Ongoing Transformation Powers Strong Start
to the Year
Raises Full Year Outlook for Organic Net
Sales(1)(2) While Holding to Previous Adjusted EBITDA(1)(2)
Expectations
The Kraft Heinz Company (Nasdaq: KHC) (“Kraft Heinz” or the
“Company”) today reported financial results for the first quarter
of 2022 that reflected strong price realization, resilient retail
demand, and foodservice growth.
"Our first quarter was a strong start to the year and yet
another period where our team rose to mitigate new and different
macro environment challenges," said Kraft Heinz CEO Miguel
Patricio. "We continue to build critical capabilities, greater
corporate agility, and additional financial flexibility to address
short-term turmoil while building our long-term advantage. We still
have work to do, more opportunity ahead, and we remain confident in
our ability to deliver our plan for the year as well as our
long-term growth strategy."
Net Sales
In millions
Net Sales
Organic Net Sales(1)
Growth
March 26,
2022
March 27,
2021
% Chg vs
PY
YoY Growth
Rate
Price
Volume/Mix
For the Three Months Ended
United States
$
4,214
$
4,608
(8.5)%
7.2%
9.3 pp
(2.1) pp
International
1,444
1,394
3.6%
6.7%
8.2 pp
(1.5) pp
Canada
387
392
(1.5)%
2.5%
8.0 pp
(5.5) pp
Kraft Heinz
$
6,045
$
6,394
(5.5)%
6.8%
9.0 pp
(2.2) pp
Net Income/(Loss) and Diluted
EPS
In millions, except per share
data
For the Three Months
Ended
March 26,
2022
March 27,
2021
% Chg vs
PY
Gross profit
$
1,931
$
2,201
(12.3)%
Operating income/(loss)
1,115
1,089
2.4%
Net income/(loss)
781
568
37.5%
Net income/(loss) attributable to common
shareholders
776
563
37.8%
Diluted EPS
$
0.63
$
0.46
37.0%
Adjusted EPS(1)
0.60
0.72
(16.7)%
Adjusted EBITDA(1)
$
1,342
$
1,580
(15.1)%
Q1 2022 Financial Summary
- Net sales decreased 5.5 percent versus the year-ago
period to $6.0 billion, including a negative 11.2 percentage point
impact from divestitures net of acquisitions and a negative 1.1
percentage point impact from currency. Organic Net Sales
increased 6.8 percent versus the prior year period. Pricing was up
9.0 percentage points versus the prior year period with growth
across each reporting segment that was primarily driven by
increases to mitigate rising input costs in retail and foodservice
channels. Volume/mix declined 2.2 percentage points versus the
year-ago period reflecting supply constraints that were partially
offset by strong demand for products in retail and a continued
recovery in foodservice channels.
- Net income/(loss) increased 37.5 percent versus the
year-ago period to $781 million primarily driven by lower non-cash
impairment losses in the current year period, lower interest
expense primarily due to debt extinguishment costs in the prior
year period, and favorable changes in other expense/(income). These
factors were partially offset by lower Adjusted EBITDA and higher
tax expenses versus the prior year period. Adjusted EBITDA
decreased 15.1 percent versus the year-ago period to $1.3 billion
with performance including an unfavorable impact from divestitures
of 7.2 percentage points and an unfavorable 0.6 percentage point
impact from currency. The remaining year-over-year change in
Adjusted EBITDA reflected higher pricing and efficiency gains that
were more than offset by higher commodity costs, primarily in
dairy, packaging materials, and meat, as well as higher supply
chain costs, reflecting inflationary pressure in procurement,
logistics and manufacturing costs.
- Diluted EPS was $0.63, up 37.0 percent versus the prior
year, driven by the net income/(loss) factors discussed above.
Adjusted EPS(1) was $0.60, down 16.7 percent versus the
prior year, primarily driven by lower Adjusted EBITDA, including a
negative $0.08 impact from divestitures, and higher taxes on
adjusted earnings that more than offset lower interest expense
versus the prior year period.
- Net cash provided by operating activities was $486
million, down 40.0 percent versus the year-ago period, primarily
driven by lower Adjusted EBITDA and higher cash outflows for
inventories primarily related to stock rebuilding and increased
input costs. These impacts were partially offset by lower cash
outflows for interest primarily due to prior year reduction of
long-term debt and lower cash outflows for variable compensation in
2022 compared to 2021. Free Cash Flow(1) was $272 million,
down 53.4 percent versus the comparable prior year period due to
the lower net cash provided by operating activities that was
partially offset by lower capital expenditures versus the prior
year period.
Outlook
The Company continues to expect strong financial performance in
2022. The Company is raising expectations for 2022 Organic Net
Sales(2) to a mid-single-digit percentage increase versus the prior
year period, reflecting strong performance to date, ongoing
business momentum, and additional pricing actions to mitigate
ongoing inflation. The Company continues to expect Adjusted
EBITDA(2) to be in the range of $5.8 billion to $6.0 billion with a
48 percent to 52 percent first half to second half split. This
reflects a 53rd week in 2022, the impact of divestitures versus the
prior year, strong Organic Net Sales as well as the Company's
ongoing efforts to manage inflationary pressures, including
unlocking gross efficiencies, as it continues to invest in
long-term growth.
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)
Full year 2022 guidance for
Organic Net Sales and 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, 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 2022 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 2021 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 "address," “anticipate,” “believe,”
“build,” "deliver,” “drive,” “expand,” “expect,” “grow,” “improve,”
“intend,” “invest,” “leverage,” “mitigate,” “plan,” “reflect,”
“transform,” “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; climate change and legal or
regulatory responses; 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 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 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 (including the Russia and
Ukraine conflict and its regional and global ramifications);
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 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 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 ("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. 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 divestiture-related license income (e.g., income related
to the sale of licenses in connection with the Cheese Transaction),
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. 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, 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 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. 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 26, 2022
March 27, 2021
Net sales
$
6,045
$
6,394
Cost of products sold
4,114
4,193
Gross profit
1,931
2,201
Selling, general and administrative
expenses, excluding impairment losses
827
882
Goodwill impairment losses
(11)
230
Selling, general and administrative
expenses
816
1,112
Operating income/(loss)
1,115
1,089
Interest expense
242
415
Other expense/(income)
(98)
(30)
Income/(loss) before income taxes
971
704
Provision for/(benefit from) income
taxes
190
136
Net income/(loss)
781
568
Net income/(loss) attributable to
noncontrolling interest
5
5
Net income/(loss) attributable to common
shareholders
$
776
$
563
Basic shares outstanding
1,225
1,223
Diluted shares outstanding
1,234
1,232
Per share data applicable to common
shareholders:
Basic earnings/(loss) per share
$
0.63
$
0.46
Diluted earnings/(loss) per share
0.63
0.46
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 26, 2022
United States
$
4,214
$
—
$
—
$
4,214
International
1,444
(65)
30
1,479
Canada
387
(1)
—
388
Kraft Heinz
$
6,045
$
(66)
$
30
$
6,081
March 27, 2021
United States
$
4,608
$
—
$
678
$
3,930
International
1,394
3
5
1,386
Canada
392
—
14
378
Kraft Heinz
$
6,394
$
3
$
697
$
5,694
Year-over-year growth rates
United States
(8.5)%
0.0 pp
(15.7) pp
7.2%
9.3 pp
(2.1) pp
International
3.6%
(4.9) pp
1.8 pp
6.7%
8.2 pp
(1.5) pp
Canada
(1.5)%
(0.2) pp
(3.8) pp
2.5%
8.0 pp
(5.5) pp
Kraft Heinz
(5.5)%
(1.1) pp
(11.2) pp
6.8%
9.0 pp
(2.2) pp
Schedule 3
The Kraft Heinz Company
Reconciliation of Net
Income/(Loss) to Adjusted EBITDA
(dollars in millions)
(Unaudited)
For the Three Months
Ended
March 26, 2022
March 27, 2021
Net income/(loss)
$
781
$
568
Interest expense
242
415
Other expense/(income)
(98)
(30)
Provision for/(benefit from) income
taxes
190
136
Operating income/(loss)
1,115
1,089
Depreciation and amortization (excluding
restructuring activities)
217
222
Divestiture-related license income
(14)
—
Restructuring activities
19
18
Deal costs
8
7
Unrealized losses/(gains) on commodity
hedges
(92)
(37)
Impairment losses
55
230
Equity award compensation expense
(excluding restructuring activities)
34
51
Adjusted EBITDA
$
1,342
$
1,580
Segment Adjusted EBITDA:
United States
$
1,091
$
1,280
International
242
283
Canada
82
87
General corporate expenses
(73)
(70)
Adjusted EBITDA
$
1,342
$
1,580
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
March 26, 2022
United States
$
1,091
$
—
$
1,091
International
242
(9)
251
Canada
82
—
82
General corporate expenses
(73)
1
(74)
Kraft Heinz
$
1,342
$
(8)
$
1,350
March 27, 2021
United States
$
1,280
$
—
$
1,280
International
283
1
282
Canada
87
—
87
General corporate expenses
(70)
—
(70)
Kraft Heinz
$
1,580
$
1
$
1,579
Year-over-year growth rates
United States
(14.8)%
0.0 pp
(14.8)%
International
(14.4)%
(3.6) pp
(10.8)%
Canada
(5.8)%
(0.2) pp
(5.6)%
General corporate expenses
4.5%
(1.9) pp
6.4%
Kraft Heinz
(15.1)%
(0.6) pp
(14.5)%
Schedule
5
The Kraft Heinz Company
Reconciliation of Diluted EPS to
Adjusted EPS
(Unaudited)
For the Three Months
Ended
March 26, 2022
March 27, 2021
Diluted EPS
$
0.63
$
0.46
Restructuring activities(a)
0.01
0.01
Unrealized losses/(gains) on commodity
hedges(b)
(0.05)
(0.02)
Impairment losses(c)
0.03
0.19
Losses/(gains) on sale of business(d)
—
0.02
Other losses/(gains) related to
acquisitions and divestitures(e)
(0.02)
—
Debt prepayment and extinguishment
costs(f)
—
0.06
Adjusted EPS
$
0.60
$
0.72
(a)
Gross expenses included in
restructuring activities were $19 million ($14 million after-tax)
for the three months ended March 26, 2022 and $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 $4 million for the three months ended March 26, 2022
and $3 million for the three months ended March 27, 2021; and
•
SG&A included expenses of $15
million for the three months ended March 26, 2022 and $15 million
for the three months ended March 27, 2021.
(b)
Gross expenses/(income) included
in unrealized losses/(gains) on commodity hedges were income of $92
million ($69 million after-tax) for the three months ended March
26, 2022 and $37 million ($27 million after-tax) for the three
months ended March 27, 2021 and were recorded in cost of products
sold.
(c)
Gross impairment losses included
the following:
•
Income related to goodwill
impairment of $11 million ($11 million after-tax) for the three
months ended March 26, 2022 and goodwill impairment losses of $230
million ($230 million after-tax) for the three months ended March
27, 2021 and were recorded in SG&A.
•
Property, plant and equipment
asset impairment losses of $66 million ($50 million after-tax) for
the three months ended March 26, 2022, which were recorded in cost
of products sold.
(d)
Gross expenses/(income) included
in losses/(gains) on sale of business were expenses of $1 million
($1 million after-tax) for the three months ended March 26, 2022
and $19 million ($19 million after-tax) for the three months ended
March 27, 2021 and were recorded in other expense/(income).
(e)
Gross expenses/(income) included
in other losses/(gains) related to acquisitions and divestitures
were income of $38 million ($29 million after-tax) for the three
months ended March 26, 2022 and were recorded in other
expense/(income).
(f)
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
6
The Kraft Heinz Company
Key Drivers of Change in Adjusted
EPS
(Unaudited)
For the Three Months
Ended
March 26, 2022
March 27, 2021
$ Change
Key drivers of change in Adjusted EPS:
Results of operations(a)(b)
$
0.76
$
0.82
$
(0.06)
Results of divested operations
—
0.08
(0.08)
Interest expense
(0.17)
(0.21)
0.04
Other expense/(income)
0.04
0.03
0.01
Effective tax rate
(0.03)
—
(0.03)
Adjusted EPS
$
0.60
$
0.72
$
(0.12)
(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 26, 2022 and March 27, 2021.
(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
March 26, 2022.
Schedule 7
The Kraft Heinz Company
Condensed Consolidated Balance
Sheets
(in millions, except per share
data)
(Unaudited)
March 26, 2022
December 25, 2021
ASSETS
Cash and cash equivalents
$
2,978
$
3,445
Trade receivables, net
2,067
1,957
Inventories
3,093
2,729
Prepaid expenses
179
136
Other current assets
869
716
Assets held for sale
89
11
Total current assets
9,275
8,994
Property, plant and equipment, net
6,602
6,806
Goodwill
31,440
31,296
Intangible assets, net
43,640
43,542
Other non-current assets
2,907
2,756
TOTAL ASSETS
$
93,864
$
93,394
LIABILITIES AND EQUITY
Commercial paper and other short-term
debt
$
50
$
14
Current portion of long-term debt
730
740
Trade payables
4,610
4,753
Accrued marketing
874
804
Interest payable
315
268
Other current liabilities
2,485
2,485
Total current liabilities
9,064
9,064
Long-term debt
20,970
21,061
Deferred income taxes
10,609
10,536
Accrued postemployment costs
209
205
Long-term deferred income
1,525
1,534
Other non-current liabilities
1,643
1,542
TOTAL LIABILITIES
44,020
43,942
Redeemable noncontrolling interest
47
4
Equity:
Common stock, $0.01 par value
12
12
Additional paid-in capital
52,954
53,379
Retained earnings/(deficit)
(905)
(1,682)
Accumulated other comprehensive
income/(losses)
(1,812)
(1,824)
Treasury stock, at cost
(605)
(587)
Total shareholders' equity
49,644
49,298
Noncontrolling interest
153
150
TOTAL EQUITY
49,797
49,448
TOTAL LIABILITIES AND EQUITY
$
93,864
$
93,394
Schedule 8
The Kraft Heinz Company
Condensed Consolidated Statements
of Cash Flow
(in millions)
(Unaudited)
For the Three Months
Ended
March 26, 2022
March 27, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)
$
781
$
568
Adjustments to reconcile net income/(loss)
to operating cash flows:
Depreciation and amortization
220
222
Amortization of postemployment benefit
plans prior service costs/(credits)
(4)
(2)
Divestiture-related license income
(14)
—
Equity award compensation expense
34
51
Deferred income tax
provision/(benefit)
23
127
Postemployment benefit plan
contributions
(7)
(9)
Goodwill and intangible asset impairment
losses
(11)
230
Nonmonetary currency devaluation
4
4
Loss/(gain) on sale of business
1
19
Other items, net
(69)
30
Changes in current assets and
liabilities:
Trade receivables
(123)
(34)
Inventories
(382)
(101)
Accounts payable
6
(11)
Other current assets
(91)
(54)
Other current liabilities
118
(230)
Net cash provided by/(used for) operating
activities
486
810
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(214)
(227)
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
6
11
Net cash provided by/(used for) investing
activities
(469)
(216)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt
(9)
(1,014)
Debt prepayment and extinguishment
costs
—
(103)
Dividends paid
(490)
(489)
Other financing activities, net
14
(37)
Net cash provided by/(used for) financing
activities
(485)
(1,643)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
2
(8)
Cash, cash equivalents, and restricted
cash
Net increase/(decrease)
(466)
(1,057)
Balance at beginning of period
3,446
3,418
Balance at end of period
$
2,980
$
2,361
Schedule 9
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 26, 2022
March 27, 2021
Net cash provided by/(used for) operating
activities
$
486
$
810
Capital expenditures
(214)
(227)
Free Cash Flow
$
272
$
583
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220427005156/en/
Alex Abraham (media) Alex.Abraham@kraftheinz.com
Christopher Jakubik, CFA (investors) ir@kraftheinz.com
Kraft Heinz (NASDAQ:KHC)
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