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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934For the quarterly period ended March 31,2023OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIE
2、SEXCHANGE ACT OF 1934For the transition period from to Commission file number 1-16483Mondelz International,Inc.(Exact name of registrant as specified in its charter)Virginia52-2284372(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)905 West Fulton Mark
3、et,Suite 200Chicago,Illinois60607(Address of principal executive offices)(Zip Code)(Registrants telephone number,including area code)(847)943-4000Not Applicable(Former name,former address and former fiscal year,if changed since last report)Securities registered pursuant to Section 12(b)of the Act:Ti
4、tle of each classTrading Symbol(s)Name of each exchange on which registeredClass A Common Stock,no par valueMDLZThe Nasdaq Global Select Market1.625%Notes due 2027MDLZ27The Nasdaq Stock Market LLC0.250%Notes due 2028MDLZ28The Nasdaq Stock Market LLC0.750%Notes due 2033MDLZ33The Nasdaq Stock Market L
5、LC2.375%Notes due 2035MDLZ35The Nasdaq Stock Market LLC4.500%Notes due 2035MDLZ35AThe Nasdaq Stock Market LLC1.375%Notes due 2041MDLZ41The Nasdaq Stock Market LLC3.875%Notes due 2045MDLZ45The Nasdaq Stock Market LLCIndicate by check mark whether the registrant(1)has filed all reports required to be
6、filed by Section 13 or 15(d)of the Securities Exchange Act of 1934during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filingrequirements for the past 90 days.Yes x No Indicate by check mark whether the regist
7、rant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit suchfiles).Yes x No Table of ContentsIndicate by c
8、heck mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or anemerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”inRule 12b-2
9、 of the Exchange Act.Large accelerated filerx Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised fi
10、nancial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No xAt April 24,2023,there were 1,361,853,497 shares of the registrants Class A Common Stock outstandi
11、ng.Table of ContentsMondelz International,Inc.Table of Contents Page No.PART I-FINANCIAL INFORMATIONItem 1.Financial Statements(Unaudited)Condensed Consolidated Statements of Earnings for the Three Months Ended March 31,2023 and 20221Condensed Consolidated Statements of Comprehensive Earnings for th
12、e Three Months Ended March 31,2023 and 20222Condensed Consolidated Balance Sheets at March 31,2023 and December 31,20223Condensed Consolidated Statements of Equity for the Three Months Ended March 31,2023 and 20224Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31,20
13、23 and 20225Notes to Condensed Consolidated Financial Statements6Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations30Item 3.Quantitative and Qualitative Disclosures about Market Risk50Item 4.Controls and Procedures50PART II-OTHER INFORMATIONItem 1.Legal Proce
14、edings52Item 1A.Risk Factors52Item 2.Unregistered Sales of Equity Securities and Use of Proceeds52Item 6.Exhibits53Signature54In this report,for all periods presented,“we,”“us,”“our,”“the Company”and“Mondelz International”refer to Mondelz International,Inc.andsubsidiaries.References to“Common Stock”
15、refer to our Class A Common Stock.Table of ContentsPART I FINANCIAL INFORMATIONItem 1.Financial StatementsMondelz International,Inc.and SubsidiariesCondensed Consolidated Statements of Earnings(in millions of U.S.dollars,except per share data)(Unaudited)For the Three Months Ended March 31,20232022Ne
16、t revenues$9,166$7,764 Cost of sales5,720 4,781 Gross profit3,446 2,983 Selling,general and administrative expenses1,855 1,693 Asset impairment and exit costs47 164 Amortization of intangible assets39 32 Operating income1,505 1,094 Benefit plan non-service income(19)(33)Interest and other expense,ne
17、t95 168 Gain on marketable securities(796)Earnings before income taxes2,225 959 Income tax provision(658)(210)Gain/(loss)on equity method investment transactions487(5)Equity method investment net earnings35 117 Net earnings2,089 861 Noncontrolling interest earnings(8)(6)Net earnings attributable to
18、Mondelz International$2,081$855 Per share data:Basic earnings per share attributable to Mondelz International$1.52$0.62 Diluted earnings per share attributable to Mondelz International$1.52$0.61 See accompanying notes to the condensed consolidated financial statements.1Table of ContentsMondelz Inter
19、national,Inc.and SubsidiariesCondensed Consolidated Statements of Comprehensive Earnings(in millions of U.S.dollars)(Unaudited)For the Three Months Ended March 31,20232022Net earnings$2,089$861 Other comprehensive earnings/(losses),net of tax:Currency translation adjustment151 50 Pension and other b
20、enefit plans(6)93 Derivative cash flow hedges(10)52 Total other comprehensive earnings/(losses)135 195 Comprehensive earnings/(losses)2,224 1,056 less:Comprehensive earnings/(losses)attributable to noncontrolling interests10 2 Comprehensive earnings/(losses)attributable to Mondelz International$2,21
21、4$1,054 See accompanying notes to the condensed consolidated financial statements.2Table of ContentsMondelz International,Inc.and SubsidiariesCondensed Consolidated Balance Sheets(in millions of U.S.dollars,except share data)(Unaudited)March 31,2023December 31,2022ASSETSCash and cash equivalents$1,9
22、17$1,923 Trade receivables(net of allowances of$60 at March 31,2023 and$45 at December 31,2022)3,502 3,088 Other receivables(net of allowances of$65 at March 31,2023 and$59 at December 31,2022)810 819 Inventories,net3,627 3,381 Other current assets2,815 880 Total current assets12,671 10,091 Property
23、,plant and equipment,net9,131 9,020 Operating lease right of use assets657 660 Goodwill23,604 23,450 Intangible assets,net19,810 19,710 Prepaid pension assets1,065 1,016 Deferred income taxes451 473 Equity method investments3,397 4,879 Other assets2,000 1,862 TOTAL ASSETS$72,786$71,161 LIABILITIESSh
24、ort-term borrowings$2,461$2,299 Current portion of long-term debt1,185 383 Accounts payable7,885 7,562 Accrued marketing2,668 2,370 Accrued employment costs785 949 Other current liabilities3,547 3,168 Total current liabilities18,531 16,731 Long-term debt18,556 20,251 Long-term operating lease liabil
25、ities508 514 Deferred income taxes3,648 3,437 Accrued pension costs387 403 Accrued postretirement health care costs214 217 Other liabilities2,668 2,688 TOTAL LIABILITIES44,512 44,241 Commitments and Contingencies(Note 12)EQUITYCommon Stock,no par value(5,000,000,000 shares authorized and 1,996,537,7
26、78 shares issued at March 31,2023 and December 31,2022)Additional paid-in capital32,112 32,143 Retained earnings33,040 31,481 Accumulated other comprehensive losses(10,814)(10,947)Treasury stock,at cost(634,260,938 shares at March 31,2023 and 630,646,687 shares at December 31,2022)(26,110)(25,794)To
27、tal Mondelz International Shareholders Equity28,228 26,883 Noncontrolling interest46 37 TOTAL EQUITY28,274 26,920 TOTAL LIABILITIES AND EQUITY$72,786$71,161 See accompanying notes to the condensed consolidated financial statements.3Table of ContentsMondelz International,Inc.and SubsidiariesCondensed
28、 Consolidated Statements of Equity(in millions of U.S.dollars,except per share data)(Unaudited)Mondelz International Shareholders Equity Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Earnings/(Losses)Treasury StockNon-controlling InterestTotal EquityThree Mon
29、ths Ended March 31,2023Balances at January 1,2023$32,143$31,481$(10,947)$(25,794)$37$26,920 Comprehensive earnings/(losses):Net earnings 2,081 8 2,089 Other comprehensive earnings/(losses),net of income taxes 133 2 135 Exercise of stock options and issuance of other stock awards(31)(8)93 54 Common S
30、tock repurchased (409)(409)Cash dividends declared($0.390 per share)(528)(528)Dividends paid on noncontrolling interest and other activities 14 (1)13 Balances at March 31,2023$32,112$33,040$(10,814)$(26,110)$46$28,274 Three Months Ended March 31,2022Balances at January 1,2022$32,097$30,806$(10,624)$
31、(24,010)$54$28,323 Comprehensive earnings/(losses):Net earnings 855 6 861 Other comprehensive earnings/(losses),net of income taxes 199 (4)195 Exercise of stock options and issuance of other stock awards(44)(11)115 60 Common Stock repurchased (735)(735)Cash dividends declared($0.315 per share)(487)(
32、487)Dividends paid on noncontrolling interest and other activities (1)(1)Balances at March 31,2022$32,053$31,163$(10,425)$(24,630)$55$28,216 See accompanying notes to the condensed consolidated financial statements.4Table of ContentsMondelz International,Inc.and SubsidiariesCondensed Consolidated St
33、atements of Cash Flows(in millions of U.S.dollars)(Unaudited)For the Three Months Ended March 31,20232022CASH PROVIDED BY/(USED IN)OPERATING ACTIVITIESNet earnings$2,089$861 Adjustments to reconcile net earnings to operating cash flows:Depreciation and amortization303 275 Stock-based compensation ex
34、pense38 24 Deferred income tax provision/(benefit)199(70)Asset impairments and accelerated depreciation18 155 Loss on early extinguishment of debt 38(Gain)/loss on equity method investment transactions(487)5 Equity method investment net earnings(35)(117)Distributions from equity method investments10
35、2 107 Unrealized gain on derivative contracts(67)(13)Unrealized gain on marketable securities(787)Non-cash items,net25 Change in assets and liabilities,net of acquisitions and divestitures:Receivables,net(590)(517)Inventories,net(232)(81)Accounts payable216 397 Other current assets(137)(104)Other cu
36、rrent liabilities517 230 Change in pension and postretirement assets and liabilities,net(49)(59)Net cash provided by operating activities1,123 1,131 CASH PROVIDED BY/(USED IN)INVESTING ACTIVITIESCapital expenditures(223)(167)Acquisitions,net of cash received1(1,418)Proceeds from divestitures includi
37、ng equity method investments1,034 66(Payments)/proceeds from investments and derivative settlements(176)78 Net cash provided by/(used in)investing activities636(1,441)CASH PROVIDED BY/(USED IN)FINANCING ACTIVITIESNet issuances/(repayments)of short-term borrowings156 217 Long-term debt proceeds 1,991
38、 Long-term debt repayments(1,036)(2,306)Repurchases of Common Stock(399)(751)Dividends paid(529)(491)Other51 60 Net cash used in financing activities(1,757)(1,280)Effect of exchange rate changes on cash,cash equivalents and restricted cash(11)(10)Cash,cash equivalents and restricted cash:(Decrease)/
39、Increase(9)(1,600)Balance at beginning of period1,948 3,553 Balance at end of period$1,939$1,953 See accompanying notes to the condensed consolidated financial statements.5Table of ContentsMondelz International,Inc.and SubsidiariesNotes to Condensed Consolidated Financial Statements(Unaudited)Note 1
40、.Basis of PresentationOur interim condensed consolidated financial statements are unaudited.Certain information and footnote disclosures normally included inannual financial statements prepared in accordance with accounting principles generally accepted in the United States of America(“U.S.GAAP”)hav
41、e been omitted.It is managements opinion that these financial statements include all normal and recurring adjustmentsnecessary for a fair presentation of our results of operations,financial position and cash flows.Results of operations for any interim periodare not necessarily indicative of future o
42、r annual results.For a complete set of consolidated financial statements and related notes,refer toour Annual Report on Form 10-K for the year ended December 31,2022.Principles of ConsolidationThe condensed consolidated financial statements include Mondelz International,Inc.as well as our wholly own
43、ed and majority ownedsubsidiaries,except our Venezuelan subsidiaries that were deconsolidated in 2015.All intercompany transactions are eliminated.Thenoncontrolling interest represents the noncontrolling investors interests in the results of subsidiaries that we control and consolidate.Weaccount for
44、 investments over which we exercise significant influence under the equity method of accounting.Investments with readilydeterminable fair values for which we do not have the ability to exercise significant influence are measured at fair value.War in UkraineIn February 2022,Russia began a military in
45、vasion of Ukraine and we closed our operations and facilities in Ukraine.In March 2022,our twoUkrainian manufacturing facilities in Trostyanets and Vyshhorod were significantly damaged.During the first quarter of 2022,we evaluatedand impaired these and other related assets.We recorded$143 million of
46、 total expenses($145 million after-tax)incurred as a direct result ofthe war.We reversed$22 million during the remainder of 2022 and$3 million during the first quarter of 2023 of previously recorded chargesprimarily as a result of higher than expected collection of trade receivables and inventory re
47、coveries.We continue to make targeted repairson both our plants and have partially reopened and restarted limited production in both plants.We also continue to support our Ukraineemployees,including paying salaries to those not yet able to return to work until full production returns.We continue to
48、consolidate both ourUkrainian and Russian subsidiaries and continue to evaluate our ability to control our operating activities and businesses on an ongoingbasis.We base our estimates on historical experience,expectations of future impacts and other assumptions that we believe are reasonable.Given t
49、he uncertainty of the ongoing effects of the war in Ukraine,and its impact on the global economic environment,our estimates could besignificantly different than future performance.Highly Inflationary AccountingWithin our consolidated entities,Argentina and Trkiye(Turkey)are accounted for as highly i
50、nflationary economies.Argentina and Trkiyerepresent 1.5%and 1.0%of our consolidated net revenues with remeasurement losses of$11 million and$1 million for the period endedMarch 31,2023,respectively.Cash,Cash Equivalents and Restricted CashCash and cash equivalents include demand deposits with banks
51、and all highly liquid investments with original maturities of three months orless.We also have restricted cash within other current assets of$22 million as of March 31,2023 and$25 million as of December 31,2022.Total cash,cash equivalents and restricted cash was$1,939 million as of March 31,2023 and
52、$1,948 million as of December 31,2022.6Table of ContentsAllowances for Credit LossesChanges in allowances for credit losses consisted of:Allowance forTrade ReceivablesAllowance forOther CurrentReceivablesAllowance forLong-TermReceivables(in millions)Balance at January 1,2023$(45)$(59)$(14)Current pe
53、riod provision for expected credit losses(16)(5)Write-offs charged against the allowance2 Currency(1)(1)Balance at March 31,2023$(60)$(65)$(14)Transfers of Financial AssetsThe outstanding principal amount of receivables under our uncommitted revolving non-recourse accounts receivable factoring arran
54、gementsamounted to$858 million as of March 31,2023 and$516 million as of December 31,2022.The incremental cost of factoring receivablesunder this arrangement was not material for all periods presented.The proceeds from the sales of receivables are included in cash fromoperating activities in the con
55、densed consolidated statements of cash flows.Non-Cash Lease TransactionsWe recorded$39 million in operating lease and$27 million in finance lease right-of-use assets obtained in exchange for lease obligationsduring the three months ended March 31,2023 and$95 million in operating lease and$56 million
56、 in finance lease right-of-use assetsobtained in exchange for lease obligations during the three months ended March 31,2022.Supply Chain FinancingAs part of our continued efforts to improve our working capital efficiency,we have worked with our suppliers over the past several years tooptimize our te
57、rms and conditions,which include the extension of payment terms.Our current payment terms with a majority of our suppliersare from 30 to 180 days,which we deem to be commercially reasonable.We also facilitate voluntary supply chain financing(“SCF”)programs through several participating financial ins
58、titutions.Under these programs,our suppliers,at their sole discretion,determine invoicesthat they want to sell to participating financial institutions.Our suppliers voluntary inclusion of invoices in SCF programs has no bearing onour payment terms or amounts due.Our responsibility is limited to maki
59、ng payments based upon the agreed-upon contractual terms.Noguarantees are provided by the Company or any of our subsidiaries under the SCF programs and we have no economic interest in thesuppliers decision to participate in the SCF programs.Amounts due to our suppliers that elected to participate in
60、 the SCF program areincluded in accounts payable in our consolidated balance sheet.We have been informed by the participating financial institutions that as ofMarch 31,2023 and December 31,2022,$2.5 billion and$2.4 billion,respectively,of our outstanding accounts payable related to suppliersthat par
61、ticipate in the SCF programs.New Accounting PronouncementsIn October 2021,the Financial Accounting Standards Board(“FASB”)issued an Accounting Standards Update(“ASU”)which requirescompanies to recognize and measure customer contract assets and contract liabilities acquired in a business combination
62、as if the acquiringcompany originated the related revenue contracts.Prior to adopting this ASU,acquired contract assets and liabilities were measured at fairvalue.This ASU is effective for fiscal years beginning after December 15,2022 and early adoption is permitted.We adopted this standard inthe fi
63、rst quarter of 2023 and it did not have an impact on our consolidated financial statements.In September 2022,the FASB issued an ASU which enhances the transparency of supplier finance programs by requiring additionaldisclosure about the key terms of these programs and a roll-forward of the related o
64、bligations to understand the effects of these programs onworking capital,liquidity and cash flows.The ASU is effective for fiscal years beginning after December 15,2022,except for the roll-forwardrequirement,which is effective for fiscal years beginning after December 15,2023.Early adoption is permi
65、tted.We adopted,with theexception of the roll-forward requirement,this standard in the first quarter of 2023 and it did not have a material impact on our consolidatedfinancial statements and related disclosures.7Table of ContentsNote 2.Acquisitions and DivestituresAcquisitionsRicolinoOn November 1,2
66、022,we acquired 100%of the equity of Grupo Bimbos confectionery business,Ricolino,located primarily in Mexico.Theacquisition of Ricolino builds on our continued prioritization of fast-growing snacking segments in key geographies.The cash considerationpaid for Ricolino totaled$26 billion Mexican peso
67、s($1.3 billion),net of cash received.We are working to complete the valuation of assets acquired and liabilities assumed and have recorded a preliminary purchase priceallocation of:(in millions)Cash$22 Receivables86 Inventory70 Other current assets3 Property,plant and equipment144 Operating leases r
68、ight of use assets17 Definite-life intangible assets218 Indefinite-life intangible assets339 Goodwill714 Assets acquired$1,613 Current liabilities177 Deferred tax liability77 Operating lease liabilities17 Other liabilities12 Total purchase price$1,330 Less:cash received(22)Net Cash Paid$1,308 Within
69、 identifiable intangible assets,we allocated$339 million to trade names,which have an indefinite life.The fair value for the Ricolino,Dulces Vero,LaCorona and Coronado trade names were determined using the Relief from Royalty method,a form of the income approach,at the acquisition date.The fair valu
70、e measurement of indefinite-life intangible assets are based on significant unobservable inputs,and thusrepresent Level 3 inputs.Significant assumptions used in assessing the fair values of intangible assets include estimates of future sales,discount and royalty rates.Goodwill was determined as the
71、excess of the purchase price over the fair value of the net assets acquired and arises principally as a resultof expansion opportunities and synergies across both new and legacy product categories in Mexico.None of the goodwill recognized isexpected to be deductible for income tax purposes.All of th
72、e goodwill was assigned to the Latin American operating segment.Ricolino added incremental net revenues of$171 million and operating income of$9 million during the three months ended March 31,2023.We incurred acquisition integration costs of$6 million during the three months ended March 31,2023.Clif
73、 BarOn August 1,2022,we acquired 100%of the equity of Clif Bar&Company(“Clif Bar”),a leading U.S.maker of nutritious energy bars withorganic ingredients.The acquisition expands our global snack bar business and complements our refrigerated snacking and performancenutrition bar portfolios.The total c
74、ash payment of$2.9 billion includes purchase price consideration of$2.6 billion,net of cash received,andone-time compensation expense of$0.3 billion related to the buyout of the non-vested employee stock ownership plan(ESOP)shares.Thiscompensation expense is considered an acquisition-related cost.Th
75、e acquisition of Clif Bar includes a contingent consideration arrangementthat may require us to pay additional consideration to the sellers for achieving certain revenue and earnings targets in 2025 and 2026 thatexceed our base financial projections for the business8Table of Contentsimplied in the u
76、pfront purchase price.The possible payments range from zero to a maximum total of$2.4 billion,with higher payoutsrequiring the achievement of targets that generate rates of returns in excess of the base financial projections.The estimated fair value of thecontingent consideration obligation at the a
77、cquisition date was$440 million determined using a Monte Carlo simulation.Significantassumptions used in assessing the fair value of the liability include financial projections for net revenue,gross profit,and earnings beforeinterest,tax,depreciation and amortization(EBITDA),as well as discount and
78、volatility rates.We are working to complete the valuation of assets acquired and liabilities assumed and have recorded a preliminary purchase priceallocation of:(in millions)Cash$99 Receivables76 Inventory124 Other current assets9 Property,plant and equipment186 Operating leases right of use assets2
79、2 Deferred tax assets92 Definite-life intangible assets200 Indefinite-life intangible assets1,450 Goodwill1,020 Other assets11 Assets acquired$3,289 Current liabilities159 Contingent consideration440 Other liabilities15 Total purchase price$2,675 Less:cash received(99)Net Cash Paid$2,576 Within iden
80、tifiable intangible assets,we allocated$1,450 million to trade names,which have an indefinite life.The fair value for the Clif andLuna trade names,were determined using the Relief from Royalty method,a form of the income approach,at the acquisition date.The fairvalue measurement of intangible assets
81、 are based on significant unobservable inputs,and thus represent Level 3 inputs.Significantassumptions used in assessing the fair values of intangible assets include forecasted future revenue,discount and royalty rates.We expectto generate a meaningful cash tax benefit over time from the amortizatio
82、n of acquisition-related intangibles.Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired and arises principally as a resultof expansion opportunities and synergies across the U.S.and other key markets.All of the goodwill was assigned to the Nort
83、h Americaoperating segment.Tax deductible goodwill is expected to be$1.4 billion and will be amortized.Clif Bar added incremental net revenues of$218 million and operating income of$35 million during the three months ended March 31,2023.We incurred acquisition integration costs of$39 million during
84、the three months ended March 31,2023.These acquisition integration costsinclude an increase to the contingent consideration liability due to changes to underlying assumptions.Refer to Note 9,Financial Instrumentsfor additional information.ChipitaOn January 3,2022,we acquired 100%of the equity of Chi
85、pita Global S.A.(“Chipita”),a leading croissants and baked snacks company inthe Central and Eastern European markets.The acquisition of Chipita offers a strategic complement to our existing portfolio and advancesour strategy to become the global leader in broader snacking.The cash consideration paid
86、 for Chipita totaled 1.2 billion($1.4 billion),net ofcash received,plus the assumption of Chipitas debt of 0.5 billion($0.4 billion)for a total purchase price of 1.7 billion($1.8 billion).9Table of ContentsWe have recorded a purchase price allocation of net tangible and intangible assets acquired an
87、d liabilities assumed as follows:(in millions)Cash$52 Receivables102 Inventory60 Other current assets3 Property,plant and equipment379 Finance leases right of use assets8 Definite-life intangible assets48 Indefinite-life intangible assets686 Goodwill795 Other assets77 Assets acquired$2,210 Current l
88、iabilities133 Deferred tax liability158 Finance lease liabilities8 Other liabilities21 Total purchase price$1,890 Less:long-term debt(436)Less:cash received(52)Net Cash Paid$1,402 Within identifiable intangible assets,we allocated$686 million to trade names,which have an indefinite life.The fair val
89、ue for the 7 Daystrade name,which is the primary asset acquired,was determined using the multi-period excess earnings method under the income approachat the acquisition date.The fair value measurements of intangible assets are based on significant unobservable inputs,and thus representLevel 3 inputs
90、.Significant assumptions used in assessing the fair values of intangible assets include forecasted future cash flows anddiscount rates.Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired and arises principally as a resultof expansion opportuniti
91、es and synergies across both new and legacy product categories.None of the goodwill recognized is expected to bedeductible for income tax purposes.All of the goodwill was assigned to the Europe operating segment.We incurred acquisition integration costs of$6 million during the three months ended Mar
92、ch 31,2023.We incurred acquisition-related costsof$21 million and acquisition integration costs of$35 million during the three months ended March 31,2022.10Table of ContentsDivestituresDeveloped Market Gum-Held for SaleOn December 16,2022,Mondelz entered into an agreement to sell its developed marke
93、t gum business in North America and Europe for$1.4 billion.It is expected to close in Q4 2023,subject to relevant antitrust approvals and closing conditions.In connection with theseagreements,we concluded that the disposal group met the held for sale criteria as of December 31,2022.The disposal grou
94、p is included aspart of the North America and Europe operating segments.We incurred divestiture-related costs of$30 million during the three months ended March 31,2023.Total assets and liabilities held for sale are comprised of the following:As of March 31,2023As of December 31,2022(in millions)Inve
95、ntories,net$90$79 Current assets held for sale$90$79 Property,plant and equipment,net161159Goodwill292292Intangible assets,net677671Noncurrent assets held for sale$1,130$1,122 Accrued employment costs64Current liabilities held for sale$6$4 Deferred income taxes1315Noncurrent liabilities held for sal
96、e$13$15(1)Reported in Other current assets on the condensed consolidated balance sheets.(2)Reported in Other assets on the condensed consolidated balance sheets.(3)Reported in Other current liabilities on the condensed consolidated balance sheets.(4)Reported in Other liabilities on the condensed con
97、solidated balance sheets.Note 3.InventoriesInventories consisted of the following:As of March 31,2023As of December 31,2022(in millions)Raw materials$1,096$1,031 Finished product2,680 2,501 3,776 3,532 Inventory reserves(149)(151)Inventories,net$3,627$3,381(1)(2)(3)(4)11Table of ContentsNote 4.Prope
98、rty,Plant and EquipmentProperty,plant and equipment consisted of the following:As of March 31,2023As of December 31,2022(in millions)Land and land improvements$378$378 Buildings and building improvements3,319 3,250 Machinery and equipment12,050 11,724 Construction in progress825 879 16,572 16,231 Ac
99、cumulated depreciation(7,441)(7,211)Property,plant and equipment,net$9,131$9,020 For the three months ended March 31,2023,capital expenditures of$223 million excluded$290 million of accrued capital expendituresremaining unpaid at March 31,2023 and included payment for a portion of the$324 million of
100、 capital expenditures that were accrued andunpaid at December 31,2022.For the three months ended March 31,2022,capital expenditures of$167 million excluded$244 million ofaccrued capital expenditures remaining unpaid at March 31,2022 and included payment for a portion of the$249 million of capitalexp
101、enditures that were accrued and unpaid at December 31,2021.Note 5.Goodwill and Intangible AssetsGoodwillChanges in goodwill consisted of:Latin AmericaAMEAEuropeNorth AmericaTotalJanuary 1,2022$674$3,365$7,830$10,109$21,978 Currency41(233)(550)(15)(757)Acquisitions 714 795 1,020 2,529 Held for Sale (
102、66)(226)(292)Divestitures(8)(8)Balance at December 31,2022$1,421$3,132$8,009$10,888$23,450 Currency95(18)73 4 154 Balance at March 31,2023$1,516$3,114$8,082$10,892$23,604(1)Refer to Note 2,Acquisitions and Divestitures for more information.Intangible AssetsIntangible assets consisted of the followin
103、g:As of March 31,2023As of December 31,2022Gross carryingamountAccumulatedamortizationNet carryingamountGross carryingamountAccumulatedamortizationNet carryingamountDefinite-life intangible assets$3,389$(2,110)$1,279$3,354$(2,057)$1,297 Indefinite-life intangible assets 18,531 18,531 18,413 18,413 T
104、otal$21,920$(2,110)$19,810$21,767$(2,057)$19,710(1)In 2022,we recorded$101 million of intangible asset impairment charges related to two biscuit brands in AMEA segment,of which$78 million was recorded in the firstquarter and$23 million was recorded in the third quarter.Indefinite-life intangible ass
105、ets consist principally of brand names purchased through our acquisitions of Nabisco Holdings Corp.,the globalLU biscuit business of Groupe Danone S.A.,Cadbury Limited and Clif Bar.Definite-life intangible assets consist primarily of trademarks,customer-related intangibles,process technology,license
106、s and non-compete agreements.(1)(1)(1)12Table of ContentsAmortization expense for intangible assets was$39 million for the three months ended March 31,2023 and$32 million for the three monthsended March 31,2022.For the next five years,we currently estimate annual amortization expense of approximatel
107、y$150 million in 2023-2025,approximately$95 million in 2026 and approximately$90 million in 2027(reflecting March 31,2023 exchange rates).Impairment AssessmentWe test our reporting units and brands for impairment annually as of July 1,or more frequently if events or circumstances indicate it is more
108、likely than not that the fair value of a reporting unit or brand is less than its carrying amount.During the first quarter of 2023,we evaluated ourgoodwill impairment and intangible asset impairment risk through an assessment of potential triggering events.We considered qualitativeand quantitative i
109、nformation in our assessment.We concluded there were no impairment indicators.During our 2022 annual indefinite-life intangible asset testing,we identified eight brands that each had a fair value in excess of book value of10%or less.The aggregate book value of the eight brands was$1.6 billion as of
110、March 31,2023.We believe our current plans for each ofthese brands will allow them to not be impaired,but if the brand earnings expectations are not met or specific valuation factors outside of ourcontrol,such as discount rates,change significantly then a brand or brands could become impaired in the
111、 future.Note 6.InvestmentsMarketable SecuritiesOn March 2,2023,we sold approximately 30 million shares of Keurig Dr Pepper Inc.(Nasdaq:KDP),which reduced our ownership interestby 2.1%,from 5.3%to 3.2%of the total outstanding shares.We received approximately$1.0 billion in proceeds and recorded a pre
112、-tax gainof$493 million(or$366 million after tax)on this sale during the first quarter of 2023.This reduction in ownership,to below 5%of theoutstanding shares of KDP,resulted in a change of accounting for our KDP investment,from equity method investment accounting toaccounting for equity interests w
113、ith readily determinable fair values(marketable securities)as we no longer have significant influence overKDP.These marketable securities are measured at fair value based on quoted prices in active markets for identical assets(Level 1).OnMarch 2,2023,the date we changed from equity method accounting
114、 to marketable securities accounting for this investment,we recordedunrealized gains for marketable securities of$755 million(or$562 million after tax).We recorded an additional unrealized gain of$32 million(or$24 million after tax)during the first quarter,for a total unrealized gain of$787 million(
115、or$586 million after tax)during the first quarter of2023.We reported marketable securities of$1.6 billion as of March 31,2023 in other current assets in the Companys CondensedConsolidated Balance Sheet.Equity Method InvestmentsOur equity method investments include,but are not limited to,our ownershi
116、p interests in JDE Peets(Euronext Amsterdam:JDEP),DongSuh Foods Corporation and Dong Suh Oil&Fats Co.Ltd.Our ownership interests may change over time due to investee stock-basedcompensation arrangements,share issuances or other equity-related transactions.As of March 31,2023,we owned 19.7%,50.0%and4
117、9.0%,respectively,of these companies outstanding shares.We continue to have board representation with two directors on the JDEPsBoard of Directors and have retained certain additional governance rights.As we continue to have significant influence,we continue toaccount for our investment in JDEP unde
118、r the equity method.Our investments accounted for under the equity method of accounting totaled$3.4 billion as of March 31,2023 and$4.9 billion as ofDecember 31,2022.The investment balance as of December 31,2022 is inclusive of our investment in KDP.We recorded equity earnings of$35 million and cash
119、 dividends of$102 million in the first quarter of 2023 and equity earnings of$117 million and cash dividends of$107million in the first quarter of 2022.Based on the quoted closing prices as of March 31,2023,the fair value of our publicly-traded investment in JDEP was$2.8 billion,and therewas no othe
120、r than temporary impairment identified.In 2021,we issued 300 million exchangeable bonds,which are redeemable at maturity in September 2024 at their principal amount in cashor,at our option,through the delivery of an equivalent number of JDE Peets ordinary shares based on an initial exchange price of
121、 35.40and,as the case may be,an additional amount in cash.If all bonds were redeemed in exchange for JDE Peets shares,this would representapproximately 8.5 million shares or approximately 9%of our equity interest in JDE Peets as of March 31,2023.Refer to Note 9,FinancialInstruments,for further detai
122、ls on this transaction.13Table of ContentsOn March 30,2023,we issued options to sell shares of JDEP in tranches equivalent to approximately 7.7 million shares.These options areexercisable at their maturities which are between July 3,2023 and September 29,2023,with strike prices ranging from 26.10 to
123、 28.71 pershare.In addition,on April 3,2023,we sold approximately 7.7 million shares of JDEP and received cash proceeds of 199 million.Thisreduced our ownership interest by 1.6%,from 19.7%to 18.1%of the total outstanding shares.If all options issued on March 30,2023 areexercised,our ownership intere
124、st will be reduced by an additional 1.6%.As we continue to have significant influence,we will continue toaccount for our investment in JDEP under the equity method.Note 7.Restructuring ProgramOn May 6,2014,our Board of Directors approved a$3.5 billion 2014-2018 restructuring program and up to$2.2 bi
125、llion of capitalexpenditures.On August 31,2016,our Board of Directors approved a$600 million reallocation between restructuring program cash costsand capital expenditures so the$5.7 billion program consisted of approximately$4.1 billion of restructuring program charges($3.1 billioncash costs and$1.0
126、 billion non-cash costs)and up to$1.6 billion of capital expenditures.On September 6,2018,our Board of Directorsapproved an extension of the restructuring program through 2022,an increase of$1.3 billion in the program charges and an increase of$700million in capital expenditures.On October 21,2021,o
127、ur Board of Directors approved an extension of the restructuring program through2023.The total$7.7 billion program now consists of$5.4 billion of program charges($4.1 billion of cash costs and$1.3 billion of non-cashcosts)and total capital expenditures of$2.3 billion to be incurred over the life of
128、the program.The current restructuring program,asincreased and extended by these actions,is now called the Simplify to Grow Program.The primary objective of the Simplify to Grow Program is to reduce our operating cost structure in both our supply chain and overhead costs.The program covers severance
129、as well as asset disposals and other manufacturing and procurement-related one-time costs.Since inception,we have incurred total restructuring and implementation charges of$5.2 billion related to the Simplify to Grow Program.We expect to incurthe remainder of the program charges by year-end 2023.Res
130、tructuring CostsThe Simplify to Grow Program liability activity for the three months ended March 31,2023 was:Severanceand related costsAssetWrite-downs andOther Total(in millions)Liability balance,January 1,2023$164$164 Charges29 1 30 Cash spent(18)(18)Non-cash settlements/adjustments (1)(1)Currency
131、2 2 Liability balance,March 31,2023$177$177(1)Includes gains as a result of assets sold which are included in the restructuring program.(2)We recorded restructuring charges of$30 million in the first quarter of 2023 and$11 million in the first quarter of 2022 within asset impairment and exit costs a
132、nd benefitplan non-service income.(3)We spent$18 million in the first quarter of 2023 and$17 million in the first quarter of 2022 in cash severance and related costs.(4)We recognized non-cash asset write-downs(including accelerated depreciation and asset impairments),and other non-cash adjustments,i
133、ncluding any gains on sale ofrestructuring program assets,which totaled a charge of$1 million in the first quarter of 2023 and a charge of$2 million in the first quarter of 2022.(5)At March 31,2023,$135 million of our net restructuring liability was recorded within other current liabilities and$42 m
134、illion was recorded within other long-term liabilities.Implementation CostsImplementation costs are directly attributable to restructuring activities;however,they do not qualify for special accounting treatment as exitor disposal activities.We believe the disclosure of implementation costs provides
135、readers of our financial statements with more informationon the total costs of our Simplify to Grow Program.Implementation costs primarily relate to reorganizing our operations and facilities inconnection with our supply chain reinvention program and other identified productivity and cost saving ini
136、tiatives.The costs includeincremental 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$5 million in(1)(2)(3)(4)(5)14Table of Contentsthe
137、 first quarter of 2023 and$20 million in the first quarter of 2022.We recorded these costs within cost of sales and general corporateexpense within selling,general and administrative expenses.Restructuring and Implementation CostsDuring the three months ended March 31,2023 and March 31,2022,and sinc
138、e inception of the Simplify to Grow Program,we recorded thefollowing restructuring and implementation costs within segment operating income and earnings before income taxes:Latin AmericaAMEAEuropeNorth AmericaCorporateTotal(in millions)For the Three Months Ended March31,2023Restructuring Costs$1$30$
139、(1)$30 Implementation Costs 5 5 Total$1$30$(1)$5$35 For the Three Months Ended March31,2022Restructuring Costs$(1)$2$2$8$11 Implementation Costs1 1 5 7 6 20 Total$3$7$15$6$31 Total Project (Inception to Date)Restructuring Costs$548$555$1,193$656$150$3,102 Implementation Costs303 245 569 590 373 2,08
140、0 Total$851$800$1,762$1,246$523$5,182 Note 8.Debt and Borrowing ArrangementsShort-Term BorrowingsOur short-term borrowings and related weighted-average interest rates consisted of:As of March 31,2023As of December 31,2022Amount OutstandingWeighted-Average RateAmount OutstandingWeighted-Average Rate(
141、in millions,except percentages)Commercial paper$2,350 4.8%$2,209 4.7%Bank loans111 9.5%90 9.1%Total short-term borrowings$2,461$2,299 Our uncommitted credit lines and committed credit lines available as of March 31,2023 and December 31,2022 include:As of March 31,2023As of December 31,2022Facility A
142、mountBorrowed AmountFacility AmountBorrowed Amount(in millions)Uncommitted credit facilities$1,306$111$1,335$90 Credit facility expiry:February 22,2023 2,500 March 11,2023 2,000 February 21,20241,500 July 29,2025 2,000 1,000 2,000 2,000 February 23,20274,500 4,500 (1)(2)15Table of Contents(1)We main
143、tain a multi-year senior unsecured revolving credit facility for general corporate purposes,including working capital needs,and to support our commercial paperprogram.The revolving credit agreement includes a covenant that we maintain a minimum shareholders equity of at least$25.0 billion,excluding
144、accumulated othercomprehensive earnings/(losses),the cumulative effects of any changes in accounting principles and earnings/(losses)recognized in connection with the ongoingapplication of any mark-to-market accounting for pensions and other retirement plans.At March 31,2023,we complied with this co
145、venant as our shareholders equity,asdefined by the covenant,was$39.0 billion.The revolving credit facility also contains customary representations,covenants and events of default.There are no credit ratingtriggers,provisions or other financial covenants that could require us to post collateral as se
146、curity.(2)On March 31,2022,we entered into a supplemental term loan credit facility that can be utilized for general corporate purposes,including acquisitions.Under thisagreement,we may draw up to a total of$2.0 billion in term loans from the facility.On July 29,2022,we drew down$2.0 billion in term
147、 loans,due July 29,2025,bearinginterest at a variable annual rate based on SOFR plus an applicable margin.On March 3,2023,we repaid$1.0 billion in term loans.Subsequently on April 3,2023,werepaid$0.3 billion.On April 6,2023,we entered into an additional revolving credit agreement that can be utilize
148、d for general corporate purposes and to supportour commercial paper program.Under this agreement,we may draw up to a total of$2.0 billion from the facility.This agreement willterminate on December 29,2023.Long-Term DebtAs of March 31,2023,the Company reclassified the net carrying value of debt of$80
149、0 million due within one year from long-term debt tocurrent portion of long-term debt.Fair Value of Our DebtThe fair value of our short-term borrowings reflects current market interest rates and approximates the amounts we have recorded on ourconsolidated balance sheets.The fair value of our term lo
150、ans was determined using quoted prices for similar instruments in markets that arenot active(Level 2 valuation data)and approximates the amounts we have recorded on our consolidated balance sheets.The fair value ofour long-term debt was determined using quoted prices in active markets(Level 1 valuat
151、ion data)for the publicly traded debt obligations.As of March 31,2023As of December 31,2022(in millions)Fair Value$19,782$20,217 Carrying Value$22,202$22,933 Interest and Other Expense,netInterest and other expense,net consisted of:For the Three Months Ended March 31,20232022(in millions)Interest ex
152、pense,debt$153$91 Loss on debt extinguishment and related expenses 129 Other(income),net(58)(52)Interest and other expense,net$95$168 Other income,net includes amounts excluded from hedge effectiveness related to our net investment hedge derivative contracts.Refer toNote 9,Financial Instruments.16Ta
153、ble of ContentsNote 9.Financial InstrumentsFair Value of Derivative InstrumentsDerivative instruments were recorded at fair value in the condensed consolidated balance sheets as follows:As of March 31,2023As of December 31,2022Asset DerivativesLiability DerivativesAsset DerivativesLiability Derivati
154、ves(in millions)Derivatives designated asaccounting hedges:Interest rate contracts$123 39$132 35 Net investment hedge derivative contracts 225 242 265 241$348$281$397$276 Derivatives not designated as accounting hedges:Currency exchange contracts$213$126$185$103 Commodity contracts346 332 200 247 In
155、terest rate contracts6 2 8 Equity method investment contracts 1 3$565$461$393$353 Total fair value$913$742$790$629(1)Net investment hedge derivative contracts consist of cross-currency interest rate swaps,forward contracts and options.We also designate some of our non-U.S.dollardenominated debt to h
156、edge a portion of our net investments in our non-U.S.operations.This debt is not reflected in the table above,but is included in long-term debtdiscussed in Note 8,Debt and Borrowing Arrangements.Both net investment hedge derivative contracts and non-U.S.dollar denominated debt acting as net investme
157、nthedges are also disclosed in the Derivative Volume table and the Hedges of Net Investments in International Operations section appearing later in this footnote.(2)Equity method investment contracts consist of two types of derivatives:(a)options to sell shares of JDEP in tranches equivalent to appr
158、oximately 7.7 million shares that areexercisable at maturity over the third quarter of 2023 with strike prices ranging between 26.10 and 28.71 per share and(b)the bifurcated embedded derivative optionthat was a component of the September 20,2021 300 million exchangeable bonds issuance.Refer to Note
159、8,Debt and Borrowing Arrangements.We record derivative assets and liabilities on a gross basis on our condensed consolidated balance sheets.The fair value of our assetderivatives is recorded within other current assets and other assets and the fair value of our liability derivatives is recorded with
160、in othercurrent liabilities and other liabilities.The fair values(asset/(liability)of our derivative instruments were determined using:As of March 31,2023 Total Fair Value of Net Asset/(Liability)Quoted Prices in Active Markets for Identical Assets(Level 1)Significant Other Observable Inputs(Level 2
161、)Significant Unobservable Inputs(Level 3)(in millions)Currency exchange contracts$87$87$Commodity contracts14(17)31 Interest rate contracts88 88 Net investment hedge contracts(17)(17)Equity method investment contracts(1)(1)Total derivatives$171$(17)$188$(1)(2)17Table of Contents As of December 31,20
162、22 TotalFair Value of Net Asset/(Liability)Quoted Prices inActive Markets for Identical Assets(Level 1)SignificantOther Observable Inputs(Level 2)SignificantUnobservable Inputs(Level 3)(in millions)Currency exchange contracts$82$82$Commodity contracts(47)(35)(12)Interest rate contracts105 105 Net in
163、vestment hedge contracts24 24 Equity method investment contracts(3)(3)Total derivatives$161$(35)$196$Level 1 financial assets and liabilities consist of exchange-traded commodity futures and listed options.The fair value of these instruments isdetermined based on quoted market prices on commodity ex
164、changes.Level 2 financial assets and liabilities consist primarily of over-the-counter(“OTC”)currency exchange forwards,options and swaps;commodity forwards and options;net investment hedge contracts;and interest rate swaps.Our currency exchange contracts are valuedusing an income approach based on
165、observable market forward rates less the contract rate multiplied by the notional amount.Commodityderivatives are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied bythe notional amount or based on pricing models that rely on mark
166、et observable inputs such as commodity prices.Our bifurcated exchangeoptions are valued,as derivative instrument liabilities,using the Black-Scholes option pricing model.This model requires assumptions relatedto the market price of the underlying note and associated credit spread combined with the s
167、hare of price,expected dividend yield,andexpected volatility of the JDE Peets shares over the life of the option.Our calculation of the fair value of interest rate swaps is derived from adiscounted cash flow analysis based on the terms of the contract and the observable market interest rate curve.Ou
168、r calculation of the fairvalue of financial instruments takes into consideration the risk of nonperformance,including counterparty credit risk.Our OTC derivativetransactions are governed by International Swap Dealers Association agreements and other standard industry contracts.Under theseagreements,
169、we do not post nor require collateral from our counterparties.The majority of our derivative contracts do not have a legal right ofset-off.We manage the credit risk in connection with these and all our derivatives by entering into transactions with counterparties withinvestment grade credit ratings,
170、limiting the amount of exposure with each counterparty and monitoring the financial condition of ourcounterparties.Derivative VolumeThe notional values of our hedging instruments were:Notional Amount As of March 31,2023As of December 31,2022(in millions)Currency exchange contracts:Intercompany loans
171、 and forecasted interest payments$2,504$2,085 Forecasted transactions7,032 5,470 Commodity contracts11,802 12,131 Interest rate contracts4,304 4,147 Net investment hedges:Net investment hedge derivative contracts7,589 7,319 Non-U.S.dollar debt designated as net investment hedgesEuro notes3,453 3,410
172、 Swiss franc notes645 638 Canadian dollar notes444 443 18Table of ContentsCash Flow HedgesCash flow hedge activity,net of taxes,is recorded within accumulated other comprehensive earnings/(losses).Refer to Note 13,Reclassifications from Accumulated Other Comprehensive Income for further information
173、on current period activity.Based on current market conditions,we would expect to transfer losses of$8 million(net of taxes)for interest rate cash flow hedges toearnings during the next 12 months.Cash Flow Hedge CoverageAs of March 31,2023,our longest dated cash flow hedges were interest rate swaps t
174、hat hedge forecasted interest rate payments over thenext 3 years,5 months.Hedges of Net Investments in International OperationsNet investment hedge(NIH)derivative contractsWe enter into cross-currency interest rate swaps,forwards and options to hedge certain investments in our non-U.S.operations aga
175、instmovements in exchange rates.The aggregate notional value as of March 31,2023 was$7.6 billion.Net investment hedge derivative contract impacts on other comprehensive earnings and net earnings were:For the Three Months Ended March 31,20232022(in millions)After-tax(loss)/gain on NIH contracts$(5)$4
176、1(1)Amounts recorded for unsettled and settled NIH derivative contracts are recorded in the cumulative translation adjustment within other comprehensive earnings.The cashflows from the settled contracts are reported within other investing activities in the condensed consolidated statement of cash fl
177、ows.For the Three Months Ended March 31,20232022(in millions)Amounts excluded from the assessment of hedge effectiveness$36$22(1)We elected to record changes in the fair value of amounts excluded from the assessment of effectiveness in net earnings within interest and other expense,net.Non-U.S.dolla
178、r debt designated as net investment hedgesAfter-tax gains/(losses)related to hedges of net investments in international operations were recorded within the cumulative translationadjustment section of other comprehensive income and were:For the Three Months Ended March 31,20232022(in millions)Euro no
179、tes$(33)$74 British pound sterling notes 8 Swiss franc notes(5)6 Canadian notes(1)(4)(1)(1)19Table of ContentsEconomic HedgesPre-tax gains/(losses)recorded in net earnings for economic hedges were:For the Three Months Ended March 31,Location of Gain/(Loss)Recognized in Earnings 20232022(in millions)
180、Currency exchange contracts:Intercompany loans and forecasted interest payments$22$(11)Interest and other expense,netForecasted transactions2(7)Cost of salesForecasted transactions5 21 Interest and other expense,netForecasted transactions(5)2 Selling,general andadministrative expensesCommodity contr
181、acts(2)237 Cost of salesEquity method investment contracts2 Gain on equity methodinvestment transactionsTotal$24$242 20Table of ContentsFair Value of Contingent ConsiderationThe following is a summary of our contingent consideration liability activity:For the Three Months EndedMarch 31,20232022(in m
182、illions)Liability at beginning of period$642$159 Changes in fair value17 6 Liability at end of period$659$165 Contingent consideration was recorded at fair value in the condensed consolidated balance sheets as follows:As of March 31,2023 Total Fair Value of LiabilityQuoted Prices in Active Markets f
183、or Identical Assets(Level 1)Significant Other Observable Inputs(Level 2)Significant Unobservable Inputs(Level 3)(in millions)Clif Bar$465$465 Other 194 194 Total contingent consideration$659$659 As of December 31,2022 Total Fair Value of LiabilityQuoted Prices in Active Markets for Identical Assets(
184、Level 1)Significant Other Observable Inputs(Level 2)Significant Unobservable Inputs(Level 3)(in millions)Clif Bar$452$452 Other 190 190 Total contingent consideration$642$642(1)In connection with the Clif Bar acquisition,we entered into a contingent consideration arrangement that may require us to p
185、ay additional consideration to the sellers forachieving certain net revenue,gross profit and EBITDA targets in 2025 and 2026 that exceed our base financial projections for the business implied in the upfront purchaseprice.The other contingent consideration liabilities are recorded at fair value with
186、in long term liabilities.The estimated fair value of the contingent consideration obligation atthe acquisition date was determined using a Monte Carlo simulation and recorded in other liabilities.Significant assumptions used in assessing the fair value of the liabilityinclude financial projections f
187、or net revenue,gross profit,and EBITDA,as well as discount and volatility rates.Fair value adjustments are primarily recorded in selling,general and administrative expenses in the condensed consolidated statement of earnings.Refer to Note 2,Acquisitions and Divestitures for additional information.(2
188、)The other contingent consideration liabilities are recorded at fair value,with$113 million and$102 million classified as other current liabilities and$81 million and$88million classified as long term liabilities at March 31,2023 and December 31,2022.The fair value of this contingent consideration w
189、as determined using a Monte Carlovaluation model based on Level 3 inputs,including managements latest estimate of forecasted future results.Other key assumptions included discount rate and volatility.Fair value adjustments are recorded in selling,general and administrative expenses in the condensed
190、consolidated statement of earnings.Refer to Note 2,Acquisitionsand Divestitures for additional information.(1)(2)(1)(2)21Table of ContentsNote 10.Benefit PlansPension PlansComponents of Net Periodic Pension CostNet periodic pension cost/(benefit)consisted of the following:U.S.PlansNon-U.S.Plans For
191、the Three Months Ended March 31,For the Three Months Ended March 31,2023202220232022(in millions)Service cost$1$1$14$39 Interest cost15 11 76 41 Expected return on plan assets(25)(18)(102)(93)Amortization:Net loss from experience differences 3 11 19 Prior service cost/(benefit)1 (1)Settlement losses
192、 and other expenses5 3 Net periodic pension(benefit)/cost$(3)$(1)$5 Employer ContributionsDuring the three months ended March 31,2023,we contributed$2 million to our U.S.pension plans and$37 million to our non-U.S.pensionplans.We make contributions to our pension plans in accordance with local fundi
193、ng arrangements and statutory minimum fundingrequirements.Discretionary contributions are made to the extent that they are tax deductible and do not generate an excise tax liability.As of March 31,2023,we plan to make further contributions of approximately$4 million to our U.S.plans and$82 million t
194、o our non-U.S.plans for the remainder of 2023.Our actual contributions may be different due to many factors,including changes in tax and other benefitlaws,significant differences between expected and actual pension asset performance or interest rates.Multiemployer Pension PlansOn July 11,2019,we rec
195、eived an undiscounted withdrawal liability assessment from the Bakery and Confectionery Union and IndustryInternational Pension Fund totaling$526 million requiring pro-rata monthly payments over 20 years.We began making monthly paymentsduring the third quarter of 2019.In connection with the discount
196、ed long-term liability,we recorded accreted interest of$3 million in the threemonths ended March 31,2023 and March 31,2022,within interest and other expense,net.As of March 31,2023,the remaining discountedwithdrawal liability was$340 million,with$15 million recorded in other current liabilities and$
197、325 million recorded in long-term otherliabilities.Postretirement and Postemployment Benefit PlansThe net periodic postretirement cost was zero for the three months ended March 31,2023 and$3 million for the three months ended March31,2022.The net periodic postemployment cost was$1 million for the th
198、ree months ended March 31,2023 and$1 million for the threemonths ended March 31,2022.22Table of ContentsNote 11.Stock PlansStock OptionsStock option activity is reflected below:Shares Subject to OptionWeighted-Average Exercise or Grant Price Per ShareAverage Remaining Contractual TermAggregate Intri
199、nsic ValueBalance at January 1,202320,490,250$46.315 years$417 millionAnnual grant to eligible employees2,452,110 65.36Additional options issued3,310 66.25Total options granted2,455,420 65.36Options exercised(1,453,616)34.75$46 millionOptions canceled(109,897)48.36Balance at March 31,202321,382,157
200、49.276 years$437 million(1)Cash received from options exercised was$49 million in the three months ended March 31,2023.The actual tax benefit realized and recorded in the provision for incometaxes for the tax deductions from the option exercises totaled$8 million in the three months ended March 31,2
201、023.Performance Share Units and Other Stock-Based AwardsOur performance share unit(PSU),deferred stock unit(DSU)and other stock-based activity is reflected below:Number of SharesGrant DateWeighted-AverageFair ValuePer Share Weighted-AverageAggregateFair Value Balance at January 1,20234,451,674$60.12
202、Annual grant to eligible employees:Mar 2,2023Performance share units895,410 68.59Deferred stock units578,570 65.36Additional shares granted 675,395 Various65.13Total shares granted2,149,375 66.63$143 millionVested(1,598,781)63.07$101 millionForfeited(91,430)60.77Balance at March 31,20234,910,838 61.
203、99(1)Includes PSUs and DSUs.(2)Includes PSUs,DSUs and other stock-based awards.(3)The actual tax benefit realized and recorded in the provision for income taxes for the tax deductions from the shares vested totaled$2 million in the three months endedMarch 31,2023.(4)The grant date fair value of PSUs
204、 is determined based on the Monte Carlo simulation model for the market-based total shareholder return component and the closingmarket price of the Companys stock on the grant date for performance-based components.The Monte Carlo simulation model incorporates the probability of achieving thetotal sh
205、areholder return market condition.Compensation expense is recognized using the grant date fair values regardless of whether the market condition is achieved,solong as the requisite service has been provided.Share Repurchase ProgramBetween 2013 and 2020,our Board of Directors authorized the repurchas
206、e of a total of$23.7 billion of our Common Stock and extended theprogram through December 31,2023.Prior to January 1,2023,we had repurchased approximately$22.0 billion of Common Stock pursuantto this authorization.Our Board of Directors approved a new program authorizing the repurchase of up to$6.0
207、billion of our Common Stockthrough December 31,2025.This authorization,effective January 1,2023,replaces our current share repurchase program.Repurchasesunder the program are determined by management and are wholly discretionary.During the three months ended March 31,2023,we repurchased approximatel
208、y 6.2 million shares of Common Stock at an average cost of$65.93 per share,or an aggregate cost of approximately$407 million,all of which was paid during the period except for approximately$8million settled in April 2023.All share repurchases were funded(1)(4)(3)(1)(2)(3)(2)23Table of Contentsthroug
209、h available cash and commercial paper issuances.As of March 31,2023,we have approximately$5.6 billion in remaining sharerepurchase capacity.Note 12.Commitments and ContingenciesLegal ProceedingsWe routinely are involved in various pending or threatened legal proceedings,claims,disputes,regulatory ma
210、tters and governmentalinquiries,inspections or investigations arising in the ordinary course of or incidental to our business,including those noted below in thissection.We record provisions in the consolidated financial statements for pending legal matters when we determine that an unfavorableoutcom
211、e is probable,and the amount of the loss can be reasonably estimated.For matters we have not provided for that are reasonablypossible to result in an unfavorable outcome,management is unable to estimate the possible loss or range of loss or such amounts havebeen determined to be immaterial.At presen
212、t we believe that the ultimate outcome of these legal proceedings and regulatory andgovernmental matters,individually and in the aggregate,will not materially harm our financial position,results of operations or cash flows.However,legal proceedings and regulatory and governmental matters are subject
213、 to inherent uncertainties,and unfavorable rulings or otherevents could occur.Unfavorable resolutions could involve substantial fines,civil or criminal penalties,and other expenditures.In addition,inmatters for which conduct remedies are sought,unfavorable resolutions could include an injunction or
214、other order prohibiting us from sellingone or more products at all or in particular ways,precluding particular business practices or requiring other equitable remedies.Anunfavorable outcome might result in a material adverse impact on our business,results of operations or financial position.On April
215、 1,2015,the U.S.Commodity Futures Trading Commission(CFTC)filed a complaint against Kraft Foods Group and MondelzGlobal LLC(“Mondelz Global”)in the U.S.District Court for the Northern District of Illinois(the District Court),Eastern Division(the“CFTCaction”)following its investigation of activities
216、related to the trading of December 2011 wheat futures contracts that occurred prior to the spin-off of Kraft Foods Group.The complaint alleged that Kraft Foods Group and Mondelz Global(1)manipulated or attempted to manipulate thewheat markets during the fall of 2011;(2)violated position limit levels
217、 for wheat futures;and(3)engaged in non-competitive trades by tradingboth sides of exchange-for-physical Chicago Board of Trade wheat contracts.The CFTC sought civil monetary penalties of either triple themonetary gain for each violation of the Commodity Exchange Act(the“Act”)or$1 million for each v
218、iolation 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 prohibitingKraft Foods Group and Mondelz Global from violating specified provisions of the Act;disgorgement of profits;and costs a
219、nd fees.On May13,2022,the District Court approved a settlement agreement between the CFTC and Mondelz Global.The terms of the settlement,whichare available in the District Courts docket,had an immaterial impact on our financial position,results of operations and cash flows and didnot include an admi
220、ssion by Mondelz Global.Several class action complaints also were filed against Kraft Foods Group and MondelzGlobal in the District Court by investors in wheat futures and options on behalf of themselves and others similarly situated.The complaintsmake similar allegations as those made in the CFTC a
221、ction,and the plaintiffs are seeking monetary damages,interest and unjustenrichment;costs and fees;and injunctive,declaratory and other unspecified relief.In June 2015,these suits were consolidated in the UnitedStates District Court for the Northern District of Illinois as case number 15-cv-2937,Har
222、ry Ploss et al.v.Kraft Foods Group,Inc.andMondelz Global LLC.On January 3,2020,the District Court granted plaintiffs request to certify a class.It is not possible to predict theoutcome of these matters;however,based on our Separation and Distribution Agreement with Kraft Foods Group dated as of Sept
223、ember 27,2012,we expect to bear any monetary penalties or other payments in connection with the class action.Although the CFTC action and theclass action complaints involve the same alleged conduct,the resolution of the CFTC matter may not be dispositive as to the outcome of theclass action.As previ
224、ously disclosed,in November 2019,the European Commission informed us that it initiated an investigation into our allegedinfringement of European Union competition law through certain practices allegedly restricting cross-border trade within the EuropeanEconomic Area.On January 28,2021,the European C
225、ommission announced it had taken the next procedural step in its investigation andopened formal proceedings.We have been cooperating with the investigation and discussions with the European Commission areprogressing in an effort to reach a negotiated,proportionate resolution in this matter.As of Mar
226、ch 31,2023 and December 31,2022,we haveaccrued(in accordance with U.S.GAAP)a liability of 300 million($325 million as of March 31,2023)within other current liabilities in theconsolidated balance sheet as an estimate of the possible cost to resolve this matter.It is not possible to predict if our ong
227、oing discussionswill result in a negotiated resolution,or result in a negotiated resolution in a higher amount,or when we will have clarity on the ultimateoutcome of these discussions.If our discussions do not result in a negotiated resolution,we expect that the European Commission willpursue24Table
228、 of Contentsproceedings against the Company,including the imposition of a fine,and we would defend against any allegations made in suchproceedings.There is a possibility that the final liability could be materially higher than the amount accrued.However,due to the inherentuncertainty of the discussi
229、ons and possible outcomes,any possible loss or range of loss different from the amount accrued is not reasonablyestimable at this time.Third-Party GuaranteesWe enter into third-party guarantees primarily to cover long-term obligations of our vendors.As part of these transactions,we guarantee thatthi
230、rd parties will make contractual payments or achieve performance measures.At March 31,2023,we had no material third-partyguarantees recorded on our condensed consolidated balance sheet.Tax MattersWe are a party to various tax matter proceedings incidental to our business.These proceedings are subjec
231、t to inherent uncertainties,andunfavorable outcomes could subject us to additional tax liabilities and could materially adversely impact our business,results of operations orfinancial position.25Table of ContentsNote 13.Reclassifications from Accumulated Other Comprehensive IncomeThe following table
232、 summarizes the changes in accumulated balances of each component of accumulated other comprehensive earnings/(losses)attributable to Mondelz International.Amounts reclassified from accumulated other comprehensive earnings/(losses)to net earnings(net of tax)were netgains of$30 million in the first q
233、uarter of 2023 and$42 million in the first quarter of 2022.For the Three Months Ended March 31,20232022(in millions)Currency Translation Adjustments:Balance at beginning of period$(9,808)$(9,097)Currency translation adjustments173 6 Tax(expense)/benefit(22)44 Other comprehensive earnings/(losses)151
234、 50 Less:other comprehensive(earnings)/loss attributable to noncontrolling interests(2)4 Balance at end of period(9,659)(9,043)Pension and Other Benefit Plans:Balance at beginning of period$(1,105)$(1,379)Net actuarial gain/(loss)arising during period2 44 Tax(expense)/benefit on net actuarial gain/(
235、loss)Losses/(gains)reclassified into net earnings:Amortization of experience losses and prior service costs 8 20 Settlement losses and other expenses 5 3 Tax expense/(benefit)on reclassifications(3)(6)Currency impact(18)32 Other comprehensive earnings/(losses)(6)93 Balance at end of period(1,111)(1,
236、286)Derivative Cash Flow Hedges:Balance at beginning of period$(34)$(148)Net derivative gains/(losses)(28)26 Tax(expense)/benefit on net derivative gain/(loss)(3)(1)Losses/(gains)reclassified into net earnings:Interest rate contracts18 48 Tax expense/(benefit)on reclassifications2(23)Currency impact
237、1 2 Other comprehensive earnings/(losses)(10)52 Balance at end of period(44)(96)Accumulated other comprehensive income attributable to Mondelz International:Balance at beginning of period$(10,947)$(10,624)Total other comprehensive earnings/(losses)135 195 Less:other comprehensive(earnings)/loss attr
238、ibutable to noncontrolling interests(2)4 Other comprehensive earnings/(losses)attributable to Mondelz International133 199 Balance at end of period$(10,814)$(10,425)(1)These reclassified losses are included in net periodic benefit costs disclosed in Note 10,Benefit Plans.(2)These reclassified gains
239、or losses are recorded within interest and other expense,net.(3)Taxes reclassified to earnings are recorded within the provision for income taxes.(1)(1)(3)(2)(3)26Table of ContentsNote 14.Income TaxesAs of the first quarter of 2023,our estimated annual effective tax rate,which excludes discrete tax
240、impacts,was 24.3%.This rate reflectedthe impact of unfavorable foreign provisions under U.S.tax laws partially offset by favorable impacts from the mix of pre-tax income invarious non-U.S.jurisdictions.Our 2023 first quarter effective tax rate of 29.6%was high due to a$127 million net tax expense in
241、curred inconnection with the KDP share sale(the earnings are reported separately on our statement of earnings and thus not included in earningsbefore income taxes).Associated with the KDP share sale,we also recorded a$201 million net tax expense related to the change ofaccounting for our KDP investm
242、ent from equity method investment accounting to accounting for equity interests with readily determinable fairvalues.Excluding these tax impacts as well as the associated pre-tax impacts,our effective tax rate for the three months ended March 31,2023 of 23.0%was favorably impacted by discrete net ta
243、x benefits of$20 million,primarily driven by a$30 million net benefit from therelease of liabilities for uncertain tax positions due to expirations of statutes of limitations and audit settlements in several jurisdictions.As of the first quarter of 2022,our estimated annual effective tax rate,which
244、excluded discrete tax impacts,was 24.8%.This rate reflectedthe impact of unfavorable foreign provisions under U.S.tax laws and our tax related to earnings from equity method investments(theearnings are reported separately on our statement of earnings and thus not included in earnings before income t
245、axes),partially offset byfavorable impacts from the mix of pre-tax income in various non-U.S.jurisdictions.The estimated annual effective tax rate also considers theimpact of the establishment of a valuation allowance related to a deferred tax asset arising from the anticipated 2022 Ukraine loss.Our
246、effective tax rate for the three months ended March 31,2022 of 21.9%was favorably impacted by discrete net tax benefits of$62 million,primarily driven by the Chipita acquisition,which resulted in the release of a portion of the valuation allowance recorded against the deferredtax asset for the step-
247、up of intangible assets in Switzerland.Note 15.Earnings per ShareBasic and diluted earnings per share(“EPS”)were calculated as follows:For the Three Months Ended March 31,20232022(in millions,except per share data)Net earnings$2,089$861 Noncontrolling interest earnings(8)(6)Net earnings attributable
248、 to Mondelz International$2,081$855 Weighted-average shares for basic EPS1,366 1,389 Plus incremental shares from assumed conversions of stock options and long-term incentive plan shares7 9 Weighted-average shares for diluted EPS1,373 1,398 Basic earnings per share attributable to Mondelz Internatio
249、nal$1.52$0.62 Diluted earnings per share attributable to Mondelz International$1.52$0.61 We exclude antidilutive Mondelz International stock options and long-term incentive plan shares from our calculation of weighted-averageshares for diluted EPS,which are 2.2 million in the first quarter of 2023 a
250、nd 2.1 million in the first quarter of 2022.Note 16.Segment ReportingWe manufacture and market primarily snack food products,including chocolate,biscuits and baked snacks,as well as gum&candy,cheese&grocery and powdered beverages.We manage our global business and report operating results through geo
251、graphic units.We manage our operations by region to leverageregional operating scale,manage different and changing business environments more effectively and pursue growth opportunities as theyarise across our key markets.Our regional management teams have responsibility for the business,product cat
252、egories and financial resultsin the regions.27Table of ContentsOur operations and management structure are organized into four operating segments:Latin America AMEA Europe North AmericaWe use segment operating income to evaluate segment performance and allocate resources.We believe it is appropriate
253、 to disclose thismeasure to help investors analyze segment performance and trends.Segment operating income excludes unrealized gains and losses onhedging activities(which are a component of cost of sales),general corporate expenses(which are a component of selling,general andadministrative expenses)
254、,amortization of intangibles,gains and losses on divestitures and acquisition-related costs(which are a componentof selling,general and administrative expenses)in all periods presented.We exclude these items from segment operating income in order toprovide better transparency of our segment operatin
255、g results.Furthermore,we centrally manage benefit plan non-service income andinterest and other expense,net.Accordingly,we do not present these items by segment because they are excluded from the segmentprofitability measure that management reviews.Our segment net revenues and earnings were:For the
256、Three Months Ended March 31,20232022(in millions)Net revenues:Latin America$1,211$826 AMEA1,939 1,867 Europe3,307 2,935 North America2,709 2,136 Net revenues$9,166$7,764 Earnings before income taxes:Operating income:Latin America$139$103 AMEA360 272 Europe507 377 North America566 418 Unrealized gain
257、s/(losses)on hedging activities (mark-to-market impacts)49 27 General corporate expenses(77)(50)Amortization of intangible assets(39)(32)Acquisition-related costs(21)Operating income1,505 1,094 Benefit plan non-service income19 33 Interest and other expense,net(95)(168)Gain on marketable securities7
258、96 Earnings before income taxes$2,225$959 Items impacting our segment operating results are discussed in Note 1,Basis of Presentation,Note 2,Acquisitions and Divestitures,Note 3,Inventories,Note 4,Property,Plant and Equipment,Note 5,Goodwill and Intangible Assets,and Note 7,Restructuring Program.Als
259、o seeNote 8,Debt and Borrowing Arrangements,and Note 9,Financial Instruments,for more information on our interest and other expense,netfor each period.28Table of ContentsNet revenues by product category were:For the Three Months Ended March 31,2023LatinAmericaAMEAEuropeNorthAmericaTotal(in millions)
260、Biscuits&Baked Snacks$276$669$1,062$2,313$4,320 Chocolate368 747 1,670 84 2,869 Gum&Candy348 206 233 312 1,099 Beverages111 208 33 352 Cheese&Grocery108 109 309 526 Total net revenues$1,211$1,939$3,307$2,709$9,166 For the Three Months Ended March 31,2022LatinAmericaAMEAEuropeNorthAmericaTotal(in mil
261、lions)Biscuits&Baked Snacks$224$657$951$1,799$3,631 Chocolate248 706 1,512 77 2,543 Gum&Candy172 203 152 260 787 Beverages102 197 32 331 Cheese&Grocery80 104 288 472 Total net revenues$826$1,867$2,935$2,136$7,764 29Table of ContentsItem 2.Managements Discussion and Analysis of Financial Condition an
262、d Results of Operations.Description of the CompanyOur core business is making and selling chocolate,biscuits and baked snacks,with additional businesses in adjacent,locally relevantcategories including gum&candy,cheese&grocery and powdered beverages around the world.We aim to be the global leader in
263、 snacking.Our strategy is to drive long-term growth by focusing on four strategic priorities:acceleratingconsumer-centric growth,driving operational excellence,creating a winning growth culture and scaling sustainable snacking.We believe thesuccessful implementation of our strategic priorities and l
264、everaging of our attractive global footprint,strong core of iconic global and localbrands,marketing,sales,distribution and cost excellence capabilities,and top talent with a growth mindset,will drive consistent top-andbottom-line growth,enabling us to continue to create long-term value for our share
265、holders.Recent Developments and Significant Items Affecting ComparabilityMacroeconomic environmentWe continue to observe significant market uncertainty,increasing inflationary pressures,supply constraints,exchange rate volatility as wellas ongoing effects from the COVID-19 pandemic.Throughout the pa
266、ndemic,we experienced an overall increase in demand and revenuegrowth as consumers increased their food purchases for in-home consumption in some markets,while parts of our business were negativelyaffected by related lockdowns and restrictions.Additionally,global supply chain,transportation and labo
267、r issues escalated and weexperienced significantly higher operating costs,including higher overall raw material,transportation,labor and energy costs that havecontinued to rise.Our overall outlook for future snacks revenue growth remains strong;however,we anticipate ongoing volatility in response to
268、 supply chainissues,including labor and transportation constraints,and COVID-related risks.We will continue to proactively manage our business inresponse to the evolving global economic environment and related uncertainty and business risks while also prioritizing and supporting ouremployees and cus
269、tomers.We continue to take steps to mitigate impacts to our supply chain,operations,technology and assets.War in UkraineIn February 2022,Russia began a military invasion of Ukraine.For the safety of our employees,we stopped production and closed ourfacilities in Ukraine;since then we have been gradu
270、ally restoring operations,continuing to take steps to protect the safety of our employeesand partially re-opening our two plants.We are providing all of our employees with compensation and with help in securing shelter inneighboring countries,where required and needed.We have also made cash and in-k
271、ind donations to several humanitarian aid organizationsin the region.In March 2022,our two Ukrainian manufacturing facilities in Trostyanets and Vyshhorod were significantly damaged.During the remainder of 2022,the war continued through parts of Ukraine.We continue to make targeted repairs on both o
272、ur plants.Werelaunched our systems and implemented additional safety and security measures.In late June,we partially reopened the Vyshhorod plantand restarted limited potato chip production and in late November,we reopened the Trostyanets plant and restarted limited chocolateproduction.We also conti
273、nue to support our Ukraine employees,including paying salaries to those not yet able to return to work until fullproduction returns.See Note 1,Basis of Presentation-War in Ukraine,to the condensed consolidated financial statements,and refer toItems Affecting Comparability of Financial Results for ad
274、ditional information.As a food company,we continue to work to support the continuity of food supply and provide packaged foods to consumers.We havesuspended new capital investments and our advertising spending in Russia,but as a food company with more than 2,500 employees in thecountry,we have not c
275、eased operations given we believe we play a role in the continuity of the food supply.We are complying and willcomply with applicable international sanctions and other measures that have been or may be imposed on Russian entities.We continue toevaluate the situation in Ukraine and Russia and our abi
276、lity to control our operating activities and businesses on an ongoing basis,and wecontinue to consolidate both our Ukrainian and Russian subsidiaries.During the first quarter of 2022,Ukraine generated 0.3%and Russiagenerated 2.4%of consolidated net revenue and during the first quarter of 2023,Ukrain
277、e generated 0.4%and Russia generated 2.8%ofconsolidated net revenue.Our Russian business has grown30Table of Contentsas a result of the stronger Russian ruble versus the U.S.dollar at the start of 2023 and increased price.The combination of pricing,suspension of advertising and ruble strength has re
278、sulted in a significant increase in the profitability of the Russian business and contributedto the growth of our consolidated performance.Our decision to suspend new capital investments in Russia has not had a material impact onour ability to meet demand within our Russian business during 2023.We b
279、elieve the war in Ukraine has had a negative impact on ourbusiness throughout the rest of our Europe operating segment,but the impact of this is difficult to quantify.We cannot predict if the recentstrength in our Russian business will continue in the future.Acquisitions and DivestituresDuring 2022,
280、we completed the following acquisitions to strategically complement and expand our existing portfolio:Ricolino,a confectionery business with products sold primarily in MexicoClif Bar&Company(“Clif Bar”),a leading U.S.maker of nutritious energy bars with organic ingredientsChipita Global S.A.(Chipita
281、),a high-growth leader in the central and Eastern European croissant and baked snacks categoryAdditionally in 2022,we announced our intention to divest our developed market gum and global Halls candy businesses and in the fourthquarter of 2022,we announced an agreement to sell the developed market g
282、um business with an anticipated closing in the fourth quarter of2023,subject to relevant antitrust approvals and closing conditions.Refer to Note 2,Acquisitions and Divestitures,for additional details.Investment TransactionsKeurig Dr Pepper TransactionsIn 2023,we sold approximately 30 million shares
283、,which reduced our ownership interest by 2.1%to 3.2%of the total outstanding shares.Werecorded a pre-tax gain of$493 million(or$366 million after tax).This reduction in ownership,to below 5%,resulted in a change ofaccounting for our investment,from equity method investment accounting to accounting f
284、or equity interests with readily determinable fairvalues(marketable securities)as we no longer have significant influence.Due to the change of accounting,we reported unrealized gainsfor marketable securities of$787 million(or$586 million after tax).JDE Peets TransactionsOn March 30,2023,we issued op
285、tions to sell shares of JDEP in tranches equivalent to approximately 7.7 million shares.These options areexercisable at maturity during the third quarter of 2023 with a potential impact to our ownership if the options are exercised.On April 3,2023,we sold approximately 7.7 million shares of JDEP,whi
286、ch reduced our ownership interest by 1.6%to 18.1%.For additional information,refer to Note 6,Investments and Note 9,Financial Instruments.Highly Inflationary AccountingTrkiyeDuring the first quarter of 2022,we concluded that Trkiye became a highly inflationary economy for accounting purposes.As of A
287、pril 1,2022,we began to apply highly inflationary accounting for our subsidiaries operating in Trkiye.See Note 1,Basis of Presentation Currency Translation and Highly Inflationary Accounting for additional details.U.K.advertising and promotion banIn the United Kingdom,a ban on specific types of TV a
288、nd online advertising of food containing levels of fat,sugar or salt above specifiedthresholds is expected to go into effect in October 2025,and new measures restricting certain promotions are expected to go into effect inOctober 2023.Restrictions on in-store placement of some of those products went
289、 into effect in October 2022.Although we are unable toestimate precisely the impact of the restrictions,they did not have a significant impact on our consolidated financial statements in the firstquarter of 2023.31Table of ContentsTaxesWe continue to monitor existing and potential future tax reform
290、around the world.On August 16,2022,the U.S.enacted the InflationReduction Act of 2022,which,among other things,implements a 15%minimum tax on book income of certain large corporations,a 1%excise tax on net stock repurchases and several tax incentives to promote clean energy.Based on the guidance ava
291、ilable thus far,we expectto meet the criteria of a large corporation but we do not believe this legislation will have a material impact on our consolidated financialstatements.We will continue to evaluate it as additional guidance and clarification becomes available.We also continue to monitor count
292、riesprogress toward enactment of the Organization of Economic Cooperation and Developments model rules on a global minimum tax.Whilenumerous countries have proposed new legislation in this area(and two countries have enacted it),any new law is only expected to beeffective for taxable years beginning
293、 after December 31,2023.If broadly enacted,these laws could have a material effect on us.Financial OutlookWe seek to achieve profitable,long-term growth and manage our business to attain this goal using our key operating metrics:Organic NetRevenue,Adjusted Operating Income and Adjusted EPS.We use th
294、ese non-GAAP financial metrics and related computations,particularlygrowth in profit dollars,to evaluate and manage our business and to plan and make near-and long-term operating and strategic decisions.As such,we believe these metrics are useful to investors as they provide supplemental information
295、 in addition to our U.S.GenerallyAccepted Accounting Principles(U.S.GAAP)financial results.We believe it is useful to provide investors with the same financialinformation that we use internally to make comparisons of our historical operating results,identify trends in our underlying operating result
296、sand evaluate our business.We believe our non-GAAP financial measures should always be considered in relation to our U.S.GAAP results.We have provided reconciliations between our GAAP and non-GAAP financial measures in Non-GAAP Financial Measures,which appearslater in this section.In addition to mon
297、itoring our key operating metrics,we monitor developments and trends that could impact our revenue and profitabilityobjectives,as highlighted in our most recently filed Annual Report on Form 10-K for the year ended December 31,2022.32Table of ContentsSummary of ResultsNet revenues increased 18.1%to$
298、9.2 billion in the first quarter of 2023 as compared to the same period in the prior year.In the firstquarter of 2023,our net revenue growth continued to reflect increased demand for most of our snack category products in both ouremerging and developed markets relative to 2022.Overall,our net revenu
299、e growth in the first quarter of 2023 was driven by highernet pricing,incremental net revenues from our acquisitions of Clif Bar and Ricolino in 2022 and favorable volume/mix,partially offsetby unfavorable currency translation and the impact of divestitures in 2022.Organic Net Revenue,a non-GAAP fin
300、ancial measure,increased 19.4%to$9.3 billion in the first quarter of 2023 as compared tosame period in the prior year.During the first quarter of 2023,Organic Net Revenue grew due to higher net pricing and favorablevolume/mix.Organic Net Revenue is on a constant currency basis and excludes revenue f
301、rom acquisitions and divestitures.We useOrganic Net Revenue as it provides improved year-over-year comparability of our underlying operating results(see the definition ofOrganic Net Revenue and our reconciliation with net revenues within Non-GAAP Financial Measures).Diluted EPS attributable to Monde
302、lz International increased 149.2%to$1.52 in the first quarter of 2023 as compared to the sameperiod in the prior year.Diluted EPS increased in the first quarter of 2023,driven by a mark-to-market gain on marketable securities,gain on equity method investment transactions,lower incremental costs due
303、to the war in Ukraine,an increase in Adjusted EPS,lapping prior-year loss on debt extinguishment,lapping prior-year intangible asset impairment charges,lower acquisition-relatedcosts and favorable year-over-year change in mark-to-market impacts from currency and commodity derivatives.These favorable
304、items were partially offset by higher acquisition integration costs and contingent consideration adjustments,higher equity investeeitems,higher divestiture-related costs,lower net earnings from divestitures and higher remeasurement loss of net monetary position.Adjusted EPS,a non-GAAP financial meas
305、ure,increased 9.9%to$0.89 in the first quarter of 2023 as compared to the same periodin the prior year.On a constant currency basis,Adjusted EPS increased 17.3%to$0.95 in the first quarter of 2023 as compared tothe same periods in the prior year.Adjusted EPS increased in the first quarter of 2023,pr
306、imarily driven by operating gains,fewershares outstanding,lower taxes and dividend income from marketable securities,partially offset by unfavorable currency translation,higher interest expense,lower equity method investment earnings and lower benefit plan non-service income.Adjusted EPS andAdjusted
307、 EPS on a constant currency basis are non-GAAP financial measures.We use these measures as they provide improvedyear-over-year comparability of our underlying results(see the definition of Adjusted EPS and our reconciliation with diluted EPSwithin Non-GAAP Financial Measures).33Table of ContentsDisc
308、ussion and Analysis of Historical ResultsItems Affecting Comparability of Financial ResultsThe following table includes significant income or(expense)items that affected the comparability of our results of operations and oureffective tax rates.Please refer to the notes to the condensed consolidated
309、financial statements indicated below for more information.Referalso to the Consolidated Results of Operations Net Earnings and Earnings per Share Attributable to Mondelz International table for theafter-tax per share impacts of these items.For the Three Months EndedMarch 31,See Note20232022 (in mill
310、ions,except percentages)Simplify to Grow ProgramNote 7Restructuring charges$(30)$(11)Implementation charges(5)(20)Intangible asset impairment chargesNote 5(78)Mark-to-market gains from derivatives Note 948 28 Acquisition and divestiture-related costs:Note 2Acquisition integration costs and contingen
311、t consideration adjustments(51)(35)Acquisition-related costs(21)Divestiture-related costs(30)(1)Incremental costs due to war in Ukraine Note 13(143)Remeasurement of net monetary positionNote 1(12)(5)Impact from pension participation changes Note 10(3)(3)Loss on debt extinguishment and related expens
312、esNote 8(129)Gain on marketable securitiesNote 6787 Gain/(loss)on equity method investment transactions 485(5)Equity method investee items(48)(10)Effective tax rateNote 1429.6%21.9%(1)Includes impacts recorded in operating income and interest expense and other,net.Mark-to-market gains/(losses)above
313、also include our equity method investment-relatedderivative contract mark-to-market gains/(losses)(refer to Note 9,Financial Instruments)that are recorded in the gain on equity method investment transactions on ourcondensed consolidated statement of earnings.(2)Incremental costs due to the war in Uk
314、raine include direct charges such as asset impairments due to damaged facilities and inventory,higher expected allowances foruncollectible accounts receivable and committed compensation.Please see the Non-GAAP Financial Measures section at the end of this item and Note 1,Basis ofPresentation War in
315、Ukraine,for additional information.(3)Gain/(loss)on equity method investment transactions is recorded outside pre-tax operating results on the condensed consolidated statement of earnings.See footnote(1)as mark-to-market gains/(losses)on our equity method-investment-related derivative contracts are
316、presented in the table above within mark-to-market gains/(losses)fromderivatives.(4)Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peets equity method investee,including acquisition and divestiture-related costs and restructuring program costs.(
317、1)(1)(2)(1)(3)(4)34Table of ContentsConsolidated Results of OperationsThree Months Ended March 31For the Three Months Ended March 31,20232022$change%change(in millions,except per share data)Net revenues$9,166$7,764$1,402 18.1%Operating income1,505 1,094 411 37.6%Net earnings attributable to Mondelz
318、International$2,081$855$1,226 143.4%Diluted earnings per share attributable to Mondelz International$1.52$0.61$0.91 149.2%Net Revenues Net revenues increased$1,402 million(18.1%)to$9,166 million in the first quarter of 2023,and Organic Net Revenue increased$1,502 million(19.4%)to$9,257 million.Devel
319、oped markets net revenues increased 16.0%and developed markets Organic NetRevenue increased 15.8%.Emerging markets net revenues increased 21.4%and emerging markets Organic Net Revenue increased25.2%.The underlying changes in net revenues and Organic Net Revenue are detailed below:2023Change in net r
320、evenues(by percentage point)Total change in net revenues18.1%Remove the following items affecting comparability:Unfavorable currency6.0 ppImpact of divestitures0.1 ppImpact of acquisitions(4.8)ppTotal change in Organic Net Revenue 19.4%Higher net pricing16.2 ppFavorable volume/mix3.2 pp(1)Please see
321、 the Non-GAAP Financial Measures section at the end of this item.Net revenue increase of 18.1%was driven by our underlying Organic Net Revenue growth of 19.4%and the impact of acquisitions,partiallyoffset by unfavorable currency translation and the impact of divestitures.Overall,we continued to see
322、increased demand for our snackcategory products.Organic Net Revenue growth was driven by higher net pricing and favorable volume/mix.Higher net pricing in all regionswas due to the benefit of carryover pricing from 2022 as well as the effects of input cost-driven pricing actions taken during the fir
323、st quarter of2023.Favorable volume/mix was reflected across all regions,primarily due to strong volume gains across our snack category products.TheNovember 1,2022 acquisition of Ricolino added incremental net revenues of$156 million(constant currency basis)and the August 1,2022acquisition of Clif Ba
324、r added incremental net revenues of$218 million.Unfavorable currency impacts decreased net revenues by$465million,primarily due to the strength of the U.S.dollar relative to most currencies,including the Argentinean peso,British pound sterling,euro,Indian rupee,Egyptian pound,Turkish lira and Chines
325、e yuan,partially offset by the strength of a few currencies relative to the U.S.dollar,primarily the Russian ruble and Mexican peso.The impact of divestitures resulted in a year-over-year reduction in net revenues of$9million.Refer to Note 2,Acquisitions and Divestitures,for additional information.(
326、1)(1)(1)(1)35Table of ContentsOperating Income Operating income increased$411 million(37.6%)to$1,505 million in the first quarter of 2023.Adjusted OperatingIncome increased$204 million(14.8%)to$1,581 million and Adjusted Operating Income on a constant currency basis increased$285million(20.7%)to$1,6
327、62 million due to the following:Operating Income%Change(in millions)Operating Income for the Three Months Ended March 31,2022$1,094 Simplify to Grow Program 31 Intangible asset impairment charge 78 Mark-to-market gains from derivatives(27)Acquisition integration costs and contingent consideration ad
328、justments 32 Acquisition-related costs 21 Divestiture-related costs 1 Operating income from divestitures(1)Remeasurement of net monetary position 5 Incremental costs due to war in Ukraine 143 Adjusted Operating Income for the Three Months Ended March 31,2022$1,377 Higher net pricing1,254 Higher inpu
329、t costs(930)Favorable volume/mix97 Higher selling,general and administrative expenses(162)Impact from acquisition 43 Other(17)Total change in Adjusted Operating Income(constant currency)285 20.7%Unfavorable currency translation(81)Total change in Adjusted Operating Income 204 14.8%Adjusted Operating
330、 Income for the Three Months Ended March 31,2023$1,581 Simplify to Grow Program(35)Mark-to-market gains from derivatives 49 Acquisition integration costs and contingent consideration adjustments(51)Divestiture-related costs(30)Incremental costs due to war in Ukraine 3 Remeasurement of net monetary p
331、osition(12)Operating Income for the Three Months Ended March 31,2023$1,505 37.6%(1)Refer to the Non-GAAP Financial Measures section.(2)Refer to Note 7,Restructuring Program,for more information.(3)Refer to Note 5,Goodwill and Intangible Assets,for more information.(4)Refer to Note 9,Financial Instru
332、ments,and the Non-GAAP Financial Measures section at the end of this item for more information on the unrealized gains/losses oncommodity and forecasted currency transaction derivatives.(5)Refer to Note 2,Acquisitions and Divestitures,for more information on the November 1,2022 acquisition of Ricoli
333、no,August 1,2022 acquisition of Clif Bar and January 3,2022 acquisition of Chipita.(6)Refer to Note 1,Basis of Presentation,for information on our accounting for the war in Ukraine and our application of highly inflationary accounting for Argentina andTrkiye.(7)Divestiture-related costs includes costs incurred associated with our publicly-announced processes to divest our developed markets gum and