Mondelez International Inc

Previous wording

We continue to observe significant market and geopolitical uncertainty, inflationary pressures, supply constraints and exchange rate volatility. As a result, we experienced significantly higher operating costs, including higher overall raw material, labor and energy costs that have continued to rise. In particular, we expect to face higher cocoa costs, as the market price for cocoa beans has increased significantly year-over-year and it is likely that prices will remain elevated for some time. Refer to Commodity Trends for additional information.

Current wording

We continue to observe significant market and geopolitical uncertainty, fluctuating consumer demand, inflationary pressures, supply constraints and exchange rate volatility. As a result, we experienced significantly higher operating costs, including higher overall raw material, labor and energy costs that have continued to rise. In particular, we expect to continue to face higher cocoa costs, as the market price for cocoa beans has increased significantly year-over-year and it is likely that prices will remain elevated for some time. Refer to Commodity Trends for additional information.

Previous wording

In February 2022, following the Russian military invasion of Ukraine, we stopped production and closed our facilities in Ukraine; since then we have taken steps to protect the safety of our employees and to restore operations at our two manufacturing facilities, which were significantly damaged in March 2022. We continue to support our Ukraine employees, including paying salaries to those not yet able to return to work until full production returns. See Note 1, Basis of Presentation -War in Ukraine, to the condensed consolidated financial statements, and refer to Items Affecting Comparability of Financial Results for additional information.

Current wording

In February 2022, following the Russian military invasion of Ukraine, we stopped production and closed our facilities in Ukraine; since then we have taken steps to protect the safety of our employees and to fully restore operations at our two manufacturing facilities, which were significantly damaged in March 2022. See Note 1, Basis of Presentation -War in Ukraine, to the condensed consolidated financial statements, and refer to Items Affecting Comparability of Financial Results for additional information.

Previous wording

We have suspended new capital investments and our advertising spending in Russia, but as a food company with more than 2,500 employees in the country, we have not ceased operations given we believe we play a role in the continuity of the food supply. We continue to evaluate the situation in Ukraine and Russia and our ability to control our operating activities and businesses on an ongoing basis and comply with applicable international sanctions, and we continue to consolidate both our Ukrainian and Russian subsidiaries. During the first quarter of 2024, Ukraine generated 0.4% and Russia generated 2.6% of consolidated net revenue and during the first quarter of 2023, Ukraine generated 0.4% and Russia generated 2.8% of consolidated net revenue. Our Russian net revenues declined in the first quarter of 2024 due to the suspension of advertising as well as currency weakness. Despite the decrease in revenues, the profitability of our Russian business in the first quarter of 2024 remained above historical levels. We cannot predict if the recent strength in our Russian business will continue in the future.

Current wording

We have suspended new capital investments and our advertising spending in Russia, but as a food company with more than 2,500 employees in the country, we have not ceased operations given we believe we play a role in the continuity of the food supply. We continue to evaluate the situation in Ukraine and Russia and our ability to control our operating activities and businesses on an ongoing basis and comply with applicable international sanctions. We continue to consolidate both our Ukrainian and Russian subsidiaries. During the second quarter of 2024, Ukraine generated 0.4% and Russia generated 2.9% of consolidated net revenue and during the second quarter of 2023, Ukraine generated 0.3% and Russia generated 2.8% of consolidated net revenue. The profitability of and the assets held by our Russian business continue to remain above historical levels. We cannot predict if the recent performance of our Russian business will continue in the future.

Previous wording

Our operations in Russia are subject to risks, including the temporary or permanent loss of assets or our ability to conduct business operations in Russia and the partial or full impairment of our Russian assets in future periods, or the termination of our business operations, based on actions taken by Russia, other parties or us. For additional information, see the risk factors in our Annual Report on Form 10-K for the year ended December 31, 2023, including the risk entitled “The war in Ukraine has impacted and could continue to impact our business operations, financial performance and results of operations.”

Current wording

Our operations in Russia are subject to risks, including the temporary or permanent loss of assets due to expropriation or further curtailment of our ability to conduct business operations in Russia. In the event this were to occur, this could lead to the partial or full impairment of our Russian assets or deconsolidation of the operations in Russia in future periods, or the termination of our business operations, based on actions taken by Russia, other parties or us. For additional information, see the risk factors in our Annual Report on Form 10-K for the year ended December 31, 2023, including the risk entitled “The war in Ukraine has impacted and could continue to impact our business operations, financial performance and results of operations.”

Previous wording

In October 2023, conflict developed in the Middle East between Hamas and Israel, and has expanded to some parts of the region. In the first quarter of 2024, we experienced sales impacts related to this conflict in certain AMEA markets, but this did not have a material impact on our business, results of operations or financial condition. We continue to evaluate the impacts of these developments on our business and we cannot predict if it will have a significant impact in the future.

Current wording

In October 2023, conflict developed in the Middle East between Hamas and Israel, and has expanded to other parts of the region. In the second quarter of 2024, we experienced sales impacts related to this conflict in certain AMEA markets, but this did not have a material impact on our business, results of operations or financial condition. We continue to evaluate the impacts of these developments on our business and we cannot predict if it will have a significant impact in the future.

Previous wording

During December 2023, the Argentinean peso significantly devalued. The peso's devaluation and potential resulting distortion on our non-GAAP Organic Net Revenue, Organic Net Revenue growth and other constant currency growth rate measures resulted in our decision to exclude the impact of pricing in excess of 26% year-over-year ("extreme pricing") in Argentina, from these measures beginning in Q1 2024. The benchmark of 26% represents the minimum annual inflation rate for each year over a 3-year period which would result in a cumulative inflation rate in excess of 100%, the level at which an economy is considered hyperinflationary under U.S. GAAP. Throughout the following MD&A discussion, we now exclude, on a prospective basis, the impact of extreme pricing in Argentina from the net pricing impact of Organic Net Revenue and Organic Net Revenue growth and its related impact on our other non-GAAP financial constant currency growth measures with a corresponding adjustment in changes in currency translation rates. Additionally within the MD&A discussion, "currency-related items" totals the impact of extreme pricing and the currency translation rate changes.

Current wording

During December 2023, the Argentinean peso significantly devalued. The peso's devaluation and potential resulting distortion on our non-GAAP Organic Net Revenue, Organic Net Revenue growth and other constant currency growth rate measures resulted in our decision to exclude the impact of pricing in excess of 26% year-over-year ("extreme pricing") in Argentina, from these measures beginning in Q1 2024. The benchmark of 26% represents the minimum annual inflation rate for each year over a 3-year period which would result in a cumulative inflation rate in excess of 100%, the level at which an economy is considered hyperinflationary under U.S. GAAP. Throughout the following MD&A discussion, we now exclude, on a prospective basis, the impact of extreme pricing in Argentina from the net pricing impact of Organic Net Revenue and Organic Net Revenue growth and its related impact on our other non-GAAP financial constant currency growth measures with a corresponding adjustment in changes in currency translation rates. Additionally within the MD&A discussion, "currency-related items" totals the impact of extreme pricing and the currency translation rate changes. Refer to Non-GAAP financial measuresfor additional information.

Previous wording

•Adjusted Operating Income: Unfavorable currency-related items of $70 million were driven by unfavorable currency translation rate changes of $190 million, partially offset by the adjustment for extreme pricing of $120 million.

Current wording

•Adjusted Operating Income: Unfavorable currency-related items of $57 million were driven by unfavorable currency translation rate changes of $119 million, partially offset by the adjustment for extreme pricing of $62 million.

Previous wording

•Adjusted EPS: Unfavorable currency-related items of $0.05 were driven by unfavorable currency translation rate changes of $0.13, partially offset by the adjustment for extreme pricing of $0.08.

Current wording

•Adjusted EPS: Unfavorable currency-related items of $0.04 were driven by unfavorable currency translation rate changes of $0.08, partially offset by the adjustment for extreme pricing of $0.04.

Previous wording

•Organic Net Revenue: In total, unfavorable currency-related items of $132 million (1.5pp) were driven by unfavorable currency translation rate changes of $513 million (5.7pp), partially offset by the adjustment for extreme pricing of $381 million (4.2pp). In Emerging Markets, unfavorable currency-related items of $166 million (4.6pp) were driven by unfavorable currency translation rate changes of $547 million (15.2pp), partially offset by the adjustment for extreme pricing of $381 million (10.6pp). In Developed Markets, favorable currency-related items of $34 million (0.7pp) were driven by favorable currency translation rate changes.

Current wording

•Organic Net Revenue: In total, unfavorable currency-related items of $348 million (2.0pp) were driven by unfavorable currency translation rate changes of $1,057 million (6.1pp), partially offset by the adjustment for extreme pricing of $709 million (4.1pp). In Emerging Markets, unfavorable currency-related items of $359 million (5.2pp) were driven by unfavorable currency translation rate changes of $1,068 million (15.5pp), partially offset by the adjustment for extreme pricing of $709 million (10.3pp). In Developed Markets, favorable currency-related items of $11 million (0.1pp) were driven by favorable currency translation rate changes.

Previous wording

In 2022, we announced our intention to divest our developed market gum and global Halls candy businesses and in the fourth quarter of 2022, we announced an agreement to sell the developed market gum business. On October 1, 2023, we completed the sale of our developed market gum business to Perfetti Van Melle Group, excluding the Portugal business which we retained pending regulatory approval. We completed the sale of the Portugal business to Perfetti Van Melle Group on October 23, 2023.

Current wording

In 2022, we announced our intention to divest our developed market gum and global Halls candy businesses and in the fourth quarter of 2022, we announced an agreement to sell the developed market gum business. On October 1, 2023, we completed the sale of our developed market gum business to Perfetti Van Melle Group, excluding the Portugal business which we retained pending regulatory approval. We completed the sale of the Portugal business to Perfetti Van Melle Group on October 23, 2023. Refer to Note 2, Divestitures, for additional details.

Previous wording

On March 2, 2023, we sold approximately 30 million shares of KDP, which reduced our ownership interest by 2.1 percentage points to 3.2%. We recorded a pre-tax gain on equity method transactions of $493 million (or $368 million after-tax) during the first quarter of 2023. Our reduction in ownership to below 5% eliminated our governance rights that had allowed us to exert substantial influence over KDP and resulted in a change of accounting from equity method investment accounting to accounting for equity interests with readily determinable fair values ("marketable securities") during the first quarter of 2023. Subsequently in 2023, we sold the remainder of our shares of KDP and exited our investment in the company.

Current wording

During the first quarter of 2023, we sold approximately 30 million shares of KDP, which reduced our ownership interest to 3.2%. We recorded a pre-tax gain on equity method transactions of $493 million (or $368 million after-tax). Our reduction in ownership to below 5% resulted in a change of accounting from equity method investment accounting to accounting for equity interests with readily determinable fair values ("marketable securities"). On June 8, 2023, we sold 23 million shares of KDP, which reduced our ownership to 1.6%. Subsequently in 2023, we sold the remainder of our shares of KDP and exited our investment in the company.

Previous wording

During the three months ended March 31, 2024, we determined there was an other-than-temporary impairment of our investment in JDEP, resulting in an impairment charge of €612 million ($665 million).

Current wording

During the first quarter of 2024, we determined there was an other-than-temporary impairment of our investment in JDEP, resulting in an impairment charge of €612 million ($665 million). During the first quarter of 2023, we sold approximately 7.7 million shares of JDEP, which reduced our ownership to 18.1%. We recorded a loss of €18 million ($19 million) on this sale.

Previous wording

•Net revenues increased 1.4% to $9.3 billion in the first quarter of 2024 as compared to the same period in the prior year. Net revenue growth in the first quarter of 2024 was driven by higher net pricing and incremental net revenue from a short-term distributor agreement related to the sale of our developed market gum business, partially offset by unfavorable volume/mix, the impact of our 2023 divestiture of the developed market gum business and unfavorable currency-related items, as the U.S. dollar strengthened relative to most currencies we operate in compared to exchange rates in the prior year.

Current wording

–Net revenue decline in the first six months of 2024 was driven by unfavorable volume/mix, unfavorable currency-related items, as the U.S. dollar strengthened relative to most currencies we operate in compared to exchange rates in the prior year and the impact of our 2023 divestiture of the developed market gum business, partially offset by higher net pricing and incremental net revenue from a short-term distributor agreement related to the sale of our developed market gum business.

Previous wording

•Organic Net Revenue, a non-GAAP financial measure, increased 4.2% to $9.4 billion in the first quarter of 2024 as compared to same period in the prior year. During the first quarter of 2024, Organic Net Revenue grew due to higher net pricing, partially offset by unfavorable volume/mix. Organic Net Revenue is on a constant currency basis and excludes revenue from acquisitions and divestitures. Refer to Non-GAAP Financial Measuresfor the definition of Organic Net Revenue and Consolidated Results of Operationsfor our reconciliation with net revenues.

Current wording

•Organic Net Revenue, a non-GAAP financial measure, increased 2.5% to $8.6 billion in the second quarter of 2024 and increased 3.4% to $18.0 billion in the first six months of 2024 as compared to the same periods in the prior year. During both the second quarter and first six months of 2024, Organic Net Revenue grew due to higher net pricing, partially offset by unfavorable volume/mix. Organic Net Revenue is on a constant currency basis and excludes revenue from acquisitions and divestitures. Refer to Non-GAAP Financial Measuresfor the definition of Organic Net Revenue and Consolidated Results of Operationsfor our reconciliation with net revenues.

Previous wording

•Diluted EPS attributable to Mondelēz International decreased (31.6)% to $1.04 in the first quarter of 2024 as compared to the same period in the prior year. Diluted EPS decreased in the first quarter of 2024, driven by an impairment charge on our JDEP equity method investment in 2024, lapping prior-year gains on marketable securities and equity method investment transactions related to our former KDP investment, lapping prior-year operating results from the developed market gum business divested in 2023 and higher costs incurred from our Simplify to Grow program. These unfavorable items were partially offset by a favorable year-over-year change in mark-to-market impacts from currency and commodity derivatives, an increase in Adjusted EPS, lower divestiture-related costs, lower acquisition integration costs and contingent consideration adjustments and lower equity method investee items.

Current wording

–Diluted EPS decreased in the first six months of 2024, driven by an impairment charge on our JDEP equity method investment in 2024, lapping prior-year net gains on marketable securities and equity method investment transactions primarily related to our former KDP investment, lapping prior-year operating results from the developed market gum business divested in 2023, unfavorable initial impacts from enacted tax law changes, higher acquisition integration costs and contingent consideration adjustments, higher costs incurred from our Simplify to Grow program and higher equity method investee items. These unfavorable items were partially offset by an increase in Adjusted EPS, favorable year-over-year change in mark-to-market impacts from commodity and currency derivatives, lower divestiture-related costs and lower loss on remeasurement of net monetary position.

Previous wording

•Adjusted EPS, a non-GAAP financial measure, increased 10.5% to $0.95 in the first quarter of 2024 as compared to the same period in the prior year. On a constant currency basis, Adjusted EPS increased 16.3% to $1.00 in the first quarter of 2024 as compared to the same period in the prior year. Adjusted EPS increased in the first quarter of 2024, driven by operating gains, lower interest expense and fewer shares outstanding, partially offset by unfavorable currency-related items and higher taxes. Refer to Non-GAAP Financial Measuresfor the definition of Adjusted EPS and Consolidated Results of Operationsfor our reconciliation with diluted EPS.

Current wording

•Adjusted EPS, a non-GAAP financial measure, increased 19.4% to $0.86 in the second quarter of 2024 and increased 15.9% to $1.82 in the first six months of 2024 as compared to the same periods in the prior year. On a constant currency basis, Adjusted EPS increased 25.0% to $0.90 in the second quarter of 2024 and increased 20.4% to $1.89 in the first six months of 2024 as compared to the same periods in the prior year. Refer to Non-GAAP Financial Measuresfor the definition of Adjusted EPS and Consolidated Results of Operationsfor our reconciliation with diluted EPS.

Previous wording

(3)(Loss)/gain (including non-cash impairment charges) on equity method investment transactions is recorded outside pre-tax operating results on the condensed consolidated statement of earnings. See footnote (1) as mark-to-market gains/(losses) on our equity method-investment-related derivative contracts are presented in the table above within mark-to-market gains/(losses) from derivatives.

Current wording

(4)(Loss)/gain (including non-cash impairment charges) on equity method investment transactions is recorded outside pre-tax operating results on the condensed consolidated statement of earnings. See footnote (1) as mark-to-market gains/(losses) on our equity method-investment-related derivative contracts are presented in the table above within mark-to-market gains/(losses) from derivatives.

Previous wording

(4)Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peet's equity method investee, including acquisition and divestiture-related costs, restructuring program costs and intangible asset impairment charges.

Current wording

(5)Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peet's equity method investee, including acquisition and divestiture-related costs, restructuring program costs and intangible asset impairment charges.

Previous wording

Net Revenues – Net revenues increased $124 million (1.4%) to $9,290 million in the first quarter of 2024, and Organic Net Revenue(1) increased $378 million (4.2%) to $9,397 million. Emerging markets net revenues increased 3.8% and emerging markets Organic Net Revenue increased 8.3%(1). Developed markets net revenues decreased (0.2)% and developed markets Organic Net Revenue increased 1.4%(1). The underlying changes in net revenues and Organic Net Revenue are detailed below:

Current wording

Net Revenues – Net revenues decreased $164 million (1.9%) to $8,343 million in the second quarter of 2024, and Organic Net Revenue(1) increased $209 million (2.5%) to $8,559 million. Emerging markets net revenues decreased (1.4)% and emerging markets Organic Net Revenue increased 4.5%(1). Developed markets net revenues decreased (2.3)% and developed markets Organic Net Revenue increased 1.2%(1). The underlying changes in net revenues and Organic Net Revenue are detailed below:

Previous wording

Operating Income – Operating income increased $1,222 million (81.2%) to $2,727 million in the first quarter of 2024. Adjusted Operating Income(1) increased $186 million (12.2%) to $1,710 million and Adjusted Operating Income on a constant currency basis(1) increased $256 million (16.8%) to $1,780 million due to the following:

Current wording

Operating Income – Operating income decreased $571 million (40.1%) to $854 million in the second quarter of 2024. Adjusted Operating Income(1) increased $223 million (17.6%) to $1,492 million and Adjusted Operating Income on a constant currency basis(1) increased $280 million (22.1%) to $1,549 million due to the following:

Previous wording

Total selling, general and administrative expenses increased $83 million from the first quarter of 2023, which reflected benefits from a number of factors noted in the table above, including in part, lower divestiture-related costs, the elimination of costs from the developed market gum business divested in 2023, lower acquisition integration costs and contingent consideration adjustments and lower remeasurement loss of net monetary position, marginally offset by higher implementation costs incurred for the Simplify to Grow program. Excluding these factors, selling, general and administrative expenses increased $138 million from the first quarter of 2023. The increase was driven primarily by higher advertising and consumer promotion costs and higher overhead costs in part due to increased investments in route to market capabilities.

Current wording

Total selling, general and administrative expenses increased $22 million from the second quarter of 2023, which was net of benefits from a number of factors noted in the table above, including in part, the elimination of costs from the developed market gum business divested in 2023, lower divestiture-related costs, lower remeasurement loss of net monetary position and a favorable currency translation impact related to expenses, partially offset by higher acquisition integration costs and contingent consideration adjustments and costs incurred for the ERP System Implementation program. Excluding these factors, selling, general and administrative expenses increased $79 million from the second quarter of 2023. The increase was driven primarily by higher advertising and consumer promotion costs and higher overhead costs in part due to increased investments in route to market capabilities.

Previous wording

Unfavorable currency-related items decreased operating income by $70 million primarily due to the strength of the U.S. dollar relative to most currencies, including the Argentinean peso, Russian ruble, Turkish lira, Chinese yuan, Australian dollar, Nigerian naira and Egyptian pound, partially offset by the strength of a few currencies relative to the U.S. dollar, primarily the British pound sterling, Mexican peso, Brazilian real, euro and Polish zloty.

Current wording

Unfavorable currency-related items, net of the adjustment for extreme pricing in Argentina, decreased operating income by $57 million primarily due to the strength of the U.S. dollar relative to most currencies, including the Argentinean peso, Egyptian pound, Russian ruble, Brazilian real, Turkish lira, euro and Chinese yuan, partially offset by the strength of a few currencies relative to the U.S. dollar, primarily the Mexican peso, British pound sterling and Polish zloty.

Previous wording

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $1,412 million decreased by $669 million (32.1%) in the first quarter of 2024. Diluted EPS attributable to Mondelēz International was $1.04 in the first quarter of 2024, down $0.48 (31.6%) from the first quarter of 2023. Adjusted EPS(1) was $0.95 in the first quarter of 2024, up $0.09 (10.5%) from the first quarter of 2023. Adjusted EPS on a constant currency basis(1) was $1.00 in the first quarter of 2024, up $0.14 (16.3%) from the first quarter of 2023.

Current wording

Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $601 million decreased by $343 million (36.3%) in the second quarter of 2024. Diluted EPS attributable to Mondelēz International was $0.45 in the second quarter of 2024, down $0.24 (34.8%) from the second quarter of 2023. Adjusted EPS(1) was $0.86 in the second quarter of 2024, up $0.14 (19.4%) from the second quarter of 2023. Adjusted EPS on a constant currency basis(1) was $0.90 in the second quarter of 2024, up $0.18 (25.0%) from the second quarter of 2023.

Previous wording

•For the three months ended March 31, 2023, taxes for the: Simplify to Grow Program were $(6) million, mark-to-market gains from derivatives were $8 million, acquisition integration costs and contingent consideration adjustments were $(13) million, divestiture-related costs were $(4) million, operating results from divestitures were $16 million, remeasurement of net monetary position were zero, gain on marketable securities were $201 million, gain on equity method investment transactions were $125 million and equity method investee items were zero.

Current wording

•For the three months ended June 30, 2023, taxes for the: Simplify to Grow Program were $(1) million, mark-to-market gains from derivatives were $21 million, acquisition integration costs and contingent consideration adjustments were $(9) million, divestiture-related costs were $(4) million, operating results from divestitures were $12 million, remeasurement of net monetary position were zero, gain on marketable securities were $(45) million, gain on equity method investment transactions were $(1) million and equity method investee items were zero.

Previous wording

(6)Refer to Note 14, Income Taxes, for additional information on the items affecting income taxes.

Current wording

(3)Refer to Note 14, Income Taxes, for additional information on the items affecting income taxes.

Previous wording

(3)Refer to Note 6, Investments, for additional information on gains/losses (including non-cash impairment charges) on equity method investment transactions and marketable securities.

Current wording

(4)Refer to Note 6, Investments, for additional information on gains/losses (including non-cash impairment charges) on equity method investment transactions and marketable securities.

Previous wording

(4)Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peet's equity method investee, such as acquisition and divestiture-related costs and restructuring program costs.

Current wording

(5)Includes our proportionate share of significant operating and non-operating items recorded by our JDE Peet's equity method investee, such as acquisition and divestiture-related costs and restructuring program costs.

Previous wording

(5)Excludes the currency impact on interest expense related to non-U.S. dollar-denominated debt, which is included in currency translation.

Current wording

(6)Excludes the currency impact on interest expense related to non-U.S. dollar-denominated debt, which is included in currency translation.

Previous wording

Net revenue increase of 1.4% was driven by our underlying Organic Net Revenue growth of 4.2% and the impact of a short-term distributor agreement, partially offset by the impact of our 2023 divestiture of the developed market gum business and unfavorable currency-related items. Organic Net Revenue growth was driven by higher net pricing, partially offset by unfavorable volume/mix. Higher net pricing in all regions was due to the benefit of carryover pricing from 2023 as well as the effects of input cost-driven pricing actions taken during the first three months of 2024. Overall, unfavorable volume/mix was driven by volume declines, due to expected customer price negotiation disruptions in Europe, softer consumer demand in the U.S. and geopolitical impacts in parts of AMEA, which were partially offset by favorable product mix. Unfavorable volume/mix was reflected across all regions. The short-term distributor agreement related to the October 1, 2023 sale of our developed market gum business added incremental net revenues of $25 million. The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $147 million. Refer to Note 2, Divestitures, for additional information. Currency-related items decreased net revenues by $132 million, driven by unfavorable currency translation rate changes, partially offset by the adjustment for extreme pricing in Argentina. Refer to Recent Developments and Significant Items Affecting Comparabilityfor additional information. Unfavorable currency translation rate changes were due to the strength of the U.S. dollar relative to several currencies, primarily the

Current wording

Net revenue decrease of 0.2% was driven by unfavorable currency-related items and the impact of our 2023 divestiture of the developed market gum business, partially offset by our underlying Organic Net Revenue growth of 3.4% and the impact of a short-term distributor agreement. Currency-related items decreased net revenues by $348 million, driven by unfavorable currency translation rate changes, partially offset by the adjustment for extreme pricing in Argentina. Refer to Recent Developments and Significant Items Affecting Comparabilityfor additional information. Unfavorable currency translation rate changes were due to the strength of the U.S. dollar relative to most currencies, primarily the Argentinean peso, as well as the Russian ruble, Turkish lira, Nigerian naira, Chinese yuan, Egyptian pound and Australian dollar, partially offset by the strength of a few currencies relative to the U.S. dollar, including the Mexican peso, British pound sterling, Polish zloty and Colombian peso. The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $304 million for the first six months of 2024. Refer to Note 2, Divestitures, for additional information. Organic Net Revenue growth was driven by higher net pricing, partially offset by unfavorable volume/mix. Higher net pricing in all regions was due to the benefit of carryover pricing from 2023 as well as the effects of input cost-driven pricing actions taken during the first six months of 2024. Overall, unfavorable volume/mix was driven by volume declines, due to expected customer price negotiation disruptions in Europe, softer consumer demand in the U.S. and Mexico and geopolitical impacts in parts of AMEA, which were partially offset by favorable product mix. Unfavorable volume/mix was reflected across all regions. The short-term distributor agreement related to the October 1, 2023 sale of our developed market gum business added incremental net revenues of $25 million for the first six months of 2024.

Previous wording

During the first quarter of 2024, we realized higher net pricing, which was partially offset by increased input costs and unfavorable volume/mix. Higher net pricing, which included the carryover impact of pricing actions taken in 2023 as well as the effects of input cost-driven pricing actions taken during the first three months of 2024, was reflected across all regions. The increase in input costs was driven by higher raw material costs net of realized gains from our forward purchasing and hedging contracts, partially offset by lower manufacturing costs driven by productivity. Higher raw material costs were in part due to higher cocoa, sugar, nuts, and other ingredient costs, as well as unfavorable year-over-year currency exchange transaction costs on imported materials, partially offset by lower dairy, edible oils, grains, energy and packaging costs. Overall, volume/mix was due to volume declines partially offset by favorable product mix. Unfavorable volume/mix was driven by Europe, North America and Latin America, which was marginally offset by slightly favorable volume/mix in AMEA.

Current wording

During the first six months of 2024, we realized higher net pricing, which was partially offset by increased input costs and unfavorable volume/mix. Higher net pricing, which included the carryover impact of pricing actions taken in 2023 as well as the effects of input cost-driven pricing actions taken during the first six months of 2024, was reflected across all regions. The increase in input costs was driven by higher raw material costs, partially offset by lower manufacturing costs driven by productivity. Higher raw material costs were in part due to higher cocoa, sugar, nuts and other ingredient costs, as well as unfavorable year-over-year currency exchange transaction costs on imported materials, partially offset by lower dairy, energy, edible oils, grains and packaging costs. Overall, unfavorable volume/mix was due to volume declines partially offset by favorable product mix. Unfavorable volume/mix was experienced in all regions.

Previous wording

Operating income margin increased from 16.4% in the first quarter of 2023 to 29.4% in the first quarter of 2024. The increase in operating income margin was driven primarily by the favorable year-over-year change in mark-to-market gains/(losses) from currency and commodity hedging activities, higher Adjusted Operating Income margin, lower divestiture-related costs and lower remeasurement loss of net monetary position, partially offset by the impact from the developed market gum business divested in 2023 and higher costs incurred for the Simplify to Grow program. Adjusted Operating Income margin increased from 16.9% for the first quarter of 2023 to 18.5% for the first quarter of 2024. The increase was driven primarily by higher net pricing, lower manufacturing costs driven by productivity, favorable product mix and overhead cost leverage, partially offset by higher raw material costs and higher advertising and consumer promotion costs.

Current wording

Operating income margin increased from 16.6% in the first six months of 2023 to 20.3% in the first six months of 2024. The increase was driven primarily by higher Adjusted Operating Income margin, favorable year-over-year change in mark-to-market gains/(losses) from commodity and currency hedging activities, lower divestiture-related costs and lower remeasurement loss of net monetary position, partially offset by the impact from the developed market gum business divested in 2023, higher costs incurred for the Simplify to Grow program and costs incurred for the ERP System Implementation program. Adjusted Operating Income margin increased from 16.1% for the first six months of 2023 to 18.2% for the first six months of 2024. The increase was driven primarily by higher net pricing, lower manufacturing costs driven by productivity and overhead leverage, partially offset by higher raw material costs and higher advertising and consumer promotion costs.

Previous wording

Our segment net revenues and earnings were:

Current wording

Our reconciliation of segment net revenues and earnings to consolidated financial statement totals were:

Previous wording

Net revenues increased $108 million (8.9%), due to higher net pricing (8.3 pp) and favorable impact of currency-related items (1.8 pp), partially offset by unfavorable volume/mix (1.2 pp). Higher net pricing, net of the adjustment for extreme pricing in Argentina, was driven by input cost-driven pricing actions and reflected across all categories, primarily in Argentina, Mexico and Brazil. Currency-related items were net positive due to the adjustment for extreme pricing in Argentina, which was mostly offset by unfavorable currency translation rate changes. Unfavorable currency translation impacts were primarily due to the strength of the U.S. dollar relative to a few currencies in the region, primarily the Argentinean peso and Chilean peso, partially offset by the strength of several currencies relative to the U.S. dollar, primarily the Mexican peso and Brazilian real. Unfavorable volume/mix was driven by declines in chocolate, biscuits & baked snacks, candy and cheese & grocery, partially offset by gains in refreshment beverages and gum.

Current wording

Net revenues increased $4 million (0.3%), due to higher net pricing (7.7 pp), partially offset by unfavorable impact of currency-related items (4.2 pp) and unfavorable volume/mix (3.2 pp). Higher net pricing, net of the adjustment for extreme pricing in Argentina, was driven by input cost-driven pricing actions and reflected across all categories, primarily in Argentina, Mexico and Brazil. Currency-related items were unfavorable, net of the adjustment for extreme pricing in Argentina, due to currency translation rate changes. Unfavorable currency translation impacts were primarily due to the strength of the U.S. dollar relative to a few currencies in the region, primarily the Argentinean peso and Brazilian real, partially offset by the strength of a few currencies relative to the U.S. dollar, primarily the Mexican peso and Colombian peso. Overall, unfavorable volume/mix reflected consumer softness, primarily in Mexico. Unfavorable volume/mix was driven by declines in chocolate, cheese & grocery, gum, candy and refreshment beverages, partially offset by a gain in biscuits & baked snacks.

Previous wording

Segment operating income increased $18 million (12.9%), primarily due to higher net pricing, lower other selling, general and administrative expenses, lower remeasurement loss on net monetary position and lower manufacturing costs driven by productivity. These favorable items were partially offset by higher raw material costs, unfavorable currency-related items, higher acquisition integration costs, higher advertising and consumer promotion costs and unfavorable volume/mix.

Current wording

Segment operating income increased $28 million (10.3%), primarily due to higher net pricing, lower other selling, general and administrative expenses, lower remeasurement loss on net monetary position and lower manufacturing costs driven by productivity. These favorable items were partially offset by higher raw material costs, unfavorable currency-related items, unfavorable volume/mix, higher advertising and consumer promotion costs and higher acquisition integration costs.

Previous wording

Net revenues increased $11 million (0.6%), due to higher net pricing (6.1 pp), mostly offset by unfavorable currency (5.3 pp) and unfavorable volume/mix (0.2 pp). Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories. Unfavorable currency translation impacts were due to the strength of the U.S. dollar relative to most currencies in the region, including the Nigerian naira, Chinese yuan, Australian dollar and Egyptian pound. Overall, unfavorable volume/mix was impacted by geopolitical events in the Middle East and Southeast Asia. Unfavorable volume/mix was driven by declines in biscuits & baked snacks, refreshment beverages and cheese & grocery, mostly offset by gains in gum, chocolate and candy.

Current wording

Net revenues decreased $11 million (0.3%), due to unfavorable currency translation rate changes (5.5 pp) and unfavorable volume/mix (0.9 pp), mostly offset by higher net pricing (6.1 pp). Unfavorable currency translation impacts were due to the strength of the U.S. dollar relative to most currencies in the region, including the Nigerian naira, Chinese yuan, Egyptian pound and Australian dollar. Overall, unfavorable volume/mix was impacted by geopolitical events in the Middle East and Southeast Asia. Unfavorable volume/mix was driven by declines in refreshment beverages, biscuits & baked snacks, cheese & grocery and chocolate, partially offset by gains in gum and candy. Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories.

Previous wording

Segment operating income increased $51 million (14.2%), primarily due to higher net pricing and lower manufacturing costs driven by productivity. These favorable items were partially offset by higher other selling, general and administrative expenses, higher raw material costs, unfavorable currency translation rate changes and higher advertising and consumer promotion costs.

Current wording

Segment operating income increased $101 million (22.5%), primarily due to higher net pricing, lower raw material costs including the benefit of realized gains from our forward purchasing and hedging contracts, lower remeasurement loss on net monetary position and lower divestiture-related costs. These favorable items were partially offset by higher other selling, general and administrative expenses, higher advertising and consumer promotion costs, unfavorable volume/mix, lapping prior-year operating results from the developed market gum business divested in 2023, unfavorable currency translation rate changes, higher manufacturing costs and higher costs incurred for the Simplify to Grow Program.

Previous wording

Net revenues increased $61 million (1.8%), due to higher net pricing (7.9 pp) and the impact from short-term distributor agreements (0.8 pp), partially offset by unfavorable volume/mix (3.5 pp), the impact of divestitures (1.8 pp) and unfavorable currency translation rate changes (1.6 pp). Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories except cheese & grocery. The short-term distributor agreement related to the October 1, 2023 sale of our developed market gum business added incremental net revenues of $25 million. Overall, unfavorable volume/mix reflected volume declines due to the impact from customer price negotiation disruptions, partially offset by favorable product mix. Unfavorable volume/mix was driven by declines in biscuits & baked snacks, chocolate, gum, candy and refreshment beverages, partially offset by a gain in cheese & grocery. The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $55 million. Unfavorable currency translation rate changes reflected the strength of the U.S. dollar relative to several currencies across the region, including the Russian ruble and Turkish lira, partially offset by the strength of several currencies relative to the U.S. dollar, including the British pound sterling, euro and Polish zloty.

Current wording

Net revenues increased $9 million (0.1%), due to higher net pricing (6.9 pp), and the impact from short-term distributor agreements (0.4 pp), partially offset by unfavorable volume/mix (3.3 pp), unfavorable currency translation rate changes (2.0 pp) and the impact of divestitures (1.9 pp). Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories except cheese & grocery. The short-term distributor agreement related to the October 1, 2023 sale of our developed market gum business added incremental net revenues of $25 million. Overall, unfavorable volume/mix reflected volume declines due to the impact from customer price negotiation disruptions, partially offset by favorable product mix. Unfavorable volume/mix was driven by declines in biscuits & baked snacks, chocolate, candy, gum and refreshment beverages, partially offset by a gain in cheese & grocery. Unfavorable currency translation rate changes reflected the strength of the U.S. dollar relative to several currencies across the region, including the Russian ruble and Turkish lira, partially offset by the strength of a few currencies relative to the U.S. dollar, including the British pound sterling and Polish zloty. The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $114 million.

Previous wording

Segment operating income increased $84 million (16.6%), primarily due to higher net pricing, lower manufacturing costs driven by productivity, lower divestiture-related costs and lower acquisition integration costs. These favorable items were partially offset by higher raw material costs, higher other selling, general and administrative expenses, unfavorable volume/mix, higher advertising and consumer promotion costs, lapping prior-year operating results from the developed market gum business divested in 2023, unfavorable currency translation rate changes, higher costs incurred for the Simplify to Grow Program and higher remeasurement loss on net monetary position.

Current wording

Segment operating income increased $185 million (19.4%), primarily due to higher net pricing, lower divestiture-related costs, lower manufacturing costs driven by productivity, lower remeasurement loss on net monetary position and lower acquisition integration costs. These favorable items were partially offset by higher other selling, general and administrative expenses, unfavorable volume/mix, higher advertising and consumer promotion costs, lapping prior-year operating results from the developed market gum business divested in 2023, unfavorable currency translation rate changes, higher costs incurred for the Simplify to Grow Program, higher incremental costs due to the war in Ukraine and higher raw material costs.

Previous wording

Net revenues decreased $56 million (2.1%), due to the impact of divestitures (3.5 pp) and unfavorable volume/mix (2.1 pp), partially offset by higher net pricing (3.4 pp) and favorable currency (0.1 pp). The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $92 million. Overall, unfavorable volume/mix reflected consumer softness in the U.S. Unfavorable volume/mix was driven by declines in biscuits & baked snacks and candy, partially offset by a gain in chocolate. Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories. Favorable currency impact was due to the strength of the Canadian dollar relative to the U.S. dollar.

Current wording

Net revenues decreased $94 million (3.4%), due to the impact of divestitures (3.6 pp), unfavorable volume/mix (1.2 pp) and unfavorable currency translation rate changes (0.1 pp), partially offset by higher net pricing (1.5 pp). The impact of our 2023 divestiture of the developed market gum business resulted in a year-over-year reduction in net revenues of $98 million. Overall, unfavorable volume/mix reflected consumer softness in the U.S. Unfavorable volume/mix was driven by declines in biscuits & baked snacks and candy, partially offset by a gain in chocolate. Unfavorable currency translation rate changes were due to the strength of the U.S. dollar relative to the Canadian dollar. Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories.

Previous wording

Segment operating income decreased $17 million (3.0%), primarily due to lapping prior-year operating results from the developed market gum business divested in 2023, higher raw material costs, higher advertising and consumer promotion costs, unfavorable volume/mix, higher costs incurred for the Simplify to Grow Program and higher other selling, general and administrative expenses. These unfavorable items were partially offset by higher net pricing, lower acquisition integration costs and contingent consideration adjustments, lower fixed asset impairment charges and lower manufacturing costs due to productivity.

Current wording

Segment operating income decreased $35 million (6.0%), primarily due to lapping prior-year operating results from the developed market gum business divested in 2023, higher raw material costs, higher advertising and consumer promotion costs, higher acquisition integration costs and contingent consideration adjustments and unfavorable volume/mix. These unfavorable items were partially offset by higher net pricing, lower manufacturing costs due to productivity, lower other selling, general and administrative expenses and lower divestiture-related costs.