain cash margin accounts in connection with funding the settlement of our open positions, and the margin requirements generally fluctuate daily based on market conditions. We have recorded margin deposits related to our exchange-traded derivatives of $198 million as of September 30, 2017 and $133 million as of December 31, 2016 within other current assets. Based on our net asset or liability positions with individual counterparties, in the event of default and immediate net settlement of all of our open positions, for derivatives we have in a net asset position, our counterparties would owe us a total of $65 million as of September 30, 2017 and $48 million as of December 31, 2016. As of September 30, 2017, we have no derivatives in a net liability position, and as of December 31, 2016 we would have owed $2 million for derivatives in a net liability position. 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 commodity and currency exchange OTC derivatives do not have a legal right of set-off. In connection with our OTC derivatives that could be net-settled in the event of default, assuming all parties were to fail to comply with the terms of the agreements, for derivatives we have in a net liability position, we would owe $409 million as of September 30, 2017 and $40 million as of December 31, 2016, and for derivatives we have in a net asset position, our counterparties would owe us a total of $25 million as of September 30, 2017 and $162 million as of December 31, 2016. 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 net notional values of our derivative instruments were: Notional Amount As of September 30, As of December 31, (in millions) Currency exchange contracts: Intercompany loans and forecasted interest payments $ 3,649 $ 3,343 Forecasted transactions 2,066 1,452 Commodity contracts 1,137 837 Interest rate contracts 6,517 6,365 Net investment hedge – euro notes 3,975 4,012 Net investment hedge – pound sterling notes 454 419 Net investment hedge – Swiss franc notes 1,704 1,447 Cash Flow Hedges: Cash flow hedge activity, net of taxes, within accumulated other comprehensive earnings/(losses) included: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Accumulated (loss)/gain at beginning of period $ (91 ) $ (36 ) $ (121 ) $ (45 ) Transfer of realized (gains)/losses in fair value to earnings (13 ) (2 ) (10 ) 64 Unrealized gain/(loss) in fair value (6 ) 4 21 (53 ) Accumulated (loss)/gain at end of period $ (110 ) $ (34 ) $ (110 ) $ (34 ) After-tax gains/(losses) reclassified from accumulated other comprehensive earnings/(losses) into net earnings were: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Currency exchange contracts – forecasted transactions $ (3 ) $ (6 ) $ (2 ) $ (3 ) Commodity contracts 16 8 12 (1 ) Interest rate contracts – – – (60 ) Total $ 13 $ 2 $ 10 $ (64 ) After-tax gains/(losses) recognized in other comprehensive earnings/(losses) were: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Currency exchange contracts – forecasted transactions $ (11 ) $ (11 ) $ (37 ) $ (21 ) Commodity contracts 25 10 31 19 Interest rate contracts (20 ) 5 27 (51 ) Total $ (6 ) $ 4 $ 21 $ (53 ) Cash flow hedge ineffectiveness was not material for all periods presented. Within interest and other expense, net, we recorded pre-tax losses of $97 million in the first quarter of 2016 related to amounts excluded from effectiveness testing. This amount relates to interest rate swaps no longer designated as cash flow hedges due to changes in financing plans. Due to lower overall costs and our decision to hedge a greater portion of our net investments in operations that use currencies other than the U.S. dollar as their functional currencies, we changed our plans to issue U.S. dollar-denominated debt and instead issued euro and Swiss franc-denominated notes in the first quarter of 2016. Amounts excluded from effectiveness testing were not material for all other periods presented. We record pre-tax and after-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: • cost of sales for commodity contracts; • cost of sales for currency exchange contracts related to forecasted transactions; and • interest and other expense, net for interest rate contracts and currency exchange contracts related to intercompany loans. Based on current market conditions, we would expect to transfer losses of $11 million (net of taxes) for commodity cash flow hedges, unrealized losses of $2 million (net of taxes) for currency cash flow hedges and unrealized losses of $1 million (net of taxes) for interest rate cash flow hedges to earnings during the next 12 months. Cash Flow Hedge Coverage: As of September 30, 2017, we hedged transactions forecasted to impact cash flows over the following periods: • commodity transactions for periods not exceeding the next 3 months; • interest rate transactions for periods not exceeding the next 6 years and 1 month; and • currency exchange transactions for periods not exceeding the next 3 months. Fair Value Hedges: Pre-tax gains/(losses) due to changes in fair value of our interest rate swaps and related hedged long-term debt were recorded in interest and other expense, net: For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Derivatives $ (2 ) $ (11 ) $ (4 ) $ (2 ) Borrowings 2 11 4 2 Fair value hedge ineffectiveness and amounts excluded from effectiveness testing were not material for all periods presented. Economic Hedges: Pre-tax gains/(losses) recorded in net earnings for economic hedges were: For the Three Months Ended For the Nine Months Ended Location of in Earnings 2017 2016 2017 2016 (in millions) Currency exchange contracts: Intercompany loans and forecasted interest payments $ (13 ) $ 7 $ (8 ) $ 18 Interest and other expense, net Forecasted transactions (1 ) (14 ) – (91 ) Cost of sales Forecasted transactions 1 2 (1 ) 10 Interest and other expense, net Forecasted transactions – 4 2 16 Selling, general and administrative expenses Commodity contracts (17 ) (13 ) (176 ) (26 ) Cost of sales Total $ (30 ) $ (14 ) $ (183 ) $ (73 ) 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, pound sterling and Swiss franc-denominated debt were: For the Three Months Ended For the Nine Months Ended Location of 2017 2016 2017 2016 (in millions) Euro notes $ (83 ) $ (38 ) $ (279 ) $ (110 ) Currency Pound sterling notes (8 ) 21 (23 ) 107 Translation Swiss franc notes 12 (4 ) (53 ) (33 ) Adjustment |
Benefit Plans
Benefit Plans | 9 Months Ended |
Sep. 30, 2017 | |
Benefit Plans | Note 9. 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 2017 2016 2017 2016 (in millions) Service cost $ 12 $ 15 $ 40 $ 37 Interest cost 16 15 51 57 Expected return on plan assets (25 ) (24 ) (110 ) (105 ) Amortization: Net loss from experience differences 10 12 43 31 Prior service credit – – (1 ) – Settlement losses and other expenses 6 9 – – Net periodic pension cost $ 19 $ 27 $ 23 $ 20 U.S. Plans Non-U.S. Plans For the Nine Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Service cost $ 34 $ 42 $ 117 $ 114 Interest cost 47 46 148 179 Expected return on plan assets (75 ) (72 ) (322 ) (326 ) Amortization: Net loss from experience differences 27 30 124 93 Prior service cost/(credit) 1 1 (2 ) (2 ) Settlement losses/(gains) and other expenses 27 25 2 (1 ) Net periodic pension cost $ 61 $ 72 $ 67 $ 57 Within settlement losses/(gains) and other expenses are losses of $1 million for the three months and $12 million for the nine months ended September 30, 2017 and $3 million for the three months and $12 million for the nine months ended September 30, 2016, that are related to our 2014-2018 Restructuring Program and are recorded within asset impairment and exit costs on our condensed consolidated statements of earnings. Employer Contributions: During the nine months ended September 30, 2017, we contributed $19 million to our U.S. pension plans and $408 million to our non-U.S. pension plans. The non-U.S. amount included a non-recurring $250 million contribution made in connection with a new funding agreement for a Company plan in the U.K. 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 September 30, 2017, we plan to make further contributions of approximately $7 million to our U.S. plans and approximately $47 million to our non-U.S. plans during the remainder of 2017. 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. Postretirement Benefit Plans Net periodic postretirement health care costs consisted of the following: For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Service cost $ 1 $ 3 $ 5 $ 9 Interest cost 4 6 11 16 Amortization: Net loss from experience differences 4 2 11 5 Prior service credit (1) (10 ) (11 ) (30 ) (14 ) Net periodic postretirement health care (credits)/costs $ (1 ) $ – $ (3 ) $ 16 (1) For the three and nine months ended September 30, 2017, amortization of prior service credit includes an $8 million and $24 million gain respectively, related to a change in the eligibility requirement and a change in benefits to Medicare-eligible participants. Postemployment Benefit Plans Net periodic postemployment costs consisted of the following: For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Service cost $ 1 $ 2 $ 4 $ 5 Interest cost 1 1 3 4 Amortization of net gains (1 ) – (3 ) – Net periodic postemployment costs $ 1 $ 3 $ 4 $ 9 |
Stock Plans
Stock Plans | 9 Months Ended |
Sep. 30, 2017 | |
Stock Plans | Note 10. Stock Plans Stock Options: Stock option activity is reflected below: Shares Subject Weighted- Average Aggregate Balance at January 1, 2017 53,601,612 $ 28.02 6 years $ 874 million Annual grant to eligible employees 6,012,140 43.20 Additional options issued 29,300 44.49 Total options granted 6,041,440 43.21 Options exercised (1) (7,837,372 ) 26.49 $ 142 million Options cancelled (1,536,249 ) 38.96 Balance at September 30, 2017 50,269,431 29.75 6 years $ 563 million (1) Cash received from options exercised was $43 million in the three months and $213 million in the nine months ended September 30, 2017. The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $6 million in the three months and $24 million in the nine months ended September 30, 2017. Performance Share Units and Other Stock-Based Awards: Our performance share unit, deferred stock unit and historically granted restricted stock activity is reflected below: Weighted-Average Weighted-Average Number Fair Value Aggregate of Shares Grant Date Per Share (3) Fair Value (3) Balance at January 1, 2017 7,593,627 $ 36.90 Annual grant to eligible employees: Feb. 16, 2017 Performance share units 1,087,010 43.14 Deferred stock units 845,550 43.20 Additional shares granted (1) 546,001 Various 33.81 Total shares granted 2,478,561 41.11 $ 102 million Vested (2) (2,522,072 ) 33.70 $ 84 million Forfeited (2) (675,920 ) 38.43 Balance at September 30, 2017 6,874,196 39.44 (1) Includes performance share units and deferred stock units. (2) Includes performance share units, deferred stock units and historically granted restricted stock. The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled less than $1 million in the three months and $7 million in the nine months ended September 30, 2017. (3) Prior-year weighted average fair value per share has been revised. Share Repurchase Program: During 2013, our Board of Directors authorized the repurchase of $7.7 billion of our Common Stock through December 31, 2016. On July 29, 2015, 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 $13.7 billion of Common Stock repurchases, and extended the program through December 31, 2018. Repurchases under the program are determined by management and are wholly discretionary. Prior to January 1, 2017, we had repurchased $10.8 billion of Common Stock pursuant to this authorization. During the nine months ended September 30, 2017, we repurchased approximately 42 million shares of Common Stock at an average cost of $43.67 per share, or an aggregate cost of approximately $1,817 million, all of which was paid during the period except for approximately $31 million settled in October 2017. All share repurchases were funded through available cash and commercial paper issuances. As of September 30, 2017, we have approximately $1 billion in remaining share repurchase capacity. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | Note 11. Commitments and Contingencies Legal Proceedings: We routinely are involved in legal proceedings, claims and governmental inspections or investigations (“Legal Matters”) arising in the ordinary course of our business. In February 2013 and March 2014, Cadbury India Limited (now known as Mondelez India Foods Private Limited), a subsidiary of Mondelēz International, and other parties received show cause notices from the Indian Central Excise Authority (the “Excise Authority”) calling upon the parties to demonstrate why the Excise Authority should not collect a total of 3.7 billion Indian rupees ($57 million as of September 30, 2017) of unpaid excise tax and an equivalent amount of penalties, as well as interest, related to production at the same Indian facility. We contested these demands for unpaid excise taxes, penalties and interest. On March 27, 2015, after several hearings, the Commissioner of the Excise Authority issued an order denying the excise exemption that we claimed for the Indian facility and confirming the Excise Authority’s demands for total taxes and penalties in the amount of 5.8 billion Indian rupees ($90 million as of September 30, 2017). We have appealed this order. In addition, the Excise Authority issued additional show cause notices in February 2015, December 2015 and October 2017 on the same issue but covering the periods January to October 2014, November 2014 to September 2015 and October 2015 to June 2017, respectively. These notices added a total of 4.9 billion Indian rupees ($75 million as of September 30, 2017) of unpaid excise taxes as well as penalties to be determined up to an amount equivalent to that claimed by the Excise Authority plus interest. With the implementation of the new Goods and Services Tax in India in July 2017, we will not receive any further show cause notices for additional amounts on this issue. We believe that the decision to claim the excise tax benefit is valid and we are continuing to contest the show cause notices through the administrative and judicial process. In April 2013, the staff of the U.S. Commodity Futures Trading Commission (“CFTC”) advised us and Kraft Foods Group that it was investigating activities related to the trading of December 2011 wheat futures contracts that occurred prior to the Spin-Off of Kraft Foods Group. We cooperated with the staff in its investigation. On April 1, 2015, the 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, Eastern Division (the “CFTC action”). 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. In December 2015, the court denied Mondelēz Global and Kraft Foods Group’s motion to dismiss the CFTC’s claims of market manipulation and attempted manipulation, and the parties are now in discovery. Additionally, several class action complaints were filed against Kraft Foods Group and Mondelēz Global in the U.S. District Court for the Northern District of Illinois 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 seek class action certification; an unspecified amount for damages, interest and unjust enrichment; costs and fees; and injunctive, declaratory and other unspecified relief. In June 2015, these suits were consolidated in the Northern District of Illinois. In June 2016, the court denied Mondelēz Global and Kraft Foods Group’s motion to dismiss, and the parties are now in discovery. 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. While we cannot predict with certainty the results of any Legal Matters in which we are currently involved, we do not expect that the ultimate costs to resolve any of these Legal Matters, individually or in the aggregate, will 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 September 30, 2017, we had no material third-party guarantees recorded on our condensed consolidated balance sheet. Tax Matters: As part of our 2010 Cadbury acquisition, we became the responsible party for tax matters under a February 2, 2006 dated Deed of Tax Covenant between the Cadbury Schweppes PLC and related entities (“Schweppes”) and Black Lion Beverages and related entities. The tax matters included an ongoing transfer pricing case with the Spanish tax authorities related to the Schweppes businesses Cadbury divested prior to our acquisition of Cadbury. During the first quarter of 2017, the Spanish Supreme Court decided the case in our favor. As a result of the final ruling, during the first quarter of 2017, we recorded a favorable earnings impact of $46 million in selling, general and administrative expenses and $12 million in interest and other expense, net, for a total pre-tax impact of $58 million due to the non-cash reversal of Cadbury-related accrued liabilities related to this matter. In the third quarter of 2017, we recorded additional income of $3 million related to a bank guarantee release within selling, general and administrative expenses and interest and other expense, net. During the first quarter of 2017, the Brazilian Supreme Court (the “Court”) ruled against the Brazilian tax authorities in a leading case related to the computation of certain indirect taxes. The Court ruled that the indirect tax base should not include a value-added tax known as “ICMS”. By removing the ICMS from the tax base, the Court effectively eliminated a “tax on a tax.” Our Brazilian subsidiary had received an injunction against making payments for the “tax on a tax” in 2008 and since that time until December 2016, had accrued this portion of the tax each quarter in the event that the tax was reaffirmed by the Brazilian courts. On September 30, 2017, based on legal advice and the publication of the Court’s decision related to this case, we determined that the likelihood that the increased tax base would be reinstated and assessed against us was remote. Accordingly, we reversed our accrual of 667 million Brazilian reais, or $212 million as of September 30, 2017, of which, $153 million was recorded within selling, general and administrative expenses and $59 million was recorded within interest and other expense, net. The Brazilian tax authority may appeal the Court’s decision, seeking potential clarification or adjustment of the terms of enforcement. We continue to monitor developments in this matter and currently do not expect a material future impact on our financial statements. |
Reclassifications from Accumula
Reclassifications from Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2017 | |
Reclassifications from Accumulated Other Comprehensive Income | Note 12. 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 $28 million in the three months and $112 million in the nine months ended September 30, 2017 and $28 million in the three months and $206 million in the nine months ended September 30, 2016. For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Currency Translation Adjustments: Balance at beginning of period $ (8,007 ) $ (7,902 ) $ (8,914 ) $ (8,006 ) Currency translation adjustments 291 15 1,055 53 Reclassification to earnings related to: Equity method investment exchange – – – 57 Tax benefit/(expense) 46 13 205 21 Other comprehensive earnings/(losses) 337 28 1,260 131 Less: (gain)/loss attributable to noncontrolling interests (8 ) 2 (24 ) 3 Balance at end of period (7,678 ) (7,872 ) (7,678 ) (7,872 ) Pension and Other Benefit Plans: Balance at beginning of period $ (2,119 ) $ (1,830 ) $ (2,087 ) $ (1,934 ) Net actuarial (loss)/gain arising during period (28 ) – (19 ) 24 Tax benefit/(expense) on net actuarial loss 25 – 25 (9 ) Losses/(gains) reclassified into net earnings: Amortization of experience losses and prior service costs (1) 47 30 130 93 Settlement losses and other expenses (1) 6 10 24 25 Tax benefit on reclassifications (2) (10 ) (10 ) (31 ) (34 ) Currency impact (50 ) 7 (171 ) 42 Other comprehensive (losses)/earnings (10 ) 37 (42 ) 141 Balance at end of period (2,129 ) (1,793 ) (2,129 ) (1,793 ) Derivative Cash Flow Hedges: Balance at beginning of period $ (91 ) $ (36 ) $ (121 ) $ (46 ) Net derivative gains/(losses) 2 6 31 (77 ) Tax benefit on net derivative gain/(loss) (5 ) (2 ) (1 ) 25 Losses/(gains) reclassified into net earnings: Currency exchange contracts – forecasted transactions (3) 2 7 2 3 Commodity contracts (3) (21 ) (8 ) (15 ) 7 Interest rate contracts (4) – – – 96 Tax benefit on reclassifications (2) 6 (1 ) 3 (41 ) Currency impact (3 ) – (9 ) (1 ) Other comprehensive earnings/(losses) (19 ) 2 11 12 Balance at end of period (110 ) (34 ) (110 ) (34 ) Accumulated other comprehensive income attributable to Mondelēz International: Balance at beginning of period $ (10,217 ) $ (9,768 ) $ (11,122 ) $ (9,986 ) Total other comprehensive earnings/(losses) 308 67 1,229 284 Less: loss/(gain) attributable to noncontrolling interests (8 ) 2 (24 ) 3 Other comprehensive earnings/(losses) attributable to Mondelēz International 300 69 1,205 287 Balance at end of period $ (9,917 ) $ (9,699 ) $ (9,917 ) $ (9,699 ) (1) These reclassified losses are included in the components of net periodic benefit costs disclosed in Note 9, Benefit Plans (2) Taxes reclassified to earnings are recorded within the provision for income taxes. (3) These reclassified gains or losses are recorded within cost of sales. (4) These reclassified losses are recorded within interest and other expense, net. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes | Note 13. Income Taxes Based on current tax laws, our estimated annual effective tax rate for 2017, excluding the impacts from the sale of our Australian grocery business, is 25.8%, which reflects favorable impacts from the mix of pre-tax income in various non-U.S. tax jurisdictions, partially offset by an increase in domestic earnings as compared to the prior year. Our 2017 third quarter effective tax rate of 23.4% was favorably impacted by the divestiture of our Australian grocery business, which had a lower effective tax rate, resulting in a $27 million tax expense related to the pre-tax gain of $187 million. Our effective tax rate for the nine months ended September 30, 2017 of 21.3% was also favorably impacted by the sale of our Australian grocery business as well as other discrete one-time benefits. The discrete net tax benefits primarily consisted of a $74 million benefit from the release of uncertain tax positions due to expirations of statutes of limitations and audit settlements in various jurisdictions and a $16 million benefit related to the U.S. domestic production activities deduction. As of the third quarter of 2016, our estimated annual effective tax rate for 2016 was 20.8%, reflecting favorable impacts from the mix of pre-tax income in various non-U.S. tax jurisdictions. Our 2016 third quarter effective tax rate of 7.2% included net benefit from discrete one-time events of $60 million, mainly due to $35 million from expirations of statutes of limitations and favorable audit settlements in several jurisdictions and a $17 million benefit from the reduction of U.K. net deferred tax liabilities resulting from tax legislation enacted during the third quarter of 2016 that reduced the U.K. corporate income tax rate. Our effective tax rate for the nine months ended September 30, 2016 of 13.6% was favorably impacted by net tax benefits of $109 million from discrete one-time events. The discrete net tax benefits primarily consisted of benefits of $73 million due to expirations of statutes of limitations and favorable audit settlements in several jurisdictions and a $17 million benefit from the reduction of U.K. net deferred tax liabilities resulting from tax legislation enacted during the third quarter of 2016 that reduced the U.K. corporate income tax rate. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share | Note 14. Earnings Per Share Basic and diluted earnings per share (“EPS”) were calculated as follows: For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions, except per share data) Net earnings $ 993 $ 548 $ 2,126 $ 1,576 Noncontrolling interest (earnings) (1 ) – (6 ) (10 ) Net earnings attributable to Mondelēz International $ 992 $ 548 $ 2,120 $ 1,566 Weighted-average shares for basic EPS 1,507 1,557 1,518 1,561 Plus incremental shares from assumed conversions 17 19 19 18 Weighted-average shares for diluted EPS 1,524 1,576 1,537 1,579 Basic earnings per share attributable to $ 0.66 $ 0.35 $ 1.40 $ 1.00 Diluted earnings per share attributable to $ 0.65 $ 0.35 $ 1.38 $ 0.99 We exclude antidilutive Mondelēz International stock options from our calculation of weighted-average shares for diluted EPS. We excluded antidilutive stock options of 9.0 million for the three months and 8.0 million for the nine months ended September 30, 2017 and 4.3 million for the three months and 7.7 million for the nine months ended September 30, 2016. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting | Note 15. 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. Our operations and management structure are organized into four reportable operating segments: • Latin America • AMEA • Europe • North America On October 1, 2016, we integrated our EEMEA operating segment into our Europe and Asia Pacific operating segments to further leverage and optimize the operating scale built within the Europe and Asia Pacific regions. Russia, Ukraine, Turkey, Belarus, Georgia and Kazakhstan were combined within our Europe operating segment, while the remaining Middle East and African countries were combined within our Asia Pacific region to form the AMEA operating segment. We have reflected the segment change as if it had occurred in all periods presented. 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 in our key markets. Our regional management teams have responsibility for the business, product categories and financial results in the regions. We use segment operating income to evaluate segment performance and allocate resources. We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends. 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 and gains and losses on divestitures 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 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, revised to reflect our new segment structure, were: For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Net revenues: Latin America $ 908 $ 868 $ 2,666 $ 2,528 AMEA 1,405 1,443 4,290 4,404 Europe 2,442 2,332 6,978 7,073 North America 1,775 1,753 4,996 5,148 Net revenues $ 6,530 $ 6,396 $ 18,930 $ 19,153 Earnings before income taxes: Operating income: Latin America $ 255 $ 92 $ 469 $ 191 AMEA 82 165 425 504 Europe 410 316 1,158 924 North America 318 274 824 840 Unrealized gains/(losses) on hedging activities (mark-to-market impacts) 28 (12 ) (69 ) (49 ) General corporate expenses (54 ) (89 ) (196 ) (216 ) Amortization of intangibles (45 ) (44 ) (133 ) (132 ) Net gain on divestitures 187 – 184 – Operating income 1,181 702 2,662 2,062 Interest and other expense, net (19 ) (145 ) (262 ) (540 ) Earnings before income taxes $ 1,162 $ 557 $ 2,400 $ 1,522 Items impacting our segment operating results are discussed in Note 1, Basis of Presentation Divestitures and Acquisitions, Property, Plant and Equipment, Goodwill and Intangible Assets, 2014-2018 Restructuring Program Commitments and Contingencies Debt and Borrowing Arrangements Financial Instruments, Net revenues by product category, revised to reflect our new segment structure, were: For the Three Months Ended September 30, 2017 Latin AMEA Europe North Total (in millions) Biscuits $ 210 $ 444 $ 761 $ 1,427 $ 2,842 Chocolate 207 520 1,196 74 1,997 Gum & Candy 247 228 185 274 934 Beverages 155 104 23 – 282 Cheese & Grocery 89 109 277 – 475 Total net revenues $ 908 $ 1,405 $ 2,442 $ 1,775 $ 6,530 For the Three Months Ended September 30, 2016 Latin AMEA Europe North Total (in millions) Biscuits $ 191 $ 416 $ 677 $ 1,403 $ 2,687 Chocolate 185 508 1,124 65 1,882 Gum & Candy 247 239 218 285 989 Beverages 164 107 37 – 308 Cheese & Grocery 81 173 276 – 530 Total net revenues $ 868 $ 1,443 $ 2,332 $ 1,753 $ 6,396 For the Nine Months Ended September 30, 2017 Latin AMEA Europe North Total (in millions) Biscuits $ 580 $ 1,198 $ 2,130 $ 4,061 $ 7,969 Chocolate 660 1,460 3,365 194 5,679 Gum & Candy 701 695 582 741 2,719 Beverages 477 466 88 – 1,031 Cheese & Grocery 248 471 813 – 1,532 Total net revenues $ 2,666 $ 4,290 $ 6,978 $ 4,996 $ 18,930 For the Nine Months Ended September 30, 2016 Latin AMEA Europe North Total (in millions) Biscuits $ 551 $ 1,179 $ 2,039 $ 4,162 $ 7,931 Chocolate 562 1,393 3,368 153 5,476 Gum & Candy 713 745 688 833 2,979 Beverages 466 513 124 – 1,103 Cheese & Grocery 236 574 854 – 1,664 Total net revenues $ 2,528 $ 4,404 $ 7,073 $ 5,148 $ 19,153 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2016. |
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. As of the close of the 2015 fiscal year, we deconsolidated and changed to the cost method of accounting for our Venezuelan operations. As such, for all periods presented, we have excluded the results of operations, financial position and cash flows of our Venezuelan subsidiaries from our condensed consolidated financial statements. |
Segment Change | Segment Change: On October 1, 2016, we integrated our Eastern Europe, Middle East, and Africa (“EEMEA”) operating segment into our Europe and Asia Pacific operating segments to further leverage and optimize the operating scale built within the Europe and Asia Pacific regions. Russia, Ukraine, Turkey, Belarus, Georgia and Kazakhstan were combined within our Europe region, while the remaining Middle East and African countries were combined within our Asia Pacific region to form a new Asia, Middle East and Africa (“AMEA”) operating segment. We have reflected the segment change as if it had occurred in all periods presented. As of October 1, 2016, our operations and management structure were organized into four reportable operating segments: • Latin America • AMEA • Europe • North America See Note 15, Segment Reporting |
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 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 of September 30, 2017, none of our consolidated subsidiaries were subject to highly inflationary accounting. Argentina. Ukraine Other Countries. |
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 a factoring arrangement with a major global bank for a maximum combined capacity of $1.0 billion. Under the program, we may sell eligible short-term trade receivables to the bank in exchange for cash. We then continue to collect the receivables sold, acting solely as a collecting agent on behalf of the bank. The outstanding principal amount of receivables under this arrangement amounted to $650 million as of September 30, 2017 and $644 million as of December 31, 2016. 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 August 2017, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) to better align hedge accounting with an entity’s risk management activities and improve disclosures surrounding hedging. For cash flow and net investment hedges as of the adoption date, the ASU requires a modified retrospective transition approach. Presentation and disclosure requirements related to this ASU are required prospectively. The ASU is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently assessing the impact on our consolidated financial statements. In May 2017, the FASB issued an ASU to clarify when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The ASU is applied prospectively to awards that are modified on or after the adoption date. The ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We do not anticipate a material impact to our consolidated financial statements. In March 2017, the FASB issued an ASU to amend the amortization period for certain purchased callable debt securities held at a premium, shortening the period to the earliest call date instead of the maturity date. The standard does not impact securities held at a discount as the discount continues to be amortized to maturity. The ASU is applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The ASU is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We do not anticipate a material impact to our consolidated financial statements. In March 2017, the FASB issued an ASU to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The standard requires employers to disaggregate the service cost component from the other components of net benefit cost and disclose the amount and location where the net benefit cost is recorded in the income statement or capitalized in assets. The standard is to be applied on a retrospective basis for the change in presentation in the income statement and prospectively for the change in presentation on the balance sheet. The ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We will adopt the standard on January 1, 2018. For information on our service cost and other components of net periodic benefit cost for pension, postretirement benefit and post-employment plans, see Note 9, Benefit Plans Benefit Plans In January 2017, the FASB issued an ASU that clarifies the definition of a business with the objective of adding guidance to assist companies with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business may affect many areas of accounting including acquisitions, disposals, goodwill and consolidation. The ASU is applied on a prospective basis and is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We continue to assess the ASU based on any pending or new transactions that may arise prior to the January 1, 2018 adoption date. At this time, we do not anticipate early adopting nor a material impact on our consolidated financial statements. In November 2016, the FASB issued an ASU that requires the change in restricted cash or cash equivalents to be included with other changes in cash and cash equivalents in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We anticipate adopting this standard at the same time as the cash flow statement classification changes described below go into effect on January 1, 2018. This ASU is not expected to have a material impact on our consolidated statement of cash flows. In October 2016, the FASB issued an ASU that requires the recognition of tax consequences of intercompany asset transfers other than inventory when the transfer occurs and removes the exception to postpone recognition until the asset has been sold to an outside party. The standard is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings. The ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We anticipate adopting on January 1, 2018 and do not expect the ASU to have a material impact on our consolidated financial statements. In August 2016, the FASB issued an ASU to provide guidance on eight specific cash flow classification issues and reduce diversity in practice in how some cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. We anticipate adopting this standard on January 1, 2018. This ASU is not expected to have a material impact on our consolidated financial statements. In February 2016, the FASB issued an ASU on lease accounting. The ASU revises existing U.S. GAAP and outlines a new model for lessors and lessees to use in accounting for lease contracts. The guidance requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases, with the exception of short-term leases. In the statement of earnings, lessees will classify leases as either operating (resulting in straight-line expense) or financing (resulting in a front-loaded expense pattern). The ASU is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We anticipate adopting the new standard on January 1, 2019. We continue to make progress in our due diligence and assess the impact of the new standard across our operations and on our consolidated financial statements, which will consist primarily of recording lease assets and liabilities on our balance sheet for our operating leases. In January 2016, the FASB issued an ASU that provides updated guidance for the recognition, measurement, presentation and disclosure of financial assets and liabilities. The standard requires that equity investments (other than those accounted for under equity method of accounting or those that result in consolidation of the investee) be measured at fair value, with changes in fair value recognized in net income. The standard also impacts financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The ASU is effective for fiscal years beginning after December 15, 2017. This ASU is not expected to have a material impact on our consolidated financial statements. In May 2014, the FASB issued an ASU on revenue recognition from contracts with customers. The ASU outlines a new, single comprehensive model for companies to use in accounting for revenue. The core principle is that an entity should recognize revenue to depict the transfer of control over promised goods or services to a customer in an amount that reflects the consideration the entity expects to be entitled to receive in exchange for the goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows from customer contracts, including significant judgments made in recognizing revenue. In 2016 and early 2017, the FASB issued several ASUs that clarified principal versus agent (gross versus net) revenue presentation considerations, confirmed the accounting for certain prepaid stored-value products and clarified the guidance for identifying performance obligations within a contract, the accounting for licenses and partial sales of nonfinancial assets. The FASB also issued two ASUs providing technical corrections, narrow scope exceptions and practical expedients to clarify and improve the implementation of the new revenue recognition guidance. The revenue guidance is effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted as of the original effective date (annual reporting periods beginning after December 15, 2016). The ASU may be applied retrospectively to historical periods presented or as a cumulative-effect adjustment as of the date of adoption. We plan to adopt the new standard on January 1, 2018 on a full retrospective basis. We are finalizing reviews and working on implementing the process, policy and disclosure changes that will go into effect on January 1, 2018. At this time, we do not expect a material financial impact from adopting the new revenue standards. |
Reclassifications | Reclassifications: Certain amounts previously reported have been reclassified to conform to current-year presentation. In connection with the October 1, 2016 segment change described above, prior-period segment information was updated to reflect the new segment structure. See Note 5, Goodwill and Intangible Assets 2014-2018 Restructuring Program; Segment Reporting Reclassifications from Accumulated Other Comprehensive Income, |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Components of Inventories | Inventories consisted of the following: As of September 30, As of December 31, 2017 2016 (in millions) Raw materials $ 764 $ 722 Finished product 2,154 1,865 2,918 2,587 Inventory reserves (137 ) (118 ) Inventories, net $ 2,781 $ 2,469 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Components of Property, Plant and Equipment | Property, plant and equipment consisted of the following: As of September 30, As of December 31, 2017 2016 (in millions) Land and land improvements $ 469 $ 471 Buildings and building improvements 2,971 2,801 Machinery and equipment 11,179 10,302 Construction in progress 1,014 1,113 15,633 14,687 Accumulated depreciation (7,095 ) (6,458 ) Property, plant and equipment, net $ 8,538 $ 8,229 |
2014-2018 Restructuring Program | |
Schedule of Restructuring and Implementation Costs | During the three and nine months ended September 30, 2017 and September 30, 2016, and since inception of the 2014-2018 Restructuring Program, we recorded restructuring and implementation costs within operating income by segment (as revised to reflect our current segment structure) as follows: Latin North America AMEA Europe America (1) Corporate (2) Total (in millions) For the Three Months Ended Restructuring Costs $ 45 $ 32 $ 30 $ 7 $ (1 ) $ 113 Implementation Costs 8 11 18 13 12 62 Total $ 53 $ 43 $ 48 $ 20 $ 11 $ 175 For the Nine Months Ended Restructuring Costs $ 76 $ 106 $ 149 $ 79 $ 8 $ 418 Implementation Costs 28 30 49 38 34 179 Total $ 104 $ 136 $ 198 $ 117 $ 42 $ 597 For the Three Months Ended Restructuring Costs $ 27 $ 9 $ 76 $ 75 $ – $ 187 Implementation Costs 15 9 45 30 15 114 Total $ 42 $ 18 $ 121 $ 105 $ 15 $ 301 For the Nine Months Ended Restructuring Costs $ 71 $ 72 $ 188 $ 144 $ 5 $ 480 Implementation Costs 34 27 78 101 46 286 Total $ 105 $ 99 $ 266 $ 245 $ 51 $ 766 Total Project 2014-2017 (3) Restructuring Costs $ 413 $ 413 $ 798 $ 433 $ 60 $ 2,117 Implementation Costs 137 116 253 233 209 948 Total $ 550 $ 529 $ 1,051 $ 666 $ 269 $ 3,065 (1) During 2017 and 2016, our North America region implementation costs included incremental costs that we incurred related to re-negotiating collective bargaining agreements that expired at the end of February 2016 for eight U.S. facilities and related to executing business continuity plans for the North America business. (2) Includes adjustment for rounding. (3) Includes all charges recorded since program inception on May 6, 2014 through September 30, 2017. |
Property Plant and Equipment | Asset impairment and exit costs | |
Schedule of Restructuring and Implementation Costs | These charges were recorded in the condensed consolidated statements of earnings within asset impairment and exit costs and in the segment results as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (in millions) Latin America $ 13 $ 3 $ 25 $ 16 AMEA 20 9 62 30 Europe 10 49 52 87 North America 3 59 25 98 Corporate – – – 2 Total non-cash asset write-downs $ 46 $ 120 $ 164 $ 233 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Schedule of Goodwill by Segment | Goodwill by segment reflects our current segment structure for both periods presented: As of September 30, As of December 31, 2017 2016 (in millions) Latin America $ 947 $ 897 AMEA 3,349 3,324 Europe 7,837 7,170 North America 8,938 8,885 Goodwill $ 21,071 $ 20,276 |
Intangible Assets Disclosure | Intangible assets consisted of the following: As of September 30, As of December 31, 2017 2016 (in millions) Non-amortizable intangible assets $ 17,625 $ 17,004 Amortizable intangible assets 2,414 2,315 20,039 19,319 Accumulated amortization (1,401 ) (1,218 ) Intangible assets, net $ 18,638 $ 18,101 |
Changes in Goodwill and Intangible Assets | Changes in goodwill and intangible assets consisted of: Goodwill Intangible (in millions) Balance at January 1, 2017 $ 20,276 $ 19,319 Currency 889 898 Divestitures (109 ) (62 ) Acquisition 15 (7 ) Asset impairments – (109 ) Balance at September 30, 2017 $ 21,071 $ 20,039 |
2014-2018 Restructuring Progr28
2014-2018 Restructuring Program (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
2014-2018 Restructuring Program | |
Schedule of Restructuring Costs | The 2014-2018 Restructuring Program liability activity for the nine months ended September 30, 2017 was: Severance Asset Write-downs Total (in millions) Liability balance, January 1, 2017 $ 464 $ – $ 464 Charges 250 168 418 Cash spent (245 ) – (245 ) Non-cash settlements/adjustments (6 ) (168 ) (174 ) Currency 30 – 30 Liability balance, September 30, 2017 $ 493 $ – $ 493 |
Debt and Borrowing Arrangemen29
Debt and Borrowing Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Short-Term Borrowings and Related Weighted-Average Interest Rates | Our short-term borrowings and related weighted-average interest rates consisted of: As of September 30, 2017 As of December 31, 2016 Amount Weighted- Amount Weighted- Outstanding Average Rate Outstanding Average Rate (in millions) (in millions) Commercial paper $ 4,370 1.3% $ 2,371 1.0% Bank loans 181 10.6% 160 10.6% Total short-term borrowings $ 4,551 $ 2,531 |
Interest and Other Expense Net Within Results of Continuing Operations | Interest and other expense, net within our results of continuing operations consisted of: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2017 2016 2017 2016 (in millions) Interest expense, debt $ 89 $ 129 $ 295 $ 400 Loss on debt extinguishment – – 11 – Loss related to interest rate swaps – – – 97 Other (income)/expense, net (70 ) 16 (44 ) 43 Interest and other expense, net $ 19 $ 145 $ 262 $ 540 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivatives | |
Fair Value of Derivatives Instruments | Derivative instruments were recorded at fair value in the condensed consolidated balance sheets as follows: As of September 30, 2017 As of December 31, 2016 Asset Liability Asset Liability Derivatives Derivatives Derivatives Derivatives (in millions) Derivatives designated as Currency exchange contracts $ – $ 2 $ 19 $ 8 Commodity contracts 1 – 17 22 Interest rate contracts 33 421 108 19 $ 34 $ 423 $ 144 $ 49 Derivatives not designated Currency exchange contracts $ 70 $ 45 $ 29 $ 43 Commodity contracts 35 169 112 167 Interest rate contracts 15 10 27 19 $ 120 $ 224 $ 168 $ 229 Total fair value $ 154 $ 647 $ 312 $ 278 |
Schedule of Derivative Instruments Fair Value and Measurement Inputs | The fair values (asset/(liability)) of our derivative instruments were determined using: As of September 30, 2017 Total Quoted Prices in Significant Significant (in millions) Currency exchange contracts $ 23 $ – $ 23 $ – Commodity contracts (133 ) (133 ) – – Interest rate contracts (383 ) – (383 ) – Total derivatives $ (493 ) $ (133 ) $ (360 ) $ – As of December 31, 2016 Total Quoted Prices in Significant Significant (in millions) Currency exchange contracts $ (3 ) $ – $ (3 ) $ – Commodity contracts (60 ) (86 ) 26 – Interest rate contracts 97 – 97 – Total derivatives $ 34 $ (86 ) $ 120 $ – |
Notional Values of Derivative Instruments | The net notional values of our derivative instruments were: Notional Amount As of September 30, As of December 31, (in millions) Currency exchange contracts: Intercompany loans and forecasted interest payments $ 3,649 $ 3,343 Forecasted transactions 2,066 1,452 Commodity contracts 1,137 837 Interest rate contracts 6,517 6,365 Net investment hedge – euro notes 3,975 4,012 Net investment hedge – pound sterling notes 454 419 Net investment hedge – Swiss franc notes 1,704 1,447 |
Cash Flow Hedges | |
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 September 30, For the Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Accumulated (loss)/gain at beginning of period $ (91 ) $ (36 ) $ (121 ) $ (45 ) Transfer of realized (gains)/losses in fair value to earnings (13 ) (2 ) (10 ) 64 Unrealized gain/(loss) in fair value (6 ) 4 21 (53 ) Accumulated (loss)/gain at end of period $ (110 ) $ (34 ) $ (110 ) $ (34 ) |
Schedule of Effects of Derivative Instruments | After-tax gains/(losses) reclassified from accumulated other comprehensive earnings/(losses) into net earnings were: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Currency exchange contracts – forecasted transactions $ (3 ) $ (6 ) $ (2 ) $ (3 ) Commodity contracts 16 8 12 (1 ) Interest rate contracts – – – (60 ) Total $ 13 $ 2 $ 10 $ (64 ) After-tax gains/(losses) recognized in other comprehensive earnings/(losses) were: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2017 2016 2017 2016 (in millions) Currency exchange contracts – forecasted transactions $ (11 ) $ (11 ) $ (37 ) $ (21 ) Commodity contracts 25 10 31 19 Interest rate contracts (20 ) 5 27 (51 ) Total $ (6 ) $ 4 $ 21 $ (53 ) |
Fair Value Hedges | |
Schedule of Effects of Derivative Instruments | Pre-tax gains/(losses) due to changes in fair value of our interest rate swaps and related hedged long-term debt were recorded in interest and other expense, net: For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Derivatives $ (2 ) $ (11 ) $ (4 ) $ (2 ) Borrowings 2 11 4 2 |
Economic Hedging | |
Schedule of Effects of Derivative Instruments | Pre-tax gains/(losses) recorded in net earnings for economic hedges were: For the Three Months Ended For the Nine Months Ended Location of in Earnings 2017 2016 2017 2016 (in millions) Currency exchange contracts: Intercompany loans and forecasted interest payments $ (13 ) $ 7 $ (8 ) $ 18 Interest and other expense, net Forecasted transactions (1 ) (14 ) – (91 ) Cost of sales Forecasted transactions 1 2 (1 ) 10 Interest and other expense, net Forecasted transactions – 4 2 16 Selling, general and administrative expenses Commodity contracts (17 ) (13 ) (176 ) (26 ) Cost of sales Total $ (30 ) $ (14 ) $ (183 ) $ (73 ) |
Net investment hedge | |
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, pound sterling and Swiss franc-denominated debt were: For the Three Months Ended For the Nine Months Ended Location of 2017 2016 2017 2016 (in millions) Euro notes $ (83 ) $ (38 ) $ (279 ) $ (110 ) Currency Pound sterling notes (8 ) 21 (23 ) 107 Translation Swiss franc notes 12 (4 ) (53 ) (33 ) Adjustment |
Benefit Plans (Tables)
Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Pension Plans | |
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 2017 2016 2017 2016 (in millions) Service cost $ 12 $ 15 $ 40 $ 37 Interest cost 16 15 51 57 Expected return on plan assets (25 ) (24 ) (110 ) (105 ) Amortization: Net loss from experience differences 10 12 43 31 Prior service credit – – (1 ) – Settlement losses and other expenses 6 9 – – Net periodic pension cost $ 19 $ 27 $ 23 $ 20 U.S. Plans Non-U.S. Plans For the Nine Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Service cost $ 34 $ 42 $ 117 $ 114 Interest cost 47 46 148 179 Expected return on plan assets (75 ) (72 ) (322 ) (326 ) Amortization: Net loss from experience differences 27 30 124 93 Prior service cost/(credit) 1 1 (2 ) (2 ) Settlement losses/(gains) and other expenses 27 25 2 (1 ) Net periodic pension cost $ 61 $ 72 $ 67 $ 57 |
Postretirement Benefit Plans | |
Components of Net Costs | Net periodic postretirement health care costs consisted of the following: For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Service cost $ 1 $ 3 $ 5 $ 9 Interest cost 4 6 11 16 Amortization: Net loss from experience differences 4 2 11 5 Prior service credit (1) (10 ) (11 ) (30 ) (14 ) Net periodic postretirement health care (credits)/costs $ (1 ) $ – $ (3 ) $ 16 (1) For the three and nine months ended September 30, 2017, amortization of prior service credit includes an $8 million and $24 million gain respectively, related to a change in the eligibility requirement and a change in benefits to Medicare-eligible participants. |
Postemployment Benefit Plans | |
Components of Net Costs | Net periodic postemployment costs consisted of the following: For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Service cost $ 1 $ 2 $ 4 $ 5 Interest cost 1 1 3 4 Amortization of net gains (1 ) – (3 ) – Net periodic postemployment costs $ 1 $ 3 $ 4 $ 9 |
Stock Plans (Tables)
Stock Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stock Options Activity | Stock option activity is reflected below: Shares Subject Weighted- Average Aggregate Balance at January 1, 2017 53,601,612 $ 28.02 6 years $ 874 million Annual grant to eligible employees 6,012,140 43.20 Additional options issued 29,300 44.49 Total options granted 6,041,440 43.21 Options exercised (1) (7,837,372 ) 26.49 $ 142 million Options cancelled (1,536,249 ) 38.96 Balance at September 30, 2017 50,269,431 29.75 6 years $ 563 million (1) Cash received from options exercised was $43 million in the three months and $213 million in the nine months ended September 30, 2017. The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $6 million in the three months and $24 million in the nine months ended September 30, 2017. |
Deferred stock unit, performance share unit and restricted stock | |
Performance Share Unit, Deferred Stock Unit, and Historically Granted Restricted Stock Activity | Our performance share unit, deferred stock unit and historically granted restricted stock activity is reflected below: Weighted-Average Weighted-Average Number Fair Value Aggregate of Shares Grant Date Per Share (3) Fair Value (3) Balance at January 1, 2017 7,593,627 $ 36.90 Annual grant to eligible employees: Feb. 16, 2017 Performance share units 1,087,010 43.14 Deferred stock units 845,550 43.20 Additional shares granted (1) 546,001 Various 33.81 Total shares granted 2,478,561 41.11 $ 102 million Vested (2) (2,522,072 ) 33.70 $ 84 million Forfeited (2) (675,920 ) 38.43 Balance at September 30, 2017 6,874,196 39.44 (1) Includes performance share units and deferred stock units. (2) Includes performance share units, deferred stock units and historically granted restricted stock. The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled less than $1 million in the three months and $7 million in the nine months ended September 30, 2017. (3) Prior-year weighted average fair value per share has been revised. |
Reclassifications from Accumu33
Reclassifications from Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 $28 million in the three months and $112 million in the nine months ended September 30, 2017 and $28 million in the three months and $206 million in the nine months ended September 30, 2016. For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Currency Translation Adjustments: Balance at beginning of period $ (8,007 ) $ (7,902 ) $ (8,914 ) $ (8,006 ) Currency translation adjustments 291 15 1,055 53 Reclassification to earnings related to: Equity method investment exchange – – – 57 Tax benefit/(expense) 46 13 205 21 Other comprehensive earnings/(losses) 337 28 1,260 131 Less: (gain)/loss attributable to noncontrolling interests (8 ) 2 (24 ) 3 Balance at end of period (7,678 ) (7,872 ) (7,678 ) (7,872 ) Pension and Other Benefit Plans: Balance at beginning of period $ (2,119 ) $ (1,830 ) $ (2,087 ) $ (1,934 ) Net actuarial (loss)/gain arising during period (28 ) – (19 ) 24 Tax benefit/(expense) on net actuarial loss 25 – 25 (9 ) Losses/(gains) reclassified into net earnings: Amortization of experience losses and prior service costs (1) 47 30 130 93 Settlement losses and other expenses (1) 6 10 24 25 Tax benefit on reclassifications (2) (10 ) (10 ) (31 ) (34 ) Currency impact (50 ) 7 (171 ) 42 Other comprehensive (losses)/earnings (10 ) 37 (42 ) 141 Balance at end of period (2,129 ) (1,793 ) (2,129 ) (1,793 ) Derivative Cash Flow Hedges: Balance at beginning of period $ (91 ) $ (36 ) $ (121 ) $ (46 ) Net derivative gains/(losses) 2 6 31 (77 ) Tax benefit on net derivative gain/(loss) (5 ) (2 ) (1 ) 25 Losses/(gains) reclassified into net earnings: Currency exchange contracts – forecasted transactions (3) 2 7 2 3 Commodity contracts (3) (21 ) (8 ) (15 ) 7 Interest rate contracts (4) – – – 96 Tax benefit on reclassifications (2) 6 (1 ) 3 (41 ) Currency impact (3 ) – (9 ) (1 ) Other comprehensive earnings/(losses) (19 ) 2 11 12 Balance at end of period (110 ) (34 ) (110 ) (34 ) Accumulated other comprehensive income attributable to Mondelēz International: Balance at beginning of period $ (10,217 ) $ (9,768 ) $ (11,122 ) $ (9,986 ) Total other comprehensive earnings/(losses) 308 67 1,229 284 Less: loss/(gain) attributable to noncontrolling interests (8 ) 2 (24 ) 3 Other comprehensive earnings/(losses) attributable to Mondelēz International 300 69 1,205 287 Balance at end of period $ (9,917 ) $ (9,699 ) $ (9,917 ) $ (9,699 ) (1) These reclassified losses are included in the components of net periodic benefit costs disclosed in Note 9, Benefit Plans (2) Taxes reclassified to earnings are recorded within the provision for income taxes. (3) These reclassified gains or losses are recorded within cost of sales. (4) These reclassified losses are recorded within interest and other expense, net. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Basic and Diluted Earnings Per Share | Basic and diluted earnings per share (“EPS”) were calculated as follows: For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions, except per share data) Net earnings $ 993 $ 548 $ 2,126 $ 1,576 Noncontrolling interest (earnings) (1 ) – (6 ) (10 ) Net earnings attributable to Mondelēz International $ 992 $ 548 $ 2,120 $ 1,566 Weighted-average shares for basic EPS 1,507 1,557 1,518 1,561 Plus incremental shares from assumed conversions 17 19 19 18 Weighted-average shares for diluted EPS 1,524 1,576 1,537 1,579 Basic earnings per share attributable to $ 0.66 $ 0.35 $ 1.40 $ 1.00 Diluted earnings per share attributable to $ 0.65 $ 0.35 $ 1.38 $ 0.99 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Net Revenues by Segment | Our segment net revenues and earnings, revised to reflect our new segment structure, were: For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Net revenues: Latin America $ 908 $ 868 $ 2,666 $ 2,528 AMEA 1,405 1,443 4,290 4,404 Europe 2,442 2,332 6,978 7,073 North America 1,775 1,753 4,996 5,148 Net revenues $ 6,530 $ 6,396 $ 18,930 $ 19,153 |
Operating Income by Segment | Our segment net revenues and earnings, revised to reflect our new segment structure, were: For the Three Months Ended For the Nine Months Ended 2017 2016 2017 2016 (in millions) Earnings before income taxes: Operating income: Latin America $ 255 $ 92 $ 469 $ 191 AMEA 82 165 425 504 Europe 410 316 1,158 924 North America 318 274 824 840 Unrealized gains/(losses) on hedging activities (mark-to-market impacts) 28 (12 ) (69 ) (49 ) General corporate expenses (54 ) (89 ) (196 ) (216 ) Amortization of intangibles (45 ) (44 ) (133 ) (132 ) Net gain on divestitures 187 – 184 – Operating income 1,181 702 2,662 2,062 Interest and other expense, net (19 ) (145 ) (262 ) (540 ) Earnings before income taxes $ 1,162 $ 557 $ 2,400 $ 1,522 |
Net Revenues by Consumer Sector | Net revenues by product category, revised to reflect our new segment structure, were: For the Three Months Ended September 30, 2017 Latin AMEA Europe North Total (in millions) Biscuits $ 210 $ 444 $ 761 $ 1,427 $ 2,842 Chocolate 207 520 1,196 74 1,997 Gum & Candy 247 228 185 274 934 Beverages 155 104 23 – 282 Cheese & Grocery 89 109 277 – 475 Total net revenues $ 908 $ 1,405 $ 2,442 $ 1,775 $ 6,530 For the Three Months Ended September 30, 2016 Latin AMEA Europe North Total (in millions) Biscuits $ 191 $ 416 $ 677 $ 1,403 $ 2,687 Chocolate 185 508 1,124 65 1,882 Gum & Candy 247 239 218 285 989 Beverages 164 107 37 – 308 Cheese & Grocery 81 173 276 – 530 Total net revenues $ 868 $ 1,443 $ 2,332 $ 1,753 $ 6,396 For the Nine Months Ended September 30, 2017 Latin AMEA Europe North Total (in millions) Biscuits $ 580 $ 1,198 $ 2,130 $ 4,061 $ 7,969 Chocolate 660 1,460 3,365 194 5,679 Gum & Candy 701 695 582 741 2,719 Beverages 477 466 88 – 1,031 Cheese & Grocery 248 471 813 – 1,532 Total net revenues $ 2,666 $ 4,290 $ 6,978 $ 4,996 $ 18,930 For the Nine Months Ended September 30, 2016 Latin AMEA Europe North Total (in millions) Biscuits $ 551 $ 1,179 $ 2,039 $ 4,162 $ 7,931 Chocolate 562 1,393 3,368 153 5,476 Gum & Candy 713 745 688 833 2,979 Beverages 466 513 124 – 1,103 Cheese & Grocery 236 574 854 – 1,664 Total net revenues $ 2,528 $ 4,404 $ 7,073 $ 5,148 $ 19,153 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017USD ($)CountrySubsidiary | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)CountrySubsidiarySegment | Sep. 30, 2016USD ($) | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||||
Number of reportable segments | Segment | 4 | ||||||
Number of consolidated subsidiaries subject to highly inflationary accounting | Subsidiary | 0 | 0 | |||||
Net revenues | $ 6,530 | $ 6,396 | $ 18,930 | $ 19,153 | |||
Number of countries in which products are sold | Country | 165 | 165 | |||||
Number of countries in which entity operates | Country | 80 | 80 | |||||
Uncommitted revolving non-recourse accounts receivable factoring arrangements, maximum combined capacity | $ 1,000 | ||||||
Outstanding principal amount of receivables sold under factoring arrangement | $ 650 | $ 650 | $ 644 | ||||
Argentina | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Net revenues | $ 152 | $ 454 | |||||
Percentage of consolidated net revenues | 2.30% | 2.40% | |||||
UKRAINE | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Net revenues | $ 21 | $ 51 | |||||
Percentage of consolidated net revenues | 0.30% | 0.30% | |||||
UKRAINE | Maximum | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Three-year cumulative inflation rate | 100.00% | ||||||
UKRAINE | Scenario, Forecast | Maximum | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Three-year cumulative inflation rate | 100.00% |
Divestitures and Acquisitions -
Divestitures and Acquisitions - Additional Information (Detail) € in Millions, £ in Millions, AUD in Millions | Oct. 23, 2017USD ($) | Oct. 23, 2017EUR (€) | Oct. 02, 2017USD ($) | Aug. 17, 2017USD ($) | Aug. 17, 2017EUR (€) | Jul. 04, 2017USD ($) | Jul. 04, 2017AUD | Apr. 28, 2017USD ($) | Apr. 28, 2017EUR (€) | Nov. 02, 2016USD ($) | Nov. 02, 2016GBP (£) | Oct. 31, 2016USD ($) | Oct. 31, 2016EUR (€) | Jul. 05, 2016USD ($) | Jun. 30, 2016 | May 02, 2016USD ($) | May 02, 2016EUR (€) | Mar. 31, 2016USD ($) | Mar. 07, 2016USD ($) | Mar. 07, 2016EUR (€) | Mar. 03, 2016USD ($) | May 31, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2017AUD | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2016EUR (€) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Jul. 19, 2016EUR (€) |
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Equity method investment net (losses) / earnings | $ 103,000,000 | $ 31,000,000 | $ 236,000,000 | $ 218,000,000 | ||||||||||||||||||||||||||||||||
Gain on equity method investment exchange | 43,000,000 | |||||||||||||||||||||||||||||||||||
Equity method investments | 6,060,000,000 | 6,060,000,000 | $ 5,585,000,000 | |||||||||||||||||||||||||||||||||
Gain (loss) on divestiture | 187,000,000 | 184,000,000 | ||||||||||||||||||||||||||||||||||
Proceeds from sale of property, plant and equipment and other | 77,000,000 | 113,000,000 | ||||||||||||||||||||||||||||||||||
Intangible asset impairment | 1,000,000 | $ 38,000,000 | 109,000,000 | |||||||||||||||||||||||||||||||||
Business acquisition, goodwill | 21,071,000,000 | 21,071,000,000 | 20,276,000,000 | |||||||||||||||||||||||||||||||||
Tax Authority, Spain | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Interest and penalties expected to be paid | 34,000,000 | € 30 | ||||||||||||||||||||||||||||||||||
North America Segment | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Intangible asset impairment | 2,000,000 | |||||||||||||||||||||||||||||||||||
Business acquisition, goodwill | 8,938,000,000 | 8,938,000,000 | 8,885,000,000 | |||||||||||||||||||||||||||||||||
Proceeds from sale of property | 10,000,000 | $ 40,000,000 | ||||||||||||||||||||||||||||||||||
Europe Segment | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Intangible asset impairment | 11,000,000 | |||||||||||||||||||||||||||||||||||
Business acquisition, goodwill | 7,837,000,000 | 7,837,000,000 | 7,170,000,000 | |||||||||||||||||||||||||||||||||
Corporate Aircraft | Corporate Segment | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Proceeds from sale of property | 3,000,000 | 20,000,000 | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | North America Segment | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Gain on sale of property | 6,000,000 | 33,000,000 | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | Corporate Aircraft | Corporate Segment | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Gain on sale of property | 1,000,000 | $ 6,000,000 | ||||||||||||||||||||||||||||||||||
Trademarks | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Intangible asset impairment | 70,000,000 | 70,000,000 | ||||||||||||||||||||||||||||||||||
Burton's Biscuit Company | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Cash paid for acquisition | $ 245,000,000 | £ 199 | ||||||||||||||||||||||||||||||||||
Business acquisition, definite-life intangible assets | 66,000,000 | |||||||||||||||||||||||||||||||||||
Business acquisition, goodwill | 173,000,000 | |||||||||||||||||||||||||||||||||||
Business acquisition, property, plant and equipment | 2,000,000 | |||||||||||||||||||||||||||||||||||
Business acquisition, inventory | $ 4,000,000 | |||||||||||||||||||||||||||||||||||
Acorn Holdings BV | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Percentage of equity interest acquired by other parties | 73.50% | 73.50% | ||||||||||||||||||||||||||||||||||
Class C,D and E | Acorn Holdings BV | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Percentage of equity interest acquired by other parties | 0.38% | 0.38% | ||||||||||||||||||||||||||||||||||
Class A | Acorn Holdings BV | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Percentage of equity interest acquired by other parties | 73.22% | 73.50% | 73.50% | 73.22% | ||||||||||||||||||||||||||||||||
Discontinued Operations, Held-for-sale | Europe Segment | The Kraft Heinz Company | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Proceeds from divestiture of businesses | $ 11,000,000 | € 9 | ||||||||||||||||||||||||||||||||||
Discontinued Operations, Held-for-sale | FINLAND | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Proceeds from divestiture of businesses | $ 16,000,000 | € 14 | ||||||||||||||||||||||||||||||||||
Proceeds from sale of property, plant and equipment and other | $ 2,000,000 | € 2 | 14,000,000 | € 12 | ||||||||||||||||||||||||||||||||
Indefinite-lived Intangible assets, divested | 8,000,000 | |||||||||||||||||||||||||||||||||||
Pre-tax gain after transaction costs | $ 6,000,000 | $ 8,000,000 | ||||||||||||||||||||||||||||||||||
Discontinued Operations, Held-for-sale | Australia And New Zealand | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Proceeds from divestiture of businesses | $ 347,000,000 | AUD 456 | ||||||||||||||||||||||||||||||||||
Disposal group, including discontinued operation, other current assets | 27,000,000 | |||||||||||||||||||||||||||||||||||
Disposal group, including discontinued operation, other non current assets | 135,000,000 | |||||||||||||||||||||||||||||||||||
Disposal group, including discontinued operation, other current liabilities | 4,000,000 | |||||||||||||||||||||||||||||||||||
Gain (loss) on divestiture | $ 187,000,000 | AUD 247 | ||||||||||||||||||||||||||||||||||
Costs related to divestiture | $ 2,000,000 | |||||||||||||||||||||||||||||||||||
Gain (loss) on foreign currency derivatives | 2,000,000 | (3,000,000) | ||||||||||||||||||||||||||||||||||
Discontinued Operations, Held-for-sale | FRANCE | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Disposal group, including discontinued operation, other current assets | $ 44,000,000 | |||||||||||||||||||||||||||||||||||
Disposal group, including discontinued operation, other non current assets | 155,000,000 | |||||||||||||||||||||||||||||||||||
Disposal group, including discontinued operation, other current liabilities | 8,000,000 | |||||||||||||||||||||||||||||||||||
Gain (loss) on divestiture | (3,000,000) | |||||||||||||||||||||||||||||||||||
Costs related to divestiture | $ 1,000,000 | 0 | $ 22,000,000 | 84,000,000 | ||||||||||||||||||||||||||||||||
Proceeds from sale of property, plant and equipment and other | 169,000,000 | € 157 | ||||||||||||||||||||||||||||||||||
Disposal group, including discontinued operation, other non current liabilities | $ 22,000,000 | |||||||||||||||||||||||||||||||||||
Discontinued Operations, Held-for-sale | FRANCE | Trademarks | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Intangible asset impairment | $ 14,000,000 | $ 5,000,000 | ||||||||||||||||||||||||||||||||||
Subsequent Event | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Proceeds from sales of equity method investment | $ 65,000,000 | |||||||||||||||||||||||||||||||||||
Subsequent Event | Discontinued Operations, Held-for-sale | Europe Segment | The Kraft Heinz Company | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Proceeds from divestiture of businesses | $ 3,000,000 | € 3 | ||||||||||||||||||||||||||||||||||
Maximum | Discontinued Operations, Held-for-sale | FINLAND | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Other assets, divested | $ 1,000,000 | |||||||||||||||||||||||||||||||||||
JDE Coffee Business | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Proceeds from divestiture of businesses | $ 275,000,000 | |||||||||||||||||||||||||||||||||||
JDE Coffee Business | Tax Authority, Spain | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Unfavorable tax expense | € | € 114 | |||||||||||||||||||||||||||||||||||
JDE | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Equity method investment, ownership percentage | 26.50% | 26.50% | 26.40% | 26.40% | ||||||||||||||||||||||||||||||||
Voting interest acquired percentage | 26.50% | 26.50% | 26.50% | 26.50% | ||||||||||||||||||||||||||||||||
Percentage of profit and dividend sharing interest | 26.20% | 26.20% | ||||||||||||||||||||||||||||||||||
Cash dividends received | $ 49,000,000 | |||||||||||||||||||||||||||||||||||
Gain on equity method investment exchange | $ 43,000,000 | |||||||||||||||||||||||||||||||||||
JDE | Equity Earnings | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Equity method investment net (losses) / earnings | $ 50,000,000 | (3,000,000) | $ 88,000,000 | $ 89,000,000 | ||||||||||||||||||||||||||||||||
JDE | Acorn Holdings BV | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Carrying value of equity method investments exchanged | $ 2,000,000,000 | € 1,700 | ||||||||||||||||||||||||||||||||||
JDE | Class C,D and E | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Stock-based compensation, dilution percentage | 2.00% | |||||||||||||||||||||||||||||||||||
JDE | Class B | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Equity method investment, ownership percentage | 26.40% | 26.50% | 26.50% | 26.40% | ||||||||||||||||||||||||||||||||
JDE | Minimum | Class B | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Equity method investment, ownership percentage | 26.27% | 26.27% | ||||||||||||||||||||||||||||||||||
Keurig Green Mountain Inc. | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Equity method investment, ownership percentage | 24.20% | 24.20% | ||||||||||||||||||||||||||||||||||
Equity method investment net (losses) / earnings | 5,000,000 | 2,000,000 | $ 4,000,000 | 11,000,000 | ||||||||||||||||||||||||||||||||
Equity method investments and shareholders loan receivable | 2,000,000,000 | 2,000,000,000 | ||||||||||||||||||||||||||||||||||
Equity method investments | 1,600,000,000 | 1,600,000,000 | ||||||||||||||||||||||||||||||||||
Shareholder loan receivable | 400,000,000 | $ 400,000,000 | ||||||||||||||||||||||||||||||||||
Shareholder loan receivable, interest rate | 5.50% | |||||||||||||||||||||||||||||||||||
Shareholder loan receivable, loan term | 7 years | |||||||||||||||||||||||||||||||||||
Keurig Green Mountain Inc. | Equity Earnings | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Equity method investment net (losses) / earnings | 25,000,000 | 10,000,000 | 39,000,000 | $ 54,000,000 | ||||||||||||||||||||||||||||||||
Keurig Green Mountain Inc. | Interest Income | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Equity method investment net (losses) / earnings | $ 6,000,000 | $ 6,000,000 | $ 14,000,000 | $ 18,000,000 | ||||||||||||||||||||||||||||||||
Keurig Green Mountain Inc. | Acorn Holdings BV | ||||||||||||||||||||||||||||||||||||
Acquisition And Dispositions [Line Items] | ||||||||||||||||||||||||||||||||||||
Business combination, consideration transferred | $ 13,900,000,000 |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 764 | $ 722 |
Finished product | 2,154 | 1,865 |
Inventories, gross | 2,918 | 2,587 |
Inventory reserves | (137) | (118) |
Inventories, net | $ 2,781 | $ 2,469 |
Property, Plant and Equipment39
Property, Plant and Equipment (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 15,633 | $ 14,687 |
Accumulated depreciation | (7,095) | (6,458) |
Property, plant and equipment, net | 8,538 | 8,229 |
Land and Land Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 469 | 471 |
Buildings and Building Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,971 | 2,801 |
Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,179 | 10,302 |
Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,014 | $ 1,113 |
Property, Plant and Equipment -
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Line Items] | ||||
Capital expenditures | $ 721 | $ 909 | ||
Accrued capital expenditures unpaid | 220 | 274 | ||
Payments for capital expenditures accrued in the prior year | 343 | 322 | ||
Asset impairments and accelerated depreciation | 287 | 262 | ||
2014-2018 Restructuring Program | ||||
Property, Plant and Equipment [Line Items] | ||||
Asset impairments and accelerated depreciation | $ 46 | $ 120 | $ 164 | $ 233 |
Summary of Asset Impairment and
Summary of Asset Impairment and Exit Costs (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||||
Asset impairments and accelerated depreciation | $ 287 | $ 262 | ||
2014-2018 Restructuring Program | ||||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||||
Asset impairments and accelerated depreciation | $ 46 | $ 120 | 164 | 233 |
2014-2018 Restructuring Program | Latin America Segment | ||||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||||
Asset impairments and accelerated depreciation | 13 | 3 | 25 | 16 |
2014-2018 Restructuring Program | Asia Middle East Africa Segment | ||||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||||
Asset impairments and accelerated depreciation | 20 | 9 | 62 | 30 |
2014-2018 Restructuring Program | Europe Segment | ||||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||||
Asset impairments and accelerated depreciation | 10 | 49 | 52 | 87 |
2014-2018 Restructuring Program | North America Segment | ||||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||||
Asset impairments and accelerated depreciation | $ 3 | $ 59 | $ 25 | 98 |
2014-2018 Restructuring Program | Corporate Segment | ||||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||||
Asset impairments and accelerated depreciation | $ 2 |
Goodwill by Segment (Detail)
Goodwill by Segment (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Goodwill | $ 21,071 | $ 20,276 |
Latin America Segment | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 947 | 897 |
Asia Middle East Africa Segment | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 3,349 | 3,324 |
Europe Segment | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 7,837 | 7,170 |
North America Segment | ||
Segment Reporting Information [Line Items] | ||
Goodwill | $ 8,938 | $ 8,885 |
Intangible Assets (Detail)
Intangible Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Intangible Assets [Line Items] | ||
Non-amortizable intangible assets | $ 17,625 | $ 17,004 |
Amortizable intangible assets | 2,414 | 2,315 |
Total intangible assets, gross | 20,039 | 19,319 |
Accumulated amortization | (1,401) | (1,218) |
Intangible assets, net | $ 18,638 | $ 18,101 |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets - Additional Information (Detail) | Mar. 31, 2016USD ($) | May 31, 2016USD ($) | Sep. 30, 2017USD ($)Brand | Jun. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Brand | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Amortization expense for intangible assets | $ 45,000,000 | $ 44,000,000 | $ 133,000,000 | $ 132,000,000 | ||||
Estimated amortization expense in year 1 | 180,000,000 | 180,000,000 | ||||||
Estimated amortization expense in year 2 | 180,000,000 | 180,000,000 | ||||||
Estimated amortization expense in year 3 | 180,000,000 | 180,000,000 | ||||||
Estimated amortization expense in year 4 | 180,000,000 | 180,000,000 | ||||||
Estimated amortization expense in year 5 | 90,000,000 | 90,000,000 | ||||||
Goodwill, Divestitures | 109,000,000 | |||||||
Intangible Assets, Divestitures | 62,000,000 | |||||||
Goodwill, Acquisition | 15,000,000 | |||||||
Intangible Assets, Acquisition | 7,000,000 | |||||||
Intangible asset impairment | $ 1,000,000 | $ 38,000,000 | 109,000,000 | |||||
Impairment of goodwill | $ 0 | $ 0 | ||||||
Number of brands impaired trademarks | Brand | 5 | 5 | ||||||
Number of brands | Brand | 13 | 13 | ||||||
Intangible asset, aggregate book value | $ 17,625,000,000 | $ 17,625,000,000 | $ 17,004,000,000 | |||||
Asia Middle East Africa Segment | ||||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Intangible asset impairment | 52,000,000 | |||||||
Europe Segment | ||||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Intangible asset impairment | 11,000,000 | |||||||
Latin America Segment | ||||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Intangible asset impairment | 5,000,000 | |||||||
North America Segment | ||||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Intangible asset impairment | $ 2,000,000 | |||||||
North America and Europe | ||||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Discount rate | 7.20% | |||||||
Latin America and AMEA | ||||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Discount rate | 10.20% | |||||||
FRANCE | ||||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Goodwill, Divestitures | $ 23,000,000 | |||||||
Intangible Assets, Divestitures | 62,000,000 | |||||||
Australia And New Zealand | Discontinued Operations, Held-for-sale | ||||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Goodwill, Divestitures | 86,000,000 | |||||||
Trademarks | ||||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Intangible asset impairment | 70,000,000 | 70,000,000 | ||||||
Intangible asset, aggregate book value | $ 965,000,000 | $ 965,000,000 | ||||||
Trademarks | FRANCE | Discontinued Operations, Held-for-sale | ||||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Intangible asset impairment | $ 14,000,000 | $ 5,000,000 | ||||||
Weighted Average | ||||||||
Goodwill and Intangible Assets Disclosure [Line Items] | ||||||||
Life of our amortizable intangible assets (in years) | 13 years 7 months 6 days |
Changes in Goodwill and Intangi
Changes in Goodwill and Intangible Assets (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill And Intangible Assets [Line Items] | ||||
Goodwill beginning balance | $ 20,276,000,000 | |||
Goodwill, Currency | 889,000,000 | |||
Goodwill, Divestitures | (109,000,000) | |||
Goodwill, Acquisition | 15,000,000 | |||
Goodwill, Asset impairments | 0 | $ 0 | ||
Goodwill ending balance | $ 21,071,000,000 | 21,071,000,000 | ||
Intangible Assets, at Cost beginning balance | 19,319,000,000 | |||
Intangible Assets, Currency | 898,000,000 | |||
Intangible Assets, Divestitures | (62,000,000) | |||
Intangible Assets, Acquisition | (7,000,000) | |||
Intangible Assets, Asset impairments | (1,000,000) | $ (38,000,000) | (109,000,000) | |
Intangible Assets, at Cost ending balance | $ 20,039,000,000 | $ 20,039,000,000 |
2014-2018 Restructuring Progr46
2014-2018 Restructuring Program - Additional Information (Detail) - USD ($) $ in Millions | Aug. 31, 2016 | May 06, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||||||||
Capital expenditures | $ 721 | $ 909 | |||||||
2014-2018 Restructuring Program | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Approved restructuring program cost | $ 5,700 | ||||||||
Reallocation of previously approved capital expenditures to be spent on restructuring program cash costs | 600 | ||||||||
Restructuring and related cost, cost incurred | $ 175 | $ 301 | 597 | 766 | $ 3,065 | [1] | |||
Restructuring charges | 113 | 187 | 418 | 480 | 2,117 | [1] | |||
Cash spent | 83 | 89 | 245 | 249 | |||||
Non-cash asset write-downs | 48 | 120 | 174 | 244 | |||||
Restructuring reserve | 493 | 493 | 493 | $ 464 | |||||
Implementation Costs | 62 | 114 | 179 | 286 | 948 | [1] | |||
2014-2018 Restructuring Program | Maximum | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Capital expenditures | 1,600 | $ 2,200 | |||||||
2014-2018 Restructuring Program | Restructuring Program Costs | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Approved restructuring program cost | 4,100 | $ 3,500 | |||||||
2014-2018 Restructuring Program | Cash Expense | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Approved restructuring program cost | 3,100 | ||||||||
2014-2018 Restructuring Program | Non Cash Expense | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Approved restructuring program cost | $ 1,000 | ||||||||
2014-2018 Restructuring Program | Selling, general and administrative expenses | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Implementation Costs | 62 | $ 114 | 179 | $ 286 | |||||
2014-2018 Restructuring Program | Other current liabilities | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring reserve | 431 | 431 | 431 | ||||||
2014-2018 Restructuring Program | Other liabilities | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring reserve | $ 62 | $ 62 | $ 62 | ||||||
[1] | Includes all charges recorded since program inception on May 6, 2014 through September 30, 2017. |
Schedule of Restructuring Costs
Schedule of Restructuring Costs (Detail) - 2014-2018 Restructuring Program - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 41 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | ||
Restructuring Cost and Reserve [Line Items] | ||||||
Balance at beginning of period | $ 464 | |||||
Charges | $ 113 | $ 187 | 418 | $ 480 | $ 2,117 | [1] |
Cash spent | (83) | (89) | (245) | (249) | ||
Non-cash settlements/adjustments | (48) | $ (120) | (174) | $ (244) | ||
Currency | 30 | |||||
Balance at end of period | 493 | 493 | 493 | |||
Severance and Related Costs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Balance at beginning of period | 464 | |||||
Charges | 250 | |||||
Cash spent | (245) | |||||
Non-cash settlements/adjustments | (6) | |||||
Currency | 30 | |||||
Balance at end of period | $ 493 | 493 | $ 493 | |||
Asset Write-Downs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Charges | 168 | |||||
Non-cash settlements/adjustments | $ (168) | |||||
[1] | Includes all charges recorded since program inception on May 6, 2014 through September 30, 2017. |
Restructuring and Implementatio
Restructuring and Implementation Costs (Detail) - 2014-2018 Restructuring Program - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 41 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | [1] | ||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Costs | $ 113 | $ 187 | $ 418 | $ 480 | $ 2,117 | ||
Implementation Costs | 62 | 114 | 179 | 286 | 948 | ||
Total | 175 | 301 | 597 | 766 | 3,065 | ||
Operating Segments | Latin America Segment | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Costs | 45 | 27 | 76 | 71 | 413 | ||
Implementation Costs | 8 | 15 | 28 | 34 | 137 | ||
Total | 53 | 42 | 104 | 105 | 550 | ||
Operating Segments | Asia Middle East Africa Segment | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Costs | 32 | 9 | 106 | 72 | 413 | ||
Implementation Costs | 11 | 9 | 30 | 27 | 116 | ||
Total | 43 | 18 | 136 | 99 | 529 | ||
Operating Segments | Europe Segment | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Costs | 30 | 76 | 149 | 188 | 798 | ||
Implementation Costs | 18 | 45 | 49 | 78 | 253 | ||
Total | 48 | 121 | 198 | 266 | 1,051 | ||
Operating Segments | North America Segment | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Costs | [2] | 7 | 75 | 79 | 144 | 433 | |
Implementation Costs | [2] | 13 | 30 | 38 | 101 | 233 | |
Total | [2] | 20 | 105 | 117 | 245 | 666 | |
Corporate | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Costs | [3] | (1) | 8 | 5 | 60 | ||
Implementation Costs | [3] | 12 | 15 | 34 | 46 | 209 | |
Total | [3] | $ 11 | $ 15 | $ 42 | $ 51 | $ 269 | |
[1] | Includes all charges recorded since program inception on May 6, 2014 through September 30, 2017. | ||||||
[2] | During 2017 and 2016, our North America region implementation costs included incremental costs that we incurred related to re-negotiating collective bargaining agreements that expired at the end of February 2016 for eight U.S. facilities and related to executing business continuity plans for the North America business. | ||||||
[3] | Includes adjustment for rounding. |
Short-Term Borrowings and Relat
Short-Term Borrowings and Related Weighted-Average Interest Rates (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Short-term Debt [Line Items] | ||
Amount outstanding | $ 4,551 | $ 2,531 |
Commercial Paper | ||
Short-term Debt [Line Items] | ||
Amount outstanding | $ 4,370 | $ 2,371 |
Weighted-average rate | 1.30% | 1.00% |
Bank Loans | ||
Short-term Debt [Line Items] | ||
Amount outstanding | $ 181 | $ 160 |
Weighted-average rate | 10.60% | 10.60% |
Debt and Borrowing Arrangemen50
Debt and Borrowing Arrangements - Additional Information (Detail) € in Millions, SFr in Millions | Apr. 12, 2017USD ($) | Mar. 30, 2017USD ($) | Mar. 30, 2017CHF (SFr) | Mar. 13, 2017CHF (SFr) | Mar. 01, 2017USD ($) | Oct. 13, 2016 | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Jan. 26, 2017EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||||||||||||
Long-term debt repaid | $ 1,468,000,000 | $ 1,757,000,000 | |||||||||||
Loss on early extinguishment of debt | $ 11,000,000 | ||||||||||||
Weighted-average interest rate | 2.00% | 2.00% | 2.20% | 3.70% | |||||||||
Fair value of total debt | $ 19,367,000,000 | $ 19,367,000,000 | $ 17,882,000,000 | ||||||||||
Carrying value of total debt | 18,633,000,000 | 18,633,000,000 | 17,199,000,000 | ||||||||||
Other income recorded in connection with resolution of tax matters | 59,000,000 | ||||||||||||
International Subsidiaries | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Revolving credit facility, maximum borrowing capacity | 1,900,000,000 | 1,900,000,000 | 1,800,000,000 | ||||||||||
Line of credit facility outstanding amount | 181,000,000 | 181,000,000 | $ 160,000,000 | ||||||||||
Revolving Credit Facility | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Revolving credit facility, maximum borrowing capacity | $ 1,500,000,000 | ||||||||||||
Line of credit facility outstanding amount | 0 | 0 | |||||||||||
Line of credit, expiration period | 364 days | ||||||||||||
Revolving credit facility expiration date | Feb. 28, 2018 | ||||||||||||
Revolving Credit Facility, October 11, 2021 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Revolving credit facility, maximum borrowing capacity | 4,500,000,000 | 4,500,000,000 | |||||||||||
Line of credit facility outstanding amount | 0 | $ 0 | |||||||||||
Revolving credit facility expiration date | Oct. 11, 2018 | Oct. 11, 2021 | |||||||||||
Revolving credit facility debt covenant | $ 24,600,000,000 | ||||||||||||
Revolving credit facility debt covenant terms | Minimum shareholders' equity of at least $24.6 billion, excluding accumulated other comprehensive earnings/(losses) and the cumulative effects of any changes in accounting principles. | ||||||||||||
Revolving credit facility debt covenant compliance | At September 30, 2017, we complied with this covenant | ||||||||||||
Total shareholders' equity, excluding accumulated other comprehensive earnings / (losses) | $ 35,900,000,000 | $ 35,900,000,000 | |||||||||||
Minimum | Commercial Paper | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Commercial paper, Maturity period | 2 days | ||||||||||||
Maximum | Commercial Paper | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Commercial paper, Maturity period | 66 days | ||||||||||||
6.500% U.S. dollar-denominated Notes | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, principal amount | $ 488,000,000 | ||||||||||||
Debt instrument, interest rate | 6.50% | ||||||||||||
Long-term debt repaid | $ 504,000,000 | ||||||||||||
Loss on early extinguishment of debt | 11,000,000 | ||||||||||||
Decrease in accrued interest | $ 5,000,000 | ||||||||||||
0.000% Swiss franc-denominated Notes | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, principal amount | SFr | SFr 175 | ||||||||||||
Debt instrument, interest rate | 0.00% | ||||||||||||
Swiss franc notes | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, principal amount | SFr 350 | $ 349,000,000 | |||||||||||
Net proceeds from issuance of notes | $ 349,000,000 | SFr 349 | |||||||||||
1.125% Euro-denominated Notes | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, principal amount | € | € 750 | ||||||||||||
Debt instrument, interest rate | 1.125% | ||||||||||||
0.050% Fixed Rate Notes, Mature on March 30, 2020 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, principal amount | SFr 225 | $ 224,000,000 | 224,000,000 | ||||||||||
Debt instrument, fixed interest rate | 0.05% | ||||||||||||
Debt instrument maturity Year | Mar. 30, 2020 | ||||||||||||
0.617% Fixed Rate Notes, Mature on September 30, 2024 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, principal amount | SFr 125 | $ 125,000,000 | $ 125,000,000 | ||||||||||
Debt instrument, fixed interest rate | 0.617% | ||||||||||||
Debt instrument maturity Year | Sep. 30, 2024 |
Interest and Other Expense Net
Interest and Other Expense Net Within Results of Continuing Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||||
Interest expense, debt | $ 89 | $ 129 | $ 295 | $ 400 |
Loss on debt extinguishment | 11 | |||
Loss related to interest rate swaps | 97 | |||
Other (income)/expense, net | (70) | 16 | (44) | 43 |
Interest and other expense, net | $ 19 | $ 145 | $ 262 | $ 540 |
Fair Value of Derivative Instru
Fair Value of Derivative Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | $ 154 | $ 312 |
Liability Derivatives | 647 | 278 |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 34 | 144 |
Liability Derivatives | 423 | 49 |
Derivatives Designated as Hedging Instruments | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 19 | |
Liability Derivatives | 2 | 8 |
Derivatives Designated as Hedging Instruments | Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 1 | 17 |
Liability Derivatives | 22 | |
Derivatives Designated as Hedging Instruments | Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 33 | 108 |
Liability Derivatives | 421 | 19 |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 120 | 168 |
Liability Derivatives | 224 | 229 |
Derivatives Not Designated as Hedging Instruments | Currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 70 | 29 |
Liability Derivatives | 45 | 43 |
Derivatives Not Designated as Hedging Instruments | Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 35 | 112 |
Liability Derivatives | 169 | 167 |
Derivatives Not Designated as Hedging Instruments | Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives | 15 | 27 |
Liability Derivatives | $ 10 | $ 19 |
Derivative Instruments Fair Val
Derivative Instruments Fair Value and Measurement Inputs (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Derivative fair value net asset (liability) | $ (493) | $ 34 |
Currency exchange contracts | ||
Derivative [Line Items] | ||
Derivative fair value net asset (liability) | 23 | (3) |
Commodity contracts | ||
Derivative [Line Items] | ||
Derivative fair value net asset (liability) | (133) | (60) |
Interest rate contracts | ||
Derivative [Line Items] | ||
Derivative fair value net asset (liability) | (383) | 97 |
Quoted Prices In Active Markets For Identical Assets (Level 1) | ||
Derivative [Line Items] | ||
Derivative fair value net asset (liability) | (133) | (86) |
Quoted Prices In Active Markets For Identical Assets (Level 1) | Commodity contracts | ||
Derivative [Line Items] | ||
Derivative fair value net asset (liability) | (133) | (86) |
Significant Other Observable Inputs (Level 2) | ||
Derivative [Line Items] | ||
Derivative fair value net asset (liability) | (360) | 120 |
Significant Other Observable Inputs (Level 2) | Currency exchange contracts | ||
Derivative [Line Items] | ||
Derivative fair value net asset (liability) | 23 | (3) |
Significant Other Observable Inputs (Level 2) | Commodity contracts | ||
Derivative [Line Items] | ||
Derivative fair value net asset (liability) | 26 | |
Significant Other Observable Inputs (Level 2) | Interest rate contracts | ||
Derivative [Line Items] | ||
Derivative fair value net asset (liability) | $ (383) | $ 97 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss related to interest rate swaps | $ (97,000,000) | |||
Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedged forecasted transactions | 6 years 1 month | |||
Interest rate contracts | Cash Flow Hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss related to interest rate swaps | $ (97,000,000) | |||
Expected transfers of unrealized gains (losses) to earnings, within next 12 months | $ (1,000,000) | |||
Commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedged forecasted transactions | 3 months | |||
Commodity contracts | Cash Flow Hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Expected transfers of unrealized gains (losses) to earnings, within next 12 months | $ (11,000,000) | |||
Currency exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Hedged forecasted transactions | 3 months | |||
Currency exchange contracts | Cash Flow Hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Expected transfers of unrealized gains (losses) to earnings, within next 12 months | $ (2,000,000) | |||
Quoted Prices In Active Markets For Identical Assets (Level 1) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative liabilities after effects of netting | 0 | $ 2,000,000 | ||
Quoted Prices In Active Markets For Identical Assets (Level 1) | Exchange Traded Options | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative assets after effects of netting | 65,000,000 | 48,000,000 | ||
Quoted Prices In Active Markets For Identical Assets (Level 1) | Exchange Traded Options | Other current assets | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Margin deposits related to exchange traded derivatives | 198,000,000 | 133,000,000 | ||
Significant Other Observable Inputs (Level 2) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative assets after effects of netting | 25,000,000 | 162,000,000 | ||
Derivative liabilities after effects of netting | $ 409,000,000 | $ 40,000,000 |
Notional Values of Derivative I
Notional Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Net investment hedge | Euro notes | ||
Derivative [Line Items] | ||
Notional Amount | $ 3,975 | $ 4,012 |
Net investment hedge | Pound sterling notes | ||
Derivative [Line Items] | ||
Notional Amount | 454 | 419 |
Net investment hedge | Swiss franc notes | ||
Derivative [Line Items] | ||
Notional Amount | 1,704 | 1,447 |
Currency exchange contracts | Intercompany loans and forecasted interest payments | ||
Derivative [Line Items] | ||
Notional Amount | 3,649 | 3,343 |
Currency exchange contracts | Forecasted transactions | ||
Derivative [Line Items] | ||
Notional Amount | 2,066 | 1,452 |
Commodity contracts | ||
Derivative [Line Items] | ||
Notional Amount | 1,137 | 837 |
Interest rate contracts | ||
Derivative [Line Items] | ||
Notional Amount | $ 6,517 | $ 6,365 |
Schedule of Cash Flow Hedges Ef
Schedule of Cash Flow Hedges Effect on Accumulated Other Comprehensive Earnings/(Losses), Net of Taxes (Detail) - Cash Flow Hedges - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Accumulated (loss)/gain at beginning of period | $ (91) | $ (36) | $ (121) | $ (45) |
Transfer of realized (gains)/losses in fair value to earnings | (13) | (2) | (10) | 64 |
Unrealized gain/(loss) in fair value | (6) | 4 | 21 | (53) |
Accumulated (loss)/gain at end of period | $ (110) | $ (34) | $ (110) | $ (34) |
Effects of Cash Flow Hedges (De
Effects of Cash Flow Hedges (Detail) - Cash Flow Hedges - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains / (losses) reclassified from AOCI into earnings | $ 13 | $ 2 | $ 10 | $ (64) |
Gains / (losses) recognized in OCI | (6) | 4 | 21 | (53) |
Currency exchange contracts | Forecasted transactions | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains / (losses) reclassified from AOCI into earnings | (3) | (6) | (2) | (3) |
Gains / (losses) recognized in OCI | (11) | (11) | (37) | (21) |
Commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains / (losses) reclassified from AOCI into earnings | 16 | 8 | 12 | (1) |
Gains / (losses) recognized in OCI | 25 | 10 | 31 | 19 |
Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains / (losses) reclassified from AOCI into earnings | (60) | |||
Gains / (losses) recognized in OCI | $ (20) | $ 5 | $ 27 | $ (51) |
Fair Value Hedges (Detail)
Fair Value Hedges (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interest Rate Swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain / (loss) recognized in income on fair value of hedges | $ (2) | $ (11) | $ (4) | $ (2) |
Long-term Debt | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain / (loss) recognized in income on fair value of hedges | $ 2 | $ 11 | $ 4 | $ 2 |
Economic Hedges (Detail)
Economic Hedges (Detail) - Economic Hedging - Derivatives Not Designated as Hedging Instruments - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain / (Loss) Recognized in Earnings | $ (30) | $ (14) | $ (183) | $ (73) |
Commodity contracts | Cost of Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain / (Loss) Recognized in Earnings | (17) | (13) | (176) | (26) |
Intercompany loans and forecasted interest payments | Currency exchange contracts | Interest and other expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain / (Loss) Recognized in Earnings | (13) | 7 | (8) | 18 |
Forecasted transactions | Currency exchange contracts | Interest and other expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain / (Loss) Recognized in Earnings | 1 | 2 | (1) | 10 |
Forecasted transactions | Currency exchange contracts | Cost of Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain / (Loss) Recognized in Earnings | $ (1) | (14) | (91) | |
Forecasted transactions | Currency exchange contracts | Selling, general and administrative expenses | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain / (Loss) Recognized in Earnings | $ 4 | $ 2 | $ 16 |
Hedges of Net Investments in In
Hedges of Net Investments in International Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Euro notes | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains / (losses) recognized in OCI | $ (83) | $ (38) | $ (279) | $ (110) |
Pound sterling notes | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains / (losses) recognized in OCI | (8) | 21 | (23) | 107 |
Swiss franc notes | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains / (losses) recognized in OCI | $ 12 | $ (4) | $ (53) | $ (33) |
Components of Net Periodic Pens
Components of Net Periodic Pension Cost (Detail) - Pension Plans - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
U.S. Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 12 | $ 15 | $ 34 | $ 42 |
Interest cost | 16 | 15 | 47 | 46 |
Expected return on plan assets | (25) | (24) | (75) | (72) |
Net loss from experience differences | 10 | 12 | 27 | 30 |
Prior service cost/(credit) | 1 | 1 | ||
Settlement losses/(gains) and other expenses | 6 | 9 | 27 | 25 |
Net periodic benefit cost | 19 | 27 | 61 | 72 |
Non-U.S. Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 40 | 37 | 117 | 114 |
Interest cost | 51 | 57 | 148 | 179 |
Expected return on plan assets | (110) | (105) | (322) | (326) |
Net loss from experience differences | 43 | 31 | 124 | 93 |
Prior service cost/(credit) | (1) | (2) | (2) | |
Settlement losses/(gains) and other expenses | 2 | (1) | ||
Net periodic benefit cost | $ 23 | $ 20 | $ 67 | $ 57 |
Benefit Plans - Additional Info
Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Asset impairment and exit costs | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlement losses/(gains) and other expenses | $ 1 | $ 3 | $ 12 | $ 12 |
Non-U.S. Pension Plans | Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlement losses/(gains) and other expenses | 2 | (1) | ||
Employer contribution | 408 | |||
Employer non-recurring contribution | 250 | |||
Estimated future employer contributions | 47 | 47 | ||
U.S. Pension Plans | Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlement losses/(gains) and other expenses | 6 | $ 9 | 27 | $ 25 |
Employer contribution | 19 | |||
Estimated future employer contributions | $ 7 | $ 7 |
Components of Net Periodic Post
Components of Net Periodic Postretirement Health Care Costs (Detail) - Postretirement Benefit Plans - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | $ 1 | $ 3 | $ 5 | $ 9 | |
Interest cost | 4 | 6 | 11 | 16 | |
Net loss from experience differences | 4 | 2 | 11 | 5 | |
Prior service credit | [1] | (10) | $ (11) | (30) | (14) |
Net periodic benefit cost | $ (1) | $ (3) | $ 16 | ||
[1] | For the three and nine months ended September 30, 2017, amortization of prior service credit includes an $8 million and $24 million gain respectively, related to a change in the eligibility requirement and a change in benefits to Medicare-eligible participants. |
Components of Net Periodic Po64
Components of Net Periodic Postretirement Health Care Costs (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Gain related to a change in the eligibility requirement and a change in benefits to Medicare-eligible participants | $ 8 | $ 24 |
Components of Net Postemploymen
Components of Net Postemployment Costs (Detail) - Postemployment Benefit Plans - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 1 | $ 2 | $ 4 | $ 5 |
Interest cost | 1 | 1 | 3 | 4 |
Amortization of net gains | (1) | (3) | ||
Net periodic benefit cost | $ 1 | $ 3 | $ 4 | $ 9 |
Stock Option Activity (Detail)
Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | ||
Shares subject to option | |||
Beginning balance | 53,601,612 | ||
Options granted | 6,041,440 | ||
Options exercised | [1] | (7,837,372) | |
Options cancelled | (1,536,249) | ||
Ending balance | 50,269,431 | 53,601,612 | |
Weighted-average exercise price | |||
Beginning balance | $ 28.02 | ||
Options granted | 43.21 | ||
Options exercised | [1] | 26.49 | |
Options cancelled | 38.96 | ||
Ending balance | $ 29.75 | $ 28.02 | |
Average remaining contractual term | |||
Ending balance | 6 years | 6 years | |
Aggregate intrinsic value | |||
Aggregate intrinsic value | $ 563 | $ 874 | |
Options exercised | [1] | $ 142 | |
Annual grant to eligible employees | |||
Shares subject to option | |||
Options granted | 6,012,140 | ||
Weighted-average exercise price | |||
Options granted | $ 43.20 | ||
Additional options issued | |||
Shares subject to option | |||
Options granted | 29,300 | ||
Weighted-average exercise price | |||
Options granted | $ 44.49 | ||
[1] | Cash received from options exercised was $43 million in the three months and $213 million in the nine months ended September 30, 2017. The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises totaled $6 million in the three months and $24 million in the nine months ended September 30, 2017. |
Stock Option Activity (Parenthe
Stock Option Activity (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Cash received from options exercised | $ 43 | $ 213 |
Actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the option exercises | $ 6 | $ 24 |
Performance Share Unit, Deferre
Performance Share Unit, Deferred Stock Unit, and Historically Granted Restricted Stock Activity (Detail) $ / shares in Units, $ in Millions | 9 Months Ended | |
Sep. 30, 2017USD ($)$ / sharesshares | ||
Number of Shares | ||
Beginning balance | shares | 7,593,627 | |
Shares granted | shares | 2,478,561 | |
Vested | shares | (2,522,072) | [1] |
Forfeited | shares | (675,920) | [1] |
Ending balance | shares | 6,874,196 | |
Weighted-average grant date fair value per share | ||
Beginning balance | $ / shares | $ 36.90 | [2] |
Shares granted | $ / shares | 41.11 | [2] |
Vested | $ / shares | 33.70 | [1],[2] |
Forfeited | $ / shares | 38.43 | [1],[2] |
Ending balance | $ / shares | $ 39.44 | [2] |
Weighted-Average Aggregate Fair Value | ||
Total shares granted | $ | $ 102 | [2] |
Vested | $ | $ 84 | [1],[2] |
Performance Share Units | ||
Number of Shares | ||
Shares granted | shares | 1,087,010 | |
Weighted-average grant date fair value per share | ||
Shares granted | $ / shares | $ 43.14 | [2] |
Deferred Stock Units | ||
Number of Shares | ||
Shares granted | shares | 845,550 | |
Weighted-average grant date fair value per share | ||
Shares granted | $ / shares | $ 43.20 | [2] |
Additional shares granted | ||
Number of Shares | ||
Shares granted | shares | 546,001 | [3] |
Weighted-average grant date fair value per share | ||
Shares granted | $ / shares | $ 33.81 | [2],[3] |
Annual grant to eligible employees | ||
Grant date | ||
Grant date | Feb. 16, 2017 | |
[1] | Includes performance share units, deferred stock units and historically granted restricted stock. The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled less than $1 million in the three months and $7 million in the nine months ended September 30, 2017. | |
[2] | Prior-year weighted average fair value per share has been revised. | |
[3] | Includes performance share units and deferred stock units. |
Performance Share Unit, Defer69
Performance Share Unit, Deferred Stock Unit, and Historically Granted Restricted Stock Activity (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Actual tax benefit realized for the tax deductions from the shares vested | $ 7 | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Actual tax benefit realized for the tax deductions from the shares vested | $ 1 |
Stock Plans - Additional Inform
Stock Plans - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions | Jul. 29, 2015 | Oct. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2013 |
Class of Stock [Line Items] | ||||||
Cost of shares repurchased | $ 1,817,000,000 | $ 2,601,000,000 | ||||
Repurchase of Common Stock | $ 1,786,000,000 | $ 1,727,000,000 | ||||
Common Class A | ||||||
Class of Stock [Line Items] | ||||||
Number of shares repurchased | 42 | |||||
Average cost of shares repurchased | $ 43.67 | |||||
Cost of shares repurchased | $ 1,817,000,000 | |||||
Stock repurchase remaining amount | 1,000,000,000 | |||||
Common Class A | Share Repurchase Program amended July 29, 2015 | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase value | $ 13,700,000,000 | |||||
Increase in share repurchase value | $ 6,000,000,000 | |||||
Stock repurchase expiration date | Dec. 31, 2018 | |||||
Common Class A | Prior to January 1, 2016 | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase value | $ 10,800,000,000 | $ 7,700,000,000 | ||||
Subsequent Event | Common Class A | ||||||
Class of Stock [Line Items] | ||||||
Repurchase of Common Stock | $ 31,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) BRL in Millions, ₨ in Billions | Sep. 30, 2017USD ($) | Sep. 30, 2017BRL | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2017INR (₨) |
Loss Contingencies [Line Items] | ||||||
Income due to reversal of accrued liability under tax indemnity | $ 58,000,000 | |||||
Contingency provision accruals | $ 212,000,000 | BRL 667 | ||||
Indian Department of Central Excise Authority | Cadbury | ||||||
Loss Contingencies [Line Items] | ||||||
Amount for formal claim of notice presented for unpaid excise tax, as of the balance sheet date | 57,000,000 | $ 57,000,000 | $ 57,000,000 | ₨ 3.7 | ||
Indian Department of Central Excise Authority | Cadbury | Show case notice | ||||||
Loss Contingencies [Line Items] | ||||||
Amount for formal claim of notice presented for unpaid excise tax, as of the balance sheet date | 75,000,000 | 75,000,000 | 75,000,000 | 4.9 | ||
Indian Department of Central Excise Authority | Cadbury | Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Tax penalties and interest expense | 90,000,000 | 90,000,000 | $ 90,000,000 | ₨ 5.8 | ||
Selling, general and administrative expenses | ||||||
Loss Contingencies [Line Items] | ||||||
Income due to reversal of accrued liability under tax indemnity | 46,000,000 | |||||
Contingency provision accruals | 153,000,000 | |||||
Interest and other expense, net | ||||||
Loss Contingencies [Line Items] | ||||||
Income due to reversal of accrued liability under tax indemnity | $ 12,000,000 | |||||
Contingency provision accruals | $ 59,000,000 | |||||
Selling, general and administrative expenses and interest and other expense, net | ||||||
Loss Contingencies [Line Items] | ||||||
Income due to reversal of accrued liability under tax indemnity | $ 3,000,000 | |||||
U.S. Commodity Futures Trading Commission ("CFTC") | ||||||
Loss Contingencies [Line Items] | ||||||
Loss contingency, filling date | April 1, 2015 | |||||
Loss contingency, damages sought | $ 1,000,000 | |||||
U.S. Commodity Futures Trading Commission ("CFTC") | Each Additional Violation of the Commodity Exchange Act | ||||||
Loss Contingencies [Line Items] | ||||||
Loss contingency, damages sought | $ 140,000 |
Reclassifications from Accumu72
Reclassifications from Accumulated Other Comprehensive Income - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Net loss amounts reclassified from accumulated other comprehensive earnings/(losses) to net earnings (net of tax) | $ 28 | $ 28 | $ 112 | $ 206 |
Components of Accumulated Other
Components of Accumulated Other Comprehensive Earnings /(Losses) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balances | $ 25,215 | $ 28,100 | $ 28,100 | |||
Cost of sales | $ (3,978) | $ (3,908) | (11,529) | (11,614) | ||
Interest rate contracts | (19) | (145) | (262) | (540) | ||
Tax benefit on reclassifications | (272) | (40) | (510) | (207) | ||
Other comprehensive earnings/(losses) | 308 | 67 | 1,229 | 284 | (1,153) | |
Less: (gain)/loss attributable to noncontrolling interests | (8) | 2 | (24) | 3 | ||
Balances | 26,099 | 26,099 | 25,215 | |||
Other comprehensive earnings/(losses) attributable to Mondelez International | 300 | 69 | 1,205 | 287 | ||
Currency Translation Adjustments | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balances | (8,007) | (7,902) | (8,914) | (8,006) | (8,006) | |
Currency translation adjustments | 291 | 15 | 1,055 | 53 | ||
Equity method investment exchange | 57 | |||||
Tax benefit/(expense) | 46 | 13 | 205 | 21 | ||
Other comprehensive earnings/(losses) | 337 | 28 | 1,260 | 131 | ||
Less: (gain)/loss attributable to noncontrolling interests | (8) | 2 | (24) | 3 | ||
Balances | (7,678) | (7,872) | (7,678) | (7,872) | (8,914) | |
Pension and Other Benefits | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balances | (2,119) | (1,830) | (2,087) | (1,934) | (1,934) | |
Net actuarial (loss)/gain arising during period | (28) | (19) | 24 | |||
Tax benefit/(expense) on net actuarial loss | 25 | 25 | (9) | |||
Currency impact | (50) | 7 | (171) | 42 | ||
Other comprehensive earnings/(losses) | (10) | 37 | (42) | 141 | ||
Balances | (2,129) | (1,793) | (2,129) | (1,793) | (2,087) | |
Derivative Cash Flow Hedges | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balances | (91) | (36) | (121) | (46) | (46) | |
Net derivative gains/(losses) | 2 | 6 | 31 | (77) | ||
Tax benefit on net derivative gain/(loss) | (5) | (2) | (1) | 25 | ||
Currency impact | (3) | (9) | (1) | |||
Other comprehensive earnings/(losses) | (19) | 2 | 11 | 12 | ||
Balances | (110) | (34) | (110) | (34) | (121) | |
Accumulated Other Comprehensive Income (Loss) | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balances | (10,217) | (9,768) | (11,122) | (9,986) | (9,986) | |
Other comprehensive earnings/(losses) | 1,205 | (1,136) | ||||
Balances | (9,917) | (9,699) | (9,917) | (9,699) | $ (11,122) | |
Reclassification out of Accumulated Other Comprehensive Income | Pension and Other Benefits | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Amortization of experience losses and prior service costs | [1] | 47 | 30 | 130 | 93 | |
Settlement losses and other expenses | [1] | 6 | 10 | 24 | 25 | |
Tax benefit on reclassifications | [2] | (10) | (10) | (31) | (34) | |
Reclassification out of Accumulated Other Comprehensive Income | Derivative Cash Flow Hedges | Forecasted transactions | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Cost of sales | [3] | 2 | 7 | 2 | 3 | |
Reclassification out of Accumulated Other Comprehensive Income | Derivative Cash Flow Hedges | Currency exchange contracts | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Cost of sales | [3] | (21) | (8) | (15) | 7 | |
Reclassification out of Accumulated Other Comprehensive Income | Derivative Cash Flow Hedges | Commodity contracts | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Interest rate contracts | [4] | 96 | ||||
Reclassification out of Accumulated Other Comprehensive Income | Derivative Cash Flow Hedges | Interest rate contracts | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Tax benefit on reclassifications | [2] | $ 6 | $ (1) | $ 3 | $ (41) | |
[1] | These reclassified losses are included in the components of net periodic benefit costs disclosed in Note 9, Benefit Plans. | |||||
[2] | Taxes reclassified to earnings are recorded within the provision for income taxes. | |||||
[3] | These reclassified gains or losses are recorded within cost of sales. | |||||
[4] | These reclassified losses are recorded within interest and other expense, net. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | |||||
Estimated effective tax rate | 25.80% | 13.60% | 20.80% | ||
Effective tax rate | 23.40% | 7.20% | 21.30% | ||
Gains on business transactions and divestitures | $ 187 | $ 184 | |||
Net favorable tax audit settlements and expirations of statutes of limitations | $ 35 | 74 | $ 73 | ||
Benefit relating to the U.S. domestic production activities deduction | $ 16 | ||||
Total unfavorable discrete items | 60 | 109 | |||
Australian Grocery Business | |||||
Income Tax Contingency [Line Items] | |||||
Tax expense on gains from divestitures | 27 | ||||
Gains on business transactions and divestitures | $ 187 | ||||
U.K | |||||
Income Tax Contingency [Line Items] | |||||
Benefit from reduction of net deferred tax liabilities in tax legislation enacted | $ 17 | $ 17 |
Basic and Diluted Earnings per
Basic and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Earnings Per Share [Line Items] | |||||
Net earnings | $ 993 | $ 548 | $ 2,126 | $ 1,576 | $ 1,669 |
Noncontrolling interest (earnings) | (1) | (6) | (10) | ||
Net earnings attributable to Mondelez International | $ 992 | $ 548 | $ 2,120 | $ 1,566 | |
Weighted-average shares for basic EPS | 1,507 | 1,557 | 1,518 | 1,561 | |
Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares | 17 | 19 | 19 | 18 | |
Weighted-average shares for diluted EPS | 1,524 | 1,576 | 1,537 | 1,579 | |
Basic earnings per share attributable to Mondelez International | $ 0.66 | $ 0.35 | $ 1.40 | $ 1 | |
Diluted earnings per share attributable to Mondelez International | $ 0.65 | $ 0.35 | $ 1.38 | $ 0.99 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Mondelez International stock options excluded from the calculation of diluted EPS | 9 | 4.3 | 8 | 7.7 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2017Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable operating segments | 4 |
Net Revenues by Segment (Detail
Net Revenues by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 6,530 | $ 6,396 | $ 18,930 | $ 19,153 |
Latin America Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 908 | 868 | 2,666 | 2,528 |
Asia Middle East Africa Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 1,405 | 1,443 | 4,290 | 4,404 |
Europe Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 2,442 | 2,332 | 6,978 | 7,073 |
North America Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 1,775 | $ 1,753 | $ 4,996 | $ 5,148 |
Operating Income by Segment (De
Operating Income by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
General corporate expenses | $ (54) | $ (89) | $ (196) | $ (216) |
Amortization of intangibles | (45) | (44) | (133) | (132) |
Net gain on divestitures | 187 | 184 | ||
Operating income | 1,181 | 702 | 2,662 | 2,062 |
Interest and other expense, net | (19) | (145) | (262) | (540) |
Earnings before income taxes | 1,162 | 557 | 2,400 | 1,522 |
Cost of Sales | ||||
Segment Reporting Information [Line Items] | ||||
Unrealized gains/(losses) on hedging activities (mark-to-market impacts) | 28 | (12) | (69) | (49) |
Latin America Segment | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 255 | 92 | 469 | 191 |
Asia Middle East Africa Segment | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 82 | 165 | 425 | 504 |
Europe Segment | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 410 | 316 | 1,158 | 924 |
North America Segment | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | $ 318 | $ 274 | $ 824 | $ 840 |
Net Revenues by Consumer Sector
Net Revenues by Consumer Sector (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 6,530 | $ 6,396 | $ 18,930 | $ 19,153 |
Biscuits | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 2,842 | 2,687 | 7,969 | 7,931 |
Chocolate | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 1,997 | 1,882 | 5,679 | 5,476 |
Gum & Candy | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 934 | 989 | 2,719 | 2,979 |
Beverages | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 282 | 308 | 1,031 | 1,103 |
Cheese & Grocery | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 475 | 530 | 1,532 | 1,664 |
Latin America Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 908 | 868 | 2,666 | 2,528 |
Latin America Segment | Biscuits | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 210 | 191 | 580 | 551 |
Latin America Segment | Chocolate | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 207 | 185 | 660 | 562 |
Latin America Segment | Gum & Candy | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 247 | 247 | 701 | 713 |
Latin America Segment | Beverages | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 155 | 164 | 477 | 466 |
Latin America Segment | Cheese & Grocery | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 89 | 81 | 248 | 236 |
Asia Middle East Africa Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 1,405 | 1,443 | 4,290 | 4,404 |
Asia Middle East Africa Segment | Biscuits | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 444 | 416 | 1,198 | 1,179 |
Asia Middle East Africa Segment | Chocolate | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 520 | 508 | 1,460 | 1,393 |
Asia Middle East Africa Segment | Gum & Candy | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 228 | 239 | 695 | 745 |
Asia Middle East Africa Segment | Beverages | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 104 | 107 | 466 | 513 |
Asia Middle East Africa Segment | Cheese & Grocery | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 109 | 173 | 471 | 574 |
Europe Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 2,442 | 2,332 | 6,978 | 7,073 |
Europe Segment | Biscuits | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 761 | 677 | 2,130 | 2,039 |
Europe Segment | Chocolate | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 1,196 | 1,124 | 3,365 | 3,368 |
Europe Segment | Gum & Candy | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 185 | 218 | 582 | 688 |
Europe Segment | Beverages | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 23 | 37 | 88 | 124 |
Europe Segment | Cheese & Grocery | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 277 | 276 | 813 | 854 |
North America Segment | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 1,775 | 1,753 | 4,996 | 5,148 |
North America Segment | Biscuits | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 1,427 | 1,403 | 4,061 | 4,162 |
North America Segment | Chocolate | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | 74 | 65 | 194 | 153 |
North America Segment | Gum & Candy | ||||
Segment Reporting Information [Line Items] | ||||
Net revenues | $ 274 | $ 285 | $ 741 | $ 833 |