Mondelez International (MDLZ) 10-K risk factor changes: FY2016 vs FY2015

Failure to effectively assess, [added: timely] change and set proper pricing [added: or trade incentives] may negatively impact the achievement of our strategic and financial goals.

We may [removed: also] need to increase or reallocate spending on marketing, advertising and new product innovation to protect or increase market share.

We [removed: have announced] [added: are pursuing] a transformation agenda with the goals of focusing our portfolio, improving our cost structure and operating model, and accelerating our growth.

If we do not achieve these objectives [removed: and] [added: or] do [removed: so] [added: not implement transformation] in a way that minimizes disruptions to our business, our financial condition and results of operations could be materially and adversely affected.

Our success depends on our ability to maintain brand image for our existing products, extend our brands into new geographies and to new distribution platforms, including [removed: online,] [added: e-commerce,] and expand our brand image with new [added: and renewed] product offerings.

We seek to maintain, extend and expand our brand image through marketing investments, including advertising and consumer promotions, and [added: both] product [added: renovation and] innovation.

[removed: Continuing] [added: Failure to effectively address the continuing] global focus on [removed: health and wellness,] [added: well-being,] including weight management, [added: changing consumer perceptions of certain ingredients,] and increasing attention from the media, shareholders, consumers, activists and other stakeholders on the role of food marketing could adversely affect our brand image.

Moreover, adverse publicity about regulatory or legal action against us, product quality and safety, [added: where we manufacture our products] or environmental and human [added: and workplace] rights risks in our supply chain could damage our reputation and brand image, undermine our customers’ confidence and reduce demand for our products, even if the regulatory or legal action is unfounded or these matters are immaterial to our operations.

[removed: We are subject to a] [added: A] variety of legal and regulatory restrictions [removed: on] [added: limit] how and to whom we market our products.

In addition, we might fail to invest sufficiently in maintaining, extending and expanding our brand [removed: image.][added: image, and our marketing efforts might not achieve desired results.]

We are a global company and generated [removed: 78.7%] [added: 75.6%] of our [removed: 2015] [added: 2016] net revenues, [removed: 82.1%] [added: 78.7%] of our [removed: 2014] [added: 2015] net revenues and [removed: 83.1%] [added: 82.1%] of our [removed: 2013] [added: 2014] net revenues outside the United States.

We manufacture and market our products in [added: approximately] 165 countries and have operations in more than 80 countries.

| | • | | compliance with antitrust and competition laws, [added: trade laws,] data privacy laws, [added: anti-bribery laws,] and a variety of other local, national and multi-national regulations and laws in multiple regimes; |

| | • | | changes in tax laws, [added: including enactment of new U.S. and foreign jurisdiction tax laws,] interpretation of tax laws and tax audit outcomes; |

| | • | | currency devaluations or fluctuations in currency values, including in developing markets such as Argentina, Brazil, China, [added: Mexico,] Russia, [removed: Turkey and] [added: Turkey, Egypt, Nigeria,] Ukraine [added: and South Africa] as well as in developed markets such as [added: the United Kingdom and other] countries within the European Union; |

| | • | | changes in capital controls, including currency exchange controls, government currency policies [added: such as demonetization in India] or other limits on our ability to import raw materials or finished product into various countries or repatriate cash from outside the United States; |

| | • | | increased sovereign risk, such as default by or deterioration in the economies and credit ratings of governments, particularly in our Latin America and [removed: EEMEA] [added: AMEA] regions; |

| | • | | greater risk of uncollectible accounts and longer collection cycles; [added: and] |

| | • | | design, implementation and use of effective control environment processes across our diverse operations and employee [removed: base; and] [added: base.] |

| | • | | the imposition of increased or new tariffs, quotas, trade barriers or similar restrictions on our sales or [added: key commodities like cocoa, potential changes in U.S. trade programs and trade relations with other countries, or] regulations, taxes or policies that might negatively affect our [removed: sales.] [added: sales;] |

[removed: The] [added: High unemployment or the] slowdown in economic growth [removed: or high unemployment] in some [removed: emerging] markets could constrain consumer [removed: spending, and declining consumer purchasing power could adversely impact our profitability.][added: spending.]

All of these factors could result in increased costs or decreased revenues, and could materially and adversely affect our product sales, financial [removed: condition and] [added: condition,] results of [removed: operations.][added: operations, and our relationships with customers, suppliers and employees in the short or long term.]

Our growth strategy depends in part on our ability to expand our operations in emerging markets, including [added: among others] Brazil, China, India, Mexico, Russia, Argentina, Ukraine, the Middle East, Africa and Southeast Asia.

In many countries, particularly those with emerging economies, [removed: it may be common for others to engage] [added: engaging] in business practices prohibited by laws and regulations with extraterritorial reach, such as the FCPA and the U.K. Bribery Act, or local anti-bribery [removed: laws.][added: laws may be more common.]

Our success in emerging markets is critical to [added: achieving] our growth strategy.

If we cannot successfully increase our business in emerging markets and manage associated political, economic and regulatory risks, our product sales, financial condition and results of operations could be adversely affected, such as [removed: the current year impact of deconsolidating] [added: occurred when we deconsolidated] and [removed: changing] [added: changed] to the cost method of accounting for our Venezuelan operations [removed: as discussed in this Form 10-K] [added: at the close of 2015] or any potential impact on our business in Venezuela from future economic or political developments.

We have a complex network of suppliers and [removed: materials] [added: material] needs, owned manufacturing locations, co-manufacturing locations, distribution networks and information systems that support our ability to provide our products to our customers consistently.

If we do not effectively respond to disruptions in our operations, for example, by finding alternative suppliers or replacing capacity at key manufacturing or distribution locations, or cannot quickly repair damage to our information, production or supply systems, we may be late in delivering or unable to deliver products to our [removed: customers.][added: customers and the quality and safety of our products might be negatively affected.]

If that occurs, we may lose our customers’ [removed: confidence,] [added: confidence or suffer damage to our reputation,] and long-term consumer demand for our products could decline.

Further, [removed: changes to regulatory restrictions within the markets in which we operate may impact] our ability to supply multiple markets with a streamlined manufacturing [removed: footprint.][added: footprint may be negatively impacted by portfolio complexity, changes in volume produced and changes to regulatory restrictions or labor-related constraints on our ability to adjust production capacity in the markets in which we operate.]

At December 31, [removed: 2015,] [added: 2016,] we sold our products in [added: approximately] 165 countries and had operations in more than 80 countries.

[removed: A] [added: Consequently, a] significant portion of our business is exposed to currency exchange rate fluctuations.

Our financial results and capital ratios are sensitive to movements in currency exchange rates because a large portion of our assets, liabilities, revenue and expenses must be translated into U.S. dollars for reporting purposes or converted into U.S. dollars to service obligations such as our U.S. dollar-denominated indebtedness and [removed: dividends.][added: to pay dividends to our shareholders.]

We purchase and use large quantities of commodities, including cocoa, dairy, wheat, corn products, [removed: soybean] [added: palm] and [added: other] vegetable oils, sugar and other sweeteners, and nuts.

Moreover, increases in the price of our products, including increases to cover higher input [removed: costs] [added: costs,] may result in lower sales volumes, while decreases in input costs could require us to lower our prices and thereby affect our revenues, profits or margins.

[removed: Changes] [added: Complying with changes] in and inconsistencies among laws and regulations in many countries in which we operate could increase our costs.

Various laws and regulations govern food production, storage, distribution, sales, [removed: advertising] [added: advertising, labeling] and marketing, as well as licensing, trade, labor, tax and environmental matters, and health and safety practices.

Unplanned turnover or failure to develop adequate succession plans for leadership positions or [added: to] hire and retain a diverse global workforce with the skills and in the locations we need to operate and grow our business could deplete our institutional knowledge base and erode our competitiveness.

We also face increased personnel-related risks in connection with implementing the changes in our transformation agenda related to our operating model and business processes, including building a global shared services [removed: capability.][added: capability and reconfiguring our supply chain.]

These risks could lead to operational challenges, including increased competition for employees with the skills we require to achieve our business [removed: goals,] [added: goals;] higher employee turnover, including of employees with key [removed: capabilities,] [added: capabilities;] and challenges in developing the capabilities necessary to build [added: and effectively execute] a shared services function and transform our business processes.

The rapid emergence of new distribution channels, such as e-commerce, may create consumer price deflation, affecting our retail customer relationships and presenting additional challenges to increasing prices in response to commodity or other cost increases.

##### [Table of Contents](#toc)

Our sponsorship relationships could also subject us to negative publicity.

Furthermore, third parties may sell counterfeit or spurious versions of our products that are inferior or pose safety risks.

If that happens, consumers could confuse these counterfeit products for our products or have a bad experience with the counterfeit brand, causing consumers to refrain from purchasing our brands.

##### [Table of Contents](#toc)

As a branded food company that seeks to sell our products at a premium, declining consumer purchasing power could result in loss of market share and adversely impact our profitability.

Continued instability in the banking and governmental sectors of certain countries or the dynamics and uncertainties associated with the United Kingdom’s vote to exit the European Union (“Brexit”), including currency exchange rate fluctuations and volatility in global stock markets, could have a negative effect on our business.

##### [Table of Contents](#toc)

Increasing focus on climate change, deforestation, water, animal welfare and human rights concerns and other risks associated with the global food system may lead to increased activism focusing on consumer goods companies, government intervention and consumer response, and could adversely affect our or our suppliers’ reputation and business and our ability to procure the materials we need to operate our business.

For instance, our financial condition and results of operations could be negatively affected by the regulatory and economic impact of changes in taxation and trade relations among the United States and other countries or changes in the European Union such as Brexit.

##### [Table of Contents](#toc)

Strikes, work stoppages or other forms of labor unrest by our employees or those of our suppliers or distributors, or situations like the re-negotiation of collective bargaining agreements covering eight U.S. facilities that expired in February 2016, could cause disruptions to our supply chain, manufacturing or distribution processes.

##### [Table of Contents](#toc)

Strategic alliances we have entered into include combining our wholly owned coffee businesses with those of D.E Master Blenders 1753 B.V. (“DEMB”) to create a new company, Jacobs Douwe Egberts (“JDE”), in July 2015 and exchanging a portion of our equity ownership in JDE for equity in the new holding company of Keurig Green Mountain, Inc. (“Keurig”) in March 2016.

##### [Table of Contents](#toc)

##### [Table of Contents](#toc)

Working with these technologies and third party service providers creates risks related to confidentiality, integrity and continuity, and some of these risks may be outside of our control.

We currently utilize third party e-commerce providers and request that they have the appropriate cybersecurity controls and meet regulatory requirements.

Going forward, should we decide to transact e-commerce direct to consumers as the merchant, we would implement additional procedures, controls and technology to address cybersecurity and regulatory compliance.

##### [Table of Contents](#toc)

The emergence of new distribution channels, such as Internet sales directly to consumers, may affect customer and consumer preferences, cost structures or margins, and we might not achieve our goal of developing and building an industry-leading e-commerce snacks business on our planned timeframe.

Continued instability in the banking and governmental sectors of certain countries or the dynamics associated with the federal and state debt and budget challenges in the United States could adversely affect us.

In July 2015, we completed transactions to combine our wholly owned coffee businesses with those of DEMB to create a new company, Jacobs Douwe Egberts, and we acquired an 80% interest in a biscuit operation in Vietnam.

In connection with management’s assessment of internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 for the fiscal year ended December 31, 2013, we determined that we did not maintain effective monitoring and oversight of controls over the completeness, accuracy and presentation of our accounting for income taxes, including the income tax provision and related tax assets and liabilities.

We determined that the ineffective monitoring and oversight of controls over income tax accounting constituted a material weakness.

As of December 31, 2015, we remediated this material weakness.

See Item 9A, _Controls and Procedures_, for a discussion of the material weakness and the remediation.

If the new controls we implemented to strengthen our overall internal control over accounting for income taxes were not designed or do not continue to operate effectively or if we are unsuccessful in continuing to follow these new processes, we may not timely or accurately report our financial condition or results of operations.

This could adversely affect our stock price and the confidence of investors, business partners and others in our financial reports.

These technologies and related information are subject to risks related to confidentiality, integrity and continuity, many of which are beyond our control.

We have operations in more than 80 countries and sell our products in [added: approximately] 165 countries.

On July 2, 2015, we completed transactions to combine our wholly owned coffee businesses [removed: (including our coffee portfolio in France)] with those of [removed: D.E Master Blenders 1753 B.V. (“DEMB”)] [added: DEMB] to create a new company, [removed: Jacobs Douwe Egberts or] JDE.

[removed: We currently hold a 43.5%] [added: At that time, our] equity interest in JDE [removed: and] [added: was 43.5% with the remaining 56.5% held by a subsidiary of] Acorn Holdings B.V. [removed: (“AHBV”),] [added: (“AHBV,”] owner of [removed: DEMB, holds the remaining 56.5% equity interest.][added: DEMB prior to July 2, 2015).]

In connection with [removed: the contribution of our global coffee businesses to JDE,] [added: these transactions, in 2015,] we recorded a [added: final] pre-tax gain of $6.8 billion [removed: (or $6.6] [added: ($6.6] billion [removed: after taxes) in 2015.][added: after-tax) from the deconsolidation of our legacy coffee businesses.]

We also recorded approximately $1.0 billion of [added: cumulative] pre-tax net gains [added: ($436 million in 2015 and $628 million in 2014) and cash] related to [added: currency] hedging [added: in connection with] the expected cash [removed: proceeds from the transactions as described further below.][added: consideration to be received in euros.]

[removed: Please see Note 2, _Divestitures and Acquisitions – Other Divestitures, Acquisitions] [added: | Divestitures, acquisitions] and [removed: Sales of Property_, for discussion of the divestiture] [added: sales] of [removed: AGF.][added: property | | | Note 2 | | | | | | | | | | | | | |]

As part of our [added: final] sales price negotiations, we [added: also] retained the right to collect future cash payments if certain estimated pension liabilities [removed: come in] [added: are realized] over an agreed amount in the future.

[removed: For] [added: See Note 2, _Divestitures and Acquisitions,_ for] additional [removed: information] [added: details] on the JDE coffee [removed: transactions, see Note 2, _Divestitures and Acquisitions_.][added: business transactions.]

Following the [removed: exchange of shares, we expect] [added: exchange,] our ownership [added: interest] in JDE [removed: to decrease to approximately] [added: became] 26.5% and [removed: our] [added: we owned a 24.2%] interest in [removed: Keurig to be somewhat lower.][added: Keurig.]

Effective as of the close of the 2015 fiscal year, we concluded that we no longer met the accounting criteria for consolidation of our [removed: Venezuela] [added: Venezuelan] subsidiaries due to a loss of control over our Venezuelan operations and an other-than-temporary lack of currency exchangeability.

[removed: As of the close of the 2015 fiscal year,] [added: At that time,] we deconsolidated and changed to the cost method of accounting for our Venezuelan operations.

We recorded a $778 million pre-tax loss [added: on December 31, 2015] as we reduced the value of our cost method investment in Venezuela and all Venezuelan receivables held by our other subsidiaries to realizable fair value, resulting in full impairment.

[removed: Beginning in] [added: As of the start of] 2016, we [removed: will] no longer include net revenues, earnings or net assets [removed: from] [added: of] our Venezuelan subsidiaries within our consolidated financial [removed: statements.][added: statements in our reported GAAP results (we exclude Venezuela in our non-GAAP results for all historical periods presented).]

Under the cost method of accounting, [removed: we will recognize] earnings [added: are] only [added: recognized] to the extent cash is received [added: and we have not received any distributed cash] from our [removed: Venezuelan subsidiaries.][added: Venezuela operations in 2016.]

Given the current and ongoing difficult economic, regulatory and business environment in Venezuela, there continues to be significant uncertainty related to our operations in [removed: Venezuela] [added: Venezuela,] and we expect these conditions will continue for the foreseeable future.

We [removed: will] monitor the extent of our ability to control our Venezuelan operations and the liquidity and availability of [added: cash and] U.S. dollars [removed: at different rates] [added: needed to operate in Venezuela,] as our current situation in Venezuela may change over time and lead to consolidation at a future date.

See [removed: below] _Discussion and Analysis of Historical Results – Items Affecting Comparability of Financial [removed: Results_,] [added: Results_ below,] and Note 1, _Summary of Significant Accounting Policies_ – _Currency Translation and Highly Inflationary Accounting: Venezuela_, for more information on our historical [removed: Venezuela] [added: Venezuelan] operating results, including the remeasurement losses and loss on deconsolidation.

| | • | | Net revenues decreased [removed: 13.5%] [added: 12.5%] to [removed: $29.6] [added: $25.9] billion in [removed: 2015] [added: 2016] and decreased [removed: 3.0%] [added: 13.5%] to [removed: $34.2] [added: $29.6] billion in [removed: 2014.] [added: 2015.] Net revenues in [removed: 2015] [added: 2016] were significantly affected by [added: the deconsolidation of our historical coffee business,] unfavorable currency translation as the U.S. dollar strengthened against most currencies in which we operate compared to exchange rates in the prior [removed: year and] [added: year,] the [removed: July 2, 2015] deconsolidation of our [removed: global coffee business.] [added: historical Venezuelan operations and the year-over-year impact of the accounting calendar change in 2015.] |

| | • | | Diluted EPS attributable to Mondelēz International [removed: increased 246.9%] [added: decreased 76.4%] to [removed: $4.44] [added: $1.05] in [removed: 2015] [added: 2016] and [removed: decreased 41.6%] [added: increased 246.9%] to [removed: $1.28] [added: $4.44] in [removed: 2014. Excluding] [added: 2015. The gain on] the [removed: results of discontinued operations in 2013, our diluted EPS attributable to Mondelēz International from continuing operations decreased 0.8% to $1.28 in 2014. A number of] [added: coffee business deconsolidation and other] significant items [removed: also] affected the comparability of our reported results, as further described in the _Discussion and Analysis of Historical Results_ appearing later in this section and in the notes to the consolidated financial statements. |

We [added: seek to achieve profitable, long-term growth and] manage our business to [removed: achieve] [added: attain] this goal using [removed: three] [added: our] key operating metrics: Organic Net Revenue, Adjusted Operating Income and Adjusted EPS.

Over the long-term, we expect these trends to continue leading to growth in [removed: key] consumer [removed: behaviors, including increased snacking occasions, greater use of convenience food and] [added: behaviors such as] migration to more frequent, smaller [removed: meals.][added: meals and snacks and greater use of convenience foods.]

In the near term, low GDP growth, [removed: high unemployment and] [added: economic recessionary pressures,] weak consumer [removed: confidence in Europe] [added: confidence, a strong U.S. dollar] and [removed: emerging markets] [added: changing consumer trends] have slowed category and our [added: net revenue] growth.

We continue to make investments in our [removed: brands] [added: brand portfolio] and build strong routes to market to address the needs of consumers in emerging and developed markets.

In doing so, we anticipate [removed: stimulating] [added: driving] demand in our categories and growing our position in these markets.

Some of these markets have greater political and economic [removed: volatility and] [added: volatility,] vulnerability to infrastructure and labor [removed: disruptions,] [added: disruptions and sensitivity to world oil and energy prices,] as we [removed: experienced] [added: noted] this past year in markets including [removed: Argentina,] Brazil, Russia, [removed: Ukraine] [added: India, China, Ukraine, the Middle East] and [added: Nigeria.]

To grow and maintain our market positions, we focus on [removed: product quality, bringing new products and innovations to market and effectively] meeting consumer needs and [removed: preferences.][added: preferences through new product innovations and product quality.]

We [added: also] continue to optimize our manufacturing and other operations and invest in our brands through ongoing research and development, advertising, marketing and consumer promotions.

In [removed: 2015,] [added: 2015 and 2016,] we generally increased prices in response to higher commodity costs, currency and other market factors.

In [removed: 2016,] [added: 2017,] we anticipate that we will adjust our prices in response to changing market conditions.

_Currency_ – As a global company with [removed: nearly 80%] [added: 75.6%] of our net revenues generated outside the United States, we are exposed to changes in global economic conditions and currency movements.

In the last three years, the U.S. dollar [added: has generally] strengthened relative to other currencies in which we operate, and several countries experienced significant declines in or devaluations of their currency.

Our 2015 net revenues were $29.6 billion, down 13.5% from 2014, including a negative 12.6 percentage point impact from currency [removed: translation.][added: translation (and a 12.0 percentage point impact excluding currency impacts related to Venezuela).]

Our 2014 net revenues were $34.2 billion, down 3.0% from 2013, including a negative 5.2 percentage point impact from currency [removed: translation.][added: translation (and a 3.9 percentage point impact excluding currency impacts related to Venezuela).]

[removed: In 2013,] [added: Our 2016] net revenues were [removed: $35.3] [added: $25.9] billion, [removed: up 0.8%,] [added: down 12.5% from 2015,] including a negative [removed: 2.4] [added: 4.6] percentage point impact from currency translation.

[removed: While] [added: To partially offset the translation of certain of our overseas operations, including the United Kingdom,] we have net investment hedges in the form of local currency denominated [removed: debt to offset the translation of certain of our overseas operations, we generally do not hedge against currency translation.][added: debt.]

We [added: generally do not hedge against currency translation and] primarily seek to hedge against economic losses on cross-currency transactions.

We have historically [removed: also] been exposed to currency devaluation risks impacting earnings [removed: particularly] [added: particularly, but not only,] in connection with our Venezuela [removed: operations, which as] [added: operations that were deconsolidated at the close] of [removed: December 31,] [added: the] 2015 [removed: has been deconsolidated.][added: fiscal year.]

While we work to mitigate our exposure to these currency risks, factors such as continued global [added: and local] market volatility, actions by foreign governments, political [removed: uncertainty] [added: uncertainty, limited hedging opportunities] and other [removed: external developments] [added: factors] could lead to further unfavorable currency impacts in the future.

We continue to use [removed: lower cost] [added: lower-cost,] short- and long-term debt to finance our ongoing working capital, capital expenditures and other investments, dividends and share repurchases.

[removed: In 2015, 2014 and 2013,] [added: During 2016,] we [removed: repaid $15.6] [added: retired $6.2] billion of our long-term debt and [added: related costs and] issued [removed: lower-cost] [added: lower-cost,] long-term euro, [removed: British pound sterling,] Swiss franc and U.S. dollar-denominated debt.

We aim to deliver strong, profitable long-term growth by accelerating our core snacks business and expanding the reach of our Power Brands globally.

Leveraging our Power brands and our innovation platforms, we plan to innovate boldly and connect with our consumers wherever they are, including new markets around the world, using both traditional and digital channels.

As consumer consumption patterns change to more accessible, frequent and better-for-you snacking, we are enhancing the goodness of many of our brands (including providing simpler and wholesome ingredient-focused snacks), expanding the well-being offerings in our portfolio and inspiring consumers to snack mindfully by providing clear and simple nutrition information.

As shopping expands further online, we are also working to grow our e-commerce platform and on-line presence with consumers.

To fuel these investments, we have been working to optimize our cost structure.

These efforts include reinventing our supply chain, including adding and upgrading to more efficient production lines, while reducing the complexity of our product offerings, ingredients and number of suppliers.

We also continue to aggressively manage our overhead costs.

We have embraced and embedded zero-based budgeting practices across the organization to identify potential areas of cost reductions and capture and sustain savings within our ongoing operating budgets.

Through these actions, we’re leveraging our brands, platforms and capabilities to drive long-term value and return on investment for our shareholders.

_JDE Coffee Business Transactions:_

We received €3.8 billion of cash ($4.2 billion) as of July 2, 2015 and with the cash from hedging currency, we effectively received $5.2 billion of cash.

On July 5, 2016, we also received from JDE an expected $275 million cash payment to settle a receivable for tax formation costs that were part of the initial sales price.

As further described below, following the March 2016 exchange of JDE shares for an investment in Keurig and stock-based compensation activity at JDE during 2016, as of December 31, 2016, our equity interest in JDE was 26.4%.

We recorded equity earnings of $100 million in 2016 and equity losses of $58 million in 2015 related to our investment in JDE.

On June 30, 2016, we entered into agreements with AHBV and its affiliates to establish a new stock-based compensation arrangement tied to the issuance of JDE equity compensation awards to JDE employees.

This arrangement replaced a temporary equity compensation program tied to the issuance of AHBV equity compensation to JDE employees.

New Class C, D and E JDE shares were authorized and issued for investments made by JDE employees and to issue shares when JDE awards vest.

As new shares of JDE are issued, the Class A and B ownership interests of JDE decrease.

Under these arrangements, dilution of the JDE shares is limited to 2%.

Based on estimated award achievement, we do not expect our JDE ownership interest to decrease below 26.27%.

Following these stock-based compensation issuances, our ownership interest in JDE was 26.4% as of December 31, 2016.

##### [Table of Contents](#toc)

_Keurig Transaction:_

On March 3, 2016, a subsidiary of AHBV completed a $13.9 billion acquisition of all of the outstanding common stock of Keurig through a merger transaction.

On March 7, 2016, we exchanged with a subsidiary of AHBV a portion of our equity interest in JDE with a carrying value of €1.7 billion (approximately $2.0 billion as of March 7, 2016) for an interest in Keurig with a fair value of $2.0 billion based on the merger consideration per share for Keurig.

We recorded the difference between the fair value of Keurig and our basis in JDE shares as a $43 million gain on the equity method investment exchange.

Both AHBV and we hold our investments in Keurig through a combination of equity and shareholder loan interests, with the same pro-rata ownership of each.

Our initial $2.0 billion investment in Keurig includes a $1.6 billion Keurig equity interest and a $0.4 billion shareholder loan receivable, which are reported on a combined basis within equity method investments on our consolidated balance sheet as of December 31, 2016.

The shareholder loan has a 5.5% interest rate and is payable at the end of a seven-year term on February 27, 2023.

Within equity earnings, we recorded equity earnings of $77 million and interest income from the shareholder loan of $20 million in 2016.

Additionally, we received $14 million of interest payments on the shareholder loan and $4 million in dividends on our investment in Keurig in 2016.

See Note 2, _Divestitures and Acquisitions,_ for additional details on the Keurig transaction.

_Coffee Business Equity Earnings:_

We have reflected the results of our historical coffee businesses and equity earnings from JDE, Keurig and Dongsuh Foods Corporation (“DSF”) in our results from continuing operations as the coffee category continues to be a significant part of our net earnings and business strategy going forward.

Historically, our coffee businesses and the income from equity method investments were recorded within our operating income as these businesses were part of our base business.

While we retain an ongoing interest in coffee through equity method investments including JDE, Keurig and DSF, and we have significant influence with our equity method investments, we do not control these operations directly.

As such, in the third quarter of 2015, we began to recognize equity method investment earnings, consisting primarily of investments in coffee businesses, outside of operating income.

For periods prior to the third quarter of 2015, our historical coffee business and equity method investment earnings were included within our operating income.

##### [Table of Contents](#toc)

| | • | | Organic Net Revenue increased 1.3% to $27.1 billion in 2016 and increased 1.4% to $30.1 billion in 2015 after recasting prior years to exclude the historical Venezuela deconsolidated operating results and historical operating results from a small 2016 divestiture in the Latin America region. Organic Net Revenue also excludes the impact of our historical global coffee business which was deconsolidated in the JDE coffee business transactions in July 2015. Organic Net Revenue is a non-GAAP financial measure and is on a constant currency basis. We use Organic Net Revenue as it provides improved year-over-year comparability of our underlying results (see the definition of Organic Net Revenue and our reconciliation with net revenues within _Non-GAAP Financial Measures_ appearing later in this section). |

Over the last several years, we have built a presence in the snacking category.

We have expanded geographically and continue to invest in product quality, marketing and innovation behind our iconic brands while also implementing a series of cost saving initiatives.

Our goals are to achieve industry-leading revenue growth over time driven by the higher expected growth rates of advantaged snack categories; leverage our cost structure through supply chain reinvention, productivity programs, overhead streamlining, volume growth and improved product mix to drive margin gains; and grow earnings per share in the top-tier of our peer group.

The consideration we have received to date consists of €3.8 billion of cash ($4.2 billion U.S. dollars as of July 2, 2015), a 43.5% equity interest in JDE and $794 million in receivables (related to sales price adjustments and tax formation cost payments).

During the third quarter of 2015, we also recorded $283 million of cash and receivables from JDE related to reimbursement of costs that we incurred in separating our coffee businesses.

The cash and equity consideration we received at closing reflects that we retained our interest in a Korea-based joint venture, Dongsuh Foods Corporation.

During the second quarter of 2015, we also completed the sale of our interest in a Japanese coffee joint venture, Ajinomoto General Foods, Inc. (“AGF”).

In lieu of contributing our interest in the AGF joint venture to JDE, we contributed the net cash proceeds from the sale, and the transaction did not change the consideration received for our global coffee businesses.

During the fourth quarter, we and JDE concluded negotiations of a sales price adjustment and completed the valuation of our investment in JDE.

Primarily related to the negotiated resolution of the sales price adjustment in the fourth quarter, we recorded a $313 million reduction in the pre-tax gain on the coffee transaction, reducing the $7.1 billion estimated gain in the third quarter to the $6.8 billion final gain for 2015.

The final value of our investment in JDE on July 2, 2015 was €4.1 billion, or $4.5 billion.

The fair value of the JDE investment was determined using both income-based and market-based valuation techniques.

The discounted cash flow analysis reflected growth, discount and tax rates and other assumptions reflecting the underlying combined businesses and countries in which the combined coffee businesses operate.

In connection with the expected receipt of cash in euros at the time of closing, we entered into a number of consecutive currency exchange forward contracts in 2014 and 2015 to lock in an equivalent expected value in U.S. dollars as of the date the coffee business transactions were first announced in May 2014.

Cumulatively, we realized aggregate net gains

and received cash of approximately $1.0 billion on these hedging contracts that increased the cash we received in connection with the coffee business transactions from $4.2 billion in cash consideration received to $5.2 billion.

In connection with these currency contracts and the transfer of the sale proceeds to our subsidiaries that deconsolidated net assets and shares, we recognized a net gain of $628 million in 2014 and a net gain of $436 million in 2015 within interest and other expense, net.

On December 18, 2015, AHBV and we agreed to provide JDE additional capital to pay down some of its debt with lenders.

Our pro rata share of the capital increase was €499 million ($544 million U.S. dollars as of December 18, 2015) and was made in return for additional shares in JDE such that we retained our 43.5% interest in JDE following the capital increase.

To fund our share of the capital increase, we contributed €460 million ($501 million) of JDE receivables and made a €39 million ($43 million) cash payment.

On December 6, 2015, we agreed to make an investment in Keurig Green Mountain Inc. (“Keurig”), which is contingent upon the successful completion of a planned acquisition of Keurig by JAB Holding Co. (“JAB” and parent company of AHBV).

Following the close of JAB’s planned acquisition of Keurig in early 2016, we intend to exchange a portion of our equity interest in JDE for an equity interest in Keurig.

We expect to account for both investments under the equity method, resulting in our recognizing our share of their earnings within our earnings and our share of their dividends within our cash flows.

Our governance rights in JDE will not change significantly and we will have similar governance rights in Keurig following the transaction.

Our investment in Keurig will follow the acquisition of Keurig by JAB, which is expected to be completed by the end of the first quarter of 2016 or early in the second quarter.

As our exchange of shares in JDE for the investment in Keurig is conditioned upon the actions of JAB and Keurig’s existing shareholders and is subject to further regulatory antitrust reviews, we have not reflected the portion of our investment in JDE that would be exchanged for the Keurig investment as assets held for sale as of December 31, 2015.

| | • | | Organic Net Revenue increased 3.7% to $31.6 billion in 2015 and increased 2.5% to $32.1 billion in 2014. Organic Net Revenue is a non-GAAP financial measure we use to evaluate our underlying results (see the definition of Organic Net Revenue and our reconciliation with net revenues within _Non-GAAP Financial Measures_ appearing later in this section). |

| | • | | Adjusted EPS remained flat at $1.75 in 2015 and increased 13.6% to $1.75 in 2014. On a constant currency basis, Adjusted EPS increased 18.9% to $2.08 in 2015 and increased 22.7% to $1.89 in 2014. Adjusted EPS is a non-GAAP financial measure we use to evaluate our underlying results (see the definition of Adjusted EPS and our reconciliation with diluted EPS within _Non-GAAP Financial Measures_ appearing later in this section). |

We seek to achieve top-tier financial performance.

(Refer to _Non-GAAP Financial Measures_ appearing later in this section for more information on these measures.) Additional metrics that we use or monitor include product quality measures, category growth, market share performance, margins, pricing net of commodity costs, net commodity inflation, volume growth, Power Brand Organic Net Revenue growth, gross and net productivity savings, brand support and related investments, capital spending, cash conversion cycle, free cash flow, return on invested capital and shareholder returns.

We also monitor a number of factors and trends that we expect may impact our revenues and profitability objectives:

Growth in the global categories increased from approximately 3.6% in 2014 to 5.5% in 2015, and our Organic Net Revenue growth also increased from 2.5% in 2014 to 3.7% in 2015.

Our Organic Net Revenue included a 90 basis point headwind from strategic decisions to improve revenue mix.

In 2015, we began to improve our revenue mix by discontinuing certain low margin, customer-specific product lines, discontinuing certain low-margin licensed products and continuing to simplify our portfolio.

We anticipate taking similar actions to optimize our portfolio in 2016.

The improvement in global category growth was largely driven by price relating to higher commodity costs and currency-related inflationary impacts.

Over the long-term, we expect category growth to return to levels more in line with historical growth rates when the macroeconomic environment in emerging markets recovers to a better balance between price and volume/mix.

Venezuela.

There will likely be continued volatility across these and other markets in which we sell.

As such, we are focused on continuing to manage our costs and adjusting prices as needed to recover changing costs while we continue to invest in our global Power Brands and routes to market.

For additional information on our derivative activity and the types of derivative instruments we use to hedge our currency exchange, commodity price and interest rate exposures, see Note [removed: 9,] [added: 8,] _Financial Instruments_.

See _Consolidated Results of Operations_ and _Results of Operations by Reportable Segment_ under _Discussion and Analysis of Historical Results_ for currency exchange effects on our financial [removed: results during 2015.][added: results.]

For additional information on the impact of currency policies, [added: Brexit, recent currency devaluations,] the deconsolidation of our Venezuelan operation and the historical remeasurement of our Venezuelan net monetary assets on our financial condition and results of operations, also see Note 1, _Summary of Significant Accounting Policies—Currency Translation and Highly Inflationary Accounting_.

To manage [removed: the] input cost volatility, we enter into forward purchase agreements and other derivative financial instruments.

In addition to using interest rate derivatives to manage future interest payments, during [removed: 2015,] [added: 2016,] we retired [removed: $4.2] [added: $6.2] billion of our long-term debt and [added: related costs and] issued [removed: $4.5] [added: $6.4] billion of lower borrowing cost debt.

Our weighted-average interest rate on our total debt as of December 31, [removed: 2015] [added: 2016] was [removed: 3.7%,] [added: 2.2%,] down from [removed: 4.3%] [added: 3.7%] as of December 31, [removed: 2014.][added: 2015.]

The VAR analysis was done separately for our currency exchange, fixed income and commodity risk portfolios as of each quarter end during [removed: 2015.][added: the periods presented below.]

Excluded from the computation were anticipated transactions, currency trade payables and receivables, and net investments in non-U.S. subsidiaries, which the [removed: abovementioned] [added: above-mentioned] instruments are intended to hedge.

The parameters used for estimating the expected return distributions were determined by observing interest rate, currency exchange, and commodity price movements over the prior quarter for the calculation of VAR amounts at December 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] and over each of the four prior quarters for the calculation of average VAR amounts during each year.

As of December 31, [added: 2016 and December 31,] 2015, the estimated potential one-day loss in fair value of our interest rate-sensitive instruments, primarily debt, and the estimated potential one-day loss in pre-tax earnings from our currency and commodity instruments, as calculated in the VAR model, were:

| | | At [removed: 12/31/14] [added: 12/31/16] | | | | Average | | | | High | | | | Low | | | | At [removed: 12/31/14] [added: 12/31/16] | | | | Average | | | | High | | | | Low | | |

| Interest rates | | | | | | | | | | | | | | | | | | | $ [removed: 50] [added: 62] | | | | $ [removed: 41] [added: 62] | | | | $ [removed: 50] [added: 91] | | | | $ [removed: 30] [added: 45] | |

| Foreign currency rates | | | $ [removed: 51] [added: 10] | | | | $ [removed: 42] [added: 18] | | | | $ [removed: 58] [added: 26] | | | | $ [removed: 25] [added: 10] | | | | | | | | | | | | | | | | | |

| Commodity prices | | | [removed: 26] [added: 16] | | | | [removed: 28] [added: 12] | | | | [removed: 38] [added: 16] | | | | [removed: 19] [added: 10] | | | | | | | | | | | | | | | | | |

There were no significant changes in the types of derivative instruments we use to hedge our exposures between December 31, 2015 and December 31, 2016.

See Note 8, _Financial Instruments_, for more information on 2016 derivative activity.

##### [Table of Contents](#toc)

The impacts in the 2015 tables above have not been recast to reflect the deconsolidation of our legacy coffee business or Venezuela business and the related derivative activity for those businesses as it is impracticable to do so.

##### [Table of Contents](#toc)

We are one of the world’s largest snack companies with global net revenues of [removed: $29.6] [added: $25.9] billion and [added: net] earnings [removed: from continuing operations] of [removed: $7.3] [added: $1.7] billion in [removed: 2015.][added: 2016.]

We manufacture and market delicious snack food and beverage products for consumers in [added: approximately] 165 countries around the world.

We are proud members of the [added: Standard and Poor’s 500,] NASDAQ 100 and [removed: Standard & Poor’s 500.][added: Dow Jones Sustainability Index.]

We also participate in the [removed: Carbon Disclosure Project] [added: CDP] Climate and Water [removed: forums] [added: disclosures] and continue to [removed: disclose and] work to reduce our carbon and water footprints.

We intend to leverage our core strengths, including our advantaged geographic footprint, market leadership positions and portfolio of iconic brands and innovation platforms, to achieve [removed: two] [added: three] primary [removed: goals: deliver top-tier financial performance] [added: goals of growing our people, growing our business] and [removed: be a great place to work.][added: growing our impact.]

Our [removed: Power Brands include global] [added: portfolio includes many iconic snack] brands [removed: such as] [added: including _Nabisco_,] _Oreo, LU_ and _belVita_ [removed: biscuits; _Milka_, _Cadbury] [added: biscuits_; Cadbury, Milka, Cadbury] Dairy [removed: Milk] [added: Milk_] and [removed: Lacta_] [added: _Toblerone_] chocolate; [removed: _Halls_ candy;] _Trident_ gum; [added: _Halls_ candy] and _Tang_ powdered beverages.

Our operations and management structure are organized into [removed: five] [added: four] reportable operating segments:

| | • | | [removed: Eastern Europe,] [added: Asia,] Middle [removed: East] [added: East,] and Africa [removed: (“EEMEA”)] [added: (“AMEA”)] |

| | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Latin America | | $ | [removed: 4,988] [added: 3,392] | | | $ | [removed: 5,153] [added: 4,988] | | | $ | [removed: 5,382] [added: 5,153] | |

| North America | | | [removed: 6,974] [added: 6,960] | | | | [removed: 6,936] [added: 6,974] | | | | [removed: 6,991] [added: 6,936] | |

| | | $ | [removed: 29,636] [added: 25,923] | | | $ | [removed: 34,244] [added: 29,636] | | | $ | [removed: 35,299] [added: 34,244] | |

[removed: Currency, the] [added: The] deconsolidation of our global coffee business [added: in 2015, the deconsolidation of our Venezuela operations beginning with our 2016 results, currency] and other items significantly affect the comparability of our consolidated and segment operating results from year to year.

During [removed: 2015,] [added: 2016,] our segments contributed to our net revenues in [removed: these] [added: the following] product [removed: categories as follows:][added: categories:]

| | | Percentage of [removed: 2015] [added: 2016] Net Revenues by Product Category | | | | | | | | | | | | | | | | | | | | | | |

| Segment | | Biscuits | | | | Chocolate | | | | Candy | | | | [removed: Beverages (1)] [added: Beverages] | | | | Grocery | | | | Total | | |

| | | [removed: | | | |] For the Years Ended December 31, | | | | | | | | | | | [added: | | | | | | | | | | | |]

| | | [added: 2016] | | | | [added: | | | |] 2015 | | | | [removed: 2014 (1)] | | | | [removed: 2013 (1)] [added: 2014] | | | [added: | | | |]

| Biscuits - Cookies and crackers | | | | | | | [removed: 34%] | | | | [removed: 30%] [added: 36%] | | | | [removed: 29%] [added: 34%] | | [added: | | 30% | |]

| Chocolate - Tablets, bars and other | | | | | | | [removed: 27%] | | | | [removed: 28%] [added: 30%] | | | | 27% | | [added: | | 28% | |]

| Beverages - Coffee | | | | | | | [removed: 6%] | | | | [removed: 11%] [added: –] | | | | [added: 6% | | | |] 11% | |

| | (1) | During 2014, we realigned some of our products across product categories and as such, we reclassified the product category net revenues on a basis consistent with the 2015 [added: and 2016] presentation. |

For a definition and reconciliation of segment operating income to consolidated pre-tax earnings as well as other information on our segments, see Note [removed: 17,] [added: 16,] _Segment Reporting_.

| | | | | | | | | [added: | |] For the Years Ended December 31, | | | | | | | | | | |

| | | | | | | | | [removed: 2015] | | [added: 2016] | | [removed: 2014] | | [added: 2015] | | [removed: 2013] | | [added: 2014 (1)] | [added: | |]

| | | [added: (in millions)] | | | | | | [added: | |] (in millions) | | | | | | | | [added: (in millions)] | | | [added: | | | |]

| Segment operating income: | | | | | | | | | | | | | | | | | | | [added: | | | | | |]

| Latin America | | [added: $] | [added: 271] | | | | [added: 8.7%] | [added: | |] $ | 485 | | | [added: | 14.6% | | |] $ | 475 | | | [removed: $] | [removed: 570] [added: 12.3%] | |

| North America | | | [added: 1,078] | | | | [added: 34.5%] | | [added: | |] 1,105 | | | | [added: 33.2% | | | |] 922 | | | | [removed: 889] [added: 23.8%] | |

| | | [added: $] | [added: 3,122] | | | | [added: 100.0%] | [added: | |] $ | 3,329 | | | [added: | 100.0% | | |] $ | 3,879 | | | [removed: $] | [removed: 4,049] [added: 100.0%] | |

For information on our significant divestitures and acquisitions, please refer to Note 2, _Divestitures and Acquisitions,_ and specifically, in connection with our global coffee business deconsolidation, see [removed: our discussion] [added: the discussions] under [removed: _Coffee] [added: _JDE Coffee] Business [removed: Transactions_.][added: Transactions_ and _Keurig Transaction_.]

No single customer accounted for 10% or more of our net revenues from continuing operations in [removed: 2015.][added: 2016.]

Our five largest customers accounted for [removed: 17%] [added: 16.6%] and our ten largest customers accounted for [removed: 24%] [added: 22.9%] of net revenues from continuing operations in [removed: 2015.][added: 2016.]

Some competitors have different profit objectives [added: and investment time horizons] than we do and therefore approach pricing and promotional decisions differently.

We [removed: also] use the services of independent sales offices and agents in some of our international locations.

Within our digital and social marketing, we [removed: also] create opportunities for consumers to easily find and buy our products online.

We purchase and use large quantities of commodities, including cocoa, dairy, wheat, corn products, [removed: soybean] [added: palm] and [added: other] vegetable oils, sugar and other sweeteners and nuts.

We [removed: regularly] monitor worldwide supply, [added: commodity] cost and currency trends [removed: related to these commodities] so we can cost-effectively secure ingredients, packaging and [removed: energy sources] [added: fuel] required for production.

A number of external factors such as weather conditions, commodity market conditions, currency fluctuations and [added: the effects of] governmental agricultural [added: or other] programs affect the cost and availability of raw materials and agricultural materials used in our products.

[removed: However,] [added: We use hedging techniques to limit the impact of fluctuations in the cost of our principal raw materials; however,] we [removed: cannot] [added: may not be able to] fully hedge against [removed: changes in] commodity [removed: costs,] [added: cost changes,] and our hedging strategies may not protect us from increases in specific raw material costs.

##### [Table of Contents](#toc)

| | • | | _Grow our People:_ We hire and inspire our people to engage in challenging and rewarding career experiences and to contribute their talent to create a great place to work. We collaborate globally, scale ideas quickly and develop world-class capabilities. Our culture is fast-moving, bold, innovative and accountable, reflecting the traits and skills necessary to thrive in a competitive global marketplace. To support and build on the success of our people in a continually-evolving business environment, we invest in our people and their development, foster respect for one another, celebrate diversity and commit to authenticity at every level. We also work to create an environment in which our people can demonstrate innovative and courageous leadership to make a difference in every role they play in the Company. As reflected in our actions and our investments in our people, we value their contributions and are committed to their success. |

| | • | | _Grow our Business:_ We aim to deliver strong, profitable long-term growth by accelerating our core snacks business and expanding the reach of our Power Brands globally. Leveraging our Power brands – including _Oreo, LU_ and _belVita_ biscuits; _Milka, Cadbury Dairy Milk_ and _Toblerone_ chocolate; _Trident_ gum and _Halls_ candy – and our innovation platforms, we plan to innovate boldly and connect with our consumers wherever they are, including new markets around the world, using both traditional and digital channels. As consumer consumption patterns change to more accessible, frequent and better-for-you snacking, we are enhancing the goodness of many of our brands (including providing simpler and wholesome ingredient-focused snacks), expanding the well-being offerings in our portfolio and inspiring consumers to snack mindfully by providing clear and simple nutrition information. As shopping expands further online, we are also working to grow our e-commerce platform and on-line presence with consumers. To fuel these investments, we have been working to optimize our cost structure. These efforts include reinventing our supply chain, including adding and upgrading to more efficient production lines, while reducing the complexity of our product offerings, ingredients and number of suppliers. We also continue to aggressively manage our overhead costs. We have embraced and embedded zero-based budgeting practices across the organization to identify potential areas of cost reductions and capture and sustain savings within our ongoing operating budgets. Through these actions, we’re leveraging our brands, platforms and capabilities to drive long-term value and return on investment for our shareholders. |

| | • | | _Grow our Impact:_ Our growth is linked to enhancing the well-being of the people who make and enjoy our products, the communities we serve and the planet and its limited resources. As consumers seek foods that taste delicious and match their lifestyle goals, we are committed to meeting their well-being needs by becoming a leader in tasty, accessible, well-being snacks. To ensure the safety of our people, we have implemented world-class safety programs, workplace wellness programs and policies to promote fair and equal treatment. We conduct business in compliance with the law, our company policies and accepted standards of business conduct. We also seek to improve consumers’ well-being by providing innovative community programs focused on learning about food choices, preparing healthy meals, growing nutritious foods and encouraging children to play. We encourage our people to contribute time and talent to community programs, and we provide humanitarian aid to communities in times of need. We also leverage our global operating scale to secure sustainable raw materials and work with suppliers to drive meaningful social and environmental changes. |

On October 1, 2016, we integrated our Eastern Europe, Middle East, and Africa (“EEMEA”) operating segment into our Europe and Asia Pacific operating segments to further leverage and optimize the operating scale built within the Europe and Asia Pacific regions.

Russia, Ukraine, Turkey, Belarus, Georgia and Kazakhstan were combined within our Europe region, while the remaining Middle East and African countries were combined within our Asia Pacific region to form the AMEA operating segment.

We have reflected the segment change as if it had occurred in all periods presented.

##### [Table of Contents](#toc)

| AMEA | | | 5,816 | | | | 6,002 | | | | 6,367 | |

| Europe | | | 9,755 | | | | 11,672 | | | | 15,788 | |

| AMEA | | | 506 | | | | 16.2% | | | | 389 | | | | 11.7% | | | | 530 | | | | 13.6% | |

| Europe | | | 1,267 | | | | 40.6% | | | | 1,350 | | | | 40.5% | | | | 1,952 | | | | 50.3% | |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| Latin America | | | 2.8% | | | | 2.9% | | | | 3.6% | | | | 2.6% | | | | 1.2% | | | | 13.1% | |

| AMEA | | | 6.1% | | | | 7.3% | | | | 3.7% | | | | 2.4% | | | | 2.9% | | | | 22.4% | |

| Europe | | | 10.4% | | | | 18.7% | | | | 3.5% | | | | 0.7% | | | | 4.3% | | | | 37.6% | |

| North America | | | 21.6% | | | | 1.0% | | | | 4.3% | | | | – | | | | – | | | | 26.9% | |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 40.9% | | | | 29.9% | | | | 15.1% | | | | 5.7% | | | | 8.4% | | | | 100.0% | |

| | | | | | | | | | | | | | | | | | | | | | | | | |

##### [Table of Contents](#toc)

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | |

Depending on when Easter falls, there may also be a shift between the first and second quarter results.

We build inventory based on expected demand and typically fill customer orders within a few days of receipt so the backlog of unfilled orders is not material.

Funding for working capital items, including inventory and receivables, is normally sourced from operating cash flows and short-term commercial paper borrowings.

For additional information on our liquidity, working capital management, cash flow and financing activities, see _Liquidity and Capital Resources_, Note 1_, Summary of Significant Accounting Policies,_ and Note 7, _Debt and Borrowing Arrangements_, appearing later in this 10-K filing.

##### [Table of Contents](#toc)

We address higher commodity costs and currency impacts primarily through hedging, higher pricing and manufacturing and overhead cost control.

In September 2016, we announced our plan to invest $65 million over 2017-2018 to build out and modernize our network of global research and development facilities.

We are focusing our technical resources at nine large locations to drive global growth and innovation.

These global hubs will enable greater effectiveness, improved efficiency and accelerated project delivery.

##### [Table of Contents](#toc)

Sustainability

A key strategic goal for us is to _Grow our Impact,_ and we seek to do that in part by sourcing our products sustainably, reducing the environmental impact of our operations and packaging, and being mindful of the limited resources available around the world.

We continue to leverage our global operating scale to secure sustainable raw materials and work with suppliers to drive meaningful social and environmental changes, focusing on where we can make the most impact.

For example, we have taken direct accountability for building a sustainable cocoa supply with our $400 million Cocoa Life program.

Our portfolio includes seven billion dollar brands—_Nabisco_, _Oreo and LU_ biscuits; _Cadbury, Cadbury Dairy Milk_ and _Milka_ chocolates; and _Trident_ gum, as well as 51 brands that each generated annual revenues of $100 million or more in 2015.

Top-tier financial performance aims to achieve sustainable top- and bottom-line growth, driven by our transformation agenda, which includes focusing our portfolio, reducing costs and investing for growth.

We plan to achieve these goals by executing five long-term strategies:

| | • | | _Unleash the Power of Our People._ We believe that our two primary goals of delivering top-tier financial performance and being a great place to work are interdependent and that one is not fully achievable without the other. Being a great place to work enables us to recruit, retain and unleash the talents of great people. We remain focused on evolving our ways of working, our standards of leadership and the development opportunities available to our colleagues. |

| --- | --- | --- | --- |

| | • | | _Transform Snacking_. Driving growth is at the forefront of our long-term business strategies. By meeting the needs of consumers through innovation of our portfolio of products, we expect to grow and maintain our Power Brands and market-leading positions. |

Our global Power Brands continue to be a significant competitive advantage.

Our brands enable us to fulfill consumer needs with a full range of snacking choices.

Along with leveraging our global innovation platforms, we offer a full range of snacking choices that address the different needs of our consumers and quickly adapt successful products from one market to others.

For example, in early 2015 we acquired Enjoy Life Foods, which creates allergen-free and better for you snacks such as _Plentils_ gluten-free chips and _Enjoy Life_ nut-free chocolate and seed & fruit products.

We are developing plans to expand this business within and outside of the North America region.

In 2015, we also transformed our business portfolio following the deconsolidation of our coffee businesses.

On July 2, 2015, we combined our global coffee business with D.E Master Blenders 1753 B.V. (“DEMB”) to form Jacobs Douwe Egberts (“JDE”), a new coffee venture in which we maintain a noncontrolling interest.

Following the transactions, our snacks net revenues from biscuits, chocolate, gum and candy were approximately 85% of our 2015 net revenues excluding coffee net revenues.

We will continue to have a significant stake in the coffee category, but holding our interest in the coffee venture as an investment will allow us to focus to a greater degree on our snacks portfolio and make operating and sales decisions that will help us to grow the snacks business.

To strengthen how we support and leverage our snacks portfolio, we created a Chief Growth Officer role in 2014 to focus on top-line revenue growth opportunities.

Beginning in January 2016, we also have a new Chief Commercial Officer.

The Chief Commercial Officer is responsible for the execution of the Company’s commercial plan with oversight over the global sales function and delivery of growth plans by the five regions.

This structure will focus us further on pursuing and executing on opportunities through which we can drive the most attractive returns.

| | • | | _Revolutionize Selling._ As part of our focus on growth around the world and particularly in emerging markets, we continue to invest heavily in our routes to market and sales capabilities across key markets, and we have made significant improvements in our marketing effectiveness and spending. In 2015, we acquired an 80% interest in a biscuit operation in Vietnam that expanded our routes to market in the Asia Pacific region. In recent years, we have also invested in expanding our brand presence across digital media and have placed increased focus on e-commerce. Effective spending on advertising and marketing fuels our brands and strengthens our growth strategies for the business. |

| | • | | _Drive Efficiency to Fuel Growth._ We manage our business through a virtuous cycle. To drive sales and earnings growth, we focus first on delivering high quality products that meet consumer needs. We expand our margins through leveraging lean and simple cost management programs within our integrated supply chain and through overhead discipline. We reinvest a portion of these savings to pursue additional targeted growth opportunities within our portfolio. |

| | • | | _Protect the Well-being of Our Planet._ We are committed to growing our business while protecting our planet and its people. We strive to enhance the well-being of the people who enjoy and make our products and to nurture communities where we live, work and grow the ingredients that go into our products. To accomplish these objectives, we focus on delivering safe, high-quality foods and maintaining a safe work environment for our employees. We work to protect resources, focusing on where we can have the greatest impact. We also make food that fits the way people eat today and provides balanced snacking choices. |

Our “Call For Well-Being” initiative focuses on four areas that we believe will have the greatest impact: sustainability, mindful snacking, safety and community partnerships.

In each of these areas, we set clear goals and metrics.

In 2015, we announced our “Sustainability 2020” goals, including reducing absolute carbon dioxide emissions; reducing deforestation within our agricultural supply chain; focusing water-reduction efforts in high-priority locations; reducing packaging material; and reducing total manufacturing waste.

| | • | | Asia Pacific |

Historically, we have recorded income from equity method investments within our operating income as these investments operated as extensions of our base business.

Beginning in the third quarter of 2015, to align with the accounting for our deconsolidated coffee business and related investment in JDE, we began to record the earnings from our equity method investments in after-tax equity method investment earnings outside of segment operating income.

For the six months ended December 31, 2015, after-tax equity method investment net earnings were less than $1 million on a combined basis.

Earnings from equity method investments through July 2, 2015 recorded within segment operating income were $49 million in Asia Pacific, $3 million in EEMEA and $4 million in North America.

For the year ended December 31, 2014 these earnings were $98 million in Asia Pacific, $6 million in EEMEA and $9 million in North America.

For the year ended December 31, 2013 these earnings were $99 million in Asia Pacific, $7 million in EEMEA and $1 million in North America.

See Note 1, _Summary of Significant Accounting Policies – Principles of Consolidation_, for additional information.

In 2015, we also began to report stock-based compensation for our corporate employees, which was previously reported within our North America region, within general corporate expenses.

We reclassified $32 million of corporate stock-based compensation expense out of the North America segment in 2015.

| Asia Pacific | | | 4,360 | | | | 4,605 | | | | 4,952 | |

| EEMEA | | | 2,786 | | | | 3,638 | | | | 3,915 | |

| Europe | | | 10,528 | | | | 13,912 | | | | 14,059 | |

| Latin America | | | 5.4% | | | | 2.8% | | | | 3.7% | | | | 2.6% | | | | 2.3% | | | | 16.8% | |

| Asia Pacific | | | 4.3% | | | | 4.9% | | | | 2.4% | | | | 1.4% | | | | 1.8% | | | | 14.8% | |

Information regarding legal proceedings is available in Note [removed: 13,] [added: 12,] _Commitments and Contingencies_, to the consolidated financial statements in this report.

| | [removed: x] [added: ☒] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

For the fiscal year ended December 31, [removed: 2015][added: 2016]

| | [removed: ¨] [added: ☐] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

[removed: ][added: ]

Yes [removed: x] [added: ☒] No [removed: ¨][added: ☐]

Yes [removed: ¨] [added: ☐] No [removed: x][added: ☒]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [removed: x]

| Large accelerated filer [removed: x] [added: ☒] | | Accelerated filer [removed: ¨] [added: ☐] | | Non-accelerated filer [removed: ¨] [added: ☐] | | Smaller reporting company [removed: ¨] [added: ☐] |

The aggregate market value of the shares of Class A Common Stock held by non-affiliates of the registrant, computed by reference to the closing price of such stock on June 30, [removed: 2015,] [added: 2016,] was [removed: $66] [added: $71] billion.

At February [removed: 12, 2016,] [added: 17, 2017,] there were [removed: 1,568,858,264] [added: 1,526,612,169] shares of the registrant’s Class A Common Stock outstanding.

Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with its annual meeting of shareholders expected to be held on May [removed: 18, 2016] [added: 17, 2017] are incorporated by reference into Part III hereof.

| [removed: [Part] [added: Part] I [removed: –](#tx51394_1)] [added: –] | | | | | | |

| Item 1. | | [removed: [Business](#tx51394_2)] [added: [Business](#toc288385_1)] | | | 1 | |

| Item 1A. | | [Risk [removed: Factors](#tx51394_3)] [added: Factors](#toc288385_2)] | | | [removed: 10] [added: 9] | |

| Item 1B. | | [Unresolved Staff [removed: Comments](#tx51394_4)] [added: Comments](#toc288385_3)] | | | [removed: 18] [added: 17] | |

| Item 2. | | [removed: [Properties](#tx51394_5)] [added: [Properties](#toc288385_4)] | | | [removed: 19] [added: 18] | |

| Item 3. | | [Legal [removed: Proceedings](#tx51394_6)] [added: Proceedings](#toc288385_5)] | | | [removed: 19] [added: 18] | |

| Item 4. | | [Mine Safety [removed: Disclosures](#tx51394_7)] [added: Disclosures](#toc288385_6)] | | | [removed: 19] [added: 18] | |

| [removed: [Part] [added: Part] II [removed: –](#tx51394_8)] [added: –] | | | | | | |

| Item 5. | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#tx51394_9)] [added: Securities](#toc288385_7)] | | | [removed: 20] [added: 18] | |

| Item 6. | | [Selected Financial [removed: Data](#tx51394_10)] [added: Data](#toc288385_8)] | | | [removed: 22] [added: 21] | |

| Item 7. | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations:](#tx51394_11)] [added: Operations:](#toc288385_9)] | | | [removed: 23] [added: 22] | |

| | | [Summary of [removed: Results](#tx51394_12)] [added: Results](#toc288385_10)] | | | [removed: 25] [added: 23] | |

| | | [Financial [removed: Outlook](#tx51394_13)] [added: Outlook](#toc288385_11)] | | | [removed: 25] [added: 24] | |

| | | [Discussion and Analysis of Historical [removed: Results](#tx51394_14)] [added: Results](#toc288385_12)] | | | [removed: 27] [added: 26] | |

| | | [Critical Accounting [removed: Estimates](#tx51394_15)] [added: Estimates](#toc288385_13)] | | | [removed: 44] [added: 43] | |

| | | [Commodity [removed: Trends](#tx51394_16)] [added: Trends](#toc288385_15)] | | | 47 | |

| | | [Liquidity and Capital [removed: Resources](#tx51394_17)] [added: Resources](#toc288385_14)] | | | [removed: 47] [added: 46] | |

| | | [Equity and [removed: Dividends](#tx51394_18)] [added: Dividends](#toc288385_17)] | | | [removed: 48] [added: 49] | |

| | | [Off-Balance Sheet Arrangements and Aggregate Contractual [removed: Obligations](#tx51394_19)] [added: Obligations](#toc288385_16)] | | | [removed: 49] [added: 48] | |

| | | [Non-GAAP Financial [removed: Measures](#tx51394_20)] [added: Measures](#toc288385_18)] | | | 50 | |

| Item 7A. | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#tx51394_21)] [added: Risk](#toc288385_19)] | | | [removed: 57] [added: 58] | |

| Item 8. | | [Financial Statements and Supplementary [removed: Data:](#tx51394_22)] [added: Data:](#toc288385_20)] | | | [removed: 59] [added: 60] | |

| | | [Report of Independent Registered Public Accounting [removed: Firm](#tx51394_23)] [added: Firm](#toc288385_21)] | | | [removed: 59] [added: 60] | |

| | | [Consolidated Statements of Earnings for the Years Ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013](#tx51394_24)] [added: 2014](#toc288385_22)] | | | [removed: 60] [added: 61] | |

| | | [Consolidated Statements of Comprehensive Earnings for the Years Ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013](#tx51394_25)] [added: 2014](#toc288385_23)] | | | [removed: 61] [added: 62] | |

| | | [Consolidated Balance Sheets as of December 31, [removed: 2015] [added: 2016] and [removed: 2014](#tx51394_26)] [added: 2015](#toc288385_24)] | | | [removed: 62] [added: 63] | |

| | | [Consolidated Statements of Equity for the Years Ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013](#tx51394_27)] [added: 2014](#toc288385_25)] | | | [removed: 63] [added: 64] | |

| | | [Consolidated Statements of Cash Flows for the Years Ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013](#tx51394_28)] [added: 2014](#toc288385_26)] | | | [removed: 64] [added: 65] | |

| | | [Notes to Consolidated Financial [removed: Statements](#tx51394_29)] [added: Statements](#toc288385_27)] | | | [removed: 65] [added: 66] | |

10-K 1 d288385d10k.htm 10-K

##### [Table of Contents](#toc)

Yes ☒ No ☐

Yes ☒ No ☐

Yes ☐ No ☒

##### [Table of Contents](#toc)

| | | [Signatures](#toc288385_37) | | | 125 | |

##### [Table of Contents](#toc)

10-K 1 d51394d10k.htm 10-K

| | | [Signatures](#tx51394_41) | | | 127 | |

##### [Table of Contents](#toc)

On December 31, [removed: 2015,] [added: 2016,] we had [removed: 156] [added: 150] manufacturing and processing facilities in [removed: 57] [added: 52] countries and [removed: 187] [added: 130] distribution centers and depots worldwide.

During [removed: 2015,] [added: 2016,] we [removed: opened 3] [added: added 5] new manufacturing facilities and disposed of or ceased operations in [removed: 17] [added: 9] manufacturing [removed: facilities, primarily related to the coffee business transactions.][added: facilities.]

We also [removed: opened 8] [added: added 4] new distribution facilities and no longer own or lease [removed: 13] [added: 12] distribution facilities.

In addition, a decrease of [removed: 24] [added: 49] distribution facilities in [removed: our Asia Pacific segment] [added: predominantly EU and AMEA] primarily reflects distribution facilities that are owned or leased by third party logistics partners.

| Latin America [added: (1)] | | | [removed: 20] [added: 17] | | | | [removed: 4] [added: 5] | |

| Europe | | | [removed: 63] [added: 67] | | | | [removed: 33] [added: 5] | |

| North America | | | [removed: 17] [added: 15] | | | | [removed: 87] [added: 82] | |

In addition to our owned or leased properties listed below, we also utilize a highly distributed network of warehouses and distribution centers that are owned or leased by third party logistics partners, contract manufacturers, co-packers or other strategic partners.

| | | As of December 31, 2016 | | | | | | |

| AMEA | | | 51 | | | | 38 | |

| Total | | | 150 | | | | 130 | |

| Owned | | | 139 | | | | 22 | |

| Leased | | | 11 | | | | 108 | |

| Total | | | 150 | | | | 130 | |

| | (1) | Excludes properties utilized by our Venezuelan businesses, which were deconsolidated effective as of the close of the 2015 fiscal year. Refer to Note 1, _Summary of Significant Accounting Policies_ – _Currency Translation and Highly Inflationary Accounting: Venezuela,_ for more information. |

| --- | --- | --- |

| | | As of December 31, 2015 | | | | | | |

| Asia Pacific | | | 31 | | | | 50 | |

| EEMEA | | | 25 | | | | 13 | |

| Total | | | 156 | | | | 187 | |

| Owned | | | 147 | | | | 47 | |

| Leased | | | 9 | | | | 140 | |

[removed: Our] [added: We have listed our] Common Stock [removed: is listed] on The NASDAQ Global Select Market under the symbol “MDLZ.” At January 31, [removed: 2016,] [added: 2017,] there were [removed: 59,102] [added: 56,105] holders of record of our Common Stock.

Information regarding the market price of our Common Stock and dividends declared during the last two fiscal years is included in Note [removed: 18,] [added: 17,] _Quarterly Financial Data (Unaudited)_, to the consolidated financial statements.

The cumulative total return reflects market prices at the end of each year and the reinvestment of dividends each year (and takes into account the value of Kraft Foods Group shares distributed in the [removed: Spin-Off).][added: spin-off of our grocery business).]

[removed: ][added: ]

| [removed: Date] | | [added: Mondelēz] International | | | | S&P 500 | | | | [added: 2016 Performance] Peer Group | | | [added: | 2015 Performance Peer Group | | |]

| December [removed: 31, 2010] [added: 2011] | | $ | 100.00 | | | $ | 100.00 | | | $ | 100.00 | | [added: | $ | 100.00 | |]

The Mondelēz International performance peer group consists of the following companies considered our market competitors or that have been selected on the basis of industry, global focus or industry leadership: Campbell Soup Company, The Coca-Cola Company, Colgate-Palmolive Company, Danone S.A., General Mills, Inc., The Hershey Company, Kellogg Company, Nestlé S.A., PepsiCo, Inc., The Procter & Gamble [removed: Company and] [added: Company,] Unilever [removed: PLC.][added: PLC and The Kraft Heinz Company.]

Our stock repurchase activity for each of the three months in the quarter ended December 31, [removed: 2015] [added: 2016] was:

| Period | | Total [removed: Number of Shares Purchased] [added: Number of Shares Purchased] (1) | | | | [removed: Average Price] [added: Average Price] Paid per Share | | | | Total [removed: Number of Shares Purchased as Part] [added: Number] of [removed: Publicly Announced Plans] [added: Shares Purchased as Part of Publicly Announced Plans] or Programs (2) | | | | Approximate Dollar [removed: Value of] [added: Value of] Shares That May [removed: Yet Be] [added: Yet Be] Purchased [removed: Under the] [added: Under the] Plans or Programs (2) | | |

| | (1) | The total number of shares purchased includes: (i) shares purchased pursuant to the repurchase program described in (2) below; and (ii) shares tendered to us by employees who used shares to exercise options and to pay the related taxes for grants of restricted and deferred stock that vested, totaling [removed: 12,074] [added: 6,345] shares, [removed: 1,597] [added: 2,280] shares and [removed: 174,350] [added: 4,340] shares for the fiscal months of October, November and December [removed: 2015,] [added: 2016,] respectively. |

| | (2) | Our Board of Directors authorized the repurchase of $13.7 billion of our Common Stock through December 31, 2018. Specifically, on March 12, 2013, our Board of Directors authorized the repurchase of up to the lesser of 40 million shares or $1.2 billion of our Common Stock through March 12, 2016. On August 6, 2013, our Audit Committee, with authorization delegated from our Board of Directors, increased the repurchase program capacity to $6.0 billion of Common Stock repurchases and extended the expiration date to December 31, 2016. On December 3, 2013, our Board of Directors approved an increase of $1.7 billion to the program related to a new accelerated share repurchase program, which concluded in May 2014. On July 29, 2015, our Finance Committee, with authorization delegated from our Board of Directors, approved a $6.0 billion increase that raised the repurchase program capacity to $13.7 billion and extended the program through December 31, 2018. See [added: related information in] Note [removed: 12,] [added: 11,] _Capital [removed: Stock_, for additional information.] [added: Stock_.] |

##### [Table of Contents](#toc)

| Date | | | | | | | | | | | | | | | | |

| December 2012 | | | 107.06 | | | | 116.00 | | | | 110.47 | | | | 110.47 | |

| December 2013 | | | 151.05 | | | | 153.57 | | | | 131.58 | | | | 131.58 | |

| December 2014 | | | 157.97 | | | | 174.60 | | | | 141.57 | | | | 141.57 | |

| December 2015 | | | 198.09 | | | | 177.01 | | | | 145.10 | | | | 145.10 | |

| December 2016 | | | 199.21 | | | | 198.18 | | | | 151.78 | | | | 149.60 | |

We added The Kraft Heinz Company to our performance peer group in 2016 and its performance history is only included for 2016 because the company was formed in 2015.

##### [Table of Contents](#toc)

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| October 1-31, 2016 | | | 2,270,497 | | | $ | 44.02 | | | | 2,264,152 | | | $ | 3,559,545,482 | |

| November 1-30, 2016 | | | 12,524,719 | | | | 42.83 | | | | 12,522,439 | | | | 3,023,387,254 | |

| December 1-31, 2016 | | | 4,269,081 | | | | 41.82 | | | | 4,264,741 | | | | 2,845,045,875 | |

| For the Quarter Ended December 31, 2016 | | | 19,064,297 | | | | 42.75 | | | | 19,051,332 | | | | | |

| | | | | | | | | | | | | | | | | |

##### [Table of Contents](#toc)

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | Mondelēz | | | | | | | | Performance | | |

| December 31, 2011 | | | 122.64 | | | | 102.11 | | | | 107.09 | |

| December 31, 2012 | | | 131.84 | | | | 118.45 | | | | 118.32 | |

| December 31, 2013 | | | 186.02 | | | | 156.82 | | | | 140.93 | |

| December 31, 2014 | | | 194.55 | | | | 178.28 | | | | 151.64 | |

| December 31, 2015 | | | 243.95 | | | | 180.75 | | | | 155.42 | |

| October 1-31, 2015 | | | 2,802,427 | | | $ | 44.77 | | | | 2,790,353 | | | $ | 5,860,675,551 | |

| November 1-30, 2015 | | | 5,288,316 | | | | 44.45 | | | | 5,286,719 | | | | 5,625,687,529 | |

| December 1-31, 2015 | | | 4,290,456 | | | | 43.58 | | | | 4,116,106 | | | | 5,446,305,470 | |

| For the Quarter Ended December 31, 2015 | | | 12,381,199 | | | | 44.22 | | | | 12,193,178 | | | | | |

| | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Net revenues | | $ | [removed: 29,636] [added: 25,923] | | | $ | [removed: 34,244] [added: 29,636] | | | $ | [removed: 35,299] [added: 34,244] | | | $ | [removed: 35,015] [added: 35,299] | | | $ | [removed: 35,810] [added: 35,015] | |

| Earnings from continuing operations, net of taxes | | | [removed: 7,291] [added: 1,669] | | | | [removed: 2,201] [added: 7,291] | | | | [removed: 2,332] [added: 2,201] | | | | [removed: 1,606] [added: 2,332] | | | | [removed: 1,764] [added: 1,606] | |

| Per share, basic | | | [removed: 4.49] [added: 1.07] | | | | [removed: 1.29] [added: 4.49] | | | | [removed: 1.30] [added: 1.29] | | | | [removed: 0.90] [added: 1.30] | | | | [removed: 0.99] [added: 0.90] | |

| Per share, diluted | | | [removed: 4.44] [added: 1.05] | | | | [removed: 1.28] [added: 4.44] | | | | [removed: 1.29] [added: 1.28] | | | | [removed: 0.88] [added: 1.29] | | | | [removed: 0.99] [added: 0.88] | |

| Net cash provided by operating activities | | | [removed: 3,728] [added: 2,838] | | | | [removed: 3,562] [added: 3,728] | | | | [removed: 6,410] [added: 3,562] | | | | [removed: 3,923] [added: 6,410] | | | | [removed: 4,520] [added: 3,923] | |

| Capital expenditures | | | [removed: 1,514] [added: 1,224] | | | | [removed: 1,642] [added: 1,514] | | | | [removed: 1,622] [added: 1,642] | | | | [removed: 1,610] [added: 1,622] | | | | [removed: 1,771] [added: 1,610] | |

| Property, plant and equipment, net | | | [removed: 8,362] [added: 8,229] | | | | [removed: 9,827] [added: 8,362] | | | | [removed: 10,247] [added: 9,827] | | | | [removed: 10,010] [added: 10,247] | | | | [removed: 13,813] [added: 10,010] | |

| Total assets | | | [removed: 62,843] [added: 61,538] | | | | [removed: 66,771] [added: 62,843] | | | | [removed: 72,464] [added: 66,771] | | | | [removed: 75,421] [added: 72,464] | | | | [removed: 93,701] [added: 75,421] | |

| Long-term debt | | | [removed: 14,557] [added: 13,217] | | | | [removed: 13,821] [added: 14,557] | | | | [removed: 14,431] [added: 13,821] | | | | [removed: 15,519] [added: 14,431] | | | | [removed: 23,013] [added: 15,519] | |

| Total Mondelēz International shareholders’ equity | | | [removed: 28,012] [added: 25,161] | | | | [removed: 27,750] [added: 28,012] | | | | [removed: 32,373] [added: 27,750] | | | | [removed: 32,276] [added: 32,373] | | | | [removed: 35,271] [added: 32,276] | |

| Shares outstanding at year end (4) | | | [removed: 1,580] [added: 1,528] | | | | [removed: 1,664] [added: 1,580] | | | | [removed: 1,705] [added: 1,664] | | | | [removed: 1,778] [added: 1,705] | | | | [removed: 1,768] [added: 1,778] | |

| Per Share and Other [removed: Data (5)] [added: Data (5)] | | | | | | | | | | | | | | | | | | | | |

| Book value per shares outstanding | | | [removed: 17.73] [added: 16.47] | | | | [removed: 16.68] [added: 17.73] | | | | [removed: 18.99] [added: 16.68] | | | | [removed: 18.15] [added: 18.99] | | | | [removed: 19.95] [added: 18.15] | |

| Dividends declared per share (6) | | | [removed: 0.64] [added: 0.72] | | | | [removed: 0.58] [added: 0.64] | | | | [removed: 0.54] [added: 0.58] | | | | [removed: 1.00] [added: 0.54] | | | | [removed: 1.16] [added: 1.00] | |

| Common Stock closing price at year end (7) | | | [removed: 44.84] [added: 44.33] | | | | [removed: 36.33] [added: 44.84] | | | | [removed: 35.30] [added: 36.33] | | | | [removed: 25.45] [added: 35.30] | | | | [removed: 37.36] [added: 25.45] | |

| Number of employees | | | [removed: 99,000] [added: 90,000] | | | | [removed: 104,000] [added: 99,000] | | | | [removed: 107,000] [added: 104,000] | | | | [removed: 110,000] [added: 107,000] | | | | [removed: 126,000] [added: 110,000] | |

| (2) | Significant items impacting the comparability of our results from continuing operations include: Spin-Off Costs in 2012-2014; Restructuring Programs in [removed: 2012-2015;] [added: 2012-2016;] Cost Savings Initiatives in [removed: 2011-2013;] [added: 2013 and 2012;] the contribution of our global coffee businesses and investment in JDE and related gain in 2015; [removed: other] [added: the gain on Keurig equity method investment exchange in 2016;other] divestitures and sales of property in [added: 2016,] 2015, 2013 and 2012; acquisitions in [added: 2016,] 2015 and 2013; the Cadbury acquisition-related Integration Program in [removed: 2011-2014;] [added: 2012-2014;] the benefit from the Cadbury acquisition-related indemnification resolution in 2013; losses on debt extinguishment in [removed: 2013-2015;] [added: 2013-2016;] unrealized gains on the coffee business transaction currency hedges in 2014 and 2015; debt tender offers completed in [removed: 2013-2015;] [added: 2013-2016;] loss on deconsolidation of Venezuela in 2015; the remeasurement of net monetary assets in Venezuela in 2013-2015; accounting calendar changes in [removed: 2015, 2013] [added: 2015] and [removed: 2011 (including a 53rd week of operating results in 2011);] [added: 2013;] impairment charges related to intangible assets in [added: 2016,] 2015, 2014 and 2012; [added: losses related to interest rate swaps in 2016] and [added: 2015; and] our provision for income taxes in all years. Please refer to Notes 1, _Summary of Significant Accounting Policies_; 2, _Divestitures and Acquisitions_; 5, _Goodwill and Intangible Assets_; 6, _Restructuring Programs_; 7, [removed: _Integration Program and Cost Savings Initiatives_; 8,] _Debt and Borrowing Arrangements_; [removed: 9,] [added: 8,] _Financial Instruments_; [removed: 13,] [added: 12,] _Commitments and Contingencies_; [removed: 15,] [added: 14,] _Income Taxes_; and [removed: 17,] [added: 16,] _Segment Reporting_, for additional information regarding items affecting comparability of our results from continuing operations. |

| (3) | Our Cash Flow and Financial Position information includes Kraft Foods Group data for periods prior to the October 1, 2012 Spin-Off date. Refer to the Annual Report on Form 10-K for the year ended December 31, 2012 for information on the divested net assets and items impacting cash flow. Other items impacting comparability primarily relate to the [added: Keurig and JDE] coffee business transactions in [removed: 2014 and 2015,] [added: 2014-2016,] the loss on deconsolidation of Venezuela in 2015 and the receipt of net cash proceeds from the resolution of the Starbucks arbitration in 2013. [removed: As of December 31,] [added: Beginning in] 2015, [removed: we had] debt issuance costs related to recognized debt liabilities [removed: of $46 million, which have been reclassified from long-term other assets to] [added: were recorded as] a deduction from the related debt obligations [added: instead of as long-term other assets] on the consolidated balance sheet. We [removed: have also] made this reclassification in the prior years presented to be consistent with the [removed: current year] [added: 2016 and 2015] presentation. |

| (4) | Refer to Note [removed: 12,] [added: 11,] _Capital Stock_, for additional information on our share repurchase program in [removed: 2013-2015.] [added: 2013-2016.] |

| (5) | Per Share and Other Data includes Kraft Foods Group data for periods prior to the October 1, 2012 Spin-Off date. Refer to [removed: Note 2, _Divestitures and Acquisitions_, related to] the [removed: resolution of the Starbucks arbitration in 2013 and the] Annual Report on Form 10-K for the year ended December 31, [removed: 2012,] [added: 2015,] for additional information on the [removed: Cadbury acquisition] [added: resolution of the Starbucks arbitration] in [removed: 2010.] [added: 2013.] |

##### [Table of Contents](#toc)

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, comprehensive earnings, equity and cash flows present fairly, in all material respects, the financial position of Mondelēz International, Inc. and its subsidiaries at December 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] and the results of their operations and their cash flows for each of the three years in the period ended December 31, [removed: 2015] [added: 2016] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2015,] [added: 2016,] based on criteria established in _Internal Control—Integrated Framework_ (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

| | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Net revenues | | $ | [removed: 29,636] [added: 25,923] | | | $ | [removed: 34,244] [added: 29,636] | | | $ | [removed: 35,299] [added: 34,244] | |

| Cost of sales | | | [removed: 18,124] [added: 15,795] | | | | [removed: 21,647] [added: 18,124] | | | | [removed: 22,189] [added: 21,647] | |

| Gross profit | | | [removed: 11,512] [added: 10,128] | | | | [removed: 12,597] [added: 11,512] | | | | [removed: 13,110] [added: 12,597] | |

| Selling, general and administrative expenses | | | [removed: 7,577] [added: 6,540] | | | | [removed: 8,457] [added: 7,577] | | | | [removed: 8,679] [added: 8,457] | |

| Asset impairment and exit costs | | | [removed: 901] [added: 852] | | | | [removed: 692] [added: 901] | | | | [removed: 273] [added: 692] | |

| Gains on [added: divestitures and JDE] coffee business transactions [removed: and divestitures] | | | [removed: (6,822] [added: (9] | ) | | | [removed: –] [added: (6,822] | [added: )] | | | [removed: (30] [added: –] | [removed: )] |

| Loss on deconsolidation of Venezuela | | | [removed: 778] [added: –] | | | | [removed: –] [added: 778] | | | | – | |

| Amortization of intangibles | | | [removed: 181] [added: 176] | | | | [removed: 206] [added: 181] | | | | [removed: 217] [added: 206] | |

| Operating income | | | [removed: 8,897] [added: 2,569] | | | | [removed: 3,242] [added: 8,897] | | | | [removed: 3,971] [added: 3,242] | |

| Interest and other expense, net | | | [removed: 1,013] [added: 1,115] | | | | [removed: 688] [added: 1,013] | | | | [removed: 1,579] [added: 688] | |

| Earnings [removed: from continuing operations] before income taxes | | | [removed: 7,884] [added: 1,454] | | | | [removed: 2,554] [added: 7,884] | | | | [removed: 2,392] [added: 2,554] | |

| Provision for income taxes | | | [removed: 593] [added: (129] | [added: )] | | | [removed: 353] [added: (593] | [added: )] | | | [removed: 60] [added: (353] | [added: )] |

| Net earnings | | | [removed: 7,291] [added: 1,669] | | | | [removed: 2,201] [added: 7,291] | | | | [removed: 3,935] [added: 2,201] | |

| Noncontrolling interest | | | [removed: 24 | | | | 17] [added: 54] | | | | [removed: 20] [added: 88] | |

| Net earnings attributable to Mondelēz International | | $ | [removed: 7,267] [added: 1,659] | | | $ | [removed: 2,184] [added: 7,267] | | | $ | [removed: 3,915] [added: 2,184] | |

| Basic earnings per share attributable to Mondelēz [removed: International:] [added: International] | | [added: $] | [added: 1.07] | | | [added: $] | [added: 4.49] | | | [added: $] | [added: 1.29] | |

| [removed: Net] [added: Basic] earnings [added: per share] attributable to Mondelēz International | | $ | [removed: 4.49] [added: 1.07] | | | $ | [removed: 1.29] [added: 4.49] | | | $ | [removed: 2.21] [added: 1.29] | |

| Diluted earnings per share attributable to Mondelēz [removed: International:] [added: International] | | [added: $] | [added: 1.05] | | | [added: $] | [added: 4.44] | | | [added: $] | [added: 1.28] | |

| [removed: Net] [added: Diluted] earnings [added: per share] attributable to Mondelēz [removed: International] [added: International:] | | $ | [removed: 4.44] [added: 1.05] | | | $ | [removed: 1.28] [added: 4.44] | | | $ | [removed: 2.19] [added: 1.28] | |

| Dividends declared | | $ | [removed: 0.64] [added: 0.72] | | | $ | [removed: 0.58] [added: 0.64] | | | $ | [removed: 0.54] [added: 0.58] | |

| Net earnings | | $ | [removed: 7,291] [added: 1,669] | | | $ | [removed: 2,201] [added: 7,291] | | | $ | [removed: 3,935] [added: 2,201] | |

| Other comprehensive earnings / [removed: (losses):] [added: (losses)] | | | [added: (75] | [added: )] | | | [added: (44] | [added: )] | | | [added: (119] | [added: )] |

| Currency translation [removed: adjustment:] [added: adjustment] | | | [added: (925] | [added: )] | | | [added: (2,990] | [added: )] | | | [added: (3,661] | [added: )] |

| Reclassification to earnings related [removed: to Venezuela deconsolidation] [added: to:] | | | [removed: 99] | | | | [removed: –] | | | | [removed: –] | |

| Tax (expense) / benefit | | | [removed: (184] [added: (135] | ) | | | [removed: (228] [added: (184] | ) | | | [removed: 36] [added: (228] | [added: )] |

| [removed: Pension] [added: Pension] and [removed: other benefits:] [added: Other Benefit Plans:] | | | | | | | | | | | | |

| Net actuarial gain / (loss) arising during period | | | [removed: (60] [added: (491] | ) | | | [removed: (1,388] [added: (60] | ) | | | [removed: 713] [added: (1,388] | [added: )] |

| [removed: Reclassification of (gains)] [added: Losses] / [removed: losses] [added: (gains) reclassified] into net earnings: | | | | | | | | | | | | |

| Amortization of experience losses and prior service costs [added: (1)] | | | [removed: 207] [added: 150] | | | | [removed: 132] [added: 207] | | | | [removed: 193] [added: 132] | |

| Settlement losses [added: (1)] | | | [removed: 111] [added: 36] | | | | [removed: 42] [added: 111] | | | | [removed: 4] [added: 42] | |

| Venezuela deconsolidation | | | [removed: 2] [added: –] | | | | [removed: –] [added: 99] | | | | – | |

| Tax (expense) / benefit [added: on reclassifications (2)] | | | [removed: (66] [added: (46] | ) | | | [removed: 386] [added: (69] | [added: )] | | | [removed: (244] [added: (56] | ) |

| Net derivative gains / (losses) | | | [removed: (74] [added: (151] | ) | | | [removed: (166] [added: (75] | ) | | | [removed: 169] [added: (166] | [added: )] |

| [removed: Reclassification of (gains)] [added: Losses] / [removed: losses] [added: (gains) reclassified] into net [removed: earnings] [added: earnings:] | | | [removed: 21] | | | | [removed: (45] | [removed: )] | | | [removed: 72] | |

| Tax (expense) / benefit [added: on reclassifications (2)] | | | [removed: 9] [added: (42] | [added: )] | | | [removed: 92] [added: (21] | [added: )] | | | [removed: (86] [added: 6] | [removed: )] |

| Total other comprehensive earnings / (losses) | | | [removed: (2,694] [added: (1,153] | ) | | | [removed: (4,462] [added: (2,694] | ) | | | [removed: (223] [added: (4,462] | ) |

| Comprehensive earnings / (losses) | | | [removed: 4,597] [added: 516] | | | | [removed: (2,261] [added: 4,597] | [removed: )] | | | [removed: 3,712] [added: (2,261] | [added: )] |

February 24, 2017

##### [Table of Contents](#toc)

| Gain on equity method investment exchange | | | 43 | | | | – | | | | – | |

| Equity method investment net earnings | | | 301 | | | | – | | | | – | |

| Noncontrolling interest earnings | | | (10 | ) | | | (24 | ) | | | (17 | ) |

##### [Table of Contents](#toc)

| Pension and other benefit plans | | | (153 | ) | | | 340 | | | | (682 | ) |

| Derivative cash flow hedges | | | (75 | ) | | | (44 | ) | | | (119 | ) |

##### [Table of Contents](#toc)

##### [Table of Contents](#toc)

| Net earnings | | | – | | | | – | | | | 1,659 | | | | – | | | | – | | | | 10 | | | | 1,669 | |

| Balances at December 31, 2016 | | $ | – | | | $ | 31,847 | | | $ | 21,149 | | | $ | (11,122 | ) | | $ | (16,713 | ) | | $ | 54 | | | $ | 25,215 | |

##### [Table of Contents](#toc)

| Net earnings | | $ | 1,669 | | | $ | 7,291 | | | $ | 2,201 | |

| Gain on equity method investment exchange | | | (43 | ) | | | – | | | | – | |

| Equity method investment net earnings | | | (301 | ) | | | (56 | ) | | | (113 | ) |

##### [Table of Contents](#toc)

While we retain an ongoing interest in coffee through equity method investments including JDE, Keurig Green Mountain Inc. (“Keurig”) and Dongsuh Foods Corporation (“DSF”), and we have significant influence with our equity method investments, we do not control these operations directly.

_Segment Change:_

On October 1, 2016, we integrated our Eastern Europe, Middle East, and Africa (“EEMEA”) operating segment into our Europe and Asia Pacific operating segments to further leverage and optimize the operating scale built within the Europe and Asia Pacific regions.

Russia, Ukraine, Turkey, Belarus, Georgia and Kazakhstan were combined within our Europe region, while the remaining Middle East and African countries were combined within our Asia Pacific region to form a new Asia, Middle East and Africa (“AMEA”) operating segment.

We have reflected the segment change as if it had occurred in all periods presented.

##### [Table of Contents](#toc)

As of October 1, 2016, our operations and management structure was organized into four reportable operating segments:

| | • | | AMEA |

See Note 16, _Segment Reporting_, for additional information on our segments.

In 2016, none of our consolidated subsidiaries were subject to highly inflationary accounting.

_United Kingdom._ On June 23, 2016, the United Kingdom (“U.K.”) voted by referendum to exit the European Union; this vote is commonly referred to as “Brexit.” The referendum is non-binding and the exit from the European Union is not immediate.

Once the United Kingdom invokes E.U. Article 50, there is a two-year window in which the United Kingdom and the European Commission can negotiate the future terms for imports, exports, taxes, employment, immigration and other areas.

Brexit has caused volatility in global stock markets and currency exchange rates, affecting the markets in which we operate.