Benzinga | Oct 12, 2021 04:12PM EDT

Mondelez 8-K Shows Impact Of Sale Of Keurig Dr Pepper Shares Will Result In 1-Quarter Lag Basis

Mondelz International, Inc. and subsidiaries (collectively, "we," "our" or "Mondelz International") are furnishing this current report to provide supplemental non-GAAP financial information related to the retrospective impact of our participation in a secondary offering of Keurig Dr Pepper Inc. ("KDP") shares on June 7, 2021. We sold approximately 28 million shares, which reduced our ownership interest by 2.0% to 6.4% of the total outstanding shares.

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 our third quarter ended September 30, 2021. 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. This change will result in the recasting of our historical non-GAAP financial results and provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results, and provide additional insight and transparency on how we evaluate our business.

Change to our Historical Non-GAAP Financial Results in connection with our Sale of KDP shares

As previously disclosed in our Quarterly Report on Form 10-Q for the three months ended June 30, 2021, we participated in a secondary offering of KDP shares on June 7, 2021. We sold approximately 28 million shares, which reduced our ownership interest by 2.0% 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.

We consider the 2.0% ownership reduction resulting from this sale of shares a partial sale of our equity method investment in KDP. Consistent with our definitions of our non-GAAP financial measures, we consider this sale 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 third quarter ended September 30, 2021. 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. Our U.S. GAAP results, which include our historical equity method investment net earnings from KDP, will not change from what was previously reported.