Item 7.01. Regulation FD Disclosure.
Mondelēz International, Inc. and subsidiaries (collectively, “we,” “our” or “Mondelēz International”) are furnishing this current report to provide supplemental non-GAAP financial information related to the retrospective impact of our participation in a secondary offering of Keurig Dr Pepper Inc. (“KDP”) shares on November 17, 2020. We sold approximately 40.0 million shares, which reduced our ownership interest by 2.8% to 8.4% of the total outstanding shares.
Due to our reporting of KDP’s results on a one-quarter lag basis, the impact of the sale of these shares will affect our non-GAAP financial results beginning with our first quarter ended March 31, 2021. Consistent with our definitions of our non-GAAP financial measures, we will reflect this partial sale of our equity method investment in KDP as a divestiture, resulting in the recasting of our non-GAAP financial results for all quarters of 2020, 2019 and 2018 and for the years ended December 31, 2020, 2019 and 2018.
Change to our Historical Non-GAAP Financial Results in Connection with our Sales of KDP shares
As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, we participated in a secondary offering of KDP shares on November 17, 2020. We sold approximately 40.0 million shares, which reduced our ownership interest by 2.8% to 8.4% of the total outstanding shares. We received $1,132 million of proceeds and recorded a pre-tax gain of $459 million (or $350 million after-tax) during the fourth quarter of 2020.
We consider the 2.8% ownership reduction, resulting from this sale of shares, a partial sale of our equity method investment in KDP. Consistent with our definitions of our non-GAAP financial measures, we consider this sale to be a divestiture. Due to our reporting of KDP’s results on a one-quarter lag basis, the impact of the sale of these shares will affect our non-GAAP financial results beginning with the first quarter ended March 31, 2021. Therefore, we will remove the equity method investment net earnings results related to this partial sale of our equity method investment in KDP from our non-GAAP financial results for Adjusted EPS for all historical periods presented. Our U.S. GAAP results, which include our historical equity method investment net earnings from KDP, will not change from what was previously reported.
Recast Amounts Reflecting Changes in Historical Non-GAAP Results
The change to our non-GAAP financial results for Adjusted EPS described above does not affect our previously reported consolidated financial results nor does it affect our non-GAAP financial results for Organic Net Revenue, Adjusted Gross Profit or Adjusted Operating Income for any period. This supplemental disclosure does not amend any disclosure contained in any of our prior SEC filings. See the chart below and Exhibit 99.1 for the unaudited GAAP and recast non-GAAP financial information for all quarters of 2020, 2019 and 2018 and for the years ended December 31, 2020, 2019 and 2018.
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Mondelēz International, Inc. and Subsidiaries
Recast Amounts Reflecting Change Due to Divestiture
(in millions of U.S. dollars, except per share data)
(Unaudited)
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2018
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2019
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2020
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2018
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2019
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2020
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FY
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FY
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FY
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Q1
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Q2
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Q3
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Q4
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Q1
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Q2
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Q3
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Q4
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Q1
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Q2
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Q3
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Q4
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Reported (GAAP)
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Equity method investment net earnings
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$
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484
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$
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501
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$
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421
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$
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229
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$
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88
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$
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84
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$
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83
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$
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166
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$
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109
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$
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114
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$
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112
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$
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121
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$
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106
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$
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84
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$
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110
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Provision for income taxes
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773
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2
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1,224
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337
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15
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310
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111
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189
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216
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(633
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)
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230
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148
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341
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391
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344
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Net earnings attributable to Mondelēz International
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3,317
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3,929
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3,555
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1,043
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319
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1,198
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757
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967
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803
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1,426
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733
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736
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544
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1,119
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1,156
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Diluted EPS attributable to Mondelēz International
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$
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2.23
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$
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2.69
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$
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2.47
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$
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0.69
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$
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0.21
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$
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0.81
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$
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0.51
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$
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0.66
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$
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0.55
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$
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0.98
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$
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0.50
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$
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0.51
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$
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0.38
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$
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0.78
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$
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0.80
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Adjusted (Non-GAAP) - As Recast
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Equity method investment net earnings
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$
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364
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$
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443
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$
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428
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$
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108
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$
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81
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$
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77
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$
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98
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$
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149
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$
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96
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$
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98
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$
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100
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$
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99
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$
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113
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$
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104
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$
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112
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Provision for income taxes
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848
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860
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928
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221
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205
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179
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243
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199
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215
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169
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277
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198
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126
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315
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289
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Net earnings attributable to Mondelēz International
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3,478
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3,560
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3,688
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927
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809
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899
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843
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971
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804
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914
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871
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948
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881
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900
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959
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Diluted EPS attributable to Mondelēz International
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$
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2.34
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$
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2.44
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$
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2.56
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|
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$
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0.62
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|
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$
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0.54
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|
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$
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0.61
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$
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0.57
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$
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0.66
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$
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0.55
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|
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$
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0.63
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|
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$
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0.60
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|
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$
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0.66
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|
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$
|
0.61
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|
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$
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0.62
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$
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0.67
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2