2014 2013 $34,244 21,647 $35,299 22,189 12,597 8,457 692 13,110 8,679 273 (30) 206 217 MONDELEZ INTERNATIONAL INC. Consolidated Statement of Earnings For the Years Ended December 31 (in millions) 2015 Net revenues $29,636 Cost of sales.. 18,124 Gross profit. . 11,512 Selling, general and administrative expenses 7,577 Asset impairment and exit costs.. 901 Gains on coffee business transactions and divestitures (6,822) Loss on deconsolidation of Venezuela. 778 Amortization of intangibles. 181 Operating income.... 8,897 Interest and other expense, net. 1,013 Earnings from continuing operations before income taxes 7,884 Provision for income taxes.. 593 Earnings from continuing operations 7,291 Earnings from discontinued operations, net of income taxes Net earnings. 7,291 Noncontrolling interest. 24 Net earnings attributable to Mondelz International $ 7,267 3,242 688 3,971 1,579 2,554 353 2,392 60 2,201 2,332 1,603 2,201 17 3,935 20 $ 2,184 $ 3,915 2015 2014 $ 1,870 $ 1.631 2,634 3,802 1,212 2,609 MONDELEZ INTERNATIONAL INC. Consolidated Balance Sheets As of December 31 (in millions, expect share data) Assets Cash and cash equivalents .... Trade receivables (net of allowances of $54 at 2015 and $66 at 2014)..... Other receivables (net of allowances of $109 at 2015 and $91 at 2014)... Inventories, net..... Deferred income taxes. Other current assets. Total current assets ... Property, plant and equipment, net Goodwill.... Intangible assets, net.. Prepaid pension assets Equity method investments. Other assets... Total Assets.. 949 3,480 480 1,408 633 8,958 8,362 20,664 18,768 69 5,387 635 11,750 9,827 23,389 20.335 53 662 755 $62,843 $66,771 P3-57. Direct Computation of Nonoperating Return Refer to the financial information of Mondelez International Inc. in P3-56 to answer the following requirements. Required a. Assume that 2015 net nonoperating expenses (NNE) are $638 million and that NOA is $41,628 mil- lion and $42,878 million in 2015 and 2014, respectively. Compute financial leverage (FLEV) and Spread for 2015. b. Compute the 2015 return on equity. The NCI ratio for 2015 is 0.999. Confirm computations to yield the relation: ROE = [RNOA + (FLEV X Spread)] X NCI ratio. c. What do your computations of the nonoperating return in parts a and b imply about the company's use of borrowed funds? 2014 2013 $34,244 21,647 $35,299 22,189 12,597 8,457 692 13,110 8,679 273 (30) 206 217 MONDELEZ INTERNATIONAL INC. Consolidated Statement of Earnings For the Years Ended December 31 (in millions) 2015 Net revenues $29,636 Cost of sales.. 18,124 Gross profit. . 11,512 Selling, general and administrative expenses 7,577 Asset impairment and exit costs.. 901 Gains on coffee business transactions and divestitures (6,822) Loss on deconsolidation of Venezuela. 778 Amortization of intangibles. 181 Operating income.... 8,897 Interest and other expense, net. 1,013 Earnings from continuing operations before income taxes 7,884 Provision for income taxes.. 593 Earnings from continuing operations 7,291 Earnings from discontinued operations, net of income taxes Net earnings. 7,291 Noncontrolling interest. 24 Net earnings attributable to Mondelz International $ 7,267 3,242 688 3,971 1,579 2,554 353 2,392 60 2,201 2,332 1,603 2,201 17 3,935 20 $ 2,184 $ 3,915 2015 2014 $ 1,870 $ 1.631 2,634 3,802 1,212 2,609 MONDELEZ INTERNATIONAL INC. Consolidated Balance Sheets As of December 31 (in millions, expect share data) Assets Cash and cash equivalents .... Trade receivables (net of allowances of $54 at 2015 and $66 at 2014)..... Other receivables (net of allowances of $109 at 2015 and $91 at 2014)... Inventories, net..... Deferred income taxes. Other current assets. Total current assets ... Property, plant and equipment, net Goodwill.... Intangible assets, net.. Prepaid pension assets Equity method investments. Other assets... Total Assets.. 949 3,480 480 1,408 633 8,958 8,362 20,664 18,768 69 5,387 635 11,750 9,827 23,389 20.335 53 662 755 $62,843 $66,771 P3-57. Direct Computation of Nonoperating Return Refer to the financial information of Mondelez International Inc. in P3-56 to answer the following requirements. Required a. Assume that 2015 net nonoperating expenses (NNE) are $638 million and that NOA is $41,628 mil- lion and $42,878 million in 2015 and 2014, respectively. Compute financial leverage (FLEV) and Spread for 2015. b. Compute the 2015 return on equity. The NCI ratio for 2015 is 0.999. Confirm computations to yield the relation: ROE = [RNOA + (FLEV X Spread)] X NCI ratio. c. What do your computations of the nonoperating return in parts a and b imply about the company's use of borrowed funds