- Q1 net sales increased 3.9% and Organic Net Sales(1)
increased 2.5%
- Q1 gross profit increased 18.5%
- Q1 operating income increased 41.3%, net income increased
49.0%, and diluted EPS increased 48.4%
- Adjusted EBITDA(1) increased 11.6% and Adjusted EPS(1)
increased 24.1%
The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the
“Company”) today reported financial results for the first quarter
of 2021 that reflected solid net sales growth, favorable product
mix, and lower general corporate expenses versus the year-ago
period, with strong performance across all business segments.
“Our first quarter was better than expected, with our team
delivering strong results on top of exceptional growth last year,”
said Kraft Heinz CEO Miguel Patricio. “Looking forward, we will
continue to focus on leveraging our tremendous scale by investing
to improve our capabilities and overall agility. As we do, we
believe we will come out of this period much stronger,
operationally and financially, than we entered.”
Net Sales
In millions
Net Sales
Organic Net Sales(1)
Growth
March 27,
2021
March 28,
2020
% Chg vs PY
YoY Growth
Rate
Price
Volume/Mix
For the Three Months Ended
United States
$
4,608
$
4,495
2.5%
2.5%
1.0 pp
1.5 pp
International
1,394
1,301
7.2%
2.7%
2.2 pp
0.5 pp
Canada
392
361
8.8%
2.5%
4.9 pp
(2.4) pp
Kraft Heinz
$
6,394
$
6,157
3.9%
2.5%
1.5 pp
1.0 pp
Net Income/(Loss) and Diluted
EPS
In millions, except per share
data
For the Three Months
Ended
March 27,
2021
March 28,
2020
% Chg vs PY
Gross profit
$
2,201
$
1,858
18.5%
Operating income/(loss)
1,089
770
41.3%
Net income/(loss)
568
381
49.0%
Net income/(loss) attributable to common
shareholders
563
378
48.9%
Diluted EPS
$
0.46
$
0.31
48.4%
Adjusted EPS(1)
0.72
0.58
24.1%
Adjusted EBITDA(1)
$
1,580
$
1,415
11.6%
Q1 2021 Financial Summary
- Net sales increased 3.9 percent versus the year-ago
period to $6.4 billion, including a favorable 1.4 percentage point
impact from currency, and increased 7.3 percent versus the
comparable 2019 period, including a favorable 0.5 percentage point
impact from currency. Organic Net Sales increased 2.5
percent versus the prior year period and increased 8.7 percent
versus the comparable 2019 period with positive contributions from
all reporting segments, and despite a negative impact from exiting
the McCafé licensing agreement. Pricing was up 1.5 percentage
points versus the prior year period reflecting a combination of
reduced retail promotions and revenue management gains that were
partially offset by unfavorable trade expense timing versus the
year-ago period. Volume/mix was up 1.0 percentage points versus the
year-ago period, driven by favorable changes in retail inventory
levels, particularly in developed markets where retail consumption
remained strong, as well as continued growth in emerging markets.
This growth was partially offset by ongoing foodservice declines,
the negative impact from exiting the McCafé licensing agreement,
and lower retail takeaway versus the prior year period that
benefited from strong, COVID-19-related consumer demand.
- Net income/(loss) of $568 million increased 49.0 percent
versus the year-ago period driven by strong gross profit growth,
which included favorable changes in unrealized losses/(gains) on
commodity hedges, and a lower effective tax rate that more than
offset unfavorable changes in interest expense due to one-time
extinguishment costs, as well as unfavorable other expense/(income)
as compared to the prior year period. Net income/(loss) increased
40.6 percent versus the comparable 2019 period. Adjusted
EBITDA of $1.6 billion increased 11.6 percent versus the
year-ago period and 10.4 percent versus the comparable 2019 period.
Excluding a favorable 1.2 percentage point impact from currency,
year-over-year Adjusted EBITDA growth was driven by favorable
pricing and product mix, as well as lower general corporate
expenses versus the prior year period that more than offset supply
chain inflation and increased spending behind strategic
investments.
- Diluted EPS increased to $0.46, up 48.4 percent versus
the prior year, driven by the net income/(loss) factors discussed
above. Adjusted EPS increased to $0.72, up 24.1 percent
versus the prior year, driven by Adjusted EBITDA growth, a lower
effective tax rate, and lower depreciation and amortization costs
that more than offset unfavorable changes in non-cash other
expense/(income) and higher non-cash equity award compensation
relative to the year-ago period.
- Net cash provided by operating activities increased to
$810 million, up 281.8 percent versus the year-ago period. This
reflected favorable changes in trade receivables, largely due to
the timing of receipts, Adjusted EBITDA growth, and favorable
changes in cash related to commodity margin requirements and
inventories versus the prior year period. These impacts were
partially offset by higher cash outflows for variable compensation
versus the year-ago period. Free Cash Flow(1) for the first
quarter of 2021 increased to $583 million, up 619.4 percent versus
the comparable prior year period as net cash provided by operating
activities was partially offset by higher capital expenditures
versus the prior year period.
Outlook
The Company continues to expect it will deliver 2021 financial
performance ahead of its strategic plan.
For the second quarter of 2021, and based on performance to
date, the Company currently expects a mid-single-digit percentage
increase in both Organic Net Sales(2) and Constant Currency
Adjusted EBITDA(2) versus the comparable 2019 period. The Company
views comparison to the 2019 period to be more meaningful than the
comparable 2020 period given the exceptional, COVID-19-related
consumer demand changes experienced in the 2020 period. This
outlook is, therefore, equivalent to a low-single-digit percentage
decline in Organic Net Sales(2) and a mid-single-digit percentage
decline in Constant Currency Adjusted EBITDA(2) versus the
comparable 2020 period.
End Notes
(1)
Organic Net Sales, Adjusted
EBITDA, Adjusted EPS, Constant Currency Adjusted EBITDA, and Free
Cash Flow are non-GAAP financial measures. Please see discussion of
non-GAAP financial measures and the reconciliations at the end of
this press release for more information.
(2)
Second quarter 2021 guidance for
Organic Net Sales and Constant Currency Adjusted EBITDA is provided
on a non-GAAP basis only because certain information necessary to
calculate the most comparable GAAP measure is unavailable due to
the uncertainty and inherent difficulty of predicting the
occurrence and the future financial statement impact of such items
impacting comparability, including, but not limited to, the impact
of currency, acquisitions and divestitures, restructuring expenses,
deal costs, unrealized losses/(gains) on commodity hedges,
impairment losses, and equity award compensation expense, among
other items. Therefore, as a result of the uncertainty and
variability of the nature and amount of future adjustments, which
could be significant, the Company is unable to provide a
reconciliation of these measures without unreasonable effort.
Earnings Discussion and Webcast Information
A pre-recorded management discussion of The Kraft Heinz
Company's first quarter 2021 earnings is available at
ir.kraftheinzcompany.com. The Company will host a live question and
answer session beginning today at 9:00 a.m. Eastern Daylight Time.
A webcast of the session will be accessible at
ir.kraftheinzcompany.com.
ABOUT THE KRAFT HEINZ COMPANY
We are driving transformation at The Kraft Heinz Company
(Nasdaq: KHC), inspired by our Purpose, Let’s Make Life Delicious.
Consumers are at the center of everything we do. With 2020 net
sales of approximately $26 billion, we are committed to growing our
iconic and emerging food and beverage brands on a global scale. We
leverage our scale and agility to unleash the full power of Kraft
Heinz across a portfolio of six consumer-driven product platforms.
As global citizens, we’re dedicated to making a sustainable,
ethical impact while helping feed the world in healthy, responsible
ways. Learn more about our journey by visiting
www.kraftheinzcompany.com or following us on LinkedIn and
Twitter.
Forward-Looking Statements
This press release contains a number of forward-looking
statements. Words such as “plan,” "believe," "anticipate,"
"reflect," "invest," "see," "make," "expect," "deliver," "drive,"
“improve,” “intend,” "assess," "remain," "evaluate," “establish,”
“focus,” “build,” “turn,” “expand,” “leverage,” "grow," "will," and
variations of such words and similar future or conditional
expressions are intended to identify forward-looking statements.
Examples of forward-looking statements include, but are not limited
to, statements regarding the Company's plans, impacts of accounting
standards and guidance, growth, legal matters, taxes, costs and
cost savings, impairments, dividends, expectations, investments,
innovations, opportunities, capabilities, execution, initiatives,
and pipeline. These forward-looking statements reflect management's
current expectations and are not guarantees of future performance
and are subject to a number of risks and uncertainties, many of
which are difficult to predict and beyond the Company's
control.
Important factors that may affect the Company's business and
operations and that may cause actual results to differ materially
from those in the forward-looking statements include, but are not
limited to, the impacts of COVID-19 and government and consumer
responses; operating in a highly competitive industry; the
Company’s ability to correctly predict, identify, and interpret
changes in consumer preferences and demand, to offer new products
to meet those changes, and to respond to competitive innovation;
changes in the retail landscape or the loss of key retail
customers; changes in the Company's relationships with significant
customers or suppliers, or in other business relationships; the
Company’s ability to maintain, extend, and expand its reputation
and brand image; the Company’s ability to leverage its brand value
to compete against private label products; the Company’s ability to
drive revenue growth in its key product categories or platforms,
increase its market share, or add products that are in
faster-growing and more profitable categories; product recalls or
other product liability claims; the Company’s ability to identify,
complete, or realize the benefits from strategic acquisitions,
alliances, divestitures, joint ventures, or other investments; the
Company's ability to successfully execute its strategic
initiatives; the impacts of the Company's international operations;
the Company's ability to protect intellectual property rights; the
Company's ownership structure; the Company’s ability to realize the
anticipated benefits from prior or future streamlining actions to
reduce fixed costs, simplify or improve processes, and improve its
competitiveness; the Company's level of indebtedness, as well as
our ability to comply with covenants under our debt instruments;
additional impairments of the carrying amounts of goodwill or other
indefinite-lived intangible assets; foreign exchange rate
fluctuations; volatility in commodity, energy, and other input
costs; volatility in the market value of all or a portion of the
commodity derivatives we use; compliance with laws, regulations,
and related interpretations and related legal claims or other
regulatory enforcement actions, including additional risks and
uncertainties related to any potential actions resulting from the
Securities and Exchange Commission’s (“SEC”) ongoing investigation,
as well as potential additional subpoenas, litigation, and
regulatory proceedings; failure to maintain an effective system of
internal controls; a downgrade in the Company's credit rating; the
impact of future sales of the Company's common stock in the public
market; the Company’s ability to continue to pay a regular dividend
and the amounts of any such dividends; unanticipated business
disruptions and natural events in the locations in which the
Company or the Company's customers, suppliers, distributors, or
regulators operate; economic and political conditions in the United
States and in various other nations where the Company does
business; changes in the Company's management team or other key
personnel and the Company's ability to hire or retain key personnel
or a highly skilled and diverse global workforce; risks associated
with information technology and systems, including service
interruptions, misappropriation of data, or breaches of security;
increased pension, labor, and people-related expenses; changes in
tax laws and interpretations; volatility of capital markets and
other macroeconomic factors; and other factors. For additional
information on these and other factors that could affect the
Company's forward-looking statements, see the Company's risk
factors, as they may be amended from time to time, set forth in its
filings with the SEC. The Company disclaims and does not undertake
any obligation to update, revise, or withdraw any forward-looking
statement in this press release, except as required by applicable
law or regulation.
Non-GAAP Financial Measures
The non-GAAP financial measures provided should be viewed in
addition to, and not as an alternative for, results prepared in
accordance with accounting principles generally accepted in the
United States of America (“GAAP”) that are presented in this press
release.
To supplement the financial information provided, the Company
has presented Organic Net Sales, Adjusted EBITDA, Constant Currency
Adjusted EBITDA, Adjusted EPS, and Free Cash Flow which are
considered non-GAAP financial measures. The non-GAAP financial
measures presented may differ from similarly titled non-GAAP
financial measures presented by other companies, and other
companies may not define these non-GAAP financial measures in the
same way. These measures are not substitutes for their comparable
GAAP financial measures, such as net sales, net income/(loss),
diluted earnings per share, net cash provided by/(used for)
operating activities, or other measures prescribed by GAAP, and
there are limitations to using non-GAAP financial measures.
Management uses these non-GAAP financial measures to assist in
comparing the Company's performance on a consistent basis for
purposes of business decision making by removing the impact of
certain items that management believes do not directly reflect the
Company's underlying operations. Management believes that
presenting the Company's non-GAAP financial measures (i.e., Organic
Net Sales, Adjusted EBITDA, Constant Currency Adjusted EBITDA,
Adjusted EPS, and Free Cash Flow) is useful to investors because it
(i) provides investors with meaningful supplemental information
regarding financial performance by excluding certain items, (ii)
permits investors to view performance using the same tools that
management uses to budget, make operating and strategic decisions,
and evaluate historical performance, and (iii) otherwise provides
supplemental information that may be useful to investors in
evaluating the Company's results. The Company believes that the
presentation of these non-GAAP financial measures, when considered
together with the corresponding GAAP financial measures and the
reconciliations to those measures, provides investors with
additional understanding of the factors and trends affecting the
Company's business than could be obtained absent these
disclosures.
Organic Net Sales is defined as net sales excluding, when they
occur, the impact of currency, acquisitions and divestitures, and a
53rd week of shipments. The Company calculates the impact of
currency on net sales by holding exchange rates constant at the
previous year's exchange rate, with the exception of highly
inflationary subsidiaries, for which the Company calculates the
previous year's results using the current year's exchange rate.
Organic Net Sales is a tool that can assist management and
investors in comparing the Company's performance on a consistent
basis by removing the impact of certain items that management
believes do not directly reflect the Company's underlying
operations.
Adjusted EBITDA is defined as net income/(loss) from continuing
operations before interest expense, other expense/(income),
provision for/(benefit from) income taxes, and depreciation and
amortization (excluding restructuring activities); in addition to
these adjustments, the Company excludes, when they occur, the
impacts of restructuring activities, deal costs, unrealized
losses/(gains) on commodity hedges, impairment losses, and equity
award compensation expense (excluding restructuring activities).
The Company also presents Adjusted EBITDA on a constant currency
basis. The Company calculates the impact of currency on Adjusted
EBITDA by holding exchange rates constant at the previous year's
exchange rate, with the exception of highly inflationary
subsidiaries, for which it calculates the previous year's results
using the current year's exchange rate. Adjusted EBITDA and
Constant Currency Adjusted EBITDA are tools that can assist
management and investors in comparing the Company's performance on
a consistent basis by removing the impact of certain items that
management believes do not directly reflect the Company's
underlying operations.
Adjusted EPS is defined as diluted earnings per share excluding,
when they occur, the impacts of restructuring activities, deal
costs, unrealized losses/(gains) on commodity hedges, impairment
losses, losses/(gains) on the sale of a business, other
losses/(gains) related to acquisitions and divestitures (e.g., tax
and hedging impacts), nonmonetary currency devaluation (e.g.,
remeasurement gains and losses), debt prepayment and extinguishment
costs, and U.S. Tax Reform discrete income tax expense/(benefit),
and including when they occur, adjustments to reflect preferred
stock dividend payments on an accrual basis. The Company believes
Adjusted EPS provides important comparability of underlying
operating results, allowing investors and management to assess
operating performance on a consistent basis.
Free Cash Flow is defined as net cash provided by/(used for)
operating activities less capital expenditures. The Company
believes Free Cash Flow provides a measure of the Company's core
operating performance, the cash-generating capabilities of the
Company's business operations, and is one factor used in
determining the amount of cash available for debt repayments,
dividends, acquisitions, share repurchases, and other corporate
purposes. The use of this non-GAAP measure does not imply or
represent the residual cash flow for discretionary expenditures
since the Company has certain non-discretionary obligations such as
debt service that are not deducted from the measure.
See the attached schedules for supplemental financial data,
which includes the financial information, the non-GAAP financial
measures and corresponding reconciliations to the comparable GAAP
financial measures for the relevant periods.
Schedule
1
The Kraft Heinz Company
Condensed Consolidated Statements
of Income
(in millions, except per share
data)
(Unaudited)
For the Three Months
Ended
March 27, 2021
March 28, 2020
Net sales
$
6,394
$
6,157
Cost of products sold
4,193
4,299
Gross profit
2,201
1,858
Selling, general and administrative
expenses, excluding impairment losses
882
862
Goodwill impairment losses
230
226
Selling, general and administrative
expenses
1,112
1,088
Operating income/(loss)
1,089
770
Interest expense
415
310
Other expense/(income)
(30)
(81)
Income/(loss) before income taxes
704
541
Provision for/(benefit from) income
taxes
136
160
Net income/(loss)
568
381
Net income/(loss) attributable to
noncontrolling interest
5
3
Net income/(loss) attributable to common
shareholders
$
563
$
378
Basic shares outstanding
1,223
1,222
Diluted shares outstanding
1,232
1,224
Per share data applicable to common
shareholders:
Basic earnings/(loss) per share
$
0.46
$
0.31
Diluted earnings/(loss) per share
0.46
0.31
Schedule
2
The Kraft Heinz Company
Reconciliation of Net Sales to
Organic Net Sales
For the Three Months Ended
(dollars in millions)
(Unaudited)
Net Sales
Currency
Acquisitions
and
Divestitures
Organic Net
Sales
Price
Volume/Mix
March 27, 2021
United States
$
4,608
$
—
$
—
$
4,608
International
1,394
64
—
1,330
Canada
392
22
—
370
Kraft Heinz
$
6,394
$
86
$
—
$
6,308
March 28, 2020
United States
$
4,495
$
—
$
—
$
4,495
International
1,301
6
—
1,295
Canada
361
—
—
361
Kraft Heinz
$
6,157
$
6
$
—
$
6,151
Year-over-year growth rates
United States
2.5%
0.0 pp
0.0 pp
2.5%
1.0 pp
1.5 pp
International
7.2%
4.5 pp
0.0 pp
2.7%
2.2 pp
0.5 pp
Canada
8.8%
6.3 pp
0.0 pp
2.5%
4.9 pp
(2.4) pp
Kraft Heinz
3.9%
1.4 pp
0.0 pp
2.5%
1.5 pp
1.0 pp
Schedule
3
The Kraft Heinz Company
Reconciliation of Net Sales to
Organic Net Sales
For the Three Months Ended
(dollars in millions)
(Unaudited)
Net Sales
Currency
Acquisitions
and
Divestitures
Organic Net
Sales
March 27, 2021
United States
$
4,608
$
—
$
—
$
4,608
International
1,394
19
—
1,375
Canada
392
19
—
373
Kraft Heinz
$
6,394
$
38
$
—
$
6,356
March 30, 2019
United States
$
4,224
$
—
$
—
$
4,224
International
1,285
7
13
1,265
Canada
450
—
91
359
Kraft Heinz
$
5,959
$
7
$
104
$
5,848
Year-over-year growth rates
United States
9.1%
0.0 pp
0.0 pp
9.1%
International
8.5%
0.9 pp
(1.2) pp
8.8%
Canada
(12.7)%
4.3 pp
(21.1) pp
4.1%
Kraft Heinz
7.3%
0.5 pp
(1.9) pp
8.7%
Schedule
4
The Kraft Heinz Company
Reconciliation of Net
Income/(Loss) to Adjusted EBITDA
(dollars in millions)
(Unaudited)
For the Three Months
Ended
March 27, 2021
March 28, 2020
March 30, 2019
Net income/(loss)
$
568
$
381
$
404
Interest expense
415
310
321
Other expense/(income)
(30)
(81)
(380)
Provision for/(benefit from) income
taxes
136
160
217
Operating income/(loss)
1,089
770
562
Depreciation and amortization (excluding
restructuring activities)
222
243
234
Restructuring activities
18
—
27
Deal costs
7
—
8
Unrealized losses/(gains) on commodity
hedges
(37)
143
(29)
Impairment losses
230
226
620
Equity award compensation expense
(excluding restructuring activities)
51
33
9
Adjusted EBITDA
$
1,580
$
1,415
$
1,431
Segment Adjusted EBITDA:
United States
$
1,280
$
1,209
$
1,139
International
283
245
238
Canada
87
55
121
General corporate expenses
(70)
(94)
(67)
Adjusted EBITDA
$
1,580
$
1,415
$
1,431
Schedule
5
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA
to Constant Currency Adjusted EBITDA
For the Three Months Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA
Currency
Constant Currency
Adjusted EBITDA
March 27, 2021
United States
$
1,280
$
—
$
1,280
International
283
16
267
Canada
87
5
82
General corporate expenses
(70)
(1)
(69)
Kraft Heinz
$
1,580
$
20
$
1,560
March 28, 2020
United States
$
1,209
$
—
$
1,209
International
245
3
242
Canada
55
—
55
General corporate expenses
(94)
—
(94)
Kraft Heinz
$
1,415
$
3
$
1,412
Year-over-year growth rates
United States
5.8%
0.0 pp
5.8%
International
15.5%
5.3 pp
10.2%
Canada
57.4%
9.6 pp
47.8%
General corporate expenses
(25.9)%
1.3 pp
(27.2)%
Kraft Heinz
11.6%
1.2 pp
10.4%
Schedule
6
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA
to Constant Currency Adjusted EBITDA
For the Three Months Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA
Currency
Constant Currency
Adjusted EBITDA
March 27, 2021
United States
$
1,280
$
—
$
1,280
International
283
11
272
Canada
87
4
83
General corporate expenses
(70)
(1)
(69)
Kraft Heinz
$
1,580
$
14
$
1,566
March 30, 2019
United States
$
1,139
$
—
$
1,139
International
238
4
234
Canada
121
—
121
General corporate expenses
(67)
—
(67)
Kraft Heinz
$
1,431
$
4
$
1,427
Year-over-year growth rates
United States
12.4%
0.0 pp
12.4%
International
18.3%
2.4 pp
15.9%
Canada
(27.6)%
3.6 pp
(31.2)%
General corporate expenses
3.6%
1.1 pp
2.5%
Kraft Heinz
10.4%
0.7 pp
9.7%
Schedule
7
The Kraft Heinz Company
Reconciliation of Diluted EPS to
Adjusted EPS
(Unaudited)
For the Three Months
Ended
March 27, 2021
March 28, 2020
Diluted EPS
$
0.46
$
0.31
Restructuring activities(a)
0.01
—
Unrealized losses/(gains) on commodity
hedges(b)
(0.02)
0.09
Impairment losses(c)
0.19
0.18
Losses/(gains) on sale of business(d)
0.02
—
Debt prepayment and extinguishment
costs(e)
0.06
—
Adjusted EPS
$
0.72
$
0.58
(a)
Gross expenses included in
restructuring activities were $18 million ($13 million after-tax)
for the three months ended March 27, 2021 and were recorded in the
following income statement line items:
•
Cost of products sold included
expenses of $3 million for the three months ended March 27, 2021
and $1 million for the three months ended March 28, 2020; and
•
SG&A included expenses of $15
million for the three months ended March 27, 2021 and income of $1
million for the three months ended March 28, 2020.
(b)
Gross expenses/(income) included
in unrealized losses/(gains) on commodity hedges were income of $37
million ($27 million after-tax) for the three months ended March
27, 2021 and expenses of $143 million ($108 million after-tax) for
the three months ended March 28, 2020 and were recorded in cost of
products sold.
(c)
Gross impairment losses, all of
which related to goodwill, were $230 million ($230 million
after-tax) for the three months ended March 27, 2021 and $226
million ($226 million after-tax) for the three months ended March
28, 2020 and were recorded in SG&A.
(d)
Gross expenses included in
losses/(gains) on sale of business were $19 million ($19 million
after-tax) for the three months ended March 27, 2021 and $2 million
($2 million after-tax) for the three months ended March 28, 2020
and were recorded in other expense/(income).
(e)
Gross expenses included in debt
prepayment and extinguishment costs were $106 million ($80 million
after-tax) for the three months ended March 27, 2021 and were
recorded in interest expense.
Schedule
8
The Kraft Heinz Company
Key Drivers of Change in Adjusted
EPS
(Unaudited)
For the Three Months
Ended
March 27, 2021
March 28, 2020
$ Change
Key drivers of change in Adjusted EPS:
Results of operations(a)
$
0.84
$
0.73
$
0.11
Interest expense
(0.20)
(0.20)
—
Other expense/(income)(b)
0.03
0.05
(0.02)
Effective tax rate
0.05
—
0.05
Adjusted EPS
$
0.72
$
0.58
0.14
(a)
Includes non-cash amortization of
definite-lived intangible assets, which accounted for a negative
impact to Adjusted EPS from results of operations of $0.04 for the
three months ended March 27, 2021 and March 28, 2020.
(b)
Includes non-cash amortization of prior
service credits, which accounted for a benefit to Adjusted EPS from
other expense/(income) of $0.02 for the three months ended March
28, 2020.
Schedule
9
The Kraft Heinz Company
Condensed Consolidated Balance
Sheets
(in millions, except per share
data)
(Unaudited)
March 27, 2021
December 26, 2020
ASSETS
Cash and cash equivalents
$
2,360
$
3,417
Trade receivables, net
2,079
2,063
Inventories
2,676
2,773
Prepaid expenses
136
132
Other current assets
621
574
Assets held for sale
5,264
1,863
Total current assets
13,136
10,822
Property, plant and equipment, net
6,579
6,876
Goodwill
31,447
33,089
Intangible assets, net
45,021
46,667
Other non-current assets
2,481
2,376
TOTAL ASSETS
$
98,664
$
99,830
LIABILITIES AND EQUITY
Commercial paper and other short-term
debt
$
6
$
6
Current portion of long-term debt
126
230
Trade payables
4,225
4,304
Accrued marketing
1,001
946
Interest payable
371
358
Other current liabilities
1,824
2,200
Liabilities held for sale
17
17
Total current liabilities
7,570
8,061
Long-term debt
27,074
28,070
Deferred income taxes
11,619
11,462
Accrued postemployment costs
244
243
Other non-current liabilities
1,726
1,751
TOTAL LIABILITIES
48,233
49,587
Equity:
Common stock, $0.01 par value
12
12
Additional paid-in capital
54,678
55,096
Retained earnings/(deficit)
(2,131)
(2,694)
Accumulated other comprehensive
income/(losses)
(1,898)
(1,967)
Treasury stock, at cost
(373)
(344)
Total shareholders' equity
50,288
50,103
Noncontrolling interest
143
140
TOTAL EQUITY
50,431
50,243
TOTAL LIABILITIES AND EQUITY
$
98,664
$
99,830
Schedule
10
The Kraft Heinz Company
Condensed Consolidated Statements
of Cash Flow
(in millions)
(Unaudited)
For the Three Months
Ended
March 27, 2021
March 28, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)
$
568
$
381
Adjustments to reconcile net income/(loss)
to operating cash flows:
Depreciation and amortization
222
243
Amortization of postretirement benefit
plans prior service costs/(credits)
(2)
(31)
Equity award compensation expense
51
33
Deferred income tax
provision/(benefit)
127
(46)
Postemployment benefit plan
contributions
(9)
(9)
Goodwill and intangible asset impairment
losses
230
226
Nonmonetary currency devaluation
4
1
Loss/(gain) on sale of business
19
2
Other items, net
30
169
Changes in current assets and
liabilities:
Trade receivables
(34)
(423)
Inventories
(101)
(231)
Accounts payable
(11)
(2)
Other current assets
(54)
(142)
Other current liabilities
(230)
41
Net cash provided by/(used for) operating
activities
810
212
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(227)
(131)
Other investing activities, net
11
9
Net cash provided by/(used for) investing
activities
(216)
(122)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt
(1,014)
(407)
Debt prepayment and extinguishment
costs
(103)
—
Proceeds from revolving credit
facility
—
4,000
Dividends paid
(489)
(488)
Other financing activities, net
(37)
—
Net cash provided by/(used for) financing
activities
(1,643)
3,105
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(8)
(71)
Cash, cash equivalents, and restricted
cash
Net increase/(decrease)
(1,057)
3,124
Balance at beginning of period
3,418
2,280
Balance at end of period
$
2,361
$
5,404
Schedule
11
The Kraft Heinz Company
Reconciliation of Net Cash
Provided By/(Used For) Operating Activities to Free Cash Flow
(in millions)
(Unaudited)
For the Three Months
Ended
March 27, 2021
March 28, 2020
Net cash provided by/(used for) operating
activities
$
810
$
212
Capital expenditures
(227)
(131)
Free Cash Flow
$
583
$
81
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210429005218/en/
Michael Mullen (media) Michael.Mullen@kraftheinz.com
Christopher Jakubik, CFA (investors) ir@kraftheinz.com
Kraft Heinz (NASDAQ:KHC)
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