Item 7.01. Regulation FD Disclosure.
Mondel?zInternational, Inc. and subsidiaries (collectively, "we," "our" or "Mondel?z International") are furnishing this current report to provide supplemental non-GAAP financial information related to the retrospective impact of our sales of approximately 14.1 million Keurig Dr Pepper Inc. ("KDP") ordinary shares onAugust 3, 2020 and approximately 12.5 million KDP ordinary shares onSeptember 9, 2020 . As a result of these sales, our equity interest in KDP decreased by 1.9% from 13.1% to 11.2%. Due to our reporting of KDP's results on a one-quarter lag basis, the impact of the sale of these shares will affect our non-GAAP financial results beginning with the fourth quarter endedDecember 31, 2020 . Consistent with our definitions of our non-GAAP financial measures, we will reflect this partial sale of our equity method investment in KDP as a divestiture, resulting in the recasting of our non-GAAP financial results for the first nine months of 2020, all quarters of 2020, 2019 and 2018 and for the years endedDecember 31, 2019 and 2018.
Change to our Historical Non-GAAP Financial Results in Connection with our Sales of KDP shares
As previously disclosed in our Quarterly Report on Form 10-Q for the quarter endedSeptember 30, 2020 , we sold approximately 14.1 million shares of KDP onAugust 3, 2020 , which reduced our ownership interest by 1.0% to 12.1% of the total outstanding shares. We received$414 million of proceeds and recorded a pre-tax gain of$181 million (or$139 million after tax) during the third quarter of 2020. Subsequently, onSeptember 9, 2020 , we sold approximately 12.5 million shares of KDP, which reduced our ownership interest by 0.9% to 11.2% of the total outstanding shares. We received$363 million of proceeds and recorded a pre-tax gain of$154 million (or$119 million after tax) during the third quarter of 2020. We consider the 1.9% ownership reduction resulting from these sales of shares a partial sale of our equity method investment in KDP. Consistent with our definitions of our non-GAAP financial measures, we consider these sales to be a divestiture. Due to our reporting of KDP's results on a one-quarter lag basis, the impact of the sale of these shares will affect our non-GAAP financial results beginning with the fourth quarter endedDecember 31, 2020 . Therefore, we will remove the equity method investment net earnings results related to this partial sale of our equity method investment in KDP from our non-GAAP financial results for Adjusted EPS for all historical periods presented. OurU.S. GAAP results, which include our historical equity method investment net earnings from KDP, will not change from what was previously reported.
Recast Amounts Reflecting Changes in Historical Non-GAAP Results
The change to our non-GAAP financial results for Adjusted EPS described above does not affect our previously reported consolidated financial results nor does it affect our non-GAAP financial results for Organic Net Revenue, Adjusted Gross Profit or Adjusted Operating Income for any period. This supplemental disclosure does not amend any disclosure contained in any of our priorSEC filings. See the chart below and Exhibit 99.1 for the unaudited GAAP and recast non-GAAP financial information for the first nine months of 2020, all quarters of 2020, 2019 and 2018 and for the years endedDecember 31, 2019 and 2018. Mondel?z International, Inc. and Subsidiaries Recast Amounts Reflecting Change Due to Divestiture (in millions of U.S. dollars, except per share data) (Unaudited) 2018 2019 2020 2018 2019 2020 FY FY Q3 YTD Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Reported (GAAP) Equity method investment net earnings$ 484 $ 501 $ 311
773 2 880
337 15 310 111 189 216 (633 ) 230 148 341 391 Net earnings attributable to Mondel?z International
3,317 3,929 2,399
1,043 319 1,198 757 967 803 1,426 733 736 544 1,119 Diluted earnings per share attributable to Mondel?z International
$ 2.23 $ 2.69 $ 1.66
Adjusted (Non-GAAP) - As Recast Equity method investment net earnings$ 393 $ 487 $ 352 $ 116 $ 87 $ 82 $ 108 $ 160 $ 106 $ 109 $ 112 $ 112 $ 124 $ 116 Provision for income taxes 853 871 648 223 207 180 243 201 219 171 280 201 129 318 Net earnings attributable to Mondel?z International 3,502 3,593 2,756 933 813 903 853 980 810 923 880 958 889 909 Diluted earnings per share attributable to Mondel?z International$ 2.36 $ 2.46 $ 1.91
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Financial Schedules
Exhibit 99.1 to this Form 8-K contains financial schedules that provide the reconciliations for our recast non-GAAP financial results for Adjusted EPS due to the partial sale of our equity method investment in KDP for the first nine months of 2020, all quarters of 2020, 2019 and 2018 and for the years endedDecember 31, 2019 and 2018.
• Schedule 1 provides reconciliations of the differences between the recast
Adjusted (non-GAAP) financial measures and their most directly comparable
reported (GAAP) financial measures. Equity method investment net earnings and
Provision for income taxes are components used to calculate net earnings and
diluted earnings per share attributable to Mondel?z International. • Schedule 2 provides reconciliations between the reported diluted EPS attributable to Mondel?z International (GAAP) and the recast Adjusted EPS (non-GAAP). Non-GAAP Financial Measures We use non-GAAP financial information and believe it is useful to investors as it provides additional information to facilitate comparisons of historical operating results and identify trends in our underlying operating results, and it provides additional insight and transparency on how we evaluate our business. For additional information regarding our non-GAAP financial measures, see Exhibit 99.2.
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibits are being furnished with this Current Report on Form 8-K.
99.1 Financial schedules - Unaudited GAAP and Non-GAAP Financial Information.
99.2 Non-GAAP Financial Measures - Additional Information.
104 The cover page from Mondel?z
8-K, formatted in Inline XBRL (included as Exhibit 101). 3
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