Good evening, and welcome to Mondelēz International's 2016 Fourth Quarter and Full Year Earnings Conference Call. Today's call is scheduled to last about one hour, including remarks by Mondelēz management and the question-and-answer session. I'd now like to turn the call over to Mr. Shep Dunlap, Vice President, Investor Relations for Mondelēz. Please go ahead. Shep Dunlap - Mondelēz International, Inc.: Thank you, and good afternoon, and thanks for joining us. With me today are Irene Rosenfeld, our Chairman and CEO; and Brian Gladden, our CFO. Shortly after market closed today, we sent out our earnings release and presentation slides, which are available on our website, mondelezinternational.com/investors. During this call, we'll make forward-looking statements about the company's performance. These statements are based on how we see things today. Actual results may differ materially due to risks and uncertainties. Please refer to the cautionary statements and risk factors contained in our 10-K and 10-Q filings for more details on our forward-looking statements. Some of today's prepared remarks include non-GAAP financial measures. Today, we will be referencing our non-GAAP financial measures, unless otherwise noted. You can find the GAAP to non-GAAP reconciliations within our earnings release and at the back of the slide presentation. Before we get started, I have one comment regarding the timing of our calls. Based on investor feedback from recent surveys, we plan to hold our earnings calls after market close going forward. We heard from many investors who would prefer not to have the call during market trading. This new timing allows additional time to digest results and provide commentary prior to the next day's market open. And, with that, I'll now turn the call over to Irene. Irene B. Rosenfeld - Mondelēz International, Inc.: Thanks, Shep, and good afternoon. As you read news from around the…

Thank you. Ladies and gentlemen, that concludes today's presentation. The floor is now open for your questions. Our first question comes from the line of Ken Goldman with JPMorgan.

Good evening, everybody, and thank you. Two for me, if I can. First, as you talked about your organic sales growth, a little bit lighter than usual, you discussed some of the headwinds. I guess, Irene, if you were maybe to size some of those headwinds, whether it's India, which you already did size, as I appreciate that, for us, competition in the U.S., global economic issues, which would you say were the most challenging in this period? And were there anything that came in, on the flip side, maybe better that you expected on that top line? Irene B. Rosenfeld - Mondelēz International, Inc.: Yeah, Ken, I think we pretty much sized the main impacts without a doubt for us, given our strong presence in India and particularly our strong presence in rural India. Demonetization was a particularly significant impact. And as Brian mentioned, we expect it'll continue probably into at least through the first quarter, if not into a little bit of the second quarter. The other one really that was different than perhaps – a little tougher than we had expected was the strong promotion spending that we saw in both the UK and the U.S. There's a lot of trade spending dollars. It didn't do very much to drive the category and, in fact, all it did was sort of margin down the business. And again, we chose to participate in that to defend our shares, but that's not the right way to build the business for the long term. And I think as our customers experience the reality of that spending, we're going to be able to get back to a more disciplined focus on innovation and brand marketing and price pack architecture. So I would say those probably were the two biggest. Without a…

That's very helpful and thank you for all that. One quick follow-up for me: Some of your peers have quantified the benefit of the accounting change to stock-based comp on their earnings guidance this year. Just curious, to any degree, are you expecting this to help your earnings this year? Or is it too small to really think about? Brian T. Gladden - Mondelēz International, Inc.: I would say, Ken, it's in our outlook that we've provided. It's relatively small and, as you know, it's kind of hard to predict, but it's in there.

All right. Thanks, Brian.

Our next question comes from Bryan Spillane with Bank of America.

Hey. Good afternoon, everyone. Irene B. Rosenfeld - Mondelēz International, Inc.: Hi, Bryan. Brian T. Gladden - Mondelēz International, Inc.: Hi, Bryan.

Just one question related to the margin outlook for 2017. Brian, can you talk a little bit about sort of where your outlook is for commodity cost inflation? And also, I guess, with revenues still sort of below average, just what kind of drag you're seeing from, like, volume deleverage? Just trying to get a sense for – even though you're sort of guiding to the mid 16% for margins, it just seems like there are still some headwinds there that you're fighting to get there, and I'm trying to get a sense for what those are. Brian T. Gladden - Mondelēz International, Inc.: Yeah, Bryan, I would say commodities is a bit mixed. I mean, everybody have seen cocoa prices come down. And clearly, we will ultimately benefit from that. Obviously, we have a hedge program that cushions that and takes some of the volatility out. So we don't necessarily get it right away, and it'll play its way through. But there are other things that are up in that portfolio of commodities that we buy. So I would say it's a mixed bag and it's not necessarily as big a driver as it's been over the last few years from a commodity standpoint. That said, there's still markets where we have to price, and that's one of the key elements that's going to drive our performance as we move into 2017. So I think that's the fundamental view on commodities. I think when you look at overall margins, we are assuming a similar environment as to what we see now, and we've sort of, as you would expect – I mean, it's been a weaker volume year than we would have hoped, and we've delivered very strong productivity with all the work that we've done despite that. So we've built a plan to deliver on our 2017 commitments, assuming that we have a similar environment from a top line standpoint, and not much help from volume. It will be continued focus on the programs that are taking overheads and shared services, and we have to do a better job on trade optimization. Price pack architecture will be part of that that drives through our margins. And then we told you last summer that we're moving some dollars from CapEx, which were initially focused on capacity and driving growth. We've moved that into more restructuring, so that gives us more confidence and a bigger portfolio of programs that help us drive the margins in an environment like this. So I think we're adapting to plan and adjusting to an environment that has lower growth.

And, I guess, is that part of the visibility beyond 17% and 18% margins, once you get a little bit of volume back into the model, that ought to drive some leverage that isn't there today. Brian T. Gladden - Mondelēz International, Inc.: Absolutely right. I mean, it changes the whole equation. If we were to get volume leverage on this thing, given what we've done with margins, it's a pretty powerful engine.

Okay. Thank you. Brian T. Gladden - Mondelēz International, Inc.: Thanks, Bryan.

Our next question comes from Chris Growe with Stifel Capital. Christopher Growe - Stifel, Nicolaus & Co., Inc.: Hi. Good afternoon. Brian T. Gladden - Mondelēz International, Inc.: Hey, Chris. Irene B. Rosenfeld - Mondelēz International, Inc.: Chris. Christopher Growe - Stifel, Nicolaus & Co., Inc.: Maybe just to follow on Bryan's question there, just to be clear, do you expect then – I heard you talk about some pricing in some markets that's going to be sporadic, it sounds like. And how would that balance against volume growth? Do you expect volume growth for the year in 2017? Brian T. Gladden - Mondelēz International, Inc.: I think it feels a lot like what we saw this year, Chris. The pricing we need to do – I mean, there are some selected markets where it's rather extreme where we've seen devaluations in Egypt and Nigeria that has forced us to act very quickly with some significant pricing. But the rest of it – a lot of it will come from things like price pack architecture and revenue management. It won't be like we saw in 2015, which was broad-based across many markets. So that's just part of the equation that we've got to drive this year and I think we're in reasonable shape in terms of executing those things heading into the year. Christopher Growe - Stifel, Nicolaus & Co., Inc.: Okay. And then just a question for you on the gross margin. As we consider the supply chain savings coming through as well as some continued overhead cost control, can you give an idea of – I thought the savings would accrue more so to the gross margin in 2017. Is that true? And the gross margin was a little weaker than I thought in the fourth quarter, perhaps…

Our next question comes from Andrew Lazar with Barclays.

Good evening, everybody. Brian T. Gladden - Mondelēz International, Inc.: Hey, Andrew.

I guess, two questions, one just to finish up this gross margin conversation. I guess, the target I think that was thrown out maybe at CAGNY about a year ago was in 2018 I think gross margins of 42% to 43%. I guess, at this stage, it sounds like at least in this current volume environment, maybe it's slightly below that, maybe the SG&A piece around overheads and whatnot just picks up a little more steam as you lean in a little more heavily on that. Is that generally what you're sort of trying to get at? Or should we not abandon the 42% to 43% just yet? Brian T. Gladden - Mondelēz International, Inc.: Yeah. Look, I think we'll talk a little bit about it at CAGNY this year. But it's clearly a different volume environment than we would've thought about, as we laid that out. So we'll give you a little bit of a sense for how we're thinking about that. I think you can have confidence that we have multiple paths to get there and we're chasing initiatives that are going to drive gross margin and overheads and the SG&A line.

Okay. And then, Irene, I guess, a question that's relevant for Mondelēz, but maybe a bit broader also and it's kind of relevant for the group as a whole. I'm trying to get a sense of, at what point, I guess, do sort of multi-year margin targets that not just Mondelēz have put out, but others, maybe become a bit counterproductive. Maybe if those margins ultimately come on a sales base that maybe is much lower than planned. I guess, at some point, how do you balance the, hey, should we push out a margin target in order to make sure we kind of stabilize our sales base the way we need to. I'm just trying to get a sense in a broader sense of how you think about that. Irene B. Rosenfeld - Mondelēz International, Inc.: I do think our balance between top and bottom is one of the things that distinguishes us. I think we are uniquely well-positioned because of the nature of our portfolio, strong brands, a strong geographic footprint, strong routes to market with a good infrastructure, all of that is why we continue to make investment even in this challenging environment. So, without a doubt, we have pulled back a little bit. We've been pretty clear with our investors as to where those pullbacks have been, but we're one of the few companies that is delivering significant earnings growth while at the same time continuing to make those investments. And I think that is something that will continue to differentiate us, Andrew.

See you in Florida. Irene B. Rosenfeld - Mondelēz International, Inc.: See you. Brian T. Gladden - Mondelēz International, Inc.: See you.

Our next question comes from David Driscoll with Citi.

Great. Thank you and good evening. Brian T. Gladden - Mondelēz International, Inc.: Hey, David.

I wanted to ask about your thoughts here on this border-adjusted tax proposal. What do you assess that on your operations? And then kind of related to this, how much margin improvement is in your forecast from your Mexican/Salinas operations for the 2018 margin goals? Brian T. Gladden - Mondelēz International, Inc.: Yeah. David, I mean, we obviously spend a lot of time talking about this. It's hard not to see it play out. But it's very difficult and I think in this discussion a little early to speculate on what it would mean to us in terms of the impact of a border adjustment tax. As you know – I mean, we are a very global company. We've structured it successfully in a way that allows us to run it efficiently and serve our customers, consumers around the world, while delivering strong returns. And this has enabled us to create a competitive and, I would say, advantaged global tax structure and low cash taxes as part of what we do in delivering our results. So, to directly really respond to the specific question, I would just say that we do import from Mexico and other parts of the world into the U.S. Our imports represent a minority of our U.S. revenues and profits. And as I said, we're not going to do anything to adjust our operations or plans until we really know what the policies are going to be, and they're much more concrete. So, I mean, we're very involved, we're watching developments. We've got a voice in this process of providing feedback. And to the extent that we face higher costs for imported products, we'd obviously need to look for ways to cover these costs, adapt our supply chain model. And we do that over time. So, in terms of how much incremental benefit associated with Mexico or Salinas, we are, I would say, fairly well utilized in that facility at this point. And we don't have right now at this point additional plans to move any additional production to Mexico. So I would say it's contributing. You've seen the results in North America in terms of our margin expansion. Obviously, that's part of it. And we have – it's important to note, we've made significant investments in our U.S. assets as well and we continue to make investments here. We've invested over the last few years over almost $0.5 billion in our existing U.S. manufacturing footprint in U.S. plants. So it's a mixed bag. And that has, David, contributed to the margin expansion as well. We've seen great margin expansion from the U.S. plants as well.

So bottom line, would you say it's fair, though, that both Brexit and border-adjusted taxes kind of throw out some big questions about how it'll impact the company. But just right as of yet with no actual definition as to exactly what's going in, you can't really assess it right now, so you stick with your 2018 margin targets. Is that where we are? Brian T. Gladden - Mondelēz International, Inc.: Yeah, look, I think it's a very global business with – for all the positive things that come from that, I mean, we've got exposures to some of these questions. We're watching the developments. We'll manage our way through it. And we will adjust as appropriate as we move forward. And we'll keep you posted as we learn more.

Thank you very much. Brian T. Gladden - Mondelēz International, Inc.: Thanks, David.

Our next question comes from Jason English with Goldman Sachs. Jason English - Goldman Sachs & Co.: Hi. Good evening, folks. Brian T. Gladden - Mondelēz International, Inc.: Hey, Jason. Jason English - Goldman Sachs & Co.: Thank you for letting me ask a question. Just a couple housekeeping items for me. I apologize if I missed it. Undoubtedly, I did miss it. But can you give us your expectation for all-in revenue growth in fiscal 2017? Brian T. Gladden - Mondelēz International, Inc.: Well, we gave you organic net revenue of at least 1%, is what we said, Jason. Jason English - Goldman Sachs & Co.: No, no, I heard that. But there's FX and there's some other moving pieces. Brian T. Gladden - Mondelēz International, Inc.: Yeah. Jason English - Goldman Sachs & Co.: What were your guidance – in terms of net sales, what your guidance is predicated on? Brian T. Gladden - Mondelēz International, Inc.: Yeah. The other thing we provided in the release would have been 1% headwind from currency on the top line. Jason English - Goldman Sachs & Co.: Okay, thank you. Sorry for the nuance question. Brian T. Gladden - Mondelēz International, Inc.: Yep. Jason English - Goldman Sachs & Co.: And the other housekeeping item, the VAT tax benefit, I think you mentioned that in your prepared remarks in terms of LatAm contribution to margins. How big was that? Brian T. Gladden - Mondelēz International, Inc.: We disclosed it in the third quarter. I think it was disclosed as about $35 million. We had an additional smaller amount in the fourth quarter. So I would say it's – we've had this over the last couple years from time to time. And it contributed in the LatAm business, I would say, about 80 basis points on the full year in terms of their profit. 80 basis points in terms of the – versus prior year. Jason English - Goldman Sachs & Co.: Got it. Okay, thank you. As promised, I was going to keep it short with the housekeeping. I'll pass it on. Brian T. Gladden - Mondelēz International, Inc.: Yep.

Our next question comes from Alexia Howard with Bernstein. Alexia Jane Howard - Sanford C. Bernstein & Co. LLC: Good evening, everyone. Irene B. Rosenfeld - Mondelēz International, Inc.: Hey, Alexia. Brian T. Gladden - Mondelēz International, Inc.: Hey, Alexia. Alexia Jane Howard - Sanford C. Bernstein & Co. LLC: Hi. Just two quick ones. Firstly, you alluded to promotional spending intensifying in the U.S. during this last quarter. I wasn't quite sure whether the idea was that it wasn't very effective and everybody's given up on it at this point, or whether it's likely to continue. That was the first question. And then the second one, I guess, linked, ad spend and consumer advertising spending, how much was that up year-on-year in the fourth quarter? What was the margin headwinds and how much more have you got to go in 2017 versus 2016? Thank you very much. Irene B. Rosenfeld - Mondelēz International, Inc.: So I would say it wasn't particularly effective, but that doesn't mean everybody will stop. So I can't forecast that. What I will tell you is we certainly are going to be a little bit more disciplined as we think about how we want to spend our money. Again, we did not see the kind of returns that we had hoped for and, in fact, it basically took our spending away from some of the other longer-term equity-building activities. So you're going to see us continue to migrate our spending. But I would say our customers, at the end of the day, if it doesn't grow the – if the spending that goes into it does not grow the category, I think our customers over time will look at other tactics as well. In terms of A&C in the fourth quarter... Brian T. Gladden -…

Our next question comes from Rob Moskow with Credit Suisse. Robert Moskow - Credit Suisse Securities (USA) LLC: Hi. Thank you. I wanted to dive a little bit more into biscuits in the U.S. because this commentary came up in third quarter that competition had intensified and it sounded like Mondelēz intended to do something about it. And with the Nabisco brand, you're obviously a big category leader. So what steps did you take to respond? And why do you think it didn't pan out the way you hoped for in fourth quarter? Irene B. Rosenfeld - Mondelēz International, Inc.: Yeah, Rob, I would say we have made terrific progress in our U.S. biscuit business in terms of margin expansion over the last couple of years. If you look at North America, it's up 540 basis points, and that's almost largely the U.S. And that's been our primary focus. And at the same time, over these last couple of years, we've been able to continue to grow our share. This last year, the net of it is that we had a lot of moving parts going on in terms of our transformation activities, and I would say with hindsight, some of the optimization that we did, for example, in our DSD selling organization had more of an impact on the execution than I would have liked. And so we did see some impact in the short term. And as I mentioned in an answer to some of the earlier questions, we have seen a very challenging retailer environment, which has really caused a lot of promotional spending, which hasn't necessarily helped the overall category. Looking ahead, we have some very strong programs in place in 2017 and, frankly, a lot of those began as we exited the year. We're going…

Ladies and gentlemen, we have reached our allotted time for questions. Our final question will come from the line of Steven Strycula with UBS.

Hey, guys. Two quick questions for me. The first would be for Irene. Just on the non-Power Brands part of the portfolio, that's down 1.9% in the quarter. Can you kind of speak to whether the market share losses are more pronounced in this portion of the portfolio relative to Power Brands? And are we seeing just an under-investment in those pocket of brands right now because of where emerging markets stand today? Just any kind of forward-looking strategy about how we think about, that would be helpful. Irene B. Rosenfeld - Mondelēz International, Inc.: Yes. Simple answer, Steven, is yes, Power Brands actually performed better in terms of overall market share. In fact, we actually grew share in Power Brands. So, some of the decline is coming from the non-Power Brands, but I would tell you that global Power Brands did exceptionally well. Our regional Power Brands was a bit of a mixed bag this past year because many of them are prominent in the emerging markets. So you think about a brand like Lacta chocolate in Brazil, for example, that given the macroeconomic conditions did not have a particularly strong year. So we did see some of these regional brands perform a little bit less well. But our focus going forward is to continue to distort our spending behind these Power Brands. They have the best margins. They've got the best growth trajectory. And that will allow us to continue to offset some of the declines in the other brands.

Okay, great. And then a follow-up for Brian. Brian, did you comment on what the SKU rationalization drag is going to be for 2017? And then lastly, should we think of equity income from JVs as up slightly from last year? Thanks. Brian T. Gladden - Mondelēz International, Inc.: Yeah. In terms of equity income, I would assume we're planning on relatively close to what they did this year, maybe a little bit better, not significant improvement. They're facing into green coffee inflation, especially in Robusta. So it's a bit of a challenge that they're working through. And, Steven, what was your first?

The SKU rationalization drag for 2017. Brian T. Gladden - Mondelēz International, Inc.: Oh, SKU rationalization, yeah. All I said and what we'll continue to say, it's smaller than we would have had in 2016 and we're not going to specifically break it out.

Okay, thanks. Brian T. Gladden - Mondelēz International, Inc.: Great.

Ladies and gentlemen, thank you for joining Mondelēz International's fourth quarter and year-end earnings conference call. You may now disconnect your lines, and have a wonderful afternoon.