Looking at Mondelez alone and its five product areas: biscuits, chocolate, gum & candy, beverages, and cheese & grocery, do a financial ratio analysis of how each product category performed in each geographic region and worldwide overall, for the years 2014, 2015 and 2016. Based on your financial analysis, how would you interpret these trends as to meeting the expectations of Mondelezs stated strategy?

336 Part 2 Cases in Crafting and Executing Strategy By 2017, Mondelz International had success- fully achieved its internationalization goals, with 76 percent of its revenues generated outside the United States in 2016. But the United States remained the company's largest market, making up 18 percent, 21 percent, and 24 percent of its sales in 2014, 2015, and 2016, respectively. No other country accounted for 10 percent of Mondelz's sales. However, the overall effectiveness of the corporate restructuring was questionable with the company's stock performance largely tracking the S&P 500 and its revenues in decline. The company's income from continuing operations grew from 2014 to 2015, but only because of a $6.8 billion pretax gain from the spin-off of its coffee business in France. Absent a large asset sale in 2016, the company's operating income fell from $8.8 bil- lion in 2015 to $2.6 billion in 2016. The company's total net revenues had declined from $34.2 billion in 2014 to $29.6 billion in 2015 and to $25.9 billion in 2016. Drawing focus on the need for improved performance, activist investor William Ackman took a $5.5 billion stake in the company in July 2015. Ackman believed that management should dramatically improve the company's performance or that the company should be a candidate for acquisition by a better performing indus- try rival. Ackman increased his stake in the company in January 2017 to 6.4 percent of outstanding shares. A summary of Mondelz International's financial per- formance from 2012 to 2016 is presented in Exhibit 1. The performance of the company's stock perfor- mance between July 2012 and July 2017 is presented in Exhibit 2. Company History Mondelz International's marquee brands all had rich histories that began with the efforts of entrepre- neurs who were inspired to launch new businesses EXHIBIT 1 Financial Summary for Mondelz International, Inc., 2012-2016 (in millions, except per share amounts) 2016 2015 2014 2013 2012 $25,923 1,659 $29,636 7.291 $34.244 2,201 $35.299 2,332 $ 35,015 1.606 1.07 1.05 4.49 4.44 1.29 1.28 1.30 1.29 0.90 0.88 Continuing Operations Net revenues Earnings from continuing operations, net of taxes Net eamings attributable to Mondelz International: Per share, basic Per share, diluted Cash Flow and Financial Position Net cash provided by operating activities Capital expenditures Property, plant and equipment, net Total assets Long-term debt Total Total Mondelz International shareholders' equity Shares outstanding at year end Per Share and Other Data Book value per shares outstanding Dividends declared per share Common stock closing price at year end Number of employees 2.838 1.224 8,229 $61.538 13,217 25,161 1,528 3.728 1,514 8,362 $62,843 14,557 28.012 1,580 3,562 1,642 9,827 $66.771 13,821 27,750 1,664 6.410 1,622 10,247 $ 72,464 14,431 32,373 1,705 3.923 1,610 10.010 $75.421 15,519 32,276 1,778 $ 16.47 0.72 44.33 90,000 $ 17.73 0.64 44.84 99,000 $ 16.68 0.58 36.33 104,000 $18.99 0.54 35.30 107,000 $ 18.15 1.00 25.45 110,000 5041rce: Moritelz Interliticial, Inc., 2016 10-K. Case 9 Mondelz International's Diversification Strategy in 2017 337 EXHIBIT 2 Performance of Mondelz International, Inc., Common Shares, July 2012-July 2017 (a) Trend in Mondelz International's Common Stock Price 50 45 st 40 Stock Price ($) 35 30 will 25 - 1 12 13 14 1 16 17 15 Year (b) Performance of Mondelz International's Stock Price versus the S&P 500 Index +80% +70% Mondelez Stock Price mama +60% II +50% +40% +30% S&P 500 +20% +10% & +0% -10% 12 13 14 16 17 15 Year that could provide consumers with value and support the newly created Kraft Foods Group for every three for their families. But Mondelz International, as a shares of Kraft Foods Inc. owned by the shareholder. corporate entity, resulted from the 2012 spin-off of At the conclusion of the spin-off, Kraft Foods Inc. Kraft Foods's North American grocery business to changed its name to Mondelz International, Inc. shareholders. Under the terms of the proposal, each and its ticker symbol became MDLZ. The KFT ticker Kraft Foods Inc. shareholder received one share of symbol was retired after the transaction. Shares of Case 9 Mondelz International's Diversification Strategy in 2017 339 The Keurig transaction was completed in March 2016 and reduced Mondelz's ownership position in JDE to 26.5 percent in return for a 24.2 percent own- ership stake in Keurig. The company also made small acquisitions and divestitures in 2015 and 2016 that included the acquisition of U.S. snack foods company Enjoy Life Foods for $81 million and the divestiture of its 50 percent interest in a Japanese coffee joint venture for $225 million and the sale of local Finnish biscuit brands for $16 million. Also in 2016, Mondelz Inter- national attempted to acquire Hershey to create the world's largest candy company. The nonprofit trust that controlled Hershey was ultimately able to block the buyout attempt. cookies, chocolate, candy, gum, and beverages. The company's acquisitions were directed at expanding its brand portfolio into rapidly growing snack catego- ries. The company's 2015 acquisition of Enjoy Life Foods added allergen-free and gluten-free chips and nut-free chocolate and seed and fruit products to its lineup of snacks. The company's strategy sought to expand mar- gins through programs to boost cost-efficiency in its manufacturing and supply chain activities. However, the company was committed to providing additional resources needed to expand marketing and sales capabilities in key markets, especially in emerging markets. The company announced its Sustainability 2020 goals in in 2015 for reducing carbon emissions, reducing deforestation within its agricultural sup- ply chain, focusing on water reduction efforts, and reducing packaging and manufacturing waste. The promotion of moderation in snacking was also an important element of the company's social responsi- bility and sustainability strategy. The company was organized into four reportable segments based on geographic markets: North Amer- ica; Latin America; Europe; and Asia, Middle East, and Africa (AMEA). Within each geographic report- ing division were five product categories-biscuits (including cookies, crackers, and salted snacks), chocolate, gum and candy, beverages, and cheese and grocery. Exhibit 3 presents a financial summary for its geographic segments for 2014 through 2016. The revenue contributions of each product category in each geographic region are presented in Exhibit 4. Mondelez Internationals Corporate Strategy and Business Segment Performance in 2017 Mondelz International's strategy was directed at exploiting its powerful brands of snack foods across the 165 country markets where its products were sold. Brands such as Oreo, Milka, Cadbury, Nabisco, Honey Maid, Trident, and Tang were popular in almost all markets where the company competed and provided for a range of products that cut across most all consumer snacking desires. For example, the company's product line included biscuits or EXHIBIT 3 Financial Summary for Mondelz International's Geographic Segments, 2014-2016 (in millions) Net revenues 2016 2015 2014 Latin America AMEA Europe North America Net revenues $ 3,392 5,816 9,755 6.960 $25,923 $ 4,988 6,002 11,672 6,974 $29,636 $ 5,153 6,367 15,788 6,936 $34,244 (Continued) 340 Part 2 Cases in Crafting and Executing Strategy 2016 2015 2014 $ $ (Continued) Earnings from continuing operations before income taxes Operating income: Latin America AMEA Europe North America Unrealized gains/losses) on hedging activities General corporate expenses Amortization of intangibles Gains on coffee business transactions and divestitures Loss on deconsolidation of Venezuela Acquisition-related costs Operating income Interest and other expense, net Earnings from continuing operations before income taxes 271 506 1,267 1,078 (94) (291) (176) 9 $ 485 389 1,350 1,105 96 (383) (181) 6,822 (778) (8) 8,897 (1,013) $ 7,884 475 530 1,952 922 (112) (317) 100 (206) (1) 2,569 (1,1151 S 1.454 (2) 3,242 (688) $ 2,554 Total assets 2016 2015 2014 Latin America AMEA Europe North America Equity method investments Unallocated assets $ 5,156 10.031 19.934 20,694 5,585 138 $61,538 $ 4,673 10,460 21,026 21,175 5,387 122 $62,843 6,470 10,549 27.240 21,287 662 563 $66,771 Total assets Depreciation expense 2016 2015 2014 $ 92 S $ Latin America AMEA Europe North America Total depreciation expense 161 253 141 94 155 299 165 713 118 154 407 174 853 $ 647 $ $ Capital expenditures 2016 2015 2014 Latin America AMEA Europe North America Total capital expenditures S 321 349 294 260 $ 1,224 $ 354 381 517 262 $ 1,514 $ 460 451 553 178 $ 1,642 SLIfce: Mendelzz International, Inc., 20 16 10-6. All of the five business segments competed in product markets that were characterized by strong competitive rivalry that required strong distribution and marketing skills to attract consumer demand and ensure product availability in supermarkets, discount clubs, mass merchandisers, convenience stores, drug Case 9 Mondelz International's Diversification Strategy in 2017 341 EXHIBIT 4 Mondelz International's Net Revenues by Product Category and Geographic Region, 2014-2016 (in millions) North America Total Biscuits Chocolate Gum & Candy For the Year Ended December 31, 2016 Latin America AMEA Europe $ 734 $1,588 $ 2,703 743 1,901 4,840 938 953 916 657 611 177 320 763 1,119 $5,816 $ 9,755 $5,565 255 1,140 $10,590 7,739 3.947 1,445 2,202 $25.923 Beverages Cheese & Grocery Total net revenues $3,392 $6,960 Total North America $5,569 256 1,149 Biscuits Chocolate Gum & Candy Beverages Cheese & Grocery Total net revenues $11,393 8,074 4,258 3,260 2,651 $29.636 $6,974 For the Year Ended December 31, 2015 Latin America AMEA Europe $1,605 $1,539 $ 2,680 840 1,928 5,050 1,091 1,003 1,015 767 730 1,763 685 802 1,164 $4,988 $6,002 $11,672 For the Year Ended December 31, 2014 Latin America AMEA Europe $1,322 $1,442 $ 3,259 1,054 2,073 5,997 1,176 1,098 1,232 940 836 3,902 661 918 1,398 $5,153 $6,367 $15,788 Total North America $5,486 296 1,154 Biscuits Chocolate Gum & Candy Beverages Cheese & Grocery Total net revenues $11.509 9,420 4,660 5,678 2,977 $34,244 $6,936 Source Maidelz Intrational, Iric 2016 10 K stores, and retail food locations serviced by its food distribution operations. Brand building, consumer health and wellness, and advertising and promotions were all critical to success in the industry. In fact, Mondelez's ability to compete against lower-priced branded and store-brand products was a function of its ability to successfully differentiate its products from lower-priced alternatives. Also, differentiation was essential to retaining shelf space as the retail grocery industry consolidated and provided retailers with greater leverage in negotiations with food manu- facturers. The company's successful differentiation of its products had also allowed it to achieve organic revenue growth of 1.3 percent in 2016 and 1.4 percent in 2015 through net price increases. The company's processed foods divisions had experienced cost increases as inflationary forces had led to higher prices for commodities used in the manufacture of its products such as coffee, cocoa, oils, nuts, and sugar. However, Mondelez utilized commodity hedging to protect against spikes in ingredient costs. In addition, price increases made ossible by its strong product differentiation had more than offset the increased cost of commodity inputs in 2015. Also, the production of Mondelez International's products was regulated by the U.S. Case 9 Mondelz International's Diversification Strategy in 2017 343 EXHIBIT 5 Mondelz International, Inc. Consolidated Statements of Earnings, 2014-2016 (in millions, except per share amounts) 2016 2015 2014 Net revenues Cost of sales Gross profit $25,923 15,795 10,128 6,540 852 (9) $34.244 21,647 12.597 8,457 692 Selling, general and administrative expenses Asset impairment and exit costs Gains on divestitures Loss on deconsolidation of Venezuela Amortization of intangibles Operating income Interest and other expense, net Earnings before income taxes Provision for income taxes Gain on equity method investment exchange Equity method investment net earnings Net earnings Noncontrolling interest earnings Net earnings attributable to Mondelz International Per share data: Basic earnings per share attributable to Mondelz International Diluted earnings per share attributable to Mondelez International $29.636 18,124 11,512 7,577 901 (6.822) 778 181 8,897 1,013 7,884 593 206 3,242 688 2,554 353 176 2,569 1,115 1,454 (129) 43 301 1,669 (10) $ 1.659 7,291 (24) $ 7,267 2,201 117 $ 2.184 $1.07 $1.05 $4.49 $4.44 $1.29 $1.28 SolarCE: Mandelz International, Inc., 2016 10-K.. equity interest in the coffee business had resulted in the first quarter of 2017. "We had a solid start to the some changes to its balance sheets. The company's year despite challenging market conditions. We deliv- balance sheets for 2015 and 2016 are presented in ered both top-line organic growth and strong margin Exhibit 6. expansion in the quarter, while also making critical The company's results for the first quarter of 2017 investments for our future. We remain confident in showed signs of stabilization with revenues for the and committed to our balanced strategy for both top- first three months of the year declining by 0.6 per and bottom-line growth, continuing to focus on what cent and its operating profit for the first quarter of we can control to deliver long-term value creation for 2017 improving from $722 million to $840 million. our shareholders." Net earnings for the quarter ending March 31, 2017, Although Mondelz International's senior man- of $633 million were 13.6 percent higher than net agement believed the company's strategy was on earnings of $554 in the same quarter the year prior. track to deliver long-term value to shareholders, Mondelz 's improvements in operating income and investors such as William Ackman were less con- net income were primarily the result of lower restruc vinced. In fact, some degree of its relatively strong turing costs and the benefit of a settlement of a Cad stock performance since 2016 was a result take- bury tax dispute. over rumors involving the company. In August 2016, Mondelez International Chairwoman and CEO Irene Mondelez shares rose when news that its attempt to Rosenfeld was bullish on the company's results for acquire Hershey had failed, with investors seeing the 336 Part 2 Cases in Crafting and Executing Strategy By 2017, Mondelz International had success- fully achieved its internationalization goals, with 76 percent of its revenues generated outside the United States in 2016. But the United States remained the company's largest market, making up 18 percent, 21 percent, and 24 percent of its sales in 2014, 2015, and 2016, respectively. No other country accounted for 10 percent of Mondelz's sales. However, the overall effectiveness of the corporate restructuring was questionable with the company's stock performance largely tracking the S&P 500 and its revenues in decline. The company's income from continuing operations grew from 2014 to 2015, but only because of a $6.8 billion pretax gain from the spin-off of its coffee business in France. Absent a large asset sale in 2016, the company's operating income fell from $8.8 bil- lion in 2015 to $2.6 billion in 2016. The company's total net revenues had declined from $34.2 billion in 2014 to $29.6 billion in 2015 and to $25.9 billion in 2016. Drawing focus on the need for improved performance, activist investor William Ackman took a $5.5 billion stake in the company in July 2015. Ackman believed that management should dramatically improve the company's performance or that the company should be a candidate for acquisition by a better performing indus- try rival. Ackman increased his stake in the company in January 2017 to 6.4 percent of outstanding shares. A summary of Mondelz International's financial per- formance from 2012 to 2016 is presented in Exhibit 1. The performance of the company's stock perfor- mance between July 2012 and July 2017 is presented in Exhibit 2. Company History Mondelz International's marquee brands all had rich histories that began with the efforts of entrepre- neurs who were inspired to launch new businesses EXHIBIT 1 Financial Summary for Mondelz International, Inc., 2012-2016 (in millions, except per share amounts) 2016 2015 2014 2013 2012 $25,923 1,659 $29,636 7.291 $34.244 2,201 $35.299 2,332 $ 35,015 1.606 1.07 1.05 4.49 4.44 1.29 1.28 1.30 1.29 0.90 0.88 Continuing Operations Net revenues Earnings from continuing operations, net of taxes Net eamings attributable to Mondelz International: Per share, basic Per share, diluted Cash Flow and Financial Position Net cash provided by operating activities Capital expenditures Property, plant and equipment, net Total assets Long-term debt Total Total Mondelz International shareholders' equity Shares outstanding at year end Per Share and Other Data Book value per shares outstanding Dividends declared per share Common stock closing price at year end Number of employees 2.838 1.224 8,229 $61.538 13,217 25,161 1,528 3.728 1,514 8,362 $62,843 14,557 28.012 1,580 3,562 1,642 9,827 $66.771 13,821 27,750 1,664 6.410 1,622 10,247 $ 72,464 14,431 32,373 1,705 3.923 1,610 10.010 $75.421 15,519 32,276 1,778 $ 16.47 0.72 44.33 90,000 $ 17.73 0.64 44.84 99,000 $ 16.68 0.58 36.33 104,000 $18.99 0.54 35.30 107,000 $ 18.15 1.00 25.45 110,000 5041rce: Moritelz Interliticial, Inc., 2016 10-K. Case 9 Mondelz International's Diversification Strategy in 2017 337 EXHIBIT 2 Performance of Mondelz International, Inc., Common Shares, July 2012-July 2017 (a) Trend in Mondelz International's Common Stock Price 50 45 st 40 Stock Price ($) 35 30 will 25 - 1 12 13 14 1 16 17 15 Year (b) Performance of Mondelz International's Stock Price versus the S&P 500 Index +80% +70% Mondelez Stock Price mama +60% II +50% +40% +30% S&P 500 +20% +10% & +0% -10% 12 13 14 16 17 15 Year that could provide consumers with value and support the newly created Kraft Foods Group for every three for their families. But Mondelz International, as a shares of Kraft Foods Inc. owned by the shareholder. corporate entity, resulted from the 2012 spin-off of At the conclusion of the spin-off, Kraft Foods Inc. Kraft Foods's North American grocery business to changed its name to Mondelz International, Inc. shareholders. Under the terms of the proposal, each and its ticker symbol became MDLZ. The KFT ticker Kraft Foods Inc. shareholder received one share of symbol was retired after the transaction. Shares of Case 9 Mondelz International's Diversification Strategy in 2017 339 The Keurig transaction was completed in March 2016 and reduced Mondelz's ownership position in JDE to 26.5 percent in return for a 24.2 percent own- ership stake in Keurig. The company also made small acquisitions and divestitures in 2015 and 2016 that included the acquisition of U.S. snack foods company Enjoy Life Foods for $81 million and the divestiture of its 50 percent interest in a Japanese coffee joint venture for $225 million and the sale of local Finnish biscuit brands for $16 million. Also in 2016, Mondelz Inter- national attempted to acquire Hershey to create the world's largest candy company. The nonprofit trust that controlled Hershey was ultimately able to block the buyout attempt. cookies, chocolate, candy, gum, and beverages. The company's acquisitions were directed at expanding its brand portfolio into rapidly growing snack catego- ries. The company's 2015 acquisition of Enjoy Life Foods added allergen-free and gluten-free chips and nut-free chocolate and seed and fruit products to its lineup of snacks. The company's strategy sought to expand mar- gins through programs to boost cost-efficiency in its manufacturing and supply chain activities. However, the company was committed to providing additional resources needed to expand marketing and sales capabilities in key markets, especially in emerging markets. The company announced its Sustainability 2020 goals in in 2015 for reducing carbon emissions, reducing deforestation within its agricultural sup- ply chain, focusing on water reduction efforts, and reducing packaging and manufacturing waste. The promotion of moderation in snacking was also an important element of the company's social responsi- bility and sustainability strategy. The company was organized into four reportable segments based on geographic markets: North Amer- ica; Latin America; Europe; and Asia, Middle East, and Africa (AMEA). Within each geographic report- ing division were five product categories-biscuits (including cookies, crackers, and salted snacks), chocolate, gum and candy, beverages, and cheese and grocery. Exhibit 3 presents a financial summary for its geographic segments for 2014 through 2016. The revenue contributions of each product category in each geographic region are presented in Exhibit 4. Mondelez Internationals Corporate Strategy and Business Segment Performance in 2017 Mondelz International's strategy was directed at exploiting its powerful brands of snack foods across the 165 country markets where its products were sold. Brands such as Oreo, Milka, Cadbury, Nabisco, Honey Maid, Trident, and Tang were popular in almost all markets where the company competed and provided for a range of products that cut across most all consumer snacking desires. For example, the company's product line included biscuits or EXHIBIT 3 Financial Summary for Mondelz International's Geographic Segments, 2014-2016 (in millions) Net revenues 2016 2015 2014 Latin America AMEA Europe North America Net revenues $ 3,392 5,816 9,755 6.960 $25,923 $ 4,988 6,002 11,672 6,974 $29,636 $ 5,153 6,367 15,788 6,936 $34,244 (Continued) 340 Part 2 Cases in Crafting and Executing Strategy 2016 2015 2014 $ $ (Continued) Earnings from continuing operations before income taxes Operating income: Latin America AMEA Europe North America Unrealized gains/losses) on hedging activities General corporate expenses Amortization of intangibles Gains on coffee business transactions and divestitures Loss on deconsolidation of Venezuela Acquisition-related costs Operating income Interest and other expense, net Earnings from continuing operations before income taxes 271 506 1,267 1,078 (94) (291) (176) 9 $ 485 389 1,350 1,105 96 (383) (181) 6,822 (778) (8) 8,897 (1,013) $ 7,884 475 530 1,952 922 (112) (317) 100 (206) (1) 2,569 (1,1151 S 1.454 (2) 3,242 (688) $ 2,554 Total assets 2016 2015 2014 Latin America AMEA Europe North America Equity method investments Unallocated assets $ 5,156 10.031 19.934 20,694 5,585 138 $61,538 $ 4,673 10,460 21,026 21,175 5,387 122 $62,843 6,470 10,549 27.240 21,287 662 563 $66,771 Total assets Depreciation expense 2016 2015 2014 $ 92 S $ Latin America AMEA Europe North America Total depreciation expense 161 253 141 94 155 299 165 713 118 154 407 174 853 $ 647 $ $ Capital expenditures 2016 2015 2014 Latin America AMEA Europe North America Total capital expenditures S 321 349 294 260 $ 1,224 $ 354 381 517 262 $ 1,514 $ 460 451 553 178 $ 1,642 SLIfce: Mendelzz International, Inc., 20 16 10-6. All of the five business segments competed in product markets that were characterized by strong competitive rivalry that required strong distribution and marketing skills to attract consumer demand and ensure product availability in supermarkets, discount clubs, mass merchandisers, convenience stores, drug Case 9 Mondelz International's Diversification Strategy in 2017 341 EXHIBIT 4 Mondelz International's Net Revenues by Product Category and Geographic Region, 2014-2016 (in millions) North America Total Biscuits Chocolate Gum & Candy For the Year Ended December 31, 2016 Latin America AMEA Europe $ 734 $1,588 $ 2,703 743 1,901 4,840 938 953 916 657 611 177 320 763 1,119 $5,816 $ 9,755 $5,565 255 1,140 $10,590 7,739 3.947 1,445 2,202 $25.923 Beverages Cheese & Grocery Total net revenues $3,392 $6,960 Total North America $5,569 256 1,149 Biscuits Chocolate Gum & Candy Beverages Cheese & Grocery Total net revenues $11,393 8,074 4,258 3,260 2,651 $29.636 $6,974 For the Year Ended December 31, 2015 Latin America AMEA Europe $1,605 $1,539 $ 2,680 840 1,928 5,050 1,091 1,003 1,015 767 730 1,763 685 802 1,164 $4,988 $6,002 $11,672 For the Year Ended December 31, 2014 Latin America AMEA Europe $1,322 $1,442 $ 3,259 1,054 2,073 5,997 1,176 1,098 1,232 940 836 3,902 661 918 1,398 $5,153 $6,367 $15,788 Total North America $5,486 296 1,154 Biscuits Chocolate Gum & Candy Beverages Cheese & Grocery Total net revenues $11.509 9,420 4,660 5,678 2,977 $34,244 $6,936 Source Maidelz Intrational, Iric 2016 10 K stores, and retail food locations serviced by its food distribution operations. Brand building, consumer health and wellness, and advertising and promotions were all critical to success in the industry. In fact, Mondelez's ability to compete against lower-priced branded and store-brand products was a function of its ability to successfully differentiate its products from lower-priced alternatives. Also, differentiation was essential to retaining shelf space as the retail grocery industry consolidated and provided retailers with greater leverage in negotiations with food manu- facturers. The company's successful differentiation of its products had also allowed it to achieve organic revenue growth of 1.3 percent in 2016 and 1.4 percent in 2015 through net price increases. The company's processed foods divisions had experienced cost increases as inflationary forces had led to higher prices for commodities used in the manufacture of its products such as coffee, cocoa, oils, nuts, and sugar. However, Mondelez utilized commodity hedging to protect against spikes in ingredient costs. In addition, price increases made ossible by its strong product differentiation had more than offset the increased cost of commodity inputs in 2015. Also, the production of Mondelez International's products was regulated by the U.S. Case 9 Mondelz International's Diversification Strategy in 2017 343 EXHIBIT 5 Mondelz International, Inc. Consolidated Statements of Earnings, 2014-2016 (in millions, except per share amounts) 2016 2015 2014 Net revenues Cost of sales Gross profit $25,923 15,795 10,128 6,540 852 (9) $34.244 21,647 12.597 8,457 692 Selling, general and administrative expenses Asset impairment and exit costs Gains on divestitures Loss on deconsolidation of Venezuela Amortization of intangibles Operating income Interest and other expense, net Earnings before income taxes Provision for income taxes Gain on equity method investment exchange Equity method investment net earnings Net earnings Noncontrolling interest earnings Net earnings attributable to Mondelz International Per share data: Basic earnings per share attributable to Mondelz International Diluted earnings per share attributable to Mondelez International $29.636 18,124 11,512 7,577 901 (6.822) 778 181 8,897 1,013 7,884 593 206 3,242 688 2,554 353 176 2,569 1,115 1,454 (129) 43 301 1,669 (10) $ 1.659 7,291 (24) $ 7,267 2,201 117 $ 2.184 $1.07 $1.05 $4.49 $4.44 $1.29 $1.28 SolarCE: Mandelz International, Inc., 2016 10-K.. equity interest in the coffee business had resulted in the first quarter of 2017. "We had a solid start to the some changes to its balance sheets. The company's year despite challenging market conditions. We deliv- balance sheets for 2015 and 2016 are presented in ered both top-line organic growth and strong margin Exhibit 6. expansion in the quarter, while also making critical The company's results for the first quarter of 2017 investments for our future. We remain confident in showed signs of stabilization with revenues for the and committed to our balanced strategy for both top- first three months of the year declining by 0.6 per and bottom-line growth, continuing to focus on what cent and its operating profit for the first quarter of we can control to deliver long-term value creation for 2017 improving from $722 million to $840 million. our shareholders." Net earnings for the quarter ending March 31, 2017, Although Mondelz International's senior man- of $633 million were 13.6 percent higher than net agement believed the company's strategy was on earnings of $554 in the same quarter the year prior. track to deliver long-term value to shareholders, Mondelz 's improvements in operating income and investors such as William Ackman were less con- net income were primarily the result of lower restruc vinced. In fact, some degree of its relatively strong turing costs and the benefit of a settlement of a Cad stock performance since 2016 was a result take- bury tax dispute. over rumors involving the company. In August 2016, Mondelez International Chairwoman and CEO Irene Mondelez shares rose when news that its attempt to Rosenfeld was bullish on the company's results for acquire Hershey had failed, with investors seeing the