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Running head: FINAL PROJECT - MILESTONE ONE 1

Final Project - Milestone One

MBA 640

July 16, 2017


FINAL PROJECT - MILESTONE ONE 2

Organizational and Financial Priorities

Thirteen Thirteen
weeks ended weeks ended

% Increase /
($ in millions except earnings per share) Sept 26, 2015 Sept 27, 2014 (Decrease)

Net sales $ 1,037.0 $ 1,195.6 (13 )%

Operating income:

GAAP $ 144.2 $ 228.8 (37 )%

Non-GAAP 197.0 $ 248.0 (21 )%

Net income:

GAAP $ 94.6 $ 141.1 (33 )%

Non-GAAP $ 131.3 $ 153.8 (15 )%

Diluted income per share:

GAAP $ 0.61 $ 0.86 (29 )%

Non-GAAP $ 0.85 $ 0.94 (10 )%


(Business Wire, 2015)

Unaudited Consolidated Statements of Operations


(Dollars in thousands, except per share data)

Thirteen weeks ended


December 26, December 27,
2015 2014
Net sales $ 1,258,421 $ 1,386,358
Cost of sales 898,424 922,236
Gross profit 359,997 464,122
FINAL PROJECT - MILESTONE ONE 3

Selling and operating expenses 137,573 176,522


General and administrative expenses 60,930 71,673
Restructuring expenses 681 —
Operating income 160,813 215,927

Other (expense) income, net (223) 181


Gain on financial instruments, net 1,395 3,345
Loss on foreign currency, net (809) (9,071)
Interest expense (2,244) (1,087)
Income before income taxes 158,932 209,295

Income tax expense (54,435) (74,616)


Net income $ 104,497 $ 134,679

Net income attributable to noncontrolling interests — 100

Net income attributable to Keurig $ 104,497 $ 134,579

Net income attributable to Keurig per common share:


Basic $ 0.70 $ 0.83
Diluted $ 0.69 $ 0.82

Cash dividends declared per common share $ 0.325 $ 0.2875

Weighted-average common shares outstanding:


Basic 150,236,842 162,181,332
Diluted 150,959,148 164,075,038
(KEURIG GREEN MOUNTAIN, 2015)
Comparative Advantage

Keurig Green Mountain’s advantage over its competition is due to the history of building

a strong resilient supply chain from the farm up. The company purchases coffee and provides

livelihoods for the suppliers helping to deliver hundreds of thousands of quality coffee to the

consumer (Keurig Green Mountain, 2017). Keurig leads the market through innovation and

partnerships. The advantage in the business industry is combined with expertise in a retail

beverage company with the high-tech appliance company (Keurig Green Mountain, 2014).

Expansion into Tokyo, Japan will differentiate from the coffee industries and build

Keurig’s core abilities. The expansion in the global market will afford the Japanese access of out

in-store and online shopping that will also grow business in a new country.