Raises Full Year Outlook for Constant
Currency Adjusted EBITDA(1)(2) and Adjusted EPS(1)(2)
Reaffirms Full Year Outlook for Organic Net
Sales(1)(2)
First Quarter Highlights
- Net sales increased 7.3%; Organic Net Sales(1) increased
9.4%
- Gross profit margin increased 62 basis points to 32.6%;
Adjusted Gross Profit Margin(1) increased 126 basis points to
32.8%
- Net income increased 7.1%; Adjusted EBITDA(1) increased
10.3%
- Diluted EPS was $0.68, up 7.9%; Adjusted EPS(1) was $0.68, up
13.3%
The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the
“Company”) today reported financial results for the first quarter
of 2023.
"We delivered strong results in the first quarter of 2023, with
net sales growth across both our North America and International
zones that continues to be fueled by Foodservice, Emerging Markets,
and U.S. Retail GROW platforms," said Kraft Heinz CEO and Chair of
the Board Miguel Patricio. "I am very proud of the entire Kraft
Heinz team as we continue to deliver on what we can control by
unlocking efficiencies and reinvesting in our brands and
capabilities. Our team's continued focus on executing against the
strategy is coming to fruition, but it's not time to declare
victory just yet. We remain committed to advancing our business
transformation, and we are confident we have the right strategy in
place to win with customers and consumers, and to deliver
profitable growth and create value for our stockholders."
Net Sales
In millions
Net Sales
Organic Net Sales(1)
April 1, 2023
March 26, 2022
% Chg vs PY
YoY Growth Rate
Price
Volume/Mix
For the Three Months Ended
North America
$
4,885
$
4,601
6.2%
6.7
%
13.2 pp
(6.5) pp
International
1,604
1,444
11.1%
18.1
%
19.3 pp
(1.2) pp
Kraft Heinz
$
6,489
$
6,045
7.3%
9.4
%
14.7 pp
(5.3) pp
Net Income/(Loss) and Diluted
EPS
In millions, except per share
data
For the Three Months
Ended
April 1, 2023
March 26, 2022
% Chg vs PY
Gross profit
$
2,113
$
1,931
9.4%
Operating income/(loss)
1,243
1,115
11.4%
Net income/(loss)
837
781
7.1%
Net income/(loss) attributable to common
shareholders
836
776
7.7%
Diluted EPS
$
0.68
$
0.63
7.9%
Adjusted EPS(1)
0.68
0.60
13.3%
Adjusted EBITDA(1)
$
1,480
$
1,342
10.3%
Q1 2023 Financial Summary
- Net sales increased 7.3 percent versus the year-ago
period to $6.5 billion, including a negative 2.1 percentage point
impact from currency. Organic Net Sales(1) increased 9.4
percent versus the prior year period. Price increased 14.7
percentage points versus the prior year period, with growth in both
reportable segments that was primarily driven by list price
increases. Volume/mix declined 5.3 percentage points versus the
prior year period, with declines in both reportable segments that
were primarily driven by elasticity impacts from pricing
actions.
- Net income/(loss) increased 7.1 percent versus the
year-ago period to $837 million primarily driven by higher Adjusted
EBITDA versus the prior year period and lapping non-cash impairment
losses in the prior year period. These factors more than offset
unrealized losses on commodity hedges in the current year period
compared to unrealized gains on commodity hedges in the prior year
period and unfavorable changes in other expense/(income).
Adjusted EBITDA(1) increased 10.3 percent versus the
year-ago period to $1.5 billion, primarily driven by higher pricing
and efficiency gains. These factors more than offset higher supply
chain costs (reflecting inflationary pressure in procurement and
manufacturing costs), unfavorable volume/mix, higher commodity
costs (mainly in soybean and vegetable oils, energy, and
sweeteners), higher general corporate expenses, an unfavorable
impact from foreign currency (1.6 pp), and an unfavorable impact of
Cyclone Gabrielle in New Zealand in the first quarter of 2023.
- Diluted EPS was $0.68, up 7.9 percent versus the prior
year period, primarily driven by the net income/(loss) factors
discussed above. Adjusted EPS(1) was $0.68, up 13.3 percent
versus the prior year period, primarily driven by higher Adjusted
EBITDA and lower interest expense. These factors more than offset
unfavorable changes in other expense/(income) and higher taxes on
adjusted earnings.
- Year-to-date net cash provided by operating activities
was $486 million, flat versus the year-ago period as higher
Adjusted EBITDA and lower cash outflows for variable compensation
versus the year-ago period were offset by unfavorable changes in
cash collateral related to our commodity derivative margin
requirements, higher cash outflows in accounts payable, unfavorable
changes in trade receivables, and higher cash outflows for
inventories. Year-to date Free Cash Flow(1) was $220
million, down 19.3 percent versus the prior year period driven by
an increase in capital expenditures.
Outlook
The Company reaffirms its expectation of 2023 Organic Net
Sales(2) growth of 4 to 6 percent versus 2022. The Company is
raising 2023 Constant Currency Adjusted EBITDA(1)(2) guidance to
growth of 4 to 6 percent versus 2022, or 6 to 8 percent when
excluding the impact from lapping the 53rd week in 2022.
The Company continues to anticipate high single-digit inflation
for the year, reflecting low double-digit inflation in the first
half of the year and mid-single-digit inflation in the second half
of the year, with pricing and gross efficiencies continuing to
contribute to Adjusted Gross Profit Margin(1)(2) recovery. 2023
Adjusted Gross Profit Margin is now expected to expand 125 to 175
basis points versus prior year. This expansion is expected to fund
incremental investments across marketing, research and development,
and technology.
The Company is raising 2023 Adjusted EPS(2) guidance to be in
the range of $2.83 to $2.91, which includes a negative impact of
approximately $0.04 from expected unfavorable changes in non-cash
pension and post-retirement benefits and a currency headwind of
approximately $0.02 at current foreign exchange rates. The expected
2023 year-over-year Adjusted EPS reflects a negative $0.06 impact
from lapping a 53rd week in 2022. Additionally, the Company now
expects an effective tax rate on Adjusted EPS to be in the range of
19 to 21 percent.
End Notes
(1)
Organic Net Sales, Adjusted EBITDA,
Constant Currency Adjusted EBITDA, Adjusted Gross Profit Margin,
Adjusted EPS, 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)
Guidance for Organic Net Sales, Constant
Currency Adjusted EBITDA, Adjusted Gross Profit Margin, and
Adjusted EPS 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,
divestiture-related license income, restructuring activities, deal
costs, unrealized losses/(gains) on commodity hedges, impairment
losses, certain non-ordinary course legal and regulatory matters,
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 2023 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 2022 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 “advance,” “anticipate,” “believe,”
“commit,” “continue,” “create,” “deliver,” “expect,” “maintain,”
“will,” “guidance,” and “outlook,” 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, 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; climate change and legal or
regulatory responses; the Company’s ability to identify, complete,
or realize the benefits from strategic acquisitions, divestitures,
alliances, joint ventures, or 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 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 influence of the Company's largest
stockholder; 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 and regulations
and related legal claims or regulatory enforcement actions; failure
to maintain an effective system of internal controls; a downgrade
in the Company's credit rating; the impact of 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; disruptions in the global economy caused by geopolitical
conflicts, including the ongoing conflict between Russia and
Ukraine; 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 (including inflationary
pressures, instability in financial institutions, general economic
slowdown, or recession); 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; our
dependence on 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 Securities and Exchange Commission. 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 in this press release
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”).
To supplement the financial information provided, the Company
has presented Organic Net Sales, Adjusted EBITDA, Constant Currency
Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Profit
Margin, Adjusted Net Income/(Loss), 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), gross profit, diluted earnings per share (“EPS”),
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. The Company believes:
- Organic Net Sales, Adjusted EBITDA, Constant Currency Adjusted
EBITDA, Adjusted Gross Profit, Adjusted Gross Profit Margin,
Adjusted Net Income/(Loss), and Adjusted EPS provide important
comparability of underlying operating results, allowing investors
and management to assess the Company’s operating performance on a
consistent basis; and
- 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.
Management believes that presenting the Company’s non-GAAP
financial measures 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.
Definitions
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.
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 divestiture-related license income,
restructuring activities, deal costs, unrealized losses/(gains) on
commodity hedges, impairment losses, certain non-ordinary course
legal and regulatory matters, and equity award compensation expense
(excluding restructuring activities). The Company also presents
Adjusted EBITDA on a constant currency basis (Constant Currency
Adjusted EBITDA). 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 Gross Profit, Adjusted Net Income/(Loss), and
Adjusted EPS are defined as gross profit, net income/(loss),
and diluted earnings per share, respectively, excluding, when they
occur, the impacts of restructuring activities, deal costs,
unrealized losses/(gains) on commodity hedges, impairment losses,
certain non-ordinary course legal and regulatory matters,
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
(benefit)/costs, and certain significant discrete income tax items
(e.g., U.S. and non-U.S. tax reform), and including when they
occur, adjustments to reflect preferred stock dividend payments on
an accrual basis. Adjusted Gross Profit Margin is defined as
Adjusted Gross Profit divided by net sales.
Free Cash Flow is defined as net cash provided by/(used
for) operating activities less capital expenditures. 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.
Schedule 1
The Kraft Heinz Company
Condensed Consolidated Statements
of Income
(in millions, except per share
data)
(Unaudited)
For the Three Months
Ended
April 1, 2023
March 26, 2022
Net sales
$
6,489
$
6,045
Cost of products sold
4,376
4,114
Gross profit
2,113
1,931
Selling, general and administrative
expenses, excluding impairment losses
870
827
Goodwill impairment losses
—
(11)
Selling, general and administrative
expenses
870
816
Operating income/(loss)
1,243
1,115
Interest expense
227
242
Other expense/(income)
(35)
(98)
Income/(loss) before income taxes
1,051
971
Provision for/(benefit from) income
taxes
214
190
Net income/(loss)
837
781
Net income/(loss) attributable to
noncontrolling interest
1
5
Net income/(loss) attributable to common
shareholders
$
836
$
776
Basic shares outstanding
1,226
1,225
Diluted shares outstanding
1,234
1,234
Per share data applicable to common
shareholders:
Basic earnings/(loss) per share
$
0.68
$
0.63
Diluted earnings/(loss) per share
0.68
0.63
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
April 1, 2023
North America
$
4,885
$
(26)
$
—
$
4,911
International
1,604
(78)
26
1,656
Kraft Heinz
$
6,489
$
(104)
$
26
$
6,567
March 26, 2022
North America
$
4,601
$
—
$
—
$
4,601
International
1,444
16
25
1,403
Kraft Heinz
$
6,045
$
16
$
25
$
6,004
Year-over-year growth rates
North America
6.2%
(0.5) pp
0.0 pp
6.7%
13.2 pp
(6.5) pp
International
11.1%
(6.7) pp
(0.3) pp
18.1%
19.3 pp
(1.2) pp
Kraft Heinz
7.3%
(2.1) pp
0.0 pp
9.4%
14.7 pp
(5.3) pp
Schedule 3
The Kraft Heinz Company
Reconciliation of Net
Income/(Loss) to Adjusted EBITDA
(dollars in millions)
(Unaudited)
For the Three Months
Ended
April 1, 2023
March 26, 2022
Net income/(loss)
$
837
$
781
Interest expense
227
242
Other expense/(income)
(35)
(98)
Provision for/(benefit from) income
taxes
214
190
Operating income/(loss)
1,243
1,115
Depreciation and amortization (excluding
restructuring activities)
217
217
Divestiture-related license income
(13)
(14)
Restructuring activities
(10)
19
Deal costs
—
8
Unrealized losses/(gains) on commodity
hedges
11
(92)
Impairment losses
—
55
Certain non-ordinary course legal and
regulatory matters
1
—
Equity award compensation expense
31
34
Adjusted EBITDA
$
1,480
$
1,342
Segment Adjusted EBITDA:
North America
$
1,333
$
1,173
International
255
242
General corporate expenses
(108)
(73)
Adjusted EBITDA
$
1,480
$
1,342
Schedule 4
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
April 1, 2023
North America
$
1,333
$
(5)
$
1,338
International
255
(15)
270
General corporate expenses
(108)
1
(109)
Kraft Heinz
$
1,480
$
(19)
$
1,499
March 26, 2022
North America
$
1,173
$
—
$
1,173
International
242
2
240
General corporate expenses
(73)
—
(73)
Kraft Heinz
$
1,342
$
2
$
1,340
Year-over-year growth rates
North America
13.7%
(0.4) pp
14.1%
International
5.3%
(7.4) pp
12.7%
General corporate expenses
47.9%
(1.7) pp
49.6%
Kraft Heinz
10.3%
(1.6) pp
11.9%
Schedule 5
The Kraft Heinz Company
Reconciliation of GAAP Results to
Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Three Months
Ended
April 1, 2023
Gross profit
Selling, general and
administrative expenses
Operating
income/(loss)
Interest expense
Other expense/(income)
Income/(loss) before income
taxes
Provision for/(benefit from)
income taxes
Net income/(loss)
Net income/(loss) attributable
to noncontrolling interest
Net income/(loss) attributable
to common shareholders
Diluted EPS
GAAP Results
$
2,113
$
870
$
1,243
$
227
$
(35)
$
1,051
$
214
$
837
$
1
$
836
$
0.68
Items Affecting Comparability
Restructuring activities
6
16
(10)
—
(2)
(8)
(1)
(7)
—
(7)
(0.01)
Unrealized losses/(gains) on commodity
hedges
11
—
11
—
—
11
2
9
—
9
0.01
Certain non-ordinary course legal and
regulatory matters
—
(1)
1
—
—
1
—
1
—
1
—
Losses/(gains) on sale of business
—
—
—
—
(1)
1
—
1
—
1
—
Nonmonetary currency devaluation
—
—
—
—
(3)
3
—
3
—
3
—
Adjusted Non-GAAP Results
$
2,130
$
844
$
0.68
Schedule 6
The Kraft Heinz Company
Reconciliation of GAAP Results to
Non-GAAP Results
(dollars in millions)
(Unaudited)
For the Three Months
Ended
March 26, 2022
Gross profit
Selling, general and
administrative expenses
Operating
income/(loss)
Interest expense
Other expense/(income)
Income/(loss) before income
taxes
Provision for/(benefit from)
income taxes
Net income/(loss)
Net income/(loss) attributable
to noncontrolling interest
Net income/(loss) attributable
to common shareholders
Diluted EPS
GAAP Results
$
1,931
$
816
$
1,115
$
242
$
(98)
$
971
$
190
$
781
$
5
$
776
$
0.63
Items Affecting Comparability
Restructuring activities
4
(15)
19
—
—
19
5
14
—
14
0.01
Deal Costs
—
(8)
8
—
—
8
3
5
—
5
—
Unrealized losses/(gains) on commodity
hedges
(92)
—
(92)
—
—
(92)
(23)
(69)
—
(69)
(0.05)
Impairment losses
66
11
55
—
—
55
16
39
—
39
0.03
Losses/(gains) on sale of business
—
—
—
—
(1)
1
—
1
—
1
—
Other losses/(gains) related to
acquisitions and divestitures
—
—
—
—
38
(38)
(9)
(29)
—
(29)
(0.02)
Nonmonetary currency devaluation
—
—
—
—
(4)
4
—
4
—
4
—
Adjusted Non-GAAP Results
$
1,909
$
746
$
0.60
Schedule 7
The Kraft Heinz Company
Adjusted Gross Profit Margin
(dollars in millions)
(Unaudited)
For the Three Months
Ended
April 1, 2023
March 26, 2022
Adjusted Gross Profit
$
2,130
$
1,909
Net sales
6,489
6,045
Adjusted Gross Profit Margin
32.8%
31.6%
Schedule 8
The Kraft Heinz Company
Key Drivers of Change in Adjusted
EPS
(Unaudited)
For the Three Months
Ended
April 1, 2023
March 26, 2022
$ Change
Key drivers of change in Adjusted EPS:
Results of operations(a)(b)
$
0.81
$
0.72
$
0.09
Interest expense
(0.15)
(0.16)
0.01
Other expense/(income)
0.03
0.04
(0.01)
Effective tax rate
(0.01)
—
(0.01)
Adjusted EPS
$
0.68
$
0.60
$
0.08
(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 April 1, 2023 and March 26, 2022.
(b)
Includes divestiture-related license
income, which accounted for a benefit to Adjusted EPS from results
of operations of $0.01 for the three months ended April 1, 2023 and
March 26, 2022.
Schedule 9
The Kraft Heinz Company
Condensed Consolidated Balance
Sheets
(in millions, except per share
data)
(Unaudited)
April 1, 2023
December 31, 2022
ASSETS
Cash and cash equivalents
$
826
$
1,040
Trade receivables, net
2,286
2,120
Inventories
4,016
3,651
Prepaid expenses
329
240
Other current assets
755
842
Assets held for sale
4
4
Total current assets
8,216
7,897
Property, plant and equipment, net
6,776
6,740
Goodwill
30,888
30,833
Intangible assets, net
42,665
42,649
Other non-current assets
2,398
2,394
TOTAL ASSETS
$
90,943
$
90,513
LIABILITIES AND EQUITY
Commercial paper and other short-term
debt
$
2
$
6
Current portion of long-term debt
840
831
Trade payables
4,804
4,848
Accrued marketing
758
749
Interest payable
315
264
Other current liabilities
2,235
2,330
Total current liabilities
8,954
9,028
Long-term debt
19,263
19,233
Deferred income taxes
10,162
10,152
Accrued postemployment costs
145
144
Long-term deferred income
1,465
1,477
Other non-current liabilities
1,601
1,609
TOTAL LIABILITIES
41,590
41,643
Redeemable noncontrolling interest
40
40
Equity:
Common stock, $0.01 par value
12
12
Additional paid-in capital
51,910
51,834
Retained earnings/(deficit)
831
489
Accumulated other comprehensive
income/(losses)
(2,748)
(2,810)
Treasury stock, at cost
(852)
(847)
Total shareholders' equity
49,153
48,678
Noncontrolling interest
160
152
TOTAL EQUITY
49,313
48,830
TOTAL LIABILITIES AND EQUITY
$
90,943
$
90,513
Schedule 10
The Kraft Heinz Company
Condensed Consolidated Statements
of Cash Flows
(in millions)
(Unaudited)
For the Three Months
Ended
April 1, 2023
March 26, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)
$
837
$
781
Adjustments to reconcile net income/(loss)
to operating cash flows:
Depreciation and amortization
220
220
Amortization of postemployment benefit
plans prior service costs/(credits)
(3)
(4)
Divestiture-related license income
(13)
(14)
Equity award compensation expense
31
34
Deferred income tax
provision/(benefit)
(3)
23
Postemployment benefit plan
contributions
(6)
(7)
Goodwill and intangible asset impairment
losses
—
(11)
Nonmonetary currency devaluation
3
4
Loss/(gain) on sale of business
1
1
Other items, net
29
(69)
Changes in current assets and
liabilities:
Trade receivables
(151)
(123)
Inventories
(406)
(382)
Accounts payable
(32)
6
Other current assets
(53)
(91)
Other current liabilities
32
118
Net cash provided by/(used for) operating
activities
486
486
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(266)
(214)
Payments to acquire business, net of cash
acquired
—
(241)
Proceeds from sale of business, net of
cash disposed and working capital adjustments
—
(20)
Other investing activities, net
2
6
Net cash provided by/(used for) investing
activities
(264)
(469)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt
(1)
(9)
Dividends paid
(491)
(490)
Other financing activities, net
53
14
Net cash provided by/(used for) financing
activities
(439)
(485)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
4
2
Cash, cash equivalents, and restricted
cash
Net increase/(decrease)
(213)
(466)
Balance at beginning of period
1,041
3,446
Balance at end of period
$
828
$
2,980
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
April 1, 2023
March 26, 2022
Net cash provided by/(used for) operating
activities
$
486
$
486
Capital expenditures
(266)
(214)
Free Cash Flow
$
220
$
272
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230503005051/en/
Alex Abraham (media) Alex.Abraham@kraftheinz.com Anne-Marie
Megela (investors) ir@kraftheinz.com
Kraft Heinz (NASDAQ:KHC)
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