Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis contains forward-looking statements. It should be read in conjunction with the other sections of this Annual Report on Form 10-K, including the consolidated financial statements and related notes contained in Forward-Looking Statements and Item 1A, Risk Factors .
For a discussion of the fiscal year ended December 31, 2024 compared to the fiscal year ended December 31, 2023, please refer to Part II, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Overview of Business and Strategy
Our core business is making and selling chocolate, biscuits and baked snacks, with additional businesses in adjacent, locally relevant categories including gum & candy, cheese & grocery and powdered beverages around the world.
We aim to be the global leader in snacking. Our strategy is to drive long-term growth by focusing on four strategic priorities: accelerating consumer-centric growth, driving operational excellence, creating a winning growth culture and scaling sustainable snacking. We believe the successful implementation of our strategic priorities and leveraging of our attractive global footprint, strong core of iconic global and local brands, marketing, sales, distribution and cost excellence capabilities, and top talent with a growth mindset, will drive consistent top- and bottom-line growth, enabling us to continue to create long-term value for our shareholders.
For more detailed information on our business and strategy, refer to Item 1, Business.
Recent Developments and Significant Items
Macroeconomic environment
We continue to observe significant market and geopolitical uncertainty, fluctuating consumer demand, inflationary pressures, supply constraints, trade and regulatory uncertainty 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, while we expect cocoa costs to be lower in 2026 compared to the current year, we expect to continue to face elevated cocoa costs as compared to historical levels in the near- and medium-term. Refer to Commodity Trends for additional information.
Our overall outlook for future snacks revenue growth remains strong; however, we anticipate ongoing volatility. While we have responded to elevated raw material costs with pricing increases for certain of our products, the elasticity impacts from those pricing increases has adversely impacted consumer demand, particularly in the United States and Europe. We will continue to proactively manage our business in response to the evolving global economic environment, related uncertainty and business risks while also prioritizing and supporting our employees and customers. We continue to take steps to mitigate impacts to our supply chain, operations, technology and assets.
Trade and Regulatory Uncertainty
In many markets, including the United States, a portion of our products, including significant inputs, are imported from other jurisdictions. As of January 2026, the U.S. maintains higher tariffs on imported goods (finished products and inputs) from many trading partners as compared to prior years. Some of these tariffs have increased our costs for finished products, as well as some ingredients and packaging used to produce and distribute our products. In some cases, U.S. tariff policy has also resulted in retaliatory measures on U.S. goods entering foreign markets. For most products and materials imported to the United States from Mexico and Canada, we comply with the terms of the U.S.-Mexico-Canada Agreement and are therefore not subject to tariffs on most products and materials imported from those jurisdictions. However, the current trade environment continues to evolve rapidly and there can be no assurance that such products and materials will continue to be exempt. The implementation of additional protectionist trade measures, and any further retaliatory actions taken in response, could result in increased costs and pricing pressures, disrupt consumer spending patterns, and impact market stability and consumer confidence, any or all of which could adversely affect our operating results.
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Additionally, we provide more information on risks related to trade and regulatory uncertainty in our Business Trends section and under Item 1A, Risk Factors .
War in Ukraine
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. Refer to Items Affecting Comparability of Financial Results for additional information.
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 because we believe that 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 2025, Ukraine generated 0.4% and Russia generated 3.7% of our consolidated net revenue. The profitability of and the assets held by our Russian business continue to remain above historic levels. We cannot predict if the recent strength in our Russian business will continue in the future.
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 and loss of revenue from our business operations, based on actions taken by Russia, other parties or us. For additional information, refer to Item 1A, Risk Factors , including the risk entitled “ The war in Ukraine has impacted and could continue to impact our business operations, financial performance and results of operations. ”
Developments in the Middle East
In October 2023, conflict developed in the Middle East between Hamas and Israel, and has expanded to other parts of the region. Throughout 2024 and 2025, we experienced limited adverse 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, including ongoing geopolitical discussions, on our business and we cannot predict if it will have a significant impact in the future.
Extreme Price Growth in Argentina and Other Currency-Related Items
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 increases in excess of 26% year-over-year ("extreme pricing") in Argentina, from these measures beginning in the first quarter of 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 exclude 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. Additionally within this MD&A discussion, "currency-related items" reflect the impacts of extreme pricing and year-over-year currency translation rate changes. Refer to Non-GAAP financial measures for additional information.
Currency-related items impacted our non-GAAP financial measures for the year ended December 31, 2025 as follows:
• Organic Net Revenue: In total, favorable currency-related items of $241 million (0.7 pp) were driven by favorable currency translation rate changes of $192 million (0.6 pp) and extreme pricing of $49 million (0.1 pp). In Emerging Markets, unfavorable currency-related items of $134 million (0.9 pp) were driven by unfavorable currency translation rate changes of $183 million (1.3 pp), partially offset by extreme pricing of $49 million (0.4 pp). In Developed Markets, favorable currency-related items of $375 million (1.7 pp) were driven by favorable currency translation rate changes.
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• Adjusted Operating Income: Favorable currency-related items of $94 million were driven by favorable currency translation rate changes of $86 million and extreme pricing of $8 million.
• Adjusted EPS: In 2025, favorable currency-related items of $0.06 were driven by favorable currency translation rate changes of $0.05 and extreme pricing of $0.01.
ERP System Implementation
In July 2024, our Board of Directors approved funding of $1.2 billion for a multi-year systems transformation program to upgrade our global ERP and supply chain systems (the “ERP System Implementation”). ERP System Implementation spending comprises both capital expenditures and operating expenses, of which a majority is expected to relate to operating expenses. The operating expenses associated with the ERP System Implementation represent incremental transformational costs above the normal ongoing level of spending on information technology to support operations. The ERP System Implementation program will be implemented by region in several phases with spending continuing over the next three years, with expected completion by year-end 2028. Refer to Non-GAAP financial measures for additional information.
Acquisitions and Divestitures
During 2024, we completed the acquisition of Evirth (Shanghai) Industrial Co., Ltd. (“Evirth”), a leading manufacturer of cakes and pastries in China. Refer to Note 2, Acquisitions and Divestitures for additional details.
Equity Method Investment Transactions
JDE Peet’s Transactions (Euronext Amsterdam: “JDEP”)
On August 24, 2025, Keurig Dr Pepper Inc. ( Nasdaq: "KDP") and JDEP entered into a definitive agreement under which KDP would acquire JDEP. As a result of that definitive agreement, we became entitled to a cash payment of €145 million ($169 million) from JAB Holding Company (“JAB”) that we received in 2025.
In the first quarter of 2024, we recorded an impairment charge of €612 million ($665 million) related to our JDEP investment. In the fourth quarter of 2024, we sold our remaining 85.9 million shares in JDEP to JAB. We received €2.2 billion ($2.3 billion) of proceeds and recorded a gain on equity method investment transactions of €313 million ($332 million).
In 2023, we sold approximately 9.9 million of our shares, which reduced our ownership interest by 2.0 percentage points, from 19.7% to 17.7%. We received cash proceeds of €255 million ($279 million) and recorded a loss of €21 million ($23 million).
Keurig Dr Pepper Transactions
During the first quarter of 2023, our ownership in KDP fell to below 5% of the outstanding shares, resulting in a change in the accounting for our KDP investment, from equity method investment accounting to accounting for equity interests with readily determinable fair values as we no longer retained significant influence. Prior to the change in accounting for our KDP investment, we sold 30 million shares of that investment. Subsequently in 2023, we sold the remainder of our shares of KDP and exited our investment in the company. In total during 2023, we sold approximately 76 million shares and received proceeds of $2.4 billion.
For additional information, refer to Note 7, Investments and Note 9, Financial Instruments.
Mondelēz Global and Canada Retirement Plan Settlements
Mondelēz Global LLC Retirement Plan Settlement
During 2024, we entered into agreements with two third-party insurance companies to purchase buy-in annuity contracts to cover the liabilities associated with the Mondelēz Global LLC Retirement Plan (“MDLZ Global Plan”), the pension plan for U.S. salaried employees. The agreements provided us with the option to elect a buy-out conversion, at which time full responsibility of the MDLZ Global Plan obligations would transfer to the insurance companies. On June 12, 2025 we elected the buy-out conversion and recognized a non-cash pre-tax settlement loss of $282 million as a component of our net periodic pension cost in the second quarter of 2025.
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Mondelez Canada Inc. - Trusteed Hourly Retirement Plan and Retirement Plan Settlement
During the third quarter of 2025, we entered into an agreement with a third-party insurance company to buy-out the retiree participants' obligations of the Mondelez Canada Inc. Trusteed Hourly Retirement Plan and Mondelez Canada Inc. Retirement Plan. On September 11, 2025, the obligations were transferred to the insurance company and we recognized a non-cash pre-tax settlement loss of $54 million as a component of our net periodic pension cost in the third quarter of 2025.
For additional information, refer to Note 10, Benefit Plans.
Taxes
We continue to monitor existing and potential future tax reform around the world. Numerous countries have enacted the Organization of Economic Cooperation and Development’s (OECD) model rules for a global minimum tax, effective in 2024. The existing legislation does not have a material impact on our consolidated financial statements. On January 5, 2026, the OECD Inclusive Framework members approved changes to the model rules, including the introduction of a “side by side” rule which would exempt U.S.-parented companies from certain aspects of the global minimum tax regime. The updated model rules will need to be incorporated into local tax legislation to be effective. We do not expect the new rules to have a material impact on our consolidated financial statements.
On July 4, 2025, the OBBBA was signed into U.S. law. While we continue to monitor supplemental guidance released by the government, there was no material impact to our financial statements for the year ended December 31, 2025.
Business Trends
We monitor a number of developments and trends that could impact our revenue and profitability objectives:
Demand
We monitor consumer spending and our market share within the food and beverage categories in which we sell our products. Core snacks categories continued to expand due to the continued growth of snacking as a consumer behavior around the world. As part of our strategic plan, we seek to drive category growth by leveraging our local and consumer-focused commercial approach, making investments in our brand and snacks portfolio, building strong routes to market in both emerging and developed markets and improving our availability across multiple channels. We believe these actions will continue to help drive demand in our categories and strengthen our positions across markets.
Long-Term Demographics and Consumer Trends
Snack food consumption is highly correlated to GDP growth, urbanization of populations and rising discretionary income levels associated with a growing middle class, particularly in emerging markets. We believe that snacks continue to be a source of comfort as well as excitement and variety for consumers. Social media increasingly helps consumers find food trends, inspiration and connection across their feeds. Consumers are also interested in buying snacks conveniently, whether through same-day delivery platforms, shipped sources or different retail settings. Many consumers also continue to prioritize sustainability in their purchase decisions, valuing sustainably sourced ingredients, low carbon footprint preparation and lower waste packaging. We seek to continue to offer snacks that meet consumer needs and preferences and align with our strategic priorities.
Pricing
Our net revenue growth and profitability may be affected as we adjust prices to address new conditions, such as increasing input and operating costs due to supply, transportation and labor constraints, the impact of tariffs and higher cost trends. We adjust our product prices based on a number of variables including market factors, transportation, logistics and changes in our product input costs, and we have increased prices to mitigate costs given significant cost inflation.
Operating Costs
Our operating costs include raw materials, labor, selling, general and administrative expenses, taxes, currency impacts and financing costs. We manage these costs through cost saving and productivity initiatives, sourcing and hedging programs, pricing actions, refinancing and other planning actions. We experienced significantly higher operating costs, including higher overall raw material (particularly cocoa) that have continued to rise. Refer to Commodity Trends for additional information.
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Trade and Regulatory Uncertainty
In many markets, including the United States, a portion of our products, including significant inputs, are imported from other jurisdictions. As of January 2026, the U.S. maintains higher tariffs on imported goods (finished products and inputs) from many trading partners. Some of these tariffs have increased our costs for finished products, as well as some ingredients and packaging used to produce and distribute our products. In some cases, U.S. tariff policy has also resulted in retaliatory measures on U.S. goods entering foreign markets. For additional information, refer to Item 1A, Risk Factors , including the risk entitled “ We are subject to risks from changes to the trade policies and tariff and import/export regulations by the U.S. and/or other foreign governments .”
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Non-GAAP Financial Measures
We use non-GAAP financial measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of business performance and as a factor in determining incentive compensation. We believe that non-GAAP financial measures, when used in connection with results reported in accordance with U.S. GAAP, provide additional information to facilitate comparisons of our historical operating results and to enable a more comprehensive understanding of trends in our underlying operating results. We also believe that presenting these measures allows investors to view our performance using the same measures that management and our Board of Directors use in evaluating our business performance and trends. However, non-GAAP financial measures should be considered in addition to, and not as substitutes for, financial information prepared in accordance with U.S. GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies. A limitation of these non-GAAP financial measures is they exclude items that have an impact on our U.S. GAAP reported results. The best way this limitation can be addressed is by evaluating our non-GAAP financial measures in combination with our U.S. GAAP reported results. We have provided the reconciliations between the GAAP and non-GAAP financial measures along with a discussion of our underlying GAAP results throughout our Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K.
We also evaluate the operating performance of the company and its international subsidiaries on a constant currency basis. Our non-GAAP measures presented on a constant currency basis exclude the effects of currency translation rate changes and, beginning in the first quarter of 2024, extreme pricing increases in Argentina. For additional information, refer to Extreme Price Growth in Argentin a and Other Currency-Related Items . We determine constant currency operating results by dividing or multiplying, as appropriate, the current-period local currency operating results by the currency exchange rates used to translate the financial statements in the comparable prior-year period to determine what the current-period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year period.
Our primary non-GAAP financial measures and corresponding metrics, listed below, reflect how we evaluate our current and prior year operating results. As new events or circumstances arise, these definitions could change. When our definitions change, we provide the updated definitions and present the related non-GAAP historical results on a comparable basis. When items no longer impact our current or future presentation of non-GAAP operating results, we remove these items from our non-GAAP definitions. For descriptions of the items excluded from our non-GAAP financial measures, refer to Items Affecting Comparability of Financial Results .
• “Organic Net Revenue” is defined as net revenues (the most comparable U.S. GAAP financial measure) excluding, when they occur, the impacts of acquisitions, divestitures, short-term distributor agreements related to the sale of a business, and currency-related items. We believe that Organic net revenue reflects the underlying growth from the ongoing activities of our business and provides improved comparability of results. Organic Net Revenue growth is presented on a consolidated basis, for each of our segments and for our emerging markets and developed markets, and these underlying measures are also reconciled to the most comparable U.S. GAAP financial measures above.
• Our emerging markets include our Latin America region in its entirety; the AMEA region, excluding Australia, New Zealand and Japan; and the following countries from the Europe region: Russia, Ukraine, Türkiye, Kazakhstan, Georgia, Poland, Czech Republic, Slovak Republic, Hungary, Bulgaria, Romania, the Baltics and the East Adriatic countries.
• Our developed markets include the entire North America region, the Europe region excluding the countries included in the emerging markets definition, and Australia, New Zealand and Japan from the AMEA region.
• “Adjusted Operating Income” is defined as operating income (the most comparable U.S. GAAP financial measure) excluding, when they occur, the impacts of: restructuring charges; gains or losses (including non-cash impairment charges) on goodwill and intangible assets; divestiture-related items; acquisition-related items; operating results from short-term distributor agreements related to the sale of a business; remeasurement of net monetary position of highly inflationary countries; mark-to-market impacts from commodity and foreign currency derivative contracts economically hedging forecasted transactions; resolution of tax matters; incremental costs due to the war in Ukraine; the European Commission legal matter; pension participation changes; and operating costs from the ERP System Implementation program.
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We also present Adjusted Operating Income margin, which is subject to the same adjustments as Adjusted Operating Income. We also evaluate growth in our Adjusted Operating Income on a constant currency basis. We believe these measures provide improved comparability of underlying operating results.
• “Adjusted EPS” is defined as diluted EPS attributable to Mondelēz International (the most comparable U.S. GAAP financial measure) from continuing operations excluding, when they occur, the impacts of the items listed in the Adjusted Operating Income definition as well as gains or losses on debt extinguishment and related expenses; gains or losses on marketable securities transactions; initial impacts from enacted tax law changes; and gains or losses on equity method investment transactions. We also evaluate growth in our Adjusted EPS on a constant currency basis. We believe Adjusted EPS provides improved comparability of underlying operating results.
Items Affecting Comparability of Financial Results
The below table and subsequent commentary present income or (expense) items that affected the comparability of our results of operations and provides details of each item. Please refer to the notes to the consolidated financial statements indicated below for additional information. These items are excluded from our non-GAAP earnings measures to better facilitate comparisons of our underlying operating performance across periods. Refer also to the Consolidated Results of Operations – Net Earnings and Earnings per Share Attributable to Mondelēz International table for the after-tax per share impacts of these items and to the Non-GAAP Financial Measures section for definitions of our non-GAAP financial measures.
For the Years Ended December 31,
Refer to Note
(in millions, except percentages)
Restructuring charges
Note 15
Intangible asset impairment charges
Note 6
Mark-to-market (losses)/gains from derivatives (1)
Note 9
Acquisition-related items
Divestiture-related items
Operating results from short-term distributor agreements
Incremental costs due to war in Ukraine
European Commission legal matter
Note 11
ERP System Implementation costs
Remeasurement of net monetary position
Note 1
Pension participation changes (1)
Note 10
Resolution of tax matters (1)
Loss on debt extinguishment and related expenses
Initial impacts from enacted tax law changes
Note 16
Gain on marketable securities
Note 7
Gain/(loss) on equity method investment transactions
Note 7
(1) Includes impacts recorded in operating income and interest expense and other, net in the consolidated statements of earnings.
Restructuring charges – Includes restructuring charges incurred under the Simplify to Grow Program as well as other subsequent restructuring actions starting in the fourth quarter of 2025. The Simplify to Grow program comprised charges such as severance, asset write-downs and other costs of implementing that program, partially offset by gains on sales of assets disposed of in connection with the program. We completed the Simplify to Grow Program in the fourth quarter of 2024. Following the completion of the program, any adjustments to the liabilities for previously recorded charges continue to be reflected within this item. Beginning in the fourth quarter of 2025, we started implementing new restructuring actions to reduce our cost structure and streamline our operations. The charges associated with these actions primarily relate to severance and other implementation costs.
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Intangible asset impairment charges – Reflects non-cash impairments of certain of our brands in connection with our indefinite-life intangible asset impairment testing.
Mark-to-market impacts from derivatives – We exclude unrealized gains and losses (mark-to-market impacts) from commodity and foreign currency derivative contracts economically hedging forecasted transactions from our non-GAAP earnings measures. The mark-to-market impacts of those derivatives are excluded until the related gains or losses are realized. Since we purchase commodity and foreign currency derivative contracts to mitigate price volatility primarily for inventory requirements in future periods, we make this adjustment to remove the volatility of these future inventory purchases on current operating results to facilitate comparisons of our underlying operating performance across periods.
Acquisition-related items – Includes acquisition-related costs, acquisition integration costs, contingent consideration adjustments, inventory step-ups and gains from acquisitions. Acquisition-related costs include third-party advisor, investment banking and legal fees. Acquisition integration costs include costs related to the integration of operations from acquisitions. Contingent consideration adjustments include any changes made to contingent compensation liabilities for earn-outs related to acquisitions that do not relate to recurring employee compensation expense. Refer to Note 9, Financial Instruments - Fair Value of Contingent Consideration for additional information. Other acquisition-related items include incremental costs from inventory step-ups associated with acquired companies related to the fair market valuation of the acquired inventory and acquisition gains from the remeasurement of an existing noncontrolling investment to fair value when the company acquires a controlling interest in the investee.
Divestiture-related items – Includes operating results from divestitures, divestiture-related costs and gains/(losses) on divestitures. Divestitures may include sales of businesses, exits of major product lines upon completion of a sale or licensing agreement or sales of equity method investments. Divestiture-related costs include costs incurred in relation to the preparation and completion of divestiture transactions (including one-time costs such as severance related to the elimination of stranded costs) as well as costs incurred associated with publicly announced processes to sell businesses. For 2024, operating results from divestitures (which are not reflected in the table above) also include the operating results from the company’s JDE Peet’s equity method investment earnings which was sold in the fourth quarter of 2024.
Operating results from short-term distributor agreements – Reflects the operating results from short-term distributor agreements that have been executed in conjunction with the sale of a business. Our agreement with the buyer of the developed market gum business to distribute gum products in certain European markets ended in the first quarter of 2024.
Incremental costs due to war in Ukraine – In February 2022, Russia began a military invasion of Ukraine and we temporarily stopped our production and closed our manufacturing facilities in Trostyanets and Vyshhorod due to damage incurred during the conflict. In the second quarter of 2024, we fully resumed production at both facilities after completing targeted repairs. Incremental costs incurred by the company related to the ongoing war in Ukraine relate to asset write-downs, net of recoveries as well as other costs, including committed compensation.
European Commission legal matter – 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. We reached a negotiated resolution to this matter in the second quarter of 2024. We adjusted our accrual accordingly and fulfilled our payment obligation in August 2024. Due to the unique nature of this matter, we believe it to be infrequent and unusual and therefore exclude it from our non-GAAP earnings measures to better facilitate comparisons of our underlying operating performance across periods.
ERP System Implementation costs – In July 2024, our Board of Directors approved funding of $1.2 billion for a multi-year systems transformation program to upgrade our global ERP and supply chain systems, which is comprised of both capital expenditures and operating expenses, of which a majority is expected to be operating expenses. The ERP System Implementation program will be implemented by region in several phases with spending continuing over the next three years, with expected completion by year-end 2028. The operating expenses associated with the ERP System Implementation represent incremental transformational costs above the normal ongoing level of spending on information technology to support operations. These expenses include third-party consulting fees, direct labor costs associated with the program, accelerated depreciation of our existing SAP
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financial systems and various other expenses, all associated with the implementation of our information technology upgrades.
Remeasurement of net monetary position of highly inflationary countries – Our operations in Argentina, Türkiye, Egypt and Nigeria are currently accounted for as highly inflationary. We exclude remeasurement gains and losses of the monetary assets and liabilities of our subsidiaries in highly inflationary economies and the realized gains and losses from derivatives that mitigate the foreign currency volatility related to the remeasurement of the respective monetary assets or liabilities from our non-GAAP earnings measures to facilitate comparisons of our underlying operating performance across periods.
Pension participation changes – Consists of the charges incurred, primarily gains or losses from pension curtailments and settlements, including settlement losses from the full or partial buy-out of our pension plans, as well as costs incurred when employee groups are withdrawn from multiemployer pension plans. We exclude these charges from our non-GAAP results because those amounts do not reflect our ongoing pension obligations.
Resolution of tax matters – Consists of the reversals and settlements of unusual and significant indirect tax matters. Due to the unique nature of these resolutions, we believe it to be infrequent and therefore exclude it from our non-GAAP earnings measures to better facilitate comparisons of our underlying operating performance across periods.
Initial impacts from enacted tax law changes – Initial impacts from enacted tax law changes include items such as the remeasurement of deferred tax balances and transition taxes from tax reforms. We exclude initial impacts from enacted tax law changes from our non-GAAP financial measures as they do not reflect our ongoing tax obligations under the enacted tax law.
Gains and losses on marketable securities – We exclude gains and losses associated with the sale of our marketable securities. These marketable securities gains or losses are not indicative of underlying operations and are excluded to better facilitate comparisons of our underlying operating performance across periods.
Gains and losses on equity method investment transactions – We exclude gains and losses from partial or full sales of equity method investments, as well as impairments or other non-routine transactions related to those investments. In addition, we also exclude from our non-GAAP financial measures any gains or losses realized on economic hedges of sales proceeds from our equity method investment transactions.
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Discussion and Analysis of Historical Results
Summary of Results
Net Revenues – Net revenues were approximately $38.5 billion in 2025 and $36.4 billion in 2024, an increase of 5.8% in 2025. Net revenues increased in 2025, driven by higher net pricing, incremental net revenue from our November 1, 2024 acquisition of Evirth and favorable currency-related items, as several currencies we operate in strengthened relative to the U.S. dollar compared to exchange rates in the prior year, partially offset by unfavorable volume/mix and lapping prior-year net revenue from a short-term distributor agreement related to the sale of our developed market gum business.
Organic Net Revenue – Organic Net Revenue, a non-GAAP financial measure, increased 4.3% to $37.9 billion in 2025 due to higher net pricing, partially offset by unfavorable volume/mix. Organic Net Revenue is reported on a constant currency basis and excludes revenue from acquisitions and divestitures. Refer to Non-GAAP Financial Measures for the definition of Organic Net Revenue and Consolidated Results of Operations for our reconciliation with net revenues.
Diluted EPS – Diluted EPS attributable to Mondelēz International decreased 44.7% to $1.89 in 2025. Diluted EPS decreased in 2025 driven by an unfavorable year-over-year change in mark-to-market impacts from commodity and foreign currency derivatives, a decrease in Adjusted EPS, settlement losses related to pension plan buy-outs, an unfavorable year-over-year change in acquisition-related items, lapping prior-year divestiture-related items and higher costs incurred for the ERP System Implementation program. These unfavorable items were partially offset by lapping a prior-year equity method investment impairment, a current year gain on an equity method investment transaction, lapping prior-year costs for the completed Simplify to Grow Program, lower intangible asset impairment charges and a favorable impact from the resolution of an indirect tax matter.
Adjusted EPS – Adjusted EPS, a non-GAAP financial measure, decreased 12.8% to $2.92 in 2025. On a constant currency basis, Adjusted EPS decreased 14.6% to $2.86 in 2025. Refer to Non-GAAP Financial Measures for the definition of Adjusted EPS and Consolidated Results of Operations for our reconciliation with diluted EPS. Adjusted EPS decreased in 2025, driven by operating declines, higher interest and other expense, higher income taxes and lower benefit plan non-service income, partially offset by fewer shares outstanding, favorable currency-related items and the impact from an acquisition.
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Consolidated Results of Operations
The following discussion compares our consolidated results of operations for 2025 with 2024.
For the Years Ended
December 31,
$ Change
% Change
(in millions, except per share data)
Net revenues
Operating income
Net earnings attributable to
Mondelēz International
Diluted earnings per share attributable to
Mondelēz International
Net Revenues – Net revenues increased $2,096 million (5.8%) to $38,537 million in 2025, and Organic Net Revenue increased $1,571 million (4.3%) to $37,946 million (1) . Emerging markets net revenues increased 8.5% and emerging markets Organic Net Revenue increased 7.2% (1) . Developed markets net revenues increased 4.0% and developed markets Organic Net Revenue increased 2.5% (1) . The underlying changes in net revenues and Organic Net Revenue are detailed below:
Emerging
Markets
Developed
Markets
Mondelēz
International
For The Year Ended December 31, 2025
Reported (GAAP)
Divestitures
Acquisitions
Currency-related items
Organic (Non-GAAP)
For The Year Ended December 31, 2024
Reported (GAAP)
Divestitures
Short-term distributor agreements
Organic (Non-GAAP)
$ Change
Reported (GAAP)
Divestitures
Short-term distributor agreements
Acquisitions
Currency-related items
Organic (Non-GAAP)
Vol/Mix
Pricing
(1) Please refer to the Non-GAAP Financial Measures section for additional information.
The net revenue increase of 5.8% was driven by our underlying Organic Net Revenue growth of 4.3%, the impact of an acquisition and favorable currency-related items, partially offset by lapping prior-year net revenue from a short-term distributor agreement related to the sale of our developed market gum business. Organic Net Revenue growth was driven by higher net pricing, partially offset by unfavorable volume/mix. Higher net pricing was due to the benefit of carryover pricing from 2024 as well as the effects of input cost-driven pricing actions taken during 2025. Higher net pricing was reflected in all regions. Unfavorable volume/mix was experienced across all regions, driven by volume declines reflecting pricing elasticity impacts in Europe, Latin America and AMEA, as well as soft biscuits & baked snacks consumption in North America. The November 1, 2024 acquisition of Evirth added incremental net revenues of $316 million (constant currency basis) through the one-year anniversary of the acquisition. Refer to Note 2, Acquisitions and Divestitures, for additional information. Currency-related items increased net revenues by $241 million, driven by favorable currency translation rate changes and the impact of extreme pricing in Argentina. Refer to Recent Developments and Significant Items Affecting Comparability for additional information.
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currency translation rate changes were due to the strength of several currencies relative to the U.S. dollar, including the euro, Russian ruble, British pound sterling, Polish zloty and Swedish krona, partially offset by the strength of the U.S. dollar relative to several currencies, primarily the Argentinean peso, Brazilian real, Mexican peso, Indian rupee, Turkish lira, Australian dollar, Egyptian pound and Canadian dollar. The lapping of the prior-year short-term distributor agreement related to the sale of our developed market gum business, which ended in the first quarter of 2024, resulted in a year-over-year incremental reduction in net revenue of $25 million.
Operating Income – Operating income decreased $2,797 million (44.1%) to $3,548 million in 2025, Adjusted Operating Income (1) decreased $822 million (13.9%) to $5,074 million and Adjusted Operating Income on a constant currency basis decreased $916 million (15.5%) to $4,980 million due to the following:
For the Years Ended December 31,
$ Change
% Change
(in millions)
Operating Income
Restructuring charges
Intangible asset impairment charges
Mark-to-market losses/(gains) from derivatives
Acquisition-related items
Divestiture-related items
Operating results from short-term distributor agreements
European Commission legal matter
Incremental costs due to war in Ukraine
ERP System Implementation costs
Remeasurement of net monetary position
Resolution of tax matters
Adjusted Operating Income (1)
Currency-related items
Adjusted Operating Income (constant currency) (1)
Key Drivers of Adjusted Operating Income (constant currency)
$ Change
Higher net pricing
Higher input costs
Unfavorable volume/mix
Higher selling, general and administrative expenses
Impact from acquisitions
Lower amortization of intangible assets
Lower asset impairment charges
Total change in Adjusted Operating Income (constant currency) (1)
(1) Refer to the Non-GAAP Financial Measures section for additional information.
During 2025, we realized higher net pricing, which was more than offset by increased input costs and unfavorable volume/mix. Higher net pricing, which included the carryover impact of pricing actions taken in 2024 as well as the effects of input cost-driven pricing actions taken during 2025, 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 primarily due to higher cocoa, dairy, packaging, edible oils, nuts and other ingredient costs, as well as unfavorable year-over-year currency exchange transaction costs on imported materials, partially offset by lower sugar, grains and energy costs. Overall, unfavorable volume/mix was experienced across all regions, reflecting pricing elasticity impacts as well as biscuit & baked snacks category softness in North America.
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Total selling, general and administrative expenses decreased $266 million from 2024, which was net of several unfavorable factors noted in the table above, including in part, an unfavorable year-over-year change in acquisition-related items, higher costs incurred for the ERP System Implementation program, incremental overhead expenses from the acquisition of Evirth and unfavorable currency-related impacts to expenses, which were partially offset by benefits from lapping prior-year implementation costs for the completed Simplify to Grow Program, a favorable resolution of an indirect tax matter and a favorable year-over-year change in divestiture-related items. Excluding these net unfavorable factors, selling, general and administrative expenses decreased $620 million from 2024. The decrease was driven primarily by lower advertising and consumer promotion costs and lower overhead costs.
Currency-related items, due to favorable currency translation rate changes and the impact of extreme pricing in Argentina increased operating income by $94 million. Favorable currency translation rate changes were primarily due to the strength of several currencies relative to the U.S. dollar, including the euro, Russian ruble and British pound sterling, partially offset by the strength of the U.S. dollar relative to several currencies, including the Swiss franc, Mexican peso, Brazilian real, Australian dollar and Indian rupee.
Operating income margin decreased from 17.4% in 2024 to 9.2% in 2025. The decrease in operating income margin was driven primarily by an unfavorable year-over-year change in mark-to-market impacts from commodity and foreign currency derivatives, lower Adjusted Operating Income margin, an unfavorable year-over-year change in acquisition-related items and higher costs incurred for the ERP System Implementation program, partially offset by lower restructuring charges and lower intangible asset impairment charges. Adjusted Operating Income margin decreased from 16.2% in 2024 to 13.2% in 2025. The decrease was driven primarily by higher raw material costs and unfavorable product mix, partially offset by higher net pricing, lower advertising and consumer promotion costs, lower manufacturing costs driven by productivity and lower overhead costs.
Income Taxes - Our 2025 effective tax rate was 25.9%, as compared to 23.5% in 2024. The increase was due to the net unfavorable impacts of our jurisdictional mix of pretax income, foreign provisions under U.S. tax laws and a net increase to valuation allowances. This was partially offset by favorable tax benefits related to audit settlements, final 2024 tax return filings and the tax treatment of certain foreign pension assets.
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Net Earnings and Earnings per Share Attributable to Mondelēz International – Net earnings attributable to Mondelēz International of $2,451 million decreased by $2,160 million (46.8%) in 2025. Diluted EPS attributable to Mondelēz International was $1.89 in 2025, down $1.53 (44.7%) from 2024. Adjusted EPS was $2.92 in 2025, down $0.43 (12.8%) from 2024 (1) . Adjusted EPS on a constant currency basis was $2.86 in 2025, down $0.49 (14.6%) from 2024.
For the Years Ended December 31,
$ Change
% Change
Diluted EPS attributable to Mondelēz International
Restructuring charges
Intangible asset impairment charges
Mark-to-market losses/(gains) from derivatives
Acquisition-related items
Divestiture-related items
ERP System Implementation costs
Remeasurement of net monetary position
Pension participation changes
Resolution of tax matters
Initial impacts from enacted tax law changes
Gain on marketable securities
(Gain)/loss on equity method investment transactions
Adjusted EPS (1)
Currency-related items
Adjusted EPS (constant currency) (1)
Key Drivers of Adjusted EPS (constant currency)
$ Change
Decrease in operations
Impact from acquisitions
Change in benefit plan non-service income
Change in interest and other expense, net
Change in income taxes
Change in shares outstanding
Total change in Adjusted EPS (constant currency) (1)
(1) Refer to the Non-GAAP Financial Measures section for additional information. The tax expense/(benefit) of each of the pre-tax items excluded from our GAAP results was computed based on the facts and tax assumptions associated with each item, and such impacts have also been excluded from Adjusted EPS.
• 2025 taxes for the: Intangible asset impairment charges were $(5) million, mark-to-market losses from derivatives were $(261) million, acquisition-related items were $22 million, ERP System Implementation costs were $(39) million, remeasurement of net monetary position were zero, pension participation changes were $(87) million, resolution of tax matters were $10 million, initial impacts from enacted tax law changes were $13 million, gain on marketable securities were $(21) million and gain on equity method investment transactions were zero.
• 2024 taxes for the: Restructuring charges were $(36) million, intangible asset impairment charges were $(40) million, mark-to-market gains from derivatives were $107 million, acquisition-related items were $88 million, divestiture-related items were $1 million, ERP System implementation costs were $(19) million, remeasurement of net monetary position were zero, pension participation changes were $(3) million, initial impacts from enacted tax law changes were $24 million and loss on equity method investment transactions were $4 million.
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Results of Operations by Operating Segment
Our operations and management structure are organized into four operating segments which are also our reportable segments:
• Latin America
• AMEA
• Europe
• North America
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. Refer to Note 18, Segment Reporting, for additional information on our segments and Items Affecting Comparability of Financial Results earlier in this section for items affecting our segment operating results.
Our segment net revenues and operating earnings were:
For the Years Ended December 31,
(in millions)
Net revenues:
Latin America
AMEA
Europe
North America
Net revenues
Segment operating income:
Latin America
AMEA
Europe
North America
Mark-to-market (losses)/gains from derivatives
General corporate expenses
Amortization of intangible assets
Gain on acquisition and divestitures
Acquisition-related costs
Operating income
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Latin America
For the Years Ended
December 31,
$ Change
% Change
(in millions)
Net revenues
Segment operating income
Net revenues decreased $27 million (0.5%), due to unfavorable impact of currency-related items (5.1 pp) and unfavorable volume/mix (3.2 pp), partially offset by higher net pricing (7.8 pp). Currency-related items were unfavorable due to currency translation rate changes, partially offset by the impact of extreme pricing in Argentina. Unfavorable currency translation impacts were primarily due to the strength of the U.S. dollar relative to most currencies in the region, including the Argentinean peso, Brazilian real and Mexican peso. Unfavorable volume/mix reflected volume declines due to pricing elasticity impacts across most markets, primarily in Argentina and Brazil. Overall, unfavorable volume/mix was driven by declines in refreshment beverages, biscuits & baked snacks, candy and cheese & grocery, partially offset by gains in chocolate and gum. Higher net pricing, net of extreme pricing in Argentina, was driven by input cost-driven pricing actions, primarily in Brazil, Argentina and Mexico, and was reflected across all categories.
Segment operating income increased $37 million (7.0%), primarily due to higher pricing, lower manufacturing costs driven by productivity, lower advertising and consumer promotion costs, lower restructuring charges, favorable resolution of an indirect tax matter, lower acquisition-related items and lower losses on remeasurement of net monetary position in highly inflationary countries. These favorable items were partially offset by higher raw materials, unfavorable volume/mix, higher costs incurred for the ERP System Implementation program and higher other selling, general and administrative expenses.
AMEA
For the Years Ended
December 31,
$ Change
% Change
(in millions)
Net revenues
Segment operating income
Net revenues increased $636 million (8.7%), due to higher net pricing (7.8 pp) and the impact of an acquisition (4.3 pp), partially offset by unfavorable volume/mix (2.1 pp) and unfavorable currency translation rate changes (1.3 pp). Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories. The November 1, 2024 acquisition of Evirth added incremental net revenues of $316 million (constant currency basis) through the one-year anniversary of the acquisition. Unfavorable volume/mix reflected pricing elasticity impacts, driven by declines in chocolate and refreshment beverages, partially offset by gains in cheese & grocery, candy, biscuits & baked snacks and gum. Unfavorable currency translation impacts were due to the strength of the U.S. dollar relative to most currencies in the region, including the Indian rupee, Australian dollar, Egyptian pound and Vietnamese dong, partially offset by the strength of a few currencies relative to the U.S. dollar, including the Malaysian ringgit and South African rand.
Segment operating income decreased $207 million (17.4%), primarily due to higher raw material costs, unfavorable volume/mix, higher acquisition-related items, unfavorable currency translation rate changes, higher intangible asset impairment costs and higher losses on remeasurement of net monetary position in highly inflationary countries. These unfavorable items were partially offset by higher net pricing, lower manufacturing costs driven by productivity, lower advertising and consumer promotion costs, the impact from our Evirth acquisition, lower other selling, general and administrative expenses, lower fixed asset impairments, lower restructuring charges and lower costs incurred for the ERP System Implementation program.
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Europe
For the Years Ended
December 31,
$ Change
% Change
(in millions)
Net revenues
Segment operating income
Net revenues increased $1,718 million (12.9%), due to higher net pricing (13.9 pp) and favorable currency translation rate changes (4.5 pp), partially offset by unfavorable volume/mix (5.3 pp), and lapping the prior-year net revenue from a short-term distributor agreement (0.2 pp ). Higher net pricing, driven by input cost-driven pricing actions, was reflected across all categories. Favorable currency translation rate changes reflected the strength of most currencies across the region relative to the U.S. dollar, primarily the euro, Russian ruble, British pound sterling, Polish zloty and Swedish krona, partially offset by the strength of the U.S. dollar relative to a few currencies, primarily the Turkish lira,. Unfavorable volume/mix reflected volume declines due to pricing elasticity impacts. Overall, unfavorable volume/mix was driven by declines in chocolate, candy and gum, partially offset by gains in biscuits & baked snacks, cheese & grocery and refreshment beverages. The lapping of the prior-year short-term distributor agreement related to the sale of our developed market gum business, which ended in the first quarter of 2024, resulted in a year-over-year incremental reduction in net revenue of $25 million.
Segment operating income decreased $248 million (12.0%), primarily due to higher raw material costs, unfavorable volume/mix, higher other selling, general and administrative expenses and higher losses from remeasurement of net monetary position in highly inflationary countries. These unfavorable items were partially offset by higher net pricing, lower advertising and consumer promotion costs, lower intangible asset impairment charges, favorable currency translation rate changes, lower manufacturing costs driven by productivity, lower restructuring charges, lower acquisition-related items, a benefit in divestiture-related items and lower fixed asset impairment charges.
North America
For the Years Ended
December 31,
$ Change
% Change
(in millions)
Net revenues
Segment operating income
Net revenues decreased $231 million (2.1%), due to unfavorable volume/mix (2.7 pp) and unfavorable currency translation rate changes (0.2 pp), partially offset by higher pricing (0.8 pp). Unfavorable volume/mix was driven by declines in biscuits & baked snacks and candy, primarily due to soft consumption in the U.S., 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.
Segment operating income decreased $588 million (23.6%), primarily due to higher raw material costs, unfavorable volume/mix, unfavorable acquisition-related items reflecting a lower year-over-year benefit from contingent consideration adjustments related to Clif Bar, net of lower acquisition integration costs, and higher costs incurred for the ERP System Implementation program. These unfavorable items were partially offset by lower advertising and consumer promotion costs, lower manufacturing costs due to productivity, higher net pricing, lower other selling, general and administrative expenses, lower restructuring charges and lower fixed asset impairment charges.
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Liquidity and Capital Resources
We believe that cash from operations, our revolving credit facilities, short-term borrowings and long-term debt financing will continue to provide sufficient liquidity for our working capital needs, planned capital expenditures and future payments of our contractual, tax and benefit plan obligations and payments for acquisitions, share repurchases and quarterly dividends. We expect to continue to utilize our commercial paper program and international credit lines as needed. We continually evaluate long-term debt issuances to meet our short- and longer-term funding requirements. We also use intercompany loans with our international subsidiaries to improve financial flexibility. Overall, we do not expect negative effects to our funding sources that would have a material effect on our liquidity, and we continue to monitor our global operations including the impact of developments in Ukraine and the Middle East. To date, we have been successful in generating cash and raising financing as needed. However, if a serious economic or credit market crisis ensues or other adverse developments arise, it could have a material adverse effect on our liquidity, results of operations and financial condition.
Our most significant ongoing short-term cash requirements relate primarily to funding operations (including expenditures for raw materials, labor, manufacturing and distribution, trade and promotions, advertising and marketing, tax liabilities, benefit plan obligations and lease expenses) as well as periodic expenditures for acquisitions, shareholder returns (such as dividend payments and share repurchases), property, plant and equipment and any significant one-time non-operating items.
Long-term cash requirements primarily relate to funding long-term debt repayments (refer to Note 8, Debt and Borrowing Arrangements ), deferred taxes (refer to Note 16, Income Taxes ), long-term benefit plan obligations (refer to Note 10, Benefit Plans ) and commodity-related purchase commitments and derivative contracts (refer to Note 9, Financial Instruments ).
We generally fund short- and long-term cash requirements with cash from operating activities as well as cash proceeds from short- and long-term debt financing (refer to Debt below). We generally do not use equity to fund our ongoing obligations.
Cash Flow
We believe our ability to generate substantial cash from operating activities and readily access capital markets and secure financing at competitive rates are key strengths and give us significant flexibility to meet our short and long-term financial commitments. Our cash flow activity over the last three years is noted below:
For the Years Ended December 31,
(in millions)
Net cash provided by/(used in):
Operating activities
Investing activities
Financing activities
Net Cash Provided by Operating Activities
The reduction in net cash provided by operating activities in 2025 was primarily due to a lower cash-basis net earnings combined with slightly unfavorable year-over-year working capital movements.
Net Cash Provided by/(Used In) Investing Activities
The reduction in net cash provided by/(used in) investing activities was largely driven by lapping prior year proceeds from the JDEP share sale combined with net payments for derivative settlements in the current year as compared to net proceeds from derivative settlements in the prior year. This was partially offset by net proceeds in investments in the current year as compared to net contributions in the prior year, lapping prior year cash consideration paid for the Evirth acquisition and lower capital expenditures as compared to the prior year. Refer to Note 2, Acquisitions and Divestitures and Note 7, Investments for more information.
Capital expenditures were $1,279 million in 2025, $1,387 million in 2024 and $1,112 million in 2023. We continue to make capital expenditures primarily to modernize manufacturing facilities and support new product and productivity initiatives. We expect 2026 capital expenditures to be up to $1.5 billion, including capital expenditures in connection
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with our ERP System Implementation program and for funding our strategic priorities. We expect to continue to fund these expenditures with cash from operations.
Net Cash Used in Financing Activities
The reduction in net cash used in financing activities was primarily due to higher debt proceeds combined with lower debt repayments, partially offset by an increase in dividends paid to shareholders in 2025 and higher share repurchases compared to prior year.
Dividends
We paid dividends of $2,487 million in 2025, $2,349 million in 2024 and $2,160 million in 2023. On July 29, 2025, the Audit Committee, with authorization delegated from our Board of Directors, declared a quarterly cash dividend of $0.50 per share of Class A Common Stock, an increase of 6 percent, which would be $2.00 per common share on an annualized basis. The declaration of dividends is subject to the discretion of our Board of Directors and depends on various factors, including our net earnings, financial condition, cash requirements, future prospects and other factors that our Board of Directors deems relevant to its analysis and decision making.
For U.S. income tax purposes only, the Company has determined that 100% of the distributions paid to its shareholders in 2025 are characterized as a qualified dividend paid from U.S. earnings and profits. Refer to Note 12, Capital Stock , to the consolidated financial statements and Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – Issuer Purchases of Equity Securities , for information on our share repurchase program.
Guarantees
As discussed in Note 11, Commitments and Contingencies , we enter into third-party guarantees primarily to cover the 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 December 31, 2025 and December 31, 2024, we had no material third-party guarantees recorded on our consolidated balance sheets. Guarantees do not have, and we do not expect them to have, a material effect on our liquidity.
Debt
The nature and amount of our long-term and short-term debt and the proportionate amount of each varies as a result of current and expected business requirements, market conditions and other factors. As such, we may issue commercial paper or secure other forms of financing throughout the year to meet short-term working capital or other financing needs.
At our December 2025 meeting, the Board of Directors approved a new $4 billion long-term financing authorization that replaced the prior long-term financing authorization of $4 billion. As of December 31, 2025, $4.0 billion of the long-term financing authorization remained available.
Our total debt was $21.2 billion at December 31, 2025 and $17.7 billion at December 31, 2024. Our debt-to-capitalization ratio was 0.45 at December 31, 2025 and 0.40 at December 31, 2024. The weighted-average term of our outstanding long-term debt was 7.3 years at December 31, 2025 and 7.7 years at December 31, 2024. Our average daily commercial paper borrowings were $2.4 billion in 2025, $1.1 billion in 2024 and $2.1 billion in 2023.
One of our subsidiaries, Mondelez International Holdings Netherlands B.V. (“MIHN”), has outstanding debt. Refer to Note 8, Debt and Borrowing Arrangements . The operations held by MIHN generated approximately 75.1% (or $28.9 billion) of the $38.5 billion of consolidated net revenue during fiscal year 2025 and represented approximately 96.5% (or $25.0 billion) of the $25.9 billion of net assets as of December 31, 2025.
Refer to Note 8, Debt and Borrowing Arrangements , for more information on our debt and debt covenants.
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Commodity Trends
We regularly monitor worldwide supply, commodity cost and currency trends so we can cost-effectively secure ingredients, packaging and fuel required for production. During 2025, the primary drivers of the increase in our aggregate commodity costs were higher cocoa, dairy, packaging, edible oils, nuts and other ingredient costs, as well as unfavorable year-over-year currency exchange transaction costs on imported materials, partially offset by lower sugar, grains and energy costs. While the costs of our principal raw materials fluctuate, generally we believe there will continue to be an adequate supply of the raw materials we use and that they will broadly remain available.
A number of external factors such as the current macroeconomic environment, including global inflation, effects of geopolitical uncertainty, climate, weather and other conditions affecting plant health and crop yield, commodity, transportation and labor market conditions, exchange rate volatility and the effects of global and local regulations, including trade policies, governmental agricultural or other programs affect the availability and cost of raw materials and agricultural materials used in our products. In particular, the supply of cocoa is exposed to many of these factors, including climate change, weather and other events affecting plant health and crop yield, local regulations in cocoa-producing countries, and global regulations such as the EU Deforestation Regulation (which requires companies to ensure that the products they place on the EU market or export from it are not associated with deforestation). These factors impact the supply of cocoa, and could potentially limit our ability to produce our products or significantly impact profitability.
During 2025, price volatility and the higher aggregate cost environment increased due to international supply chain and labor market disruptions and generally higher commodity, transportation and labor costs. We expect these conditions to continue to impact our aggregate commodity costs. In particular, while we expect cocoa costs to be lower in 2026 compared to the current year, we expect to continue to face elevated cocoa costs as compared to historical levels in the near- and medium-term due to these factors. It is possible that we may not be able to increase prices sufficiently to fully cover the incremental costs of cocoa prices in this environment and/or our hedging strategies may not protect us from increases in cocoa costs, which could result in a significant adverse impact on our profitability.
We address higher commodity costs and currency impacts primarily through hedging, higher pricing and manufacturing and overhead cost control. We use hedging techniques to limit the impact of fluctuations in the cost of our principal raw materials; however, we may not be able to fully hedge against commodity cost changes, such as dairy, where there is a limited ability to hedge, and our hedging strategies may not protect us from increases in specific raw material costs. Our commodity procurement practices are intended to mitigate price volatility and provide visibility to future costs, but also may potentially limit our ability to benefit from possible future price decreases. Additionally, our costs for major raw materials will not necessarily reflect market price fluctuations because of our forward purchasing and hedging practices. Due to competitive or market conditions, planned trade or promotional incentives, fluctuations in currency exchange rates or other factors, our pricing actions may also lag commodity cost changes temporarily.
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Critical Accounting Estimates
We prepare our consolidated financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements includes a summary of the significant accounting policies we used to prepare our consolidated financial statements. We have discussed the selection and disclosure of our critical accounting policies and estimates with our Audit Committee. The following is a review of our most significant assumptions and estimates.
Goodwill and Indefinite-Life Intangible Assets
We test goodwill and indefinite-life intangible assets for impairment on an annual basis on July 1 or whenever events or changes in circumstances indicate that the fair value of the reporting unit or indefinite-life intangible asset is more likely than not below its carrying value. Goodwill is tested for impairment at the reporting unit level, and we monitor our reporting structure on an ongoing basis to identify changes that could potentially impact the composition of our reporting units.
We have the option to assess goodwill for impairment by initially performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying value, then the quantitative goodwill impairment test is not required to be performed. If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, or if we elect not to perform an initial qualitative assessment, we perform a quantitative goodwill impairment test by comparing the estimated fair value of the reporting unit to its carrying value. When quantitative testing is performed, we estimate reporting unit fair values using a discounted cash flow method that incorporates earnings forecasts, market-based discount rates and terminal growth rates. If the carrying value of the reporting unit exceeds its estimated fair value, an impairment charge is recorded for the amount by which its carrying value, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit.
In 2025, 2024 and 2023, there were no goodwill impairments, as each of our reporting units had sufficient fair value in excess of carrying value. While all reporting units passed our annual impairment testing, if planned business performance expectations are not met or valuation inputs outside of our control, such as discount rates, change significantly, then the estimated fair values of a reporting unit or reporting units might decline and lead to a goodwill impairment in the future.
We have the option to assess our indefinite-life intangible assets (primarily brand intangible assets) by initially performing qualitative assessments to determine whether it is more likely than not that the fair values of the indefinite-life intangible assets are less than their carrying values. If we determine that it is more likely than not that an indefinite-life intangible asset is impaired, or if we elect not to perform an initial qualitative assessment, we perform a quantitative impairment test by comparing the estimated fair value of the indefinite-life intangible asset to its carrying value. For indefinite-life intangible assets for which quantitative impairment testing is performed, we use several accepted valuation methods, including relief from royalty, excess earnings and excess margin, that utilize estimates of future sales, earnings growth rates, royalty rates and discount rates to estimate fair value. If the carrying value of the asset exceeds its fair value, we consider the asset impaired and reduce its carrying value to the estimated fair value.
We recognized intangible asset impairment charges of $33 million in 2025, $153 million in 2024 and $26 million in 2023 to reduce the carrying amounts of certain brands to their estimated fair values. Those charges are reported within asset impairment and exit costs in the consolidated statements of earnings. The 2025 impairments related to two biscuit brands in the Europe segment, one biscuit brand in the AMEA segment and one candy brand in the Latin America segment. The 2024 impairments 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. The 2023 impairments related to a chocolate brand in the North America segment and a biscuit brand in the Europe segment.
Including the four brands for which we recognized impairments in 2025, we identified five brand intangibles, as part of our annual test, for which fair value exceeded book value by less than 10%. The aggregate carrying value of those five brands was $1.5 billion as of December 31, 2025. We are closely monitoring the performance of those brands and if there are adverse changes to the related sales and earnings forecasts in the future, whether caused
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by business-specific or broader macroeconomic factors, one or more of those indefinite-life intangible assets could become impaired.
Refer to Note 6, Goodwill and Intangible Assets , for additional information.
Business Combinations
The assets acquired and liabilities assumed upon the acquisition or consolidation of a business are recorded at fair value (or other measurement attribute required by U.S. GAAP), with the residual of the purchase price recognized as goodwill. We engage third-party valuation specialists to assist management in determining the fair values of certain assets acquired and liabilities assumed. During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to assets acquired and liabilities assumed with the corresponding offset to goodwill. The results of operations of an acquired business are included in our operating results from the date of acquisition.
In determining fair values of assets acquired and liabilities assumed in business combinations, we use several accepted valuation methods, including relief from royalty, excess earnings and excess margin, depending on the asset or liability being valued. Such valuations require management to make significant judgments, estimates and assumptions, especially with respect to intangible assets. Management makes estimates of fair value based upon the best information available at the date of acquisition. These estimates are based upon historical experience and information obtained from the management of the acquired company and are inherently uncertain. Critical estimates in valuing certain of the intangible assets include, but are not limited to: future sales, earnings growth rates, royalty rates, discount rates and economic lives of customer relationships, trade names and fixed assets. Unanticipated events and circumstances may occur, which may affect the accuracy or validity of such assumptions or estimates.
Further, certain of our acquisitions may include earn-out provisions or other forms of contingent consideration. As of the acquisition date, we record contingent consideration arrangements at their estimated fair values. Contingent consideration arrangements are subsequently remeasured to fair value each reporting period, with changes in fair value recognized in earnings. The estimated fair values of our contingent consideration liabilities are primarily determined using Monte Carlo simulations. Significant assumptions used in assessing the fair values of the liabilities include financial projections for net revenue, gross profit and EBITDA, as well as discount and volatility rates. Changes to those estimates and assumptions may occur due to various reasons, including the operating performance of the acquired business and/or changes in other valuation inputs.
Legal costs, due diligence costs, business valuation costs and all other business acquisition costs are expensed as incurred.
Trade and Marketing Programs
We promote our products with trade and sales incentives as well as marketing and advertising programs. These programs include, but are not limited to, new product introduction fees, discounts, coupons, rebates and volume-based incentives as well as cooperative advertising, in-store displays and consumer marketing promotions. Trade and sales incentives are recorded as a reduction to revenues based on estimates of the amounts due to customers and consumers at the end of a period. We base these estimates principally on historical utilization and redemption rates. Estimates that affect revenue, such as trade incentives and product returns, are monitored and adjusted each period until the incentives or product returns are realized. Advertising, consumer promotion and market research costs are recorded within selling, general and administrative expenses. For interim reporting purposes, those expenses are charged to operations as a percentage of volume, based on estimated sales volume and estimated program spending. We do not defer costs on our year-end consolidated balance sheets and all marketing and advertising costs are recorded as an expense in the year incurred.
Employee Benefit Plans
We sponsor various employee benefit plans worldwide, primarily including pension plans and postretirement healthcare benefit plans. We estimate the pension and postretirement healthcare benefit obligations for those plans utilizing assumptions and estimates for discount rates; expected returns on plan assets; expected compensation increases; employee-related factors such as turnover, retirement age and mortality; and health care cost trends. We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when appropriate. Our assumptions also reflect our historical experiences and management’s best judgment regarding future expectations. These and other assumptions affect the annual expense and obligations recognized for the underlying plans.
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We amortize the effect of changes in the assumptions over future periods to reflect the cost or benefit of plan changes, such as increasing or decreasing benefits for prior employee service (prior service cost). These changes are deferred and included in expense on a straight-line basis over the average remaining service period of the employees expected to receive benefits.
Since pension and postretirement liabilities are measured on a discounted basis, the discount rate significantly affects our plan obligations and net periodic (benefit)/cost. For plans that have assets held in trust, the expected return on plan assets assumption also significantly affects our periodic (benefit)/cost. The assumptions for discount rates and expected return on plan assets and our process for setting these assumptions are described in Note 10, Benefit Plans , along with additional information on our employee benefit plans.
As a sensitivity measure, a fifty-basis point change in our discount rates or the expected rate of return on plan assets would have the following effects, increase/(decrease), on our annual benefit plan costs:
As of December 31, 2025
U.S. Plans
Non-U.S. Plans
Fifty-Basis-Point
Fifty-Basis-Point
Increase
Decrease
Increase
Decrease
(in millions)
Effect of change in discount rate on
pension and postretirement costs
Effect of change in expected rate of return on
plan assets on pension and postretirement costs
Effect of change in discount rate on
postretirement health care costs
Income Taxes
As a global company, we calculate and provide for income taxes in each tax jurisdiction in which we operate. Our provision for income taxes includes amounts payable or refundable for the current year, the effect of deferred taxes and impacts from uncertain tax positions. Our provision for income taxes is significantly affected by shifts in the geographic mix of our pre-tax earnings across tax jurisdictions, changes in tax laws and regulations, tax planning opportunities available in each tax jurisdiction and the ultimate outcome of various tax audits.
We recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and tax bases of our assets and liabilities, operating loss carryforwards and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those differences are expected to reverse.
The realization of certain deferred tax assets is dependent on generating sufficient taxable income in the appropriate jurisdiction prior to the expiration of the carryforward periods. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. When assessing the need for a valuation allowance, we consider any carryback potential, future reversals of existing taxable temporary differences (including liabilities for unrecognized tax benefits), future taxable income and tax planning strategies.
We believe our tax positions comply with applicable tax laws and that we have properly accounted for uncertain tax positions. We recognize tax benefits in our financial statements from uncertain tax positions only if it is more likely than not that the tax position will be sustained by the taxing authorities based on the technical merits of the position. The amount we recognize is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon resolution. We evaluate uncertain tax positions on an ongoing basis and adjust the amount recognized in light of changing facts and circumstances, such as the progress of a tax audit or expiration of a statute of limitations. We believe the estimates and assumptions used to support our evaluation of uncertain tax positions are reasonable. However, final determination of historical tax liabilities, whether by settlement with tax authorities, judicial or administrative ruling or due to expiration of statutes of limitations, could be materially different from estimates reflected on our consolidated balance sheets and historical income tax provisions. The outcome of these final determinations could have a material effect on our provision for income taxes, net earnings or cash flows in the period in which the determination is made.
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We monitor for changes in tax laws and reflect the impacts of tax law changes in the period of enactment. When there is refinement to tax law changes in subsequent periods, we account for the new guidance in the period when it becomes known.
Refer to Note 16, Income Taxes , for additional information on our effective tax rate, current and deferred taxes, valuation allowances and unrecognized tax benefits.
Contingencies
Refer to Note 11, Commitments and Contingencies , to the consolidated financial statements.
New Accounting Guidance
Refer to Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements for a discussion of new accounting standards that have been adopted, as well as new accounting standards that have been issued but not yet adopted.
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