Mondelēz International Inc. (NASDAQ:MDLZ)

The provision for income taxes exhibited fluctuations over the five-year period. Current income tax expense generally decreased from 2021 to 2025, while deferred tax expense demonstrated more volatility. Overall, the total provision for income taxes followed an undulating pattern.

Current Income Tax Expense

Current income tax expense began at US$985 million in 2021, decreased to US$907 million in 2022, and then increased substantially to US$1,574 million in 2023. A subsequent decrease to US$1,212 million occurred in 2024, followed by a further decline to US$766 million in 2025. This suggests a correlation with underlying profitability, though further investigation would be needed to confirm this relationship.

Deferred Income Tax Expense (Benefit)

Deferred income tax expense was US$205 million in 2021. In 2022, it shifted to a benefit of US$42 million, and remained a benefit of US$37 million in 2023. A significant reversal occurred in 2024, resulting in an expense of US$257 million, before decreasing to a minimal expense of US$16 million in 2025. The volatility in deferred taxes may be attributable to changes in temporary differences between book and tax bases of assets and liabilities, or changes in tax rates.

Total Provision for Income Taxes

The total provision for income taxes mirrored the combined effect of current and deferred taxes. It started at US$1,190 million in 2021, decreased to US$865 million in 2022, rose to US$1,537 million in 2023, then decreased slightly to US$1,469 million in 2024, and finally decreased to US$782 million in 2025. The largest year-over-year change was a US$672 million increase from 2022 to 2023.

The fluctuations in both current and deferred tax components indicate potential shifts in taxable income, applicable tax rates, or the recognition and utilization of tax loss carryforwards or other tax credits. The significant changes observed warrant further investigation into the underlying drivers of these tax provisions.

The effective income tax rate exhibited fluctuations over the five-year period. While the U.S. federal statutory tax rate remained constant at 21.00%, the effective tax rate demonstrated a decreasing trend from 2021 to 2024, followed by an increase in the final year.

Effective Tax Rate Trend

In 2021, the effective tax rate was 27.20%. This decreased to 26.80% in 2022, continuing to 26.10% in 2023. A more substantial decline was observed in 2024, with the effective tax rate falling to 23.50%. However, in 2025, the rate increased to 25.90%.

The consistent statutory rate suggests that changes in the effective tax rate are driven by factors other than legislative adjustments to the corporate tax code. These factors could include shifts in the geographic distribution of earnings, the utilization of tax credits or deductions, or changes in deferred tax assets and liabilities. The increase in the effective tax rate in 2025 warrants further investigation to determine the underlying cause.

Difference from Statutory Rate

The effective tax rate consistently exceeded the U.S. federal statutory rate throughout the period. The difference between the two rates varied, ranging from 6.20 percentage points in 2021 to 2.50 percentage points in 2024. This indicates the presence of permanent differences between taxable income and accounting income.

The observed pattern suggests a dynamic tax profile, potentially influenced by international operations and tax planning strategies. The reversal of the downward trend in 2025 suggests a possible change in these influencing factors.

The composition of deferred tax assets and liabilities exhibits several notable trends over the five-year period. Deferred tax assets are primarily driven by accrued postretirement and postemployment benefits, other employee benefits, loss carryforwards, tax credit carryforwards, and a category labeled “other.” Deferred tax liabilities are largely attributable to intangible assets, property, plant, and equipment, and another “other” category.

Deferred Tax Asset Components

Accrued postretirement and postemployment benefits demonstrate a consistent decline from US$114 million in 2021 to US$44 million in 2025. Accrued pension costs are initially reported at US$23 million in 2021, then disappear from subsequent reporting periods. Other employee benefits remain relatively stable, fluctuating between US$154 million and US$168 million. Loss carryforwards show an increasing trend, rising from US$685 million in 2021 to US$752 million in 2025, with a slight dip in 2024. Tax credit carryforwards also generally increase, moving from US$786 million to US$773 million over the period, with a decrease in 2024. The “other” component of deferred tax assets experiences significant growth, increasing from US$468 million to US$763 million.

Deferred Tax Liability Components

Intangible assets consistently represent the largest portion of deferred tax liabilities, decreasing from negative US$3,214 million in 2021 to negative US$3,310 million in 2025. Property, plant, and equipment also contribute significantly, with liabilities increasing from negative US$638 million to negative US$875 million. Accrued pension costs appear as a liability starting in 2022, becoming more substantial (negative US$74 million) in 2024 before decreasing to negative US$10 million in 2025. The “other” component of deferred tax liabilities also shows a consistent increase, moving from negative US$451 million to negative US$680 million.

Valuation Allowance and Net Deferred Tax Position

The valuation allowance against deferred tax assets consistently increases over the period, from negative US$1,280 million in 2021 to negative US$1,448 million in 2025. This suggests a growing uncertainty regarding the realization of the deferred tax assets. Consequently, net deferred income tax assets initially stand at US$1,400 million in 2021 but decrease to US$1,681 million in 2025. The net deferred tax position, considering both assets and liabilities, is consistently negative, ranging from negative US$2,903 million to negative US$3,194 million, indicating a net deferred tax liability position.

Overall, the deferred tax liability position is significantly larger than the deferred tax asset position, and the gap between the two widens slightly over the observed period. The increasing valuation allowance suggests a more conservative approach to recognizing the benefits of deferred tax assets.

Over the five-year period ending December 31, 2025, a consistent pattern emerges regarding deferred income tax assets and liabilities. Deferred income tax assets exhibit a general decreasing trend, while deferred income tax liabilities demonstrate relative stability with a slight increase over the period.

Deferred Income Tax Assets

The value of deferred income tax assets decreased from US$541 million in 2021 to US$336 million in 2025. The most significant decline occurred between 2021 and 2023, falling from US$541 million to US$408 million. The rate of decrease slowed between 2023 and 2024, with a reduction to US$333 million, followed by a marginal increase to US$336 million in 2025. This suggests a potential reduction in the realizability of existing deferred tax assets or a decrease in the generation of future deductible temporary differences.

Deferred Income Tax Liabilities

Deferred income tax liabilities remained relatively stable throughout the period, fluctuating between US$3,292 million and US$3,530 million. The value began at US$3,444 million in 2021, decreased slightly to US$3,437 million in 2022, then decreased further to US$3,292 million in 2023. A subsequent increase was observed in 2024, reaching US$3,425 million, and continued to US$3,530 million in 2025. This indicates a consistent level of taxable temporary differences giving rise to future tax obligations.

The contrasting trends in deferred tax assets and liabilities suggest a shifting balance in the company’s temporary differences. The decrease in deferred tax assets, coupled with the relatively stable deferred tax liabilities, could indicate a change in the nature of transactions generating these differences, or a change in the company’s ability to utilize existing tax assets.

The financial information reveals adjustments made to reported figures, primarily concerning the removal of deferred tax assets and liabilities. These adjustments impact total assets, total liabilities, shareholders’ equity, and net earnings over the five-year period from 2021 to 2025. A consistent pattern emerges where adjusted figures differ from reported figures, suggesting a material impact from these tax-related adjustments.

Total Assets

Reported total assets exhibit a fluctuating trend, increasing from US$67,092 million in 2021 to US$71,161 million in 2022, then peaking at US$71,391 million in 2023. A decrease is observed in 2024 to US$68,497 million, followed by a slight recovery to US$71,487 million in 2025. The adjusted total assets follow a similar pattern, consistently lower than the reported values. The difference between reported and adjusted assets remains relatively stable, averaging approximately US$500-600 million annually.

Total Liabilities

Reported total liabilities demonstrate an increasing trend from 2021 to 2022, rising from US$38,769 million to US$44,241 million. A subsequent decline is noted in 2023 and 2024, reaching US$41,539 million, before increasing again to US$45,596 million in 2025. Adjusted total liabilities consistently present lower values than reported liabilities, with the gap widening slightly in 2022 and 2025. The adjustments reduce reported liabilities by approximately US$3.4 to US$3.5 billion each year.

Shareholders’ Equity

Reported shareholders’ equity experiences a decrease from US$28,269 million in 2021 to US$26,883 million in 2022, followed by a recovery to US$28,332 million in 2023. A decline is then observed in 2024 and 2025, reaching US$25,838 million. The adjusted shareholders’ equity figures are consistently higher than the reported values, and the difference between the two is more pronounced than in the asset and liability adjustments, averaging around US$2.5 to US$3.0 billion. This suggests a significant portion of the deferred tax adjustments directly impacts the equity position.

Net Earnings

Reported net earnings attributable to the company fluctuate over the period. Earnings decrease from US$4,300 million in 2021 to US$2,717 million in 2022, then increase to US$4,959 million in 2023 and US$4,611 million in 2024, before declining to US$2,451 million in 2025. The adjusted net earnings are consistently higher than the reported net earnings, though the difference is relatively small, ranging from US$30 to US$114 million annually. This indicates that the deferred tax adjustments have a modest, but consistent, positive impact on reported earnings.

In summary, the adjustments related to deferred taxes consistently reduce reported assets and liabilities while increasing reported shareholders’ equity and net earnings. The impact on equity and assets/liabilities is more substantial than the impact on net earnings. The consistent nature of these adjustments suggests they are a recurring element of the company’s financial reporting.

The financial performance, as indicated by several key ratios, exhibits nuanced trends when considering adjustments for deferred tax impacts. Generally, the adjusted ratios demonstrate a slightly more conservative view of profitability and returns compared to the reported figures. While the directional movements are largely consistent between the reported and adjusted metrics, the magnitude of change differs in some instances.

Profitability

Reported net profit margin decreased significantly from 14.97% in 2021 to 8.63% in 2022, before recovering to 13.77% in 2023 and subsequently declining to 6.36% in 2025. The adjusted net profit margin follows a similar pattern, though the fluctuations are less pronounced. The removal of deferred tax effects appears to modestly reduce the reported margin in each year. The trend suggests a period of volatility in profitability, with a notable decrease projected for 2025.

Asset Utilization

Both reported and adjusted total asset turnover ratios show an increasing trend from 0.43 in 2021 to 0.54 in 2025. This indicates improving efficiency in generating sales from the company’s asset base. The adjustment for deferred taxes has a minimal impact on the reported asset turnover, with the adjusted ratio remaining consistently close to its reported counterpart.

Financial Leverage

Reported financial leverage increased from 2.37 in 2021 to 2.77 in 2025, suggesting a greater reliance on debt financing. The adjusted financial leverage exhibits a similar upward trend, but remains lower than the reported leverage in each period. The adjustment for deferred taxes results in a lower leverage ratio, indicating a reduced level of financial risk when these effects are excluded.

Return on Equity (ROE)

Reported ROE experienced a substantial decline from 15.21% in 2021 to 10.11% in 2022, followed by a recovery to 17.50% in 2023, and a subsequent drop to 9.49% in 2025. The adjusted ROE mirrors this pattern, but with slightly lower values. The impact of deferred taxes on ROE is noticeable, consistently reducing the reported value. The projected ROE for 2025 is significantly lower than prior years, both reported and adjusted.

Return on Assets (ROA)

Reported ROA decreased from 6.41% in 2021 to 3.82% in 2022, increased to 6.95% in 2023, and then declined to 3.43% in 2025. The adjusted ROA demonstrates a similar trajectory, with minor differences in magnitude. The adjustment for deferred taxes slightly increases the ROA in 2021, 2023 and 2024, but decreases it in 2022 and 2025. The projected ROA for 2025 is the lowest observed over the analyzed period.

In summary, the adjustments related to deferred taxes generally lead to a more conservative assessment of financial performance. While the overall trends remain consistent between the reported and adjusted ratios, the magnitude of changes, particularly in profitability and returns, is affected by the inclusion or exclusion of these tax effects. The projected performance for 2025 indicates a potential weakening in key financial metrics.

The period under review demonstrates fluctuations in both reported and adjusted net earnings, consequently impacting associated profit margins. A general observation is that while reported and adjusted earnings move in similar directions, the adjusted figures consistently present a slightly more favorable profitability picture.

Reported Net Profit Margin

The reported net profit margin experienced a significant decline from 14.97% in 2021 to 8.63% in 2022. A subsequent recovery was observed in 2023, reaching 13.77%, followed by a slight decrease to 12.65% in 2024. The most substantial drop occurred in 2025, with the margin falling to 6.36%. This indicates increasing sensitivity to factors impacting reported earnings, or potentially, changes in the cost structure not fully captured in adjusted earnings.

Adjusted Net Profit Margin

The adjusted net profit margin mirrored the trend of the reported margin, decreasing from 15.69% in 2021 to 8.49% in 2022. It then rose to 13.67% in 2023 and 13.36% in 2024. Similar to the reported margin, a considerable decline was noted in 2025, with the adjusted margin reaching 6.40%. The adjusted margin consistently remained above the reported margin throughout the period, suggesting that certain adjustments are effectively smoothing out earnings volatility.

Relationship Between Reported and Adjusted Margins

The difference between the reported and adjusted net profit margins remained relatively stable across the years, typically ranging between 0.60% and 1.00%. This consistency suggests that the adjustments made to net earnings are of a recurring nature and have a predictable impact on the overall profitability assessment. The parallel declines in both margins in 2022 and 2025 indicate that the underlying factors affecting profitability are impacting both reported and adjusted results.

The substantial decrease in both reported and adjusted net profit margins in 2025 warrants further investigation to determine the root causes. The consistent, albeit small, difference between the two margins suggests the adjustments are reliable, but the overall downward trend in profitability requires attention.

The analysis reveals a generally increasing trend in both reported and adjusted total asset turnover ratios over the five-year period. While total assets experienced fluctuations, the efficiency with which these assets are used to generate revenue appears to be improving. The adjusted total asset turnover mirrors the reported ratio closely, suggesting that adjustments to total assets do not significantly alter the overall efficiency picture.

Reported Total Asset Turnover

The reported total asset turnover ratio increased from 0.43 in 2021 to 0.54 in 2025. This represents a 25% increase over the period, indicating a growing ability to generate sales from each dollar of assets. The most significant increase occurred between 2022 and 2023, moving from 0.44 to 0.50. Growth slowed slightly in subsequent years, with increases of 0.03 between 2023 and 2024, and again between 2024 and 2025.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio exhibits a similar pattern to the reported ratio, beginning at 0.43 in 2021 and reaching 0.54 in 2025, also a 25% increase. The adjusted ratio also shows the largest increase between 2022 and 2023, rising from 0.45 to 0.51. The incremental increases from 2023 to 2024 and 2024 to 2025 are consistent with the reported ratio at 0.03 each year.

Total Assets

Reported total assets increased from US$67,092 million in 2021 to US$71,161 million in 2022, then to US$71,391 million in 2023. A decrease was observed in 2024, falling to US$68,497 million, before recovering to US$71,487 million in 2025. Adjusted total assets follow a similar pattern, with minor differences in magnitude. The fluctuations in total assets do not appear to directly correlate with the increases in asset turnover, suggesting that improvements in efficiency are not simply a result of asset expansion or contraction.

In conclusion, the consistent upward trend in both reported and adjusted total asset turnover ratios suggests improving operational efficiency. The relatively stable adjusted ratio compared to the reported ratio indicates that the adjustments made to total assets do not fundamentally change the interpretation of asset utilization.

An examination of the financial information reveals trends in both reported and adjusted asset and equity figures, subsequently impacting calculated financial leverage ratios. Over the five-year period, both reported and adjusted total assets demonstrate relative stability, with fluctuations occurring year-over-year but ultimately returning to levels comparable to the beginning of the period.

Total Assets

Reported total assets increased from US$67,092 million in 2021 to US$71,161 million in 2022, then plateaued at US$71,391 million in 2023 before decreasing to US$68,497 million in 2024. A slight recovery to US$71,487 million is observed in 2025. Adjusted total assets follow a similar pattern, exhibiting a comparable trajectory over the same timeframe.

Shareholders’ Equity

Reported total shareholders’ equity experienced a decline from US$28,269 million in 2021 to US$26,883 million in 2022, followed by a recovery to US$28,332 million in 2023. A subsequent decrease to US$26,932 million in 2024 is noted, with a further decline to US$25,838 million in 2025. Adjusted total shareholders’ equity mirrors this trend, though the absolute values differ, generally being higher than the reported equity.

Reported Financial Leverage

Reported financial leverage increased from 2.37 in 2021 to 2.65 in 2022, then decreased slightly to 2.52 in 2023 and remained stable at 2.54 in 2024. An increase to 2.77 is observed in 2025. This indicates a generally increasing reliance on financial leverage over the period, with a notable rise in the final year.

Adjusted Financial Leverage

Adjusted financial leverage also increased from 2.13 in 2021 to 2.37 in 2022, decreased to 2.27 in both 2023 and 2024, and then increased to 2.45 in 2025. While the magnitude of the changes differs from the reported leverage, the overall trend is similar. The adjusted leverage consistently remains lower than the reported leverage throughout the period, suggesting that adjustments to asset and equity values result in a more conservative leverage position.

The consistent difference between reported and adjusted financial leverage suggests the adjustments made to total assets and shareholders’ equity have a material impact on the calculated ratio. The increasing trend in both reported and adjusted financial leverage in 2025 warrants further investigation to understand the underlying drivers and potential implications for the company’s financial risk profile.

Analysis of the presented financial information reveals fluctuations in both reported and adjusted return on equity (ROE) over the five-year period. These variations correlate with changes in net earnings and shareholders’ equity, both reported and adjusted. A general observation is that the adjusted ROE consistently falls below the reported ROE, suggesting the adjustments made to net earnings and shareholders’ equity have a dampening effect on the calculated return.

Net Earnings Trend

Reported net earnings attributable to Mondelēz International demonstrate volatility. Earnings decreased significantly from 2021 to 2022, then increased substantially in 2023, followed by a slight decrease in 2024 and a more pronounced decline in 2025. Adjusted net earnings follow a similar pattern, though the magnitude of the fluctuations is slightly less pronounced. The largest decrease in both reported and adjusted net earnings occurs between 2024 and 2025.

Shareholders’ Equity Trend

Reported total shareholders’ equity also exhibits variability. A decrease is observed from 2021 to 2022, followed by an increase in 2023, a decrease in 2024, and a further decrease in 2025. Adjusted total shareholders’ equity mirrors this trend, generally showing higher values than the reported equity. The most substantial decrease in both reported and adjusted shareholders’ equity occurs between 2024 and 2025.

Reported ROE Analysis

Reported ROE mirrors the volatility in net earnings. It declines from 15.21% in 2021 to 10.11% in 2022, rises to 17.50% in 2023, decreases slightly to 17.12% in 2024, and then falls sharply to 9.49% in 2025. This significant drop in 2025 aligns with the decrease in reported net earnings and shareholders’ equity during that year.

Adjusted ROE Analysis

Adjusted ROE demonstrates a similar pattern to the reported ROE, but with consistently lower values. It decreases from 14.45% in 2021 to 8.96% in 2022, increases to 15.77% in 2023, rises to 16.21% in 2024, and then declines substantially to 8.50% in 2025. The decline in 2025 is again linked to decreases in both adjusted net earnings and adjusted shareholders’ equity. The difference between reported and adjusted ROE widens in 2025, indicating a more significant impact from the adjustments made in that year.

In summary, the period under review is characterized by fluctuating profitability and equity levels, resulting in corresponding variations in both reported and adjusted ROE. The substantial declines observed in 2025 for all metrics warrant further investigation to understand the underlying drivers of these changes.

The period between 2021 and 2025 demonstrates fluctuations in both reported and adjusted net earnings, total assets, and resulting return on assets. Reported net earnings attributable to Mondelēz International decreased significantly from 2021 to 2022, recovered in 2023, experienced a slight decline in 2024, and then decreased substantially in 2025. Adjusted net earnings followed a similar pattern, though the magnitude of the changes differed slightly. Total assets, both reported and adjusted, generally increased from 2021 to 2023 before decreasing in 2024 and then increasing again in 2025.

Reported Return on Assets (ROA)

Reported ROA exhibited a notable decrease from 6.41% in 2021 to 3.82% in 2022, coinciding with the decline in reported net earnings. A recovery to 6.95% was observed in 2023, followed by a slight decrease to 6.73% in 2024. The most significant decline occurred in 2025, with reported ROA falling to 3.43%. This mirrors the substantial decrease in reported net earnings during that year.

Adjusted Return on Assets (ROA)

Adjusted ROA mirrored the trend of the reported ROA, decreasing from 6.77% in 2021 to 3.78% in 2022. It also recovered to 6.93% in 2023 and experienced a slight increase to 7.14% in 2024. Similar to the reported ROA, adjusted ROA decreased significantly in 2025, reaching 3.47%. The adjusted ROA consistently remained slightly higher than the reported ROA throughout the period, suggesting that adjustments made to net earnings and total assets positively impacted profitability as measured by this metric.

The consistency between the trends of reported and adjusted ROA suggests that the adjustments applied are not fundamentally altering the overall profitability picture. The declines in both ROA measures in 2022 and 2025 warrant further investigation to understand the underlying drivers of reduced earnings. The increase in total assets in 2025, despite the decline in net earnings, suggests a potential inefficiency in asset utilization during that year.