Description of the Company

We make and sell primarily snacks, including biscuits, chocolate, gum & candy as well as various cheese & grocery and powdered beverage products around the world.



We aim to be the global leader in snacking. In May 2022, we announced the
evolution of our strategy to drive long-term growth by focusing on four
strategic pillars and priorities: accelerating consumer-centric growth, driving
operational excellence, creating a winning growth culture and scaling
sustainable snacking. We also announced our plans to reshape our portfolio, with
a focus on extending our leadership positions in chocolate and biscuits as well
as baked snacks. We seek to further enable our growth by investing in our strong
and inclusive talent, brand portfolio and digital technologies and skills, as
well as our sales and marketing capabilities. We believe the successful
implementation of our strategic priorities and leveraging of our strong
foundation of iconic global and local brands, an attractive global footprint,
our market leadership in developed and emerging markets, our deep innovation,
marketing and distribution capabilities, and our efficiency and sustainability
efforts, will drive top- and bottom-line growth, enabling us to continue to
create long-term value for our shareholders.

Recent Developments and Significant Items Affecting Comparability

War in Ukraine



In February 2022, Russia began a military invasion of Ukraine. For the safety of
our employees, we stopped production and closed our facilities in Ukraine. We
are providing all of our employees with compensation and with help in securing
shelter in neighboring countries. We have also made cash and in-kind donations
to several humanitarian aid organizations in the region.

In March 2022, our two Ukrainian manufacturing facilities in Trostyanets and
Vyshhorod were significantly damaged. In connection with the damage to these
plants and impairment of other assets, primarily inventory, other plant,
property and equipment, as well as increased allowances on our receivables,
during the first quarter of 2022, we recorded $143 million of charges directly
incurred as a result of the war in Ukraine, including an accrual for continued
compensation for our employees in Ukraine (see Note 1, Basis of Presentation, to
the condensed consolidated financial statements, and refer to Items Affecting
Comparability of Financial Results for additional information.) We have
increased operations and continue to provide resources in other primarily
European manufacturing and distribution facilities to seek to continue supplying
our Ukraine business's customers and consumers across Europe.

During the second quarter of 2022, the war continued through parts of Ukraine.
Our Trostyanets plant continues to be significantly damaged. In our Vyshhorod
plant, we made and continue to make targeted repairs. We relaunched our systems
and implemented additional safety and security measures. In late June, we
decided to partially reopen the Vyshhorod plant and restart limited potato chip
production. During the second quarter of 2022, we reversed approximately
$15 million of previously recorded charges as a result of higher than expected
collection of trade receivables and inventory recoveries.

As a food company, we continue to work to support the continuity of food supply
and provide packaged foods to consumers. We have discontinued new capital
investments and suspended our advertising spending in Russia, but as a food
company with more than 2,500 employees in Russia, we have not ceased operations
given we believe we play a role in the continuity of the food supply. We are
required to comply with applicable international sanctions and other measures
that have been or may be imposed on Russian entities. 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 we continue to consolidate
both our Ukrainian and Russian subsidiaries. Prior to the onset of the war,
Ukraine generated 0.5% and Russia generated 2.9% of 2021 consolidated net
revenues. The war has not had a material impact on our Russian entities during
the first six months of 2022.

We provide more information on risks related to the war in Ukraine in our Financial Outlook and Commodity Trends section, Item 3. Quantitative and Qualitative Disclosures about Market Risk and under Item 1A, Risk Factors.


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COVID-19

In the third year of the COVID-19 global pandemic, our main priority remains the
safety of our employees as well as continuing to help maintain the global food
supply. During the pandemic, we experienced an overall increase in demand and
revenue growth as consumers increased their food purchases for in-home
consumption in many markets, while parts of our business were negatively
affected by related lockdowns and restrictions. In late 2021, global supply
chain, transportation and labor issues escalated and we experienced
significantly higher operating costs, including higher overall raw material,
transportation, labor and energy costs that have continued to rise in 2022 as
the pandemic continues to affect global markets and operations.

During the first six months of 2022, our net revenues continued to increase with
growth of 8.3% and Organic Net Revenue growth of 10.7%, compared to the first
six months of 2021. In the first half of 2022, we continued to see increased
demand primarily for our snack category products and revenue growth in both our
emerging and developed markets relative to the first half of 2021. We continued
to also experience significantly higher operating costs. See additional details
on our results in our Discussion and Analysis of Historical Results.

During the pandemic, we continued to closely monitor our cash position and cash
flows and worked to increase our access to financing. As of June 30, 2022, our
liquidity remains strong. During the first quarter of 2022, we funded our
acquisition of Chipita (see additional information below) and issued $2 billion
of long-term debt, refinancing approximately $2 billion of tendered and redeemed
debt (refer to Note 8, Debt and Borrowing Arrangements for details) ahead of a
2022 rising interest rate environment. We generated $2.0 billion of cash from
operations, ending the quarter with cash and cash equivalents of $1.9 billion as
of June 30, 2022. We also had $9 billion of unused credit facilities available
as of June 30, 2022 as well as ongoing access to additional financing as
evidenced by the incremental term loan facility we entered into and announced on
July 11, 2022. Our JDE Peet's and KDP equity method investments also give us
additional financial flexibility.

We will continue to proactively manage our business in response to the evolving
global economic environment and related uncertainty and business risks as well
as prioritize and support our employees and customers. We continue to take steps
to mitigate impacts to our supply chain, operations, technology and assets. We
intend to continue to execute on our new strategic and operating plans as the
situation evolves. We seek to further our strategic priorities and position the
Company to withstand the current uncertainties and emerge stronger.

Acquisitions and Divestitures



During the second quarter of 2022, we announced the planned acquisitions of Clif
Bar & Company ("Clif Bar") and Ricolino. Refer to Financial Outlook below and
Note 2, Acquisitions and Divestitures, for additional details. In the second
quarter, we also announced our intention to divest our developed market gum and
global Halls candy businesses.

On January 3, 2022, we closed on our acquisition of Chipita Global S.A.
("Chipita"), which is a strategic complement to our existing snacks portfolio
and advances our strategy to become the global leader in broader snacking. We
paid cash consideration of €1.2 billion ($1.4 billion), net of cash received,
and we assumed and paid down €0.4 billion ($0.4 billion) of Chipita's debt in
January for a total purchase price of approximately €1.7 billion ($1.8 billion).
Refer to our Discussion and Analysis of Historical Results for more information
on the impact of the acquisition on our results and refer to Note 2,
Acquisitions and Divestitures, for additional details on the acquisition.

JDE Peet's and KDP Equity Method Investment Transactions

JDE Peet's
On May 8, 2022, we sold approximately 18.6 million JDE Peet's shares directly
back to JDE Peet's, which reduced our ownership interest to 19.8%. We received
€500 million ($529 million) of proceeds and recorded a loss of €8 million ($8
million) on this sale during the second quarter of 2022.

KDP


On June 7, 2021, we participated in a secondary offering of KDP shares and sold
approximately 28 million shares, which reduced our ownership interest to 6.4% of
the total outstanding shares. We received $997 million of proceeds and recorded
a pre-tax gain of $520 million (or $392 million after-tax) during the second
quarter of 2021. The cash taxes associated with the KDP share sales were paid in
late 2021.
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Summary of Results

•Net revenues increased 9.5% to $7.3 billion in the second quarter of 2022 and
increased 8.3% to $15.0 billion in the first six months of 2022 as compared to
the same period in the prior year. In the second quarter and first six months of
2022, our net revenue growth continued to reflect increased demand for most of
our snack category products in both our emerging and developed markets relative
to 2021. Overall, our net revenue growth in the second quarter and first six
months of 2022 was driven by higher net pricing, favorable volume/mix and
incremental net revenues from acquisitions, partially offset by unfavorable
currency translation and the impact of a prior-year divestiture.

•Organic Net Revenue, a non-GAAP financial measure, increased 13.1% to $7.5
billion in the second quarter of 2022 and increased 10.7% to $15.4 billion in
the first six months of 2022 as compared to same period in the prior year.
During the second quarter and first six months of 2022, Organic Net Revenue grew
due to higher net pricing and favorable volume/mix. Refer to our Discussion and
Analysis of Historical Results below for additional information. Organic Net
Revenue is on a constant currency basis and excludes revenue from acquisitions
and divestitures. We use Organic Net Revenue as it provides improved
year-over-year comparability of our underlying operating results (see the
definition of Organic Net Revenue and our reconciliation with net revenues
within Non-GAAP Financial Measures appearing later in this section).

•Diluted EPS attributable to Mondel?z International decreased 28.9% to $0.54 in
the second quarter of 2022 and decreased 20.1% to $1.15 in the first six months
of 2022 as compared to the same period in the prior year.
-Diluted EPS decreased in the second quarter of 2022, primarily driven by
lapping a prior-year net gain on equity method transactions, an unfavorable
year-over-year change in mark-to-market impacts from currency and commodity
derivatives and higher acquisition integration costs, partially offset by lower
Simplify to Grow program costs, lower negative impacts from enacted tax law
changes, lapping a prior-year intangible asset impairment charge, lapping a
prior-year unfavorable impact of pension participation changes and an increase
in Adjusted EPS.
-Diluted EPS decreased during the first six months of 2022, primarily driven by
lapping prior-year net gain on equity method transactions, unfavorable
year-over-year mark-to-market impacts from currency and commodity derivatives,
incremental costs incurred due to the war in Ukraine, higher intangible asset
impairment charges, higher acquisition integration costs and contingent
consideration adjustments and higher acquisition-related costs, partially offset
by lower Simplify to Grow program costs, lower negative impacts from enacted tax
law changes, lower equity method investee items and an increase in Adjusted EPS.

•Adjusted EPS, a non-GAAP financial measure, increased 1.5% to $0.67 in the
second quarter of 2022 and increased 3.4% to $1.50 in the first six months of
2022 as compared to the same period in the prior year. On a constant currency
basis, Adjusted EPS increased 9.1% to $0.72 in the second quarter of 2022 and up
11.7% to $1.62 in the first six months of 2022 as compared to the same periods
in the prior year.
-Adjusted EPS increased in the second quarter of 2022, primarily driven by
operating gains, lower taxes and fewer shares outstanding, mostly offset by
unfavorable currency translation, higher interest expense and lower equity
method investment earnings.
-Adjusted EPS increased during the first six months of 2022, primarily driven by
operating gains, fewer shares outstanding and lower interest expense, partially
offset by unfavorable currency translation, lower benefit plan non-service
income, higher taxes primarily due to lower net benefits from non-recurring
discrete tax items and lower equity method investment earnings.
Adjusted EPS and Adjusted EPS on a constant currency basis
are non-GAAP financial measures. We use these measures as they provide improved
year-over-year comparability of our underlying results (see the definition of
Adjusted EPS and our reconciliation with diluted EPS within Non-GAAP Financial
Measures appearing later in this section).

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Financial Outlook

We seek to achieve profitable, long-term growth and manage our business to
attain this goal using our key operating metrics: Organic Net Revenue, Adjusted
Operating Income and Adjusted EPS. We use these non-GAAP financial metrics and
related computations, particularly growth in profit dollars, to evaluate and
manage our business and to plan and make near- and long-term operating and
strategic decisions. As such, we believe these metrics are useful to investors
as they provide supplemental information in addition to our U.S. Generally
Accepted Accounting Principles ("U.S. GAAP") financial results. We believe it is
useful to provide investors with the same financial information that we use
internally to make comparisons of our historical operating results, identify
trends in our underlying operating results and evaluate our business. We believe
our non-GAAP financial measures should always be considered in relation to our
GAAP results. We have provided reconciliations between our GAAP and non-GAAP
financial measures in Non-GAAP Financial Measures, which appears later in this
section.

In addition to monitoring our key operating metrics, we monitor developments and
trends that could impact our revenue and profitability objectives, similar to
those we highlighted in our most recently filed Annual Report on Form 10-K for
the year ended December 31, 2021 and discussed in the footnotes to our financial
statements.

•Market conditions. Snack categories continued to grow in the first six months
of 2022. This is consistent with the latest findings in the third annual State
of Snacking report, commissioned by Mondel?z International and issued in January
2022. The research report was conducted in conjunction with consumer poll
specialist The Harris Poll and summarizes the findings from interviews with
thousands of consumers across 12 countries. The report underscores the growth of
snacking worldwide and how behavior, sentiment and routines surrounding food are
being reshaped by factors such as the COVID-19 pandemic. Snacking, which was
already increasing among consumers, continues to grow as we noted in our latest
Annual Report on Form 10-K. Our outlook for future snacks revenue growth remains
strong, but we anticipate some volatility in revenues while current events and
conditions continue. As the COVID-19 pandemic, war in Ukraine and related
impacts continue, we could see shifts in consumer demand and in our sales and
product mix that could have a negative impact on our results. We continue to
monitor volatility across markets, including global consumer, energy and other
commodity, transportation, labor, currency and capital markets. We expect
greater inflation, including input cost volatility and a higher aggregate cost
environment to continue in 2022, as the war in Ukraine, the pandemic, supply
chain disruptions (affecting the availability of raw materials, packaging,
transportation and other costs), rising energy costs, labor shortages, adverse
weather events and conditions and other factors are expected to continue. Refer
also to Commodity Trends and Item 3, Quantitative and Qualitative Disclosures
about Market Risk.
•War in Ukraine. We expect to experience heightened volatility and higher costs
in international supply chains and global markets (including energy and other
commodities, currencies and capital markets) in connection with the war in
Ukraine with related negative impacts to our operating results that we cannot
fully predict with certainty. We also expect increased inflationary pressures
that will adversely impact our operating costs, particularly as the war
continues. Demand for our products may also be negatively impacted, particularly
in those markets closest to Ukraine or other markets that are more vulnerable to
consumer price increases. We have expanded operations in other European
facilities and are adapting to continue supplying the majority of our Ukraine
business's customers and consumers across Europe. We continue to take action and
evaluate additional ways to mitigate risks, including executing business
continuity plans to cover products produced in Ukraine and taking actions to
adjust product offerings, package sizes and pricing to help address rising
costs. In addition, we may experience negative impacts to our business in Russia
due to the war in Ukraine, including challenges to supply products as a result
of sanctions or other supply chain challenges, reductions in consumer demand or
local government actions that negatively impact our business. Our continued
operating presence in Russia may result in negative publicity or consumer
actions against our brands, which may have negative impacts on our business. We
may also experience increased cyber attacks from state sponsored threat actors
with ransomware or other type of malware attacks due to a heightened level of
malicious cyber activity as a result of the War in Ukraine. While we are working
to mitigate negative effects on our business, we may not be able to fully
predict or respond to all of the direct or indirect impacts on our business on a
timely basis to prevent adverse impacts to our results. We also continue to
monitor the situation in Russia and any risks to our employees, operations or
assets. Any ongoing or new developments in the war could have a material
negative effect on our business and results in the future.
•COVID-19. As described above, we continue to monitor and respond to the
COVID-19 pandemic. Since its inception, it has had a material negative effect on
the global and local economies and could have a material negative effect on our
business and results in the future, particularly if there are significant
adverse changes
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to consumer demand, product mix or operating costs; significant disruptions to
the supply, production or distribution of our products; or deterioration of the
credit or financial stability of our customers and other business partners.
Disruptions or our failure to effectively respond to them could further increase
product or distribution costs and prices and negatively affect operations and
results. Although we hedge to mitigate exposures to commodity and other input
cost increases, we cannot fully hedge against all cost increases and changes in
costs, and our hedging strategies may not protect us from increases in specific
raw materials or other costs. We also may not be able to adjust pricing timely
or fully, and this may negatively affect our revenue, margins or earnings. If a
significant economic or credit deterioration occurs, it could impair credit
availability and our ability to raise capital when needed. A significant
disruption in the financial markets may also have a negative effect on our
derivative counterparties and could impair our banking or other business
partners, on whom we rely for access to capital and as counterparties for a
number of our derivative contracts. As we continue to manage operations during
the pandemic, we will continue to prioritize the safety of our employees and
consumers and we may continue to incur increased labor, customer service,
commodity, transportation and other costs. We are working to mitigate negative
impacts to our business from the COVID-19 pandemic, but we may not be able to
fully predict or respond to all impacts on a timely basis to prevent adverse
impacts to our results. Any of these and other developments could materially
harm our business, results of operations and financial condition.
•Clif Bar acquisition. On June 20, 2022, we announced an agreement to acquire
Clif Bar for approximately $2.9 billion. The acquisition of Clif Bar includes a
contingent consideration arrangement that may require us to pay additional
consideration to the sellers for achieving certain revenue and earnings 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. In connection with this acquisition, we expect to generate a
meaningful cash tax benefit over time from the amortization of
acquisition-related intangibles. The acquisition is subject to customary closing
conditions and regulatory reviews and is expected to close in the third quarter
of 2022. Refer to Note 2, Acquisitions and Divestitures, and Liquidity and
Capital Resources for additional details.
•Ricolino acquisition. On April 24, 2022, we entered into an agreement with
Grupo Bimbo to acquire Ricolino, its confectionery business located primarily in
Mexico for a purchase price of approximately $1.3 billion, subject to closing
purchase price adjustments. The transaction is subject to relevant antitrust
approvals and closing conditions and is expected to close in the second half of
2022. Refer to Note 2, Acquisitions and Divestitures, and Liquidity and Capital
Resources for additional details.
•Planned Divestiture of our developed market gum and global Halls candy
businesses. In May 2022, we announced our intention to divest these businesses.
In the third quarter of 2022, we will formally begin to seek potential buyers
for these businesses.
•Taxes. We continue to monitor existing and potential future tax reform around
the world. In March 2022, President Biden sent a proposed 2023 budget to
Congress and in November 2021, the U.S. House of Representatives passed a bill
that has not yet been acted on by the Senate; both proposals contain significant
changes to currently enacted U.S. tax rules. In addition, the Organization of
Economic Cooperation and Development (OECD) continues to work toward agreement
regarding model rules for a global minimum tax. These proposed U.S. and global
legislative changes could have a material effect on us if enacted.
•Türkiye, Argentina and currency volatility. During the first quarter of 2022,
currency exchange rate volatility increased. We discuss currency impacts on our
results in our Discussion and Analysis of Historical Results. As further
discussed in Note 1, Basis of Presentation - Currency Translation and Highly
Inflationary Accounting, during the first quarter of 2022, we concluded that
Türkiye became a highly inflationary economy for accounting purposes. As of
April 1, 2022, we apply highly inflationary accounting for our subsidiaries
operating in Türkiye and changed their functional currency from the Turkish lira
to the U.S. dollar. Our operations in Türkiye contributed $90 million or 0.6% of
our condensed consolidated net revenues in the six months ended June 30, 2022.
Within selling, general and administrative expenses, we recorded a remeasurement
loss of less than $1 million during the three months ended June 30, 2022 related
to the revaluation of the Turkish lira denominated net monetary position during
the quarter. We also continue to apply highly inflationary accounting for our
Argentinean subsidiaries. We recorded a remeasurement loss of $10 million during
the three months and $15 million during the six months ended June 30, 2022
within selling, general and administrative expenses related to the revaluation
of our Argentinean peso denominated net monetary position. The mix of monetary
assets and liabilities and the exchange rate to convert Turkish lira and
Argentinean pesos to U.S. dollars could change over time, so it is difficult to
predict the overall impact of Türkiye and Argentina highly inflationary
accounting on future net earnings.
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•U.K. advertising and promotion ban. In the United Kingdom, a ban on specific
types of TV and online advertising of food containing levels of fat, sugar or
salt above specified thresholds is expected to go into effect in 2023, and new
measures restricting certain promotions and in-store placement of some of those
products are expected to go into effect in October 2022. Although we are unable
to estimate precisely the impact of the restrictions, they could significantly
negatively affect our U.K. results of operations in 2022 and thereafter. In the
six months ended June 30, 2022, we generated 8.1% of our consolidated net
revenues in the U.K.
•Cybersecurity Risks. Global cybersecurity risks continue to increase and we
continue to be on heightened alert and dedicate focused resources to network
security, backup and disaster recovery and to provide ongoing workforce training
and employ security measures to protect our systems and data. We also continue
to monitor threats in our environment, including but not limited to the
manufacturing environment and operational technologies, as well as adjusting
information security controls based on updated threats. While we have taken
security measures to protect our systems and data, security measures cannot
provide absolute certainty or guarantee that we will be successful in preventing
or responding to every breach or disruption on a timely basis.
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Discussion and Analysis of Historical Results

Items Affecting Comparability of Financial Results



The following table includes significant income or (expense) items that affected
the comparability of our results of operations and our effective tax rates.
Please refer to the notes to the condensed consolidated financial statements
indicated below for more information. Refer also to the Consolidated Results of
Operations - Net Earnings and Earnings per Share Attributable to Mondel?z
International table for the after-tax per share impacts of these items.

                                                                              For the Three Months Ended              For the Six Months Ended
                                                                                       June 30,                               June 30,
                                                        See Note                2022                2021                2022               2021
                                                                                              (in millions, except percentages)

Simplify to Grow Program                                 Note 7
Restructuring charges                                                      $       (4)           $   (100)         $      (15)          $  (188)
Implementation charges                                                            (19)                (33)                (39)              (67)
Intangible asset impairment charges                      Note 5                     -                 (32)                (78)              (32)
Mark-to-market (losses)/gains from derivatives (1)       Note 9                  (128)                 17                (100)              134
Acquisitions and divestiture-related costs:              Note 2

Acquisition integration costs and


  contingent consideration adjustments (1)                                        (37)                 (2)                (72)               (3)
Acquisition-related costs                                                          (5)                (17)                (26)              (24)
Gain on acquisition                                                                 -                   -                   -                 9
Divestiture-related costs                                                          (5)                  -                  (6)                -
Incremental costs due to war in Ukraine (2)              Note 1                    15                   -                (128)                -

Remeasurement of net monetary position                   Note 1                   (10)                 (3)                (15)               (8)
Impact from pension participation changes (1)            Note 10                   (2)                (33)                 (5)              (37)
Impact from resolution of tax matters (1)                Note 12                    -                   7                   -                 7

Loss on debt extinguishment and related expenses         Note 8                     -                   -                (129)             (137)
Initial impacts from enacted tax law changes             Note 14                   (9)                (95)                 (9)              (99)

(Loss)/gain on equity method investment


  transactions (3)                                                                 (8)                502                 (13)              495
Equity method investee items (4)                                                   12                  (5)                 13               (62)
Effective tax rate                                       Note 14                 23.4    %           45.9  %             22.6   %          30.9  %



(1)Includes impacts recorded in operating income and interest expense and other,
net. Mark-to-market gains/(losses) above also include our equity method
investment-related derivative contract mark-to-market gains/(losses) (refer to
Note 9, Financial Instruments) that are recorded in the gain on equity method
investment transactions on our condensed consolidated statement of earnings.
(2)Incremental costs due to the war in Ukraine include direct charges such as
asset impairments due to damaged facilities and inventory, higher expected
allowances for uncollectible accounts receivable and committed compensation.
Please see the Non-GAAP Financial Measures section at the end of this item and
Note 1, Basis of Presentation - War in Ukraine, for additional information.
(3)(Loss)/gain 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.
(4)Includes our proportionate share of significant operating and non-operating
items recorded by our JDE Peet's and KDP equity method investees, including
acquisition and divestiture-related costs and restructuring program costs.


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