filings.toolsItem 1. Financial Statements
106K characters. Original on sec.gov · Markdown
Item 1. Financial Statements
Mondelēz International, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings
(in millions of U.S. dollars, except per share data)
(Unaudited)
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Net revenues | $ | 9,313 | $ | 9,290 | |||||||||||||||||||
| Cost of sales | (6,883) | (4,540) | |||||||||||||||||||||
| Gross profit | 2,430 | 4,750 | |||||||||||||||||||||
| Selling, general and administrative expenses | (1,711) | (1,938) | |||||||||||||||||||||
| Asset impairments and exit costs | (2) | (47) | |||||||||||||||||||||
| Amortization of intangible assets | (37) | (38) | |||||||||||||||||||||
| Operating income | 680 | 2,727 | |||||||||||||||||||||
| Benefit plan non-service income | 18 | 23 | |||||||||||||||||||||
| Interest and other expense, net | (153) | (68) | |||||||||||||||||||||
| Earnings before income taxes | 545 | 2,682 | |||||||||||||||||||||
| Income tax provision | (154) | (632) | |||||||||||||||||||||
| Loss on equity method investment transactions | — | (665) | |||||||||||||||||||||
| Equity method investment net earnings | 16 | 31 | |||||||||||||||||||||
| Net earnings | 407 | 1,416 | |||||||||||||||||||||
| less: Noncontrolling interest earnings | (5) | (4) | |||||||||||||||||||||
| Net earnings attributable to Mondelēz International | $ | 402 | $ | 1,412 | |||||||||||||||||||
| Per share data: | |||||||||||||||||||||||
| Basic earnings per share attributable to Mondelēz International | $ | 0.31 | $ | 1.05 | |||||||||||||||||||
| Diluted earnings per share attributable to Mondelēz International | $ | 0.31 | $ | 1.04 |
See accompanying notes to the condensed consolidated financial statements.
| 1 |  |
Mondelēz International, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Earnings
(in millions of U.S. dollars)
(Unaudited)
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Net earnings | $ | 407 | $ | 1,416 | |||||||||||||||||||
| Other comprehensive earnings/(losses), net of tax: | |||||||||||||||||||||||
| Currency translation adjustment | 536 | (222) | |||||||||||||||||||||
| Pension and other benefit plans | (28) | 38 | |||||||||||||||||||||
| Derivative cash flow hedges | (9) | (8) | |||||||||||||||||||||
| Total other comprehensive earnings/(losses) | 499 | (192) | |||||||||||||||||||||
| Comprehensive earnings/(losses) | 906 | 1,224 | |||||||||||||||||||||
| less: Comprehensive earnings/(losses) attributable to noncontrolling interests | (12) | 2 | |||||||||||||||||||||
| Comprehensive earnings/(losses) attributable to Mondelēz International | $ | 894 | $ | 1,226 |
See accompanying notes to the condensed consolidated financial statements.
| 2 | |
Mondelēz International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions of U.S. dollars, except share data)
(Unaudited)
| March 31, 2025 | December 31, 2024 | ||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 1,561 | $ | 1,351 | |||||||
| Trade receivables, less allowance ($37 and $37, respectively) | 4,318 | 3,874 | |||||||||
| Other receivables, less allowance ($38 and $37, respectively) | 941 | 937 | |||||||||
| Inventories, net | 4,255 | 3,827 | |||||||||
| Other current assets | 1,655 | 3,253 | |||||||||
| Total current assets | 12,730 | 13,242 | |||||||||
| Property, plant and equipment, net | 9,767 | 9,481 | |||||||||
| Operating lease right-of-use assets | 761 | 767 | |||||||||
| Goodwill | 23,439 | 23,017 | |||||||||
| Intangible assets, net | 19,130 | 18,848 | |||||||||
| Prepaid pension assets | 993 | 987 | |||||||||
| Deferred income taxes | 400 | 333 | |||||||||
| Equity method investments | 610 | 635 | |||||||||
| Other assets | 1,097 | 1,187 | |||||||||
| TOTAL ASSETS | $ | 68,927 | $ | 68,497 | |||||||
| LIABILITIES | |||||||||||
| Short-term borrowings | $ | 1,914 | $ | 71 | |||||||
| Current portion of long-term debt | 1,828 | 2,014 | |||||||||
| Accounts payable | 9,921 | 9,433 | |||||||||
| Accrued marketing | 2,697 | 2,558 | |||||||||
| Accrued employment costs | 774 | 928 | |||||||||
| Other current liabilities | 3,869 | 4,545 | |||||||||
| Total current liabilities | 21,003 | 19,549 | |||||||||
| Long-term debt | 15,796 | 15,664 | |||||||||
| Long-term operating lease liabilities | 617 | 623 | |||||||||
| Deferred income taxes | 3,429 | 3,425 | |||||||||
| Accrued pension costs | 366 | 391 | |||||||||
| Accrued postretirement health care costs | 95 | 98 | |||||||||
| Other liabilities | 1,798 | 1,789 | |||||||||
| TOTAL LIABILITIES | 43,104 | 41,539 | |||||||||
| Commitments and Contingencies (Note 10) | |||||||||||
| EQUITY | |||||||||||
| Common Stock, no par value (5,000,000,000 shares authorized, 1,996,537,778 shares issued) | — | — | |||||||||
| Additional paid-in capital | 32,233 | 32,276 | |||||||||
| Retained earnings | 36,263 | 36,476 | |||||||||
| Accumulated other comprehensive losses | (11,979) | (12,471) | |||||||||
| Treasury stock, at cost (701,689,976 and 678,708,640 shares, respectively) | (30,732) | (29,349) | |||||||||
| Total Mondelēz International Shareholders’ Equity | 25,785 | 26,932 | |||||||||
| Noncontrolling interest | 38 | 26 | |||||||||
| TOTAL EQUITY | 25,823 | 26,958 | |||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 68,927 | $ | 68,497 |
See accompanying notes to the condensed consolidated financial statements.
| 3 | |
Mondelēz International, Inc. and Subsidiaries
Condensed Consolidated Statements of Equity
(in millions of U.S. dollars, except per share data)
(Unaudited)
| Mondelēz International Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Earnings/ (Losses) | Treasury Stock | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Balances at January 1, 2025 | $ | — | $ | 32,276 | $ | 36,476 | $ | (12,471) | $ | (29,349) | $ | 26 | $ | 26,958 | |||||||||||||||||||||||||||
| Comprehensive earnings/(losses): | |||||||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | 402 | — | — | 5 | 407 | ||||||||||||||||||||||||||||||||||
| Other comprehensive earnings/(losses), net of income taxes | — | — | — | 492 | — | 7 | 499 | ||||||||||||||||||||||||||||||||||
| Exercise of stock options and issuance of other stock awards | — | (43) | (4) | — | 86 | — | 39 | ||||||||||||||||||||||||||||||||||
| Common Stock repurchased | — | — | — | — | (1,469) | — | (1,469) | ||||||||||||||||||||||||||||||||||
| Cash dividends declared ($0.470 per share) | — | — | (611) | — | — | — | (611) | ||||||||||||||||||||||||||||||||||
| Balances at March 31, 2025 | $ | — | $ | 32,233 | $ | 36,263 | $ | (11,979) | $ | (30,732) | $ | 38 | $ | 25,823 | |||||||||||||||||||||||||||
| Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Balances at January 1, 2024 | $ | — | $ | 32,216 | $ | 34,236 | $ | (10,946) | $ | (27,174) | $ | 34 | $ | 28,366 | |||||||||||||||||||||||||||
| Comprehensive earnings/(losses): | |||||||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | 1,412 | — | — | 4 | 1,416 | ||||||||||||||||||||||||||||||||||
| Other comprehensive earnings/(losses), net of income taxes | — | — | — | (186) | — | (6) | (192) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options and issuance of other stock awards | — | (53) | 1 | — | 117 | — | 65 | ||||||||||||||||||||||||||||||||||
| Common Stock repurchased | — | — | — | — | (566) | — | (566) | ||||||||||||||||||||||||||||||||||
| Cash dividends declared ($0.425 per share) | — | — | (575) | — | — | — | (575) | ||||||||||||||||||||||||||||||||||
| Balances at March 31, 2024 | $ | — | $ | 32,163 | $ | 35,074 | $ | (11,132) | $ | (27,623) | $ | 32 | $ | 28,514 |
See accompanying notes to the condensed consolidated financial statements.
| 4 | |
Mondelēz International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in millions of U.S. dollars)
(Unaudited)
| For the Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES | |||||||||||
| Net earnings | $ | 407 | $ | 1,416 | |||||||
| Adjustments to reconcile net earnings to operating cash flows: | |||||||||||
| Depreciation and amortization | 324 | 319 | |||||||||
| Stock-based compensation expense | 18 | 31 | |||||||||
| Deferred income tax (benefit)/provision | (96) | 270 | |||||||||
| Asset impairments and accelerated depreciation | 4 | 6 | |||||||||
| Loss on equity method investment transactions | — | 665 | |||||||||
| Equity method investment net earnings | (16) | (31) | |||||||||
| Distributions from equity method investments | 44 | 81 | |||||||||
| Unrealized loss/(gain) on derivative contracts | 689 | (1,134) | |||||||||
| Contingent consideration adjustments | (12) | 22 | |||||||||
| Other non-cash items, net | 56 | 25 | |||||||||
| Change in assets and liabilities, net of acquisitions and divestitures: | |||||||||||
| Receivables, net | (379) | (395) | |||||||||
| Inventories, net | (300) | (16) | |||||||||
| Accounts payable | 222 | 419 | |||||||||
| Other current assets | 196 | (330) | |||||||||
| Other current liabilities | (58) | 36 | |||||||||
| Change in pension and postretirement assets and liabilities, net | (7) | (60) | |||||||||
| Net cash provided by operating activities | 1,092 | 1,324 | |||||||||
| CASH PROVIDED BY/(USED IN) INVESTING ACTIVITIES | |||||||||||
| Capital expenditures | (277) | (299) | |||||||||
| Acquisitions, net of cash received | (15) | — | |||||||||
| Proceeds from divestitures | 4 | 4 | |||||||||
| Proceeds from derivative settlements | 14 | 71 | |||||||||
| Payments for derivative settlements | — | (32) | |||||||||
| Proceeds from/(contributions to) investments | 22 | (192) | |||||||||
| Proceeds from sales of property, plant and equipment and other | 1 | 2 | |||||||||
| Net cash used in investing activities | (251) | (446) | |||||||||
| CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES | |||||||||||
| Net issuance/(repayment) of short-term borrowings | 1,841 | (166) | |||||||||
| Long-term debt proceeds | — | 547 | |||||||||
| Long-term debt repayments | (453) | (534) | |||||||||
| Repurchases of Common Stock | (1,522) | (568) | |||||||||
| Dividends paid | (623) | (578) | |||||||||
| Other | 53 | 76 | |||||||||
| Net cash used in financing activities | (704) | (1,223) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 88 | (77) | |||||||||
| Cash, cash equivalents and restricted cash: | |||||||||||
| Increase/(decrease) | 225 | (422) | |||||||||
| Balance at beginning of period | 1,400 | 1,884 | |||||||||
| Balance at end of period | $ | 1,625 | $ | 1,462 |
See accompanying notes to the condensed consolidated financial statements.
| 5 | |
Mondelēz International, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1. Basis of Presentation
Our interim condensed consolidated financial statements are unaudited. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted. It is management’s opinion that these financial statements include all normal and recurring adjustments necessary for a fair presentation of our results of operations, financial position and cash flows. Results of operations for any interim period are not necessarily indicative of future or annual results. For a complete set of consolidated financial statements and related notes, refer to our Annual Report on Form 10-K for the year ended December 31, 2024.
Principles of Consolidation
The condensed consolidated financial statements include Mondelēz International, Inc. as well as our wholly owned and majority owned subsidiaries, except our Venezuelan subsidiaries that were deconsolidated in 2015. All intercompany transactions are eliminated. The noncontrolling interest represents the noncontrolling investors' interests in the results of subsidiaries that we control and consolidate. We account for investments in common stock or in-substance common stock over which we exercise significant influence under the equity method of accounting.
Highly Inflationary Accounting
Within our consolidated entities, Argentina, Türkiye, Egypt and Nigeria are accounted for as highly inflationary countries. Argentina, Türkiye, Egypt and Nigeria represent 1.5%, 0.8%, 0.4% and 0.3%, respectively, of our consolidated net revenues for the three months ended March 31, 2025. The aggregate losses from remeasurements of monetary assets and liabilities into our reporting currency for the highly inflationary countries were $(7) million and $(8) million for the three months ended March 31, 2025 and 2024, respectively. Given the continued volatility of these currencies, impacts to our financial statements in future periods could be significantly different from historical levels.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents include demand deposits with banks and all highly liquid investments with original maturities of three months or less. Restricted cash primarily includes cash held on behalf of financial institutions in accordance with accounts receivable factoring arrangements and letters of credit arrangements with legally restricted cash collateral provisions. Restricted cash is recorded within other current assets and was $64 million as of March 31, 2025 and $49 million as of December 31, 2024. Total cash, cash equivalents and restricted cash was $1,625 million as of March 31, 2025 and $1,400 million as of December 31, 2024.
Allowances for Credit Losses
Changes in allowances for credit losses consisted of:
| Allowance for Trade Receivables | Allowance for Other Current Receivables | Allowance for Long-Term Receivables | |||||||||||||||
| (in millions) | |||||||||||||||||
| Balance at January 1, 2025 | $ | (37) | $ | (37) | $ | (16) | |||||||||||
| Currency and other | — | (1) | (1) | ||||||||||||||
| Balance at March 31, 2025 | $ | (37) | $ | (38) | $ | (17) |
Transfers of Financial Assets
The outstanding principal amount of receivables under our uncommitted revolving non-recourse accounts receivable factoring arrangements amounted to $576 million as of March 31, 2025 and $159 million as of December 31, 2024. The incremental cost of factoring receivables under this arrangement was not material for all periods presented. The proceeds from the sales of receivables are included in cash from operating activities in the condensed consolidated statements of cash flows.
Non-Cash Lease Transactions
We recorded $38 million in operating lease and $51 million in finance lease right-of-use assets obtained in exchange for lease obligations during the three months ended March 31, 2025 and $12 million in operating lease
| 6 | |
and $22 million in finance lease right-of-use assets obtained in exchange for lease obligations during the three months ended March 31, 2024.
Supply Chain Financing
As part of our continued efforts to improve our working capital efficiency, we have worked with our suppliers over the past several years to optimize our terms and conditions, which include the extension of payment terms. We also facilitate voluntary supply chain financing (“SCF”) programs through several participating financial institutions. Amounts due to our suppliers that elected to participate in the SCF program are included in accounts payable in our consolidated balance sheets. Our outstanding obligations confirmed as valid under our SCF program are $3.7 billion and $3.5 billion as of March 31, 2025 and December 31, 2024, respectively.
New Accounting Pronouncements
In December 2023, the FASB issued an Accounting Standards Update ("ASU") which enhances the transparency of annual income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. The ASU is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted. We are currently assessing the impact on our consolidated financial statements and related disclosures.
In November 2024, the FASB issued an ASU that requires incremental disclosures in the notes to the financial statements to disaggregate certain income statement expense line items. The ASU is effective for fiscal years beginning after December 15, 2026 and early adoption is permitted. We are currently assessing the impact on our consolidated financial statements and related disclosures.
Note 2. Acquisitions and Divestitures
Evirth
On November 1, 2024, we acquired Evirth (Shanghai) Industrial Co., Ltd. ("Evirth"), a leading manufacturer of cakes and pastries in China. The acquisition will continue to expand our growth in the cakes and pastries categories. The cash consideration paid totaled ¥1.8 billion ($255 million), net of cash received.
We are working to complete the valuation of assets acquired and liabilities assumed and have recorded a preliminary purchase price allocation.
Within definite-lived intangible assets, we allocated $117 million to customer relationships which have an estimated useful life of 17 years. The fair value of customer relationships at the acquisition date was determined using the multi-period excess earnings method under the income approach. The fair value measurements are based on significant unobservable inputs, and thus represent Level 3 inputs. Significant assumptions used in assessing the fair values of the intangible assets include discounted cash flows, customer attrition rates and discount rates.
Goodwill of $125 million was determined as the excess of the purchase price over the fair value of the net assets acquired and arises principally as a result of expansion opportunities and synergies across China. None of the goodwill recognized will be deductible for income tax purposes. All of the goodwill was assigned to the AMEA operating segment. For further detail, refer to Note 5, Goodwill and Intangible Assets.
Acquisition and Divestiture-Related Costs
We recorded a net gain of $8 million during the three months ended March 31, 2025 and incurred $43 million during the three months ended March 31, 2024 in total acquisition integration costs and contingent consideration adjustments. We recorded a net gain of $4 million during the three months ended March 31, 2025 and incurred $4 million during the three months ended March 31, 2024 of total divestiture-related costs.
| 7 | |
Note 3. Inventories
Inventories consisted of the following:
| As of March 31, 2025 | As of December 31, 2024 | ||||||||||
| (in millions) | |||||||||||
| Raw materials | $ | 1,159 | $ | 1,058 | |||||||
| Finished product | 3,269 | 2,940 | |||||||||
| 4,428 | 3,998 | ||||||||||
| Inventory reserves | (173) | (171) | |||||||||
| Inventories, net | $ | 4,255 | $ | 3,827 |
Note 4. Property, Plant and Equipment
Property, plant and equipment consisted of the following:
| As of March 31, 2025 | As of December 31, 2024 | ||||||||||
| (in millions) | |||||||||||
| Land and land improvements | $ | 383 | $ | 373 | |||||||
| Buildings and building improvements | 3,602 | 3,453 | |||||||||
| Machinery and equipment | 13,340 | 12,732 | |||||||||
| Construction in progress | 967 | 1,058 | |||||||||
| 18,292 | 17,616 | ||||||||||
| Accumulated depreciation | (8,525) | (8,135) | |||||||||
| Property, plant and equipment, net | $ | 9,767 | $ | 9,481 |
For the three months ended March 31, 2025, capital expenditures of $277 million excluded $397 million of accrued capital expenditures remaining unpaid at March 31, 2025 and included payment for a portion of the $458 million of capital expenditures that were accrued and unpaid at December 31, 2024. For the three months ended March 31, 2024, capital expenditures of $299 million excluded $418 million of accrued capital expenditures remaining unpaid at March 31, 2024 and included payment for a portion of the $471 million of capital expenditures that were accrued and unpaid at December 31, 2023.
| 8 | |
Note 5. Goodwill and Intangible Assets
Goodwill
Changes in goodwill consisted of:
| Latin America | AMEA | Europe | North America | Total | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| January 1, 2024 | $ | 1,607 | $ | 3,065 | $ | 8,350 | $ | 10,874 | $ | 23,896 | |||||||||||||||||||
| Currency | (291) | (147) | (508) | (55) | (1,001) | ||||||||||||||||||||||||
| Acquisition (1) | — | 122 | — | — | 122 | ||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | 1,316 | $ | 3,040 | $ | 7,842 | $ | 10,819 | $ | 23,017 | |||||||||||||||||||
| Currency | 40 | 14 | 366 | (1) | 419 | ||||||||||||||||||||||||
| Other (1) | — | 3 | — | — | 3 | ||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | 1,356 | $ | 3,057 | $ | 8,208 | $ | 10,818 | $ | 23,439 |
(1)Relates to purchase price allocation and subsequent adjustments for Evirth. See Note 2, Acquisitions and Divestitures for additional information.
Intangible Assets
Intangible assets consisted of the following:
| As of March 31, 2025 | As of December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Indefinite-life intangible assets (1) | $ | 18,081 | $ | — | $ | 18,081 | $ | 17,770 | $ | — | $ | 17,770 | |||||||||||||||||||||||
| Definite-life intangible assets | 3,360 | (2,311) | 1,049 | 3,306 | (2,228) | 1,078 | |||||||||||||||||||||||||||||
| Total | $ | 21,441 | $ | (2,311) | $ | 19,130 | $ | 21,076 | $ | (2,228) | $ | 18,848 |
(1)We recorded intangible asset impairments of $153 million in 2024 within asset impairment and exit costs in the condensed consolidated statement of earnings.
Indefinite-life intangible assets consist principally of brand names purchased through our acquisitions of Nabisco Holdings Corp., the global LU biscuit business of Groupe Danone S.A., Cadbury Limited and Clif Bar. Definite-life intangible assets consist primarily of trademarks, customer-related intangibles, process technology, licenses and non-compete agreements.
Amortization expense for intangible assets was $37 million for the three months ended March 31, 2025 and $38 million for the three months ended March 31, 2024.
For the next five years, we estimate annual amortization expense of approximately (reflecting March 31, 2025 exchange rates):
| (in millions) | |||||
| 2025 | $ | 140 | |||
| 2026 | 110 | ||||
| 2027 | 90 | ||||
| 2028 | 85 | ||||
| 2029 | 85 |
Impairment Assessment:
We test our reporting units and brands for impairment annually as of July 1, or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit or brand is less than its carrying amount. During the first quarter of 2025, we evaluated our goodwill impairment and intangible asset impairment risk
| 9 | |
through an assessment of potential triggering events. We considered qualitative and quantitative information in our assessment and concluded there were no impairment indicators.
During our 2024 annual indefinite-life intangible assets testing, we recorded $153 million of intangible asset impairment charges related to two biscuit brands in the Europe segment, one biscuit brand in the AMEA segment and one candy and one biscuit brand in the Latin America segment. Additionally, we identified thirteen brands that each had a fair value in excess of book value of 10% or less. The aggregate book value of the thirteen brands was $3.0 billion as of March 31, 2025. We believe our current plans for each of these brands will allow them to not be impaired, but if plans to grow brand revenue and earnings, and expand margin are not met or specific valuation factors outside of our control, such as discount rates, change significantly then a brand or brands could become impaired in the future.
Note 6. Equity Method Investments
Our current equity method investments primarily relate to our ownership interests in Dong Suh Foods Corporation and Dong Suh Oil & Fats Co. Ltd. As of March 31, 2025, we owned 50.0% and 49.0%, respectively, of these companies' outstanding shares. Our ownership interests may change over time due to investee stock-based compensation arrangements, share issuances or other equity-related transactions.
Our investments accounted for under the equity method of accounting totaled $610 million as of March 31, 2025 and $635 million as of December 31, 2024. We recorded equity earnings of $16 million and received cash dividends of $44 million in the three months ended March 31, 2025. We recorded equity earnings of $31 million and received cash dividends of $81 million in the three months ended March 31, 2024, which included our prior investment in JDE Peet’s N.V. (“JDEP”). During the fourth quarter of 2024, we sold our remaining 85.9 million shares in JDEP to JAB Holding Company and fully exited the investment.
During the three months ended March 31, 2024, we determined there was an other-than-temporary impairment of our investment in JDEP based on the period for which the quoted market price fair value had been less than the carrying value of the investment and the uncertainty surrounding JDEP's stock price recovering to the carrying value. As a result, the investment was written down to its estimated fair value based on the closing price of the underlying equity security of €19.46 per share on March 28, 2024, resulting in an impairment charge of €612 million ($665 million). This charge was included within Loss on equity method investment transactions in the condensed consolidated statement of earnings.
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Note 7. Debt and Borrowing Arrangements
Short-Term Borrowings
Our short-term borrowings and related weighted-average interest rates consisted of:
| As of March 31, 2025 | As of December 31, 2024 | ||||||||||||||||||||||
| Amount Outstanding | Weighted- Average Rate | Amount Outstanding | Weighted- Average Rate | ||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||
| Commercial paper | $ | 1,843 | 4.6 | % | $ | — | — | % | |||||||||||||||
| Bank loans | 71 | 10.8 | % | 71 | 12.1 | % | |||||||||||||||||
| Total short-term borrowings | $ | 1,914 | $ | 71 |
Our uncommitted credit lines and committed credit lines available include:
| As of March 31, 2025 | As of December 31, 2024 | ||||||||||||||||||||||
| Facility Amount | Borrowed Amount | Facility Amount | Borrowed Amount | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Uncommitted credit facilities | $ | 864 | $ | 71 | $ | 784 | $ | 71 | |||||||||||||||
| Credit facilities (1): | |||||||||||||||||||||||
| February 19, 2025 | — | — | 1,500 | — | |||||||||||||||||||
| February 18, 2026 | 1,500 | — | — | — | |||||||||||||||||||
| February 23, 2027 | — | — | 4,500 | — | |||||||||||||||||||
| February 19, 2030 | 4,500 | — | — | — |
(1)On February 19, 2025, our $1.5 billion 364-day senior unsecured revolving credit agreement dated as of February 21, 2024 expired and we entered into a $1.5 billion 364-day senior unsecured revolving credit agreement that will expire on February 18, 2026. Additionally, we early terminated our $4.5 billion five-year senior unsecured revolving credit agreement dated as of February 23, 2022, and entered into a $4.5 billion five-year senior unsecured revolving credit agreement that will expire on February 19, 2030.
We maintain senior unsecured revolving credit facilities for general corporate purposes, including working capital needs, and to support our commercial paper program. The revolving credit agreements include a covenant that we maintain a minimum shareholders' equity of at least $25.0 billion, excluding accumulated other comprehensive earnings/(losses), the cumulative effects of any changes in accounting principles and earnings/(losses) recognized in connection with any mark-to-market accounting for pensions and other retirement plans. At March 31, 2025, we complied with this covenant. The revolving credit facility also contains customary representations, covenants and events of default. There are no credit rating triggers, provisions or other financial covenants that could require us to post collateral as security.
Debt Repayments
During the three months ended March 31, 2025, we repaid the following notes (in millions):
| Interest Rate | Maturity Date | Amount | USD Equivalent | |||||||||||||||||
| 3.250% | March 2025 | C$600 | $417 |
During the three months ended March 31, 2024, we repaid the following notes (in millions):
| Interest Rate | Maturity Date | Amount | USD Equivalent | |||||||||||||||||
| 2.125% | March 2024 | $500 | $500 |
Debt Issuances
During the three months ended March 31, 2025, we did not complete any debt issuances.
| 11 | |
During the three months ended March 31, 2024, we issued the following notes (in millions):
| Issuance Date | Interest Rate | Maturity Date | Principal Amount | Principal Amount USD Equivalent | ||||||||||||||||||||||
| February 2024 | 4.750% | February 2029 | $550 | $550 |
Fair Value of Our Debt
The fair value of our short-term borrowings reflects current market interest rates and approximates the amounts we have recorded on our condensed consolidated balance sheets. The fair value of substantially all of our long-term debt was determined using quoted prices in active markets (Level 1 valuation data).
| As of March 31, 2025 | As of December 31, 2024 | ||||||||||
| (in millions) | |||||||||||
| Fair Value | $ | 17,683 | $ | 15,846 | |||||||
| Carrying Value | $ | 19,538 | $ | 17,749 |
Interest and Other Expense, net
Interest and other expense, net consisted of:
| For the Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Interest expense | $ | 137 | $ | 122 | |||||||
| Other expense/(income), net | 16 | (54) | |||||||||
| Interest and other expense, net | $ | 153 | $ | 68 |
Other expense/(income), net includes amortization of amounts excluded from our assessment of hedge effectiveness related to our net investment hedge derivative contracts, foreign currency transaction gains and losses on certain foreign currency denominated assets and liabilities, gains and losses on certain foreign currency derivative contracts, interest income and other non-operating items. Refer to Note 8, Financial Instruments for additional information about our hedging activities.
| 12 | |
Note 8. Financial Instruments
Derivatives and Hedging Activities
Fair Value of Derivative Instruments
Derivative instruments were recorded at fair value in the condensed consolidated balance sheets as follows:
| As of March 31, 2025 | As of December 31, 2024 | ||||||||||||||||||||||
| Asset Derivatives | Liability Derivatives | Asset Derivatives | Liability Derivatives | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Derivatives designated as accounting hedges: | |||||||||||||||||||||||
| Interest rate contracts (1) | $ | 63 | $ | 60 | $ | 84 | $ | 35 | |||||||||||||||
| Net investment hedge derivative contracts (2) | 244 | 201 | 305 | 50 | |||||||||||||||||||
| $ | 307 | $ | 261 | $ | 389 | $ | 85 | ||||||||||||||||
| Derivatives not designated as accounting hedges: | |||||||||||||||||||||||
| Currency exchange contracts | $ | 176 | $ | 146 | $ | 302 | $ | 118 | |||||||||||||||
| Commodity contracts | 911 | 752 | 2,205 | 1,522 | |||||||||||||||||||
| Interest rate contracts | 3 | — | 3 | — | |||||||||||||||||||
| $ | 1,090 | $ | 898 | $ | 2,510 | $ | 1,640 | ||||||||||||||||
| Total fair value | $ | 1,397 | $ | 1,159 | $ | 2,899 | $ | 1,725 |
(1)Interest rate contracts designated as cash flow hedging instruments.
(2)Net investment hedge derivative contracts consist of cross-currency interest rate swaps, forward contracts and options. We also designate some of our non-U.S. dollar denominated debt to hedge a portion of our net investments in our non-U.S. operations. This debt is not reflected in the table above, but is included in long-term debt discussed in Note 7, Debt and Borrowing Arrangements. Both net investment hedge derivative contracts and non-U.S. dollar denominated debt acting as net investment hedges are also disclosed in the Derivative Volume table and the Hedges of Net Investments in International Operations section appearing later in this footnote.
We recorded the fair value of our derivative instruments in the condensed consolidated balance sheets as follows:
| As of March 31, 2025 | As of December 31, 2024 | ||||||||||
| (in millions) | |||||||||||
| Other current assets | $ | 1,164 | $ | 2,545 | |||||||
| Other assets | 233 | 354 | |||||||||
| Other current liabilities | 1,000 | 1,641 | |||||||||
| Other liabilities | 159 | 84 |
The fair values (asset/(liability)) of our derivative instruments were determined using:
| As of March 31, 2025 | |||||||||||||||||||||||
| Total Fair Value of Net Asset/(Liability) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Currency exchange contracts | $ | 30 | $ | — | $ | 30 | $ | — | |||||||||||||||
| Commodity contracts | 159 | 106 | 53 | — | |||||||||||||||||||
| Interest rate contracts | 6 | — | 6 | — | |||||||||||||||||||
| Net investment hedge contracts | 43 | — | 43 | — | |||||||||||||||||||
| Total derivatives | $ | 238 | $ | 106 | $ | 132 | $ | — |
| 13 | |
| As of December 31, 2024 | |||||||||||||||||||||||
| Total Fair Value of Net Asset/(Liability) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Currency exchange contracts | $ | 184 | $ | — | $ | 184 | $ | — | |||||||||||||||
| Commodity contracts | 683 | (111) | 794 | — | |||||||||||||||||||
| Interest rate contracts | 52 | — | 52 | — | |||||||||||||||||||
| Net investment hedge contracts | 255 | — | 255 | — | |||||||||||||||||||
| Total derivatives | $ | 1,174 | $ | (111) | $ | 1,285 | $ | — |
Level 1 financial assets and liabilities consist of exchange-traded commodity futures and listed options. The fair value of these instruments is determined based on quoted market prices on commodity exchanges.
Level 2 financial assets and liabilities consist primarily of over-the-counter (“OTC”) currency exchange forwards, options and swaps; commodity forwards and options; net investment hedge contracts; and interest rate swaps. Our currency exchange contracts are valued using an income approach based on observable market forward rates less the contract rate multiplied by the notional amount. Commodity derivatives are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied by the notional amount or based on pricing models that rely on market observable inputs such as commodity prices. Our calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the observable market interest rate curve. Our calculation of the fair value of financial instruments takes into consideration the risk of nonperformance, including counterparty credit risk. Our OTC derivative transactions are governed by International Swap Dealers Association agreements and other standard industry contracts. Under these agreements, we do not post nor require collateral from our counterparties. The majority of our derivative contracts do not have a legal right of set-off. We manage the credit risk in connection with these and all our derivatives by entering into transactions with counterparties with investment grade credit ratings, limiting the amount of exposure with each counterparty and monitoring the financial condition of our counterparties.
Derivative Volume
The gross notional values of our hedging instruments were:
| Notional Amount | |||||||||||
| As of March 31, 2025 | As of December 31, 2024 | ||||||||||
| (in millions) | |||||||||||
| Currency exchange contracts | $ | 16,284 | $ | 13,538 | |||||||
| Commodity contracts | 17,142 | 16,210 | |||||||||
| Interest rate contracts | 4,536 | 5,336 | |||||||||
| Net investment hedges: | |||||||||||
| Net investment hedge derivative contracts | 9,421 | 8,647 | |||||||||
| Non-U.S. dollar debt designated as net investment hedges: | |||||||||||
| Euro notes | 3,446 | 3,298 | |||||||||
| Swiss franc notes | 226 | 220 | |||||||||
| Canadian dollar notes | 452 | 869 |
Cash Flow Hedges
Cash flow hedge activity, net of taxes, is recorded within accumulated other comprehensive earnings/(losses). Refer to Note 12, Reclassifications from Accumulated Other Comprehensive Income for additional information on current period activity. Based on current market conditions, we would expect to transfer losses of $24 million (net of taxes) for interest rate cash flow hedges to earnings during the next 12 months.
Cash Flow Hedge Coverage
As of March 31, 2025, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 4 years.
| 14 | |
Hedges of Net Investments in International Operations
Net investment hedge ("NIH") derivative contracts
We enter into cross-currency interest rate swaps, forwards and options to hedge certain investments in our non-U.S. operations against movements in exchange rates. As of March 31, 2025, the aggregate notional value was $9.4 billion.
Net investment hedge derivative contract impacts on other comprehensive earnings and net earnings were:
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| (Loss)/gain on NIH contracts (1) | $ | (201) | $ | 220 | |||||||||||||||||||
| Amounts excluded from the assessment of hedge effectiveness (2) | 57 | 41 |
(1)Amounts recorded for unsettled and settled NIH derivative contracts are recorded within the cumulative translation adjustment section of other comprehensive earnings/(losses).
(2)We assess the effectiveness of NIH relationships based on spot rates and amortize the initial value attributable to the excluded component to earnings over the life of the hedging instrument within interest and other expense, net.
Non-U.S. dollar debt designated as net investment hedges
Gains/(losses) related to non-U.S. dollar debt designated as hedges of net investments in international operations, which are recorded within the cumulative translation adjustment section of other comprehensive earnings/(losses), were:
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Euro notes | $ | (147) | $ | 79 | |||||||||||||||||||
| Swiss franc notes | (6) | 26 | |||||||||||||||||||||
| Canadian notes | — | 10 |
Derivatives Not Designated as Accounting Hedges
For derivatives not designated as accounting hedges ("economic hedges"), we classify gains and losses in the income statement based on the classification of the item economically hedged. Pre-tax gains/(losses) recorded in net earnings for economic hedges were:
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Currency exchange contracts: | |||||||||||||||||||||||
| Cost of sales | $ | (131) | $ | 25 | |||||||||||||||||||
| Selling, general and administrative expenses | — | 7 | |||||||||||||||||||||
| Interest and other expense, net | 90 | 56 | |||||||||||||||||||||
| Commodity contracts - Cost of sales | (409) | 1,184 | |||||||||||||||||||||
| Total | $ | (450) | $ | 1,272 |
| 15 | |
Fair Value of Contingent Consideration
The following is a summary of our contingent consideration liability activity:
| For the Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Liability at beginning of period | $ | 179 | $ | 680 | |||||||
| Changes in fair value | (12) | 23 | |||||||||
| Liability at end of period | $ | 167 | $ | 703 |
Contingent consideration was recorded at fair value in the condensed consolidated balance sheets as follows:
| As of March 31, 2025 | |||||||||||||||||||||||
| Total Fair Value of Liability | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Clif Bar (1) | $ | 99 | $ | — | $ | — | $ | 99 | |||||||||||||||
| Other (2) | 68 | — | — | 68 | |||||||||||||||||||
| Total contingent consideration | $ | 167 | $ | — | $ | — | $ | 167 |
| As of December 31, 2024 | |||||||||||||||||||||||
| Total Fair Value of Liability | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Clif Bar (1) | $ | 124 | $ | — | $ | — | $ | 124 | |||||||||||||||
| Other (2) | 55 | — | — | 55 | |||||||||||||||||||
| Total contingent consideration | $ | 179 | $ | — | $ | — | $ | 179 |
(1)In connection with the Clif Bar acquisition, we entered into a contingent consideration arrangement that may require us to pay additional consideration to the sellers for achieving certain net revenue, gross profit and EBITDA targets in 2025 and 2026 that exceed our base financial projections for the business implied in the upfront purchase price. The possible payments range from zero to a maximum total of $2.4 billion, with higher payouts requiring the achievement of targets that generate rates of returns in excess of the base financial projections. The contingent consideration liabilities are recorded at fair value and primarily recorded in other liabilities as of March 31, 2025 and December 31, 2024. The estimated fair value of the contingent consideration obligation is determined using a Monte Carlo simulation. Significant assumptions used in assessing the fair value of the liability include financial projections for net revenue, gross profit and EBITDA, as well as discount and volatility rates. Fair value adjustments are primarily recorded in selling, general and administrative expenses in the condensed consolidated statement of earnings.
(2)The other contingent consideration liabilities are recorded at fair value and recorded in other liabilities as of March 31, 2025 and December 31, 2024. Fair value adjustments were recorded in selling, general and administrative expenses in the condensed consolidated statement of earnings.
| 16 | |
Note 9. Benefit Plans
Pension Plans
Components of Net Periodic Pension Cost
Net periodic pension cost/(benefit) consisted of the following:
| U.S. Plans | Non-U.S. Plans | ||||||||||||||||||||||
| For the Three Months Ended March 31, | For the Three Months Ended March 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Service cost | $ | 1 | $ | 1 | $ | 15 | $ | 15 | |||||||||||||||
| Interest cost | 9 | 15 | 69 | 71 | |||||||||||||||||||
| Expected return on plan assets | (13) | (23) | (104) | (108) | |||||||||||||||||||
| Amortization of net loss and prior service cost | — | — | 17 | 16 | |||||||||||||||||||
| Settlement losses | 4 | 6 | — | — | |||||||||||||||||||
| Net periodic pension cost/(benefit) | $ | 1 | $ | (1) | $ | (3) | $ | (6) | |||||||||||||||
Employer Contributions
During the three months ended March 31, 2025, we contributed $29 million to our non-U.S. pension plans. We make contributions to our pension plans in accordance with local funding arrangements and statutory minimum funding requirements. Discretionary contributions are made to the extent that they are tax deductible and do not generate an excise tax liability.
As of March 31, 2025, we plan to make further contributions of approximately $11 million to our U.S. plans and $39 million to our non-U.S. plans for the remainder of 2025. However, our actual contributions may be different due to many factors, including changes in tax and other benefit laws, significant differences between expected and actual pension asset performance or changes in interest rates.
Mondelēz Global LLC Retirement Plan Update
During the third quarter of 2024, we entered into an agreement with two third party insurance companies for the Mondelēz Global LLC Retirement Plan (“MDLZ Global Plan”), the pension plan for US salaried employees. The agreement featured a buy-in of the plan assets with an option to elect a future buy-out conversion. As part of the buy-in, all of the MDLZ Global Plan assets were transferred to the insurance companies in exchange for an annuity contract during the third quarter of 2024 to further reduce the risk of plan asset value volatility. As of January 1, 2025, the annuity contract is providing all future benefit payments to the MDLZ Global Plan participants. However, we continue to retain the primary benefit obligation until the buy-out conversion is completed. Upon election of the buy-out conversion, we will transfer full responsibility of the MDLZ Global Plan obligations to the insurance companies, at which time we will derecognize the assets and liabilities of the pension plan and recognize a settlement loss as a component of net periodic pension cost.
We currently intend to execute the buy-out conversion in the second quarter of 2025.
Multiemployer Pension Plans
On July 11, 2019, we received a withdrawal liability assessment from the Bakery and Confectionery Union and the Industry International Pension Fund requiring pro-rata monthly payments over 20 years and we recorded a discounted liability of $491 million at that time. In connection with the discounted long-term liability, we recorded accreted interest of $2 million for the three months ended March 31, 2025 and the three months ended March 31, 2024 within Interest and other expense, net in the condensed consolidated statement of earnings. As of March 31, 2025, the remaining discounted withdrawal liability was $307 million, with $16 million recorded in Other current liabilities and $291 million recorded in Long-term other liabilities in the condensed consolidated balance sheets.
Postretirement and Postemployment Benefit Plans
The net periodic postretirement benefit was $(3) million for the three months ended March 31, 2025 and the three months ended March 31, 2024. The net periodic postemployment cost was $5 million for the three months ended March 31, 2025 and March 31, 2024.
| 17 | |
Note 10. Commitments and Contingencies
Legal Proceedings
We routinely are involved in various pending or threatened legal proceedings, claims, disputes, regulatory matters and governmental inquiries, inspections or investigations arising in the ordinary course of or incidental to our business, including those noted below in this section. We record provisions in the consolidated financial statements for pending legal matters when we determine that an unfavorable outcome is probable, and the amount of the loss can be reasonably estimated. For matters we have not provided for that are reasonably possible to result in an unfavorable outcome, management is unable to estimate the possible loss or range of loss or such amounts have been determined to be immaterial. At present we believe that the ultimate outcome of these legal proceedings and regulatory and governmental matters, individually and in the aggregate, will not materially harm our financial position, results of operations or cash flows. However, legal proceedings and regulatory and governmental matters are subject to inherent uncertainties, and unfavorable rulings or other events could occur. Unfavorable resolutions could involve substantial fines, civil or criminal penalties, and other expenditures. In addition, in matters for which conduct remedies are sought, unfavorable resolutions could include an injunction or other order prohibiting us from selling one or more products at all or in particular ways, precluding particular business practices or requiring other equitable remedies. An unfavorable outcome might result in a material adverse impact on our business, results of operations or financial position.
On April 1, 2015, the U.S. Commodity Futures Trading Commission ("CFTC") filed a complaint against Kraft Foods Group and Mondelēz Global LLC (“Mondelēz Global”) in the U.S. District Court for the Northern District of Illinois (the "District Court") related to the trading of December 2011 wheat futures contracts that occurred prior to the spin-off of Kraft Foods Group. The complaint alleged that Mondelēz Global: (1) manipulated or attempted to manipulate the wheat markets during the fall of 2011; (2) violated position limit levels for wheat futures; and (3) engaged in non-competitive trades. On May 13, 2022, the District Court approved a settlement agreement between the CFTC and Mondelēz Global. The terms of the settlement, which are available in the District Court’s docket, had an immaterial impact on our financial position, results of operations and cash flows and did not include an admission by Mondelēz Global. Several class action complaints also were filed against Mondelēz Global in the District Court by investors who copied and expanded upon the CFTC allegations in a series of private claims for monetary damages as well as injunctive, declaratory, and other unspecified relief. In June 2015, these suits were consolidated in the United States District Court for the Northern District of Illinois as case number 15-cv-2937, Harry Ploss et al. v. Kraft Foods Group, Inc. and Mondelēz Global LLC. On January 3, 2020, the District Court granted plaintiffs' request to certify a class. In November 2022, the District Court adjourned the trial date it had previously set for November 30, 2022 and ordered the parties to brief Kraft’s motions to decertify the class and for summary judgment, which has been completed. It is not possible to predict the outcome of these matters; however, based on our Separation and Distribution Agreement with Kraft Foods Group dated as of September 27, 2012, we expect to bear any monetary penalties or other payments in connection with the class action.
As previously disclosed, in November 2019, the European Commission informed us that it initiated an investigation into our alleged infringement of European Union competition law through certain practices allegedly restricting cross-border trade within the European Economic Area. In the second quarter of 2024, we reached a negotiated resolution in this matter. At that time, we had accrued (in accordance with U.S. GAAP), on a pre-tax basis, a liability of €337.5 million ($376 million). Pursuant to the terms of the agreed settlement, we fulfilled our payment obligation in August 2024. We do not anticipate any modification of our business practices and agreements that would have a material impact on our ongoing business operations within the European Union.
Third-Party Guarantees
We enter into third-party guarantees primarily to cover long-term obligations of our vendors. As part of these transactions, we guarantee that third parties will make contractual payments or achieve performance measures. As of March 31, 2025 and December 31, 2024, we had no material third-party guarantees recorded on our condensed consolidated balance sheets.
Tax Matters
We are a party to various tax matter proceedings incidental to our business. These proceedings are subject to inherent uncertainties, and unfavorable outcomes could subject us to additional tax liabilities and could materially adversely impact our business, results of operations or financial position.
| 18 | |
Note 11. Stock Plans
Stock Options
Stock option activity is reflected below:
| Shares Subject to Option | Weighted- Average Exercise or Grant Price Per Share | Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||
| Balance at January 1, 2025 | 16,479,169 | $54.51 | 5 years | $ | 135 | million | |||||||||||||||||
| Annual grant to eligible employees | 1,989,760 | 65.09 | |||||||||||||||||||||
| Options exercised (1) | (1,131,487) | 39.97 | $ | 26 | million | ||||||||||||||||||
| Options canceled | (148,672) | 66.01 | |||||||||||||||||||||
| Balance at March 31, 2025 | 17,188,770 | 56.59 | 6 years | $ | 205 | million |
(1)Cash received from options exercised was $44 million in the three months ended March 31, 2025. We recognized $4 million of excess income tax benefits from stock option exercises in the three months ended March 31, 2025.
Performance Share Units and Other Stock-Based Awards
Our performance share unit (PSU), deferred stock unit (DSU) and other stock-based activity is reflected below:
| Number of Shares | Weighted-Average Fair Value Per Share (4) | Weighted-Average Aggregate Fair Value (3) | |||||||||||||||
| Balance at January 1, 2025 | 4,536,574 | $67.76 | |||||||||||||||
| Annual grant to eligible employees: | |||||||||||||||||
| Performance share units | 1,194,640 | 69.49 | |||||||||||||||
| Deferred stock units | 826,180 | 65.09 | |||||||||||||||
| Additional shares granted (1) | 744,905 | 59.73 | |||||||||||||||
| Total shares granted | 2,765,725 | 65.55 | $ | 181 | million | ||||||||||||
| Vested (2) (3) | (1,397,324) | 63.30 | $ | 88 | million | ||||||||||||
| Forfeited (2) | (140,406) | 69.14 | |||||||||||||||
| Balance at March 31, 2025 | 5,764,569 | 67.74 |
(1)Includes primarily DSUs and incremental PSUs issued over target.
(2)Includes PSUs, DSUs and other stock-based awards.
(3)We recognized $1 million of income tax shortfalls upon vesting of PSUs and DSUs in the three months ended March 31, 2025.
(4)The grant date fair value of PSUs is determined based on the Monte Carlo simulation model for the market-based total shareholder return component and the closing market price of the Company’s stock on the grant date for performance-based components. The Monte Carlo simulation model incorporates the probability of achieving the total shareholder return market condition. Compensation expense is recognized using the grant date fair values regardless of whether the market condition is achieved, so long as the requisite service has been provided.
Share Repurchase Program
Effective January 1, 2025, our Board of Directors replaced our prior share repurchase program by approving a program authorizing the repurchase of up to $9.0 billion of our Common Stock through December 31, 2027. Repurchases under the program are determined by management and are wholly discretionary.
During the three months ended March 31, 2025, we repurchased approximately 25 million shares of Common Stock at an average cost of $57.91 per share, or an aggregate cost of approximately $1.5 billion, all of which was paid during the period. All share repurchases were funded through available cash and commercial paper issuances. As of March 31, 2025, we have approximately $7.5 billion in remaining share repurchase capacity.
| 19 | |
Note 12. Reclassifications from Accumulated Other Comprehensive Income
The following table summarizes the changes in accumulated balances of each component of accumulated other comprehensive earnings/(losses) attributable to Mondelēz International. Amounts reclassified from accumulated other comprehensive earnings/(losses) to net earnings (net of tax) were net (losses)/gains of $(47) million in the first quarter of 2025 and $23 million in the first quarter of 2024.
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Currency Translation Adjustments: | |||||||||||||||||||||||
| Balance at beginning of period | $ | (11,017) | $ | (9,574) | |||||||||||||||||||
| Currency translation adjustments | 549 | (182) | |||||||||||||||||||||
| Tax effect | (13) | (40) | |||||||||||||||||||||
| Other comprehensive earnings/(losses) | 536 | (222) | |||||||||||||||||||||
| Less: other comprehensive (earnings)/loss attributable to noncontrolling interests | (7) | 6 | |||||||||||||||||||||
| Balance at end of period | (10,488) | (9,790) | |||||||||||||||||||||
| Pension and Other Benefit Plans: | |||||||||||||||||||||||
| Balance at beginning of period | $ | (1,402) | $ | (1,323) | |||||||||||||||||||
| Net actuarial gain/(loss) arising during period | — | (5) | |||||||||||||||||||||
| Losses/(gains) reclassified into net earnings: | |||||||||||||||||||||||
| Amortization of net loss and prior service (1) | 14 | 12 | |||||||||||||||||||||
| Settlement losses (1) | 4 | 6 | |||||||||||||||||||||
| Tax expense/(benefit) on reclassifications (3) | (2) | (4) | |||||||||||||||||||||
| Currency impact | (44) | 29 | |||||||||||||||||||||
| Other comprehensive earnings/(losses) | (28) | 38 | |||||||||||||||||||||
| Balance at end of period | (1,430) | (1,285) | |||||||||||||||||||||
| Derivative Cash Flow Hedges: | |||||||||||||||||||||||
| Balance at beginning of period | $ | (52) | $ | (49) | |||||||||||||||||||
| Net derivative gains/(losses) | (37) | 25 | |||||||||||||||||||||
| Tax effect on net derivative gain/(loss) | 1 | 3 | |||||||||||||||||||||
| Losses/(gains) reclassified into net earnings: | |||||||||||||||||||||||
| Interest rate contracts (2) | 28 | (36) | |||||||||||||||||||||
| Tax expense/(benefit) on reclassifications (3) | 3 | (1) | |||||||||||||||||||||
| Currency impact | (4) | 1 | |||||||||||||||||||||
| Other comprehensive earnings/(losses) | (9) | (8) | |||||||||||||||||||||
| Balance at end of period | (61) | (57) | |||||||||||||||||||||
| Accumulated other comprehensive income attributable to Mondelēz International: | |||||||||||||||||||||||
| Balance at beginning of period | $ | (12,471) | $ | (10,946) | |||||||||||||||||||
| Total other comprehensive earnings/(losses) | 499 | (192) | |||||||||||||||||||||
| Less: other comprehensive (earnings)/loss attributable to noncontrolling interests | (7) | 6 | |||||||||||||||||||||
| Other comprehensive earnings/(losses) attributable to Mondelēz International | 492 | (186) | |||||||||||||||||||||
| Balance at end of period | $ | (11,979) | $ | (11,132) |
(1)These reclassified losses are included in net periodic benefit costs disclosed in Note 9, Benefit Plans.
(2)These reclassified gains or losses are recorded within interest and other expense, net.
(3)Taxes reclassified to earnings are recorded within the provision for income taxes.
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Note 13. Restructuring Program
In 2014, our Board of Directors approved a multi-year restructuring program ("Simplify to Grow Program") to reduce our operating cost structure in both supply chain and overhead costs. Total restructuring and implementation charges of $5.4 billion were incurred throughout the Simplify to Grow Program, which ended in December 2024.
We recorded restructuring charges of $42 million and implementation costs of $11 million in the three months ended March 31, 2024.
The Simplify to Grow Program restructuring liability activity for the three months ended March 31, 2025 was:
| Severance and related costs | |||||
| (in millions) | |||||
| Liability balance, January 1, 2025 | $ | 188 | |||
| Payments | (23) | ||||
| Currency and other | 5 | ||||
| Liability balance, March 31, 2025 | $ | 170 |
The liability for restructuring charges is included within other current liabilities and other long-term liabilities.
Note 14. Income Taxes
As of the first quarter of 2025, our effective tax rate was 28.3% as compared to 23.6% in the first quarter of 2024. The higher effective tax rate is driven by our jurisdictional mix of earnings (including the impact of mark-to-market losses on commodity and foreign currency derivatives) and the relative impact of permanent items on lower pre-tax earnings on a year-over-year basis. Those items were partially offset by additional releases of liabilities for uncertain tax positions due to audit developments in the first quarter of 2025 as compared to the first quarter of 2024.
Note 15. Earnings per Share
Basic and diluted earnings per share (EPS) were calculated as follows:
| For the Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in millions, except per share data) | |||||||||||||||||||||||
| Net earnings | $ | 407 | $ | 1,416 | |||||||||||||||||||
| less: Noncontrolling interest earnings | (5) | (4) | |||||||||||||||||||||
| Net earnings attributable to Mondelēz International | $ | 402 | $ | 1,412 | |||||||||||||||||||
| Weighted-average shares for basic EPS | 1,301 | 1,348 | |||||||||||||||||||||
| Plus: Dilutive effect of outstanding stock awards | 4 | 7 | |||||||||||||||||||||
| Weighted-average shares for diluted EPS | 1,305 | 1,355 | |||||||||||||||||||||
| Basic earnings per share attributable to Mondelēz International | $ | 0.31 | $ | 1.05 | |||||||||||||||||||
| Diluted earnings per share attributable to Mondelēz International | $ | 0.31 | $ | 1.04 |
We exclude antidilutive Mondelēz International stock options and long-term incentive plan shares from our calculation of weighted-average shares for diluted EPS. We excluded antidilutive stock options and performance share units of 6.4 million for the three months ended March 31, 2025 and 2.7 million for the three months ended March 31, 2024.
| 21 | |
Note 16. Segment Reporting
We manufacture and market primarily snack food products, including chocolate, biscuits and baked snacks, as well as gum & candy, cheese & grocery and powdered beverages. We manage our global business and report operating results through geographic units. We manage our operations by region to leverage regional operating scale, manage different and changing business environments more effectively and pursue growth opportunities as they arise across our key markets. Our regional management teams have responsibility for the business, product categories and financial results in the regions.
Our operations and management structure are organized into four operating segments:
-
Latin America
-
AMEA
-
Europe
-
North America
Our Chief Operating Decision Maker (CODM) is our Chief Executive Officer. Our CODM uses segment operating income in the annual plan and forecasting process and considers actual versus plan variances in assessing the performance of the segment. The CODM also uses segment operating income as an input to the overall compensation measures for segment management under our incentive compensation plans. We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends. Segment operating income excludes certain mark-to-market impacts on commodity and foreign currency derivatives (which are primarily a component of cost of sales), general corporate expenses (which are a component of selling, general and administrative expenses), amortization of intangibles, gains and losses on divestitures and acquisition-related costs (which are a component of selling, general and administrative expenses) in all periods presented. We exclude these items from segment operating income in order to provide better transparency of our segment operating results. Furthermore, we centrally manage benefit plan non-service income and interest and other expense, net. Accordingly, we do not present these items by segment because they are excluded from the segment profitability measure that our CODM reviews. Additionally, assets for reportable segments are not disclosed as such information is not regularly reviewed by the Company's CODM.
Our segment net revenue, significant segment expenses and operating income, by reportable segment were as follows:
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Latin America | AMEA | Europe | North America | Total | |||||||||||||||||||||||||
| Net revenues | $ | 1,203 | $ | 2,016 | $ | 3,550 | $ | 2,544 | $ | 9,313 | |||||||||||||||||||
| Segment cost of sales | (815) | (1,270) | (2,541) | (1,583) | (6,209) | ||||||||||||||||||||||||
| Segment selling, general and administrative expenses (1) | (249) | (403) | (547) | (476) | (1,675) | ||||||||||||||||||||||||
| Segment operating income | $ | 139 | $ | 343 | $ | 462 | $ | 485 | 1,429 | ||||||||||||||||||||
| Mark-to-market losses on commodity and foreign currency derivatives | (669) | ||||||||||||||||||||||||||||
| General corporate expenses | (43) | ||||||||||||||||||||||||||||
| Amortization of intangible assets | (37) | ||||||||||||||||||||||||||||
| Operating income | $ | 680 |
| 22 | |
| Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Latin America | AMEA | Europe | North America | Total | |||||||||||||||||||||||||
| Net revenues | $ | 1,319 | $ | 1,950 | $ | 3,368 | $ | 2,653 | $ | 9,290 | |||||||||||||||||||
| Segment cost of sales | (866) | (1,138) | (2,137) | (1,525) | (5,666) | ||||||||||||||||||||||||
| Segment selling, general and administrative expenses (1) | (296) | (401) | (640) | (579) | (1,916) | ||||||||||||||||||||||||
| Segment operating income | $ | 157 | $ | 411 | $ | 591 | $ | 549 | 1,708 | ||||||||||||||||||||
| Mark-to-market gains on commodity and foreign currency derivatives | 1,124 | ||||||||||||||||||||||||||||
| General corporate expenses | (67) | ||||||||||||||||||||||||||||
| Amortization of intangible assets | (38) | ||||||||||||||||||||||||||||
| Operating income | $ | 2,727 |
(1) SG&A for all reportable segments includes: Advertising & consumer expenses and overhead expenses.
Total depreciation expense and capital expenditures by segment, reflecting our current segment structure for all periods presented, were:
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Depreciation expense (2): | |||||||||||
| Latin America | $ | 34 | $ | 38 | |||||||
| AMEA | 41 | 40 | |||||||||
| Europe | 71 | 67 | |||||||||
| North America | 43 | 38 | |||||||||
| Corporate | 11 | 13 | |||||||||
| Total depreciation expense | $ | 200 | $ | 196 |
(2) Includes depreciation expense related to owned property, plant and equipment. Does not include amortization of intangible assets or leased assets. Refer to the consolidated statement of cash flows for total depreciation and amortization expenses.
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Capital expenditures: | |||||||||||
| Latin America | $ | (35) | $ | (38) | |||||||
| AMEA | (54) | (52) | |||||||||
| Europe | (123) | (141) | |||||||||
| North America | (64) | (63) | |||||||||
| Corporate | (1) | (5) | |||||||||
| Total capital expenditures | $ | (277) | $ | (299) |
| 23 | |
Net revenues by product category, reflecting our current segment structure for all periods presented, were:
| For the Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||
| Latin America | AMEA | Europe | North America | Total | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Biscuits & Baked Snacks | $ | 287 | $ | 736 | $ | 1,088 | $ | 2,220 | $ | 4,331 | |||||||||||||||||||
| Chocolate | 369 | 773 | 1,940 | 100 | 3,182 | ||||||||||||||||||||||||
| Gum & Candy | 341 | 243 | 162 | 224 | 970 | ||||||||||||||||||||||||
| Beverages | 96 | 164 | 37 | — | 297 | ||||||||||||||||||||||||
| Cheese & Grocery | 110 | 100 | 323 | — | 533 | ||||||||||||||||||||||||
| Total net revenues | $ | 1,203 | $ | 2,016 | $ | 3,550 | $ | 2,544 | $ | 9,313 | |||||||||||||||||||
| For the Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||
| Latin America | AMEA | Europe | North America | Total | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| Biscuits & Baked Snacks | $ | 286 | $ | 644 | $ | 1,030 | $ | 2,339 | $ | 4,299 | |||||||||||||||||||
| Chocolate | 382 | 771 | 1,770 | 91 | 3,014 | ||||||||||||||||||||||||
| Gum & Candy | 393 | 234 | 206 | 223 | 1,056 | ||||||||||||||||||||||||
| Beverages | 130 | 189 | 34 | — | 353 | ||||||||||||||||||||||||
| Cheese & Grocery | 128 | 112 | 328 | — | 568 | ||||||||||||||||||||||||
| Total net revenues | $ | 1,319 | $ | 1,950 | $ | 3,368 | $ | 2,653 | $ | 9,290 |
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