UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
Pursuant to Section 13 or 15(d)
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (§230.405 of this chapter) or Rule 12b-2 of the Exchange Act (§240.12b-2 of this chapter).
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
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Item 1.01. | Entry into a Material Definitive Agreement. |
Extension of the Credit Agreement
On March 23, 2020, The Kraft Heinz Company (“Kraft Heinz”), together with our 100% owned operating subsidiary, Kraft Heinz Foods Company (the “Company”) entered into an extension letter agreement (the “Extension Agreement”) with respect to the Credit Agreement dated as of July 6, 2015 among the Company, Kraft Heinz, JPMorgan Chase Bank, N.A., as administrative agent, J.P. Morgan Europe Limited, as London agent, and the other financial institutions party thereto (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), which provides for a $4.0 billion senior unsecured revolving credit facility (the “Senior Credit Facility”).
In connection with the Extension Agreement, the Company extended the maturity date of $3.9 billion of the revolving loans and commitments under the Credit Agreement from July 6, 2023 to July 6, 2024. The revolving loans and commitments of each lender that did not agree to the Extension Agreement shall continue to terminate on the existing maturity date of July 6, 2023.
The obligations under the Credit Agreement continue to be guaranteed by the Company in the case of indebtedness and other liabilities of any subsidiary borrower and by Kraft Heinz in the case of indebtedness and other liabilities of any subsidiary borrower and the Company.
The foregoing description of the Extension Agreement is qualified in its entirety by reference to the full text of the Extension Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 8.01. | Other Events. |
Borrowings under Senior Credit Facility
As of December 28, 2019, no amounts were drawn on the Company’s Senior Credit Facility. On March 12, 2020, the Company provided notice to its lenders to borrow the full available amount under its Senior Credit Facility so that a total of $4.0 billion is currently outstanding. This action was a precautionary measure to preserve financial flexibility in light of the current uncertainty in the global economy resulting from the novel coronavirus pandemic (“COVID-19”).
The information provided in Item 1.01 above is incorporated herein by reference.
Changes in Segment Reporting
As previously described in our Annual Report on Form 10-K for the year ended December 28, 2019, prior to the reorganization of our segments in the first quarter of our fiscal year 2020, we managed and reported our operating results through four segments. We had three reportable segments defined by geographic region: United States, Canada, and Europe, Middle East, and Africa (“EMEA”). Our remaining businesses were combined and disclosed as “Rest of World.” Rest of World comprised two operating segments: Latin America and Asia Pacific (“APAC”).
During the third quarter of our fiscal year 2019, certain organizational changes were announced that impacted our fiscal year 2020 internal reporting and reportable segments. As a result of these changes, we combined our EMEA, Latin America, and APAC zones to form the International zone. In addition, we moved our Puerto Rico business from the Latin America zone to the United States zone to consolidate and streamline the management of our product categories and supply chain.
Therefore, effective in the first quarter of 2020, we manage and report our operating results through three reportable segments defined by geographic region: United States, International, and Canada.
We are furnishing supplemental historical segment financial information, which conforms to the new reportable segment structure, in the exhibit included as Exhibit 99.1.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
The following exhibits are furnished with this Current Report on Form 8-K.
Exhibit |
Description | |||
10.1 |
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99.1 |
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104 |
The cover page from The Kraft Heinz Company’s Current Report on Form 8-K dated March 23, 2020, formatted in inline XBRL. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
The Kraft Heinz Company | ||||||
Date: March 23, 2020 |
By: |
/s/ Paulo Basilio | ||||
Paulo Basilio | ||||||
Global Chief Financial Officer |
Exhibit 10.1
EXECUTION VERSION
THE KRAFT HEINZ COMPANY
KRAFT HEINZ FOODS COMPANY
JPMorgan Chase Bank, N.A.
JPM Loan & Agency Services
500 Stanton Christiana Road, NCC 5, 1st Floor
Newark, DE 19713-2107
Attention of Michelle Keesee
Lenders under the Credit Agreement referred to below
March 23, 2020
Revolving Maturity Date Extension
Reference is made to the Credit Agreement dated as of July 6, 2015, as amended by the First Amendment dated as of May 4, 2016 and the Second Amendment dated as of June 15, 2018 (as so amended and as otherwise heretofore amended, the Credit Agreement), among The Kraft Heinz Company, a Delaware corporation (Kraft Heinz), Kraft Heinz Foods Company, a Pennsylvania limited liability company (the Parent Borrower and, together with Kraft Heinz, the Companies), the lenders party thereto, JPMorgan Chase Bank, N.A. (JPMorgan), as administrative agent, and J.P. Morgan Europe Limited, as London agent. Capitalized terms used but not defined herein shall have the meanings set forth in the Credit Agreement.
The Parent Borrower has requested that the Revolving Lenders agree to extend the scheduled Revolving Maturity Date from July 6, 2023 to July 6, 2024 (the Extension). In connection with the Extension, each of JPMorgan, Barclays Bank PLC, Citibank, N.A., Goldman Sachs Bank USA, BofA Securities, Inc., Morgan Stanley Senior Funding, Inc. and Wells Fargo Securities, LLC is appointed as a joint lead arranger and joint bookrunner for the Extension.
Each of the undersigned Revolving Lenders hereby agrees (in the case of any such Revolving Lender that is also an Issuing Bank or a Swingline Lender, both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable) that, from and after the Extension Effective Date (as defined below), the term Revolving Maturity Date set forth in the Credit Agreement shall be amended, solely as to the Revolving Lenders (including, as applicable, in their capacities as Issuing Banks and Swingline Lenders) agreeing to the Extension and their successors and assigns, to replace the phrase the date that is five years after the Second Amendment Effective Date with July 6, 2024.
Each of the undersigned Revolving Lenders hereby waives, in each case solely with respect to the Extension, (a) the requirement set forth in Section 2.10(b)(i) of the Credit Agreement that the notice by the Parent Borrower requesting the Extension be delivered at least 30 days but not more than 45 days prior to an anniversary of the Second Amendment Effective Date, it being agreed by the parties hereto that the notice heretofore delivered by the Parent Borrower to the Administrative Agent in connection with the Extension shall be deemed to satisfy such requirement, and (b) the provisions set forth in Section 2.10(b)(iii) of the Credit Agreement that condition the effectiveness of any extension of the Revolving Maturity Date effected under Section 2.10(b) of the Credit Agreement on the satisfaction of the conditions in Sections 3.03(a) and 3.03(b) of the Credit Agreement as of the Extension Date (as defined in the Credit Agreement), it being agreed by the parties hereto that such condition shall be deemed to be replaced in its entirety with the condition set forth in clause (b) in the next succeeding
paragraph. Except as set forth in the immediately preceding sentence, for all purposes of the Credit Agreement the Extension shall be deemed to be made under, and shall be subject to the provisions of, Section 2.10(b) of the Credit Agreement.
The Extension shall become effective on the first date (the Extension Effective Date) on which each of the following conditions shall have been satisfied or waived:
(a) the Administrative Agent shall have executed this letter agreement and shall have received from the Parent Borrower, Kraft Heinz and the Revolving Lenders constituting at least a Majority in Interest of the Revolving Lenders either (i) a counterpart of this letter agreement signed on behalf of such Person or (ii) evidence satisfactory to the Administrative Agent (which may include a facsimile or electronic image scan transmission) that such party has signed a counterpart of this letter agreement;
(b) the Administrative Agent shall have received a certificate of a duly authorized officer of Kraft Heinz, dated the Extension Effective Date, to the effect that, on and as of the Extension Effective Date, (i) the representations and warranties contained in Section 4.01 of the Credit Agreement (with such representations and warranties being deemed, for purposes of this clause (b), to include a reference to this letter agreement after each reference to the Credit Agreement in the text thereof) are correct in all material respects, before and after giving effect to the amendments set forth herein, as though made on and as of such date; provided that any representation and warranty that is qualified as to materiality or Material Adverse Effect or by similar language shall be true and correct in all respects on such date, and (ii) no Default or Event of Default has occurred and is continuing as of such date; and
(c) the Administrative Agent shall have received all fees and other amounts due and payable in connection with the Extension to JPMorgan Chase Bank, N.A. or the Revolving Lenders party hereto and, to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required to be reimbursed or paid by Kraft Heinz and the Parent Borrower under the Credit Agreement.
The Administrative Agent shall notify Kraft Heinz, the Parent Borrower and the Lenders of the Extension Effective Date, and such notice shall be conclusive and binding.
Each of Kraft Heinz and the Parent Borrower hereby (a) acknowledges and agrees that Guaranteed Obligations (as defined in the Holdco Guaranty Agreement) and Designated Subsidiary Obligations shall, following the occurrence of the Extension Effective Date, be determined after giving effect to this letter agreement and shall include all the obligations of the Borrowers or the Designated Subsidiaries, as the case may be, under the Credit Agreement as amended hereby and (b) affirms and confirms its guarantee and other obligations under the Holdco Guaranty Agreement or under Article VIII of the Credit Agreement, as the case may be, and agrees that its guarantee and other obligations under the Holdco Guaranty Agreement or under such Article, as the case may be, shall continue to be in full force and effect following the effectiveness of this letter agreement.
THIS LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CHOICE OF LAW DOCTRINES.
This letter agreement constitutes the entire contract among the parties relating to the subject matter hereof. Except as expressly set forth herein, all the terms and provisions of the Credit
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Agreement are and shall remain in full force and effect. The amendments contained herein shall not constitute a waiver, amendment or modification of any provision of the Credit Agreement except as expressly set forth herein. On and after the Extension Effective Date, (a) each reference in the Credit Agreement to this Agreement, hereunder, hereof or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended hereby and (b) each reference in the Holdco Guaranty Agreement or any Note to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended hereby.
The provisions of Sections 9.03, 9.04(a), 9.04(c), 9.06, 9.10, 9.11 and 9.16 of the Credit Agreement are hereby incorporated by reference as if set forth in full herein, mutatis mutandis.
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IN WITNESS WHEREOF, the parties hereto have caused this letter agreement to be duly executed by their respective authorized officers as of the date first above written.
THE KRAFT HEINZ COMPANY, | ||
by |
/s/ Yang Xu | |
Name: Yang Xu | ||
Title: Treasurer | ||
KRAFT HEINZ FOODS COMPANY, | ||
by |
/s/ Ciao Xing | |
Name: Ciao Xing | ||
Title: Assistant Treasurer |
[Signature Page to Extension Letter Agreement]
JPMORGAN CHASE BANK N.A., individually and as Administrative Agent | ||
by |
/s/ Gregory T. Martin | |
Name: Gregory T. Martin | ||
Title: Executive Director |
[Signature Page to Extension Letter Agreement]
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
Banco Santander, S.A., New York Branch | ||
by | ||
/s/ Juan Galan | ||
Name: Juan Galan | ||
Title: Managing Director |
For any Revolving Lender requiring a second signature line:
by | ||
/s/ Rita Walz-Cuccioli | ||
Name: Rita Walz-Cuccioli | ||
Title: Executive Director |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
Bank of America, N.A. | ||
by | ||
/s/ Casey Cosgrove | ||
Name: | Casey Cosgrove | |
Title: | Director |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
Barclays Bank PLC | ||
by | ||
/s/ Christopher M. Aitkin | ||
Name: | Christopher M. Aitkin | |
Title: | Vice President |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
BNP Paribas | ||
by | ||
/s/ Mike Shryock | ||
Name: | Mike Shryock | |
Title: | Managing Director |
by | ||
/s/ Todd Grossnickle | ||
Name: | Todd Grossnickle | |
Title: | Director |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
CITIBANK, N.A. | ||
by | ||
/s/ Carolyn Kee | ||
Name: | Carolyn Kee | |
Title: | Vice President |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
Coöperatieve Rabobank U.A., New York Branch | ||
by | ||
/s/ Justine Dupont-Nivet | ||
Name: | Justine Dupont-Nivet | |
Title: | Executive Director |
by | ||
/s/ Floris Rooijmans | ||
Name: | Floris Rooijmans | |
Title: | Executive Director |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
Credit Agricole Corporate and Investment Bank | ||
by | ||
/s/ Gordon Yip | ||
Name: | Gordon Yip | |
Title: | Director |
For any Revolving Lender requiring a second signature line:
by | ||
/s/ Myra Martinez | ||
Name: | Myra Martinez | |
Title: | Vice President |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH | ||
by | ||
/s/ Vipul Dhadda | ||
Name: | Vipul Dhadda | |
Title: | Authorized Signatory |
For any Revolving Lender requiring a second signature line:
by | ||
/s/ Bastien Dayer | ||
Name: | Bastien Dayer | |
Title: | Authorized Signatory |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
DEUTSCHE BANK AG NEW YORK BRANCH | ||
by | ||
/s/ Ming K. Chu | ||
Name: | Ming K. Chu | |
Title: | Director ming.k.chu@db.com +1-212-250-5451 |
For any Revolving Lender requiring a second signature line:
by | ||
/s/ Annie Chung | ||
Name: | Annie Chung | |
Title: | Director annie.chung@db.com +1-212-250-6375 |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
HSBC BANK USA, NATIONAL ASSOCIATION | ||
by | ||
/s/ Rafael S De Paoli | ||
Name: | Rafael S De Paoli | |
Title: | Managing Director |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
MIZUHO BANK, LTD. | ||
by | ||
/s/ Tracy Rahn | ||
Name: | Tracy Rahn | |
Title: | Executive Director |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
MORGAN STANLEY BANK, N.A. | ||
by | ||
/s/ Alysha Salinger | ||
Name: | Alysha Salinger | |
Title: | Authorized Signatory |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
MORGAN STANLEY SENIOR FUNDING, INC. | ||
by | ||
/s/ Alysha Salinger | ||
Name: | Alysha Salinger | |
Title: | Vice President |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
MUFG Bank, Ltd. (formerly known as The Bank of Tokyo-Mitsubishi UFJ, Ltd.) | ||
by | ||
/s/ Reema Sharma | ||
Name: | Reema Sharma | |
Title: | Authorized Signatory |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Royal Bank of Canada (executing in its capacity as a Revolving Lender):
Royal Bank of Canada | ||
by | ||
/s/ John Flores | ||
Name: | John Flores | |
Title: | Authorized Signatory |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
SUMITOMO MITSUI BANKING CORPORATION | ||
by | ||
/s/ Katie Lee | ||
Name: | Katie Lee | |
Title: | Director |
SIGNATURE PAGE TO
REVOLVING MATURITY DATE EXTENSION
LETTER AGREEMENT TO
CREDIT AGREEMENT OF
THE KRAFT HEINZ COMPANY AND
KRAFT HEINZ FOODS COMPANY
Name of Revolving Lender (with each Revolving Lender that is an Issuing Bank or a Swingline Lender executing both in its capacity as a Revolving Lender and as an Issuing Bank and/or a Swingline Lender, as applicable):
Wells Fargo Bank, National Association | ||
by | ||
/s/ Mark Holm | ||
Name: | Mark Holm | |
Title: | Managing Director |
Exhibit 99.1
SUPPLEMENTAL HISTORICAL SEGMENT FINANCIAL INFORMATION AND SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
Table of Contents
Page No. | ||||
Introduction |
1 | |||
Results of Operations by Segment |
2 | |||
Non-GAAP Financial Measures |
3 |
Unless the context otherwise requires, the terms we, us, our, Kraft Heinz, and the Company each refer to The Kraft Heinz Company.
Forward-Looking Statements
This supplemental information contains a number of forward-looking statements. Words such as anticipate, reflect, invest, see, make, expect, give, deliver, drive, believe, improve, assess, reassess, remain, evaluate, grow, will, plan, intend, and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding our plans, impacts of accounting standards and guidance, growth, legal matters, taxes, costs and cost savings, impairments, and dividends. These forward-looking statements 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 our control.
Important factors that may affect our 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; our 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 our relationships with significant customers, suppliers, and other business relationships; our ability to maintain, extend, and expand our reputation and brand image; our ability to leverage our brand value to compete against private label products; our ability to drive revenue growth in our key product categories, increase our market share, or add products that are in faster-growing and more profitable categories; product recalls or product liability claims; unanticipated business disruptions; our ability to identify, complete, or realize the benefits from strategic acquisitions, alliances, divestitures, joint ventures, or other investments; our ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes, and improve our competitiveness; our ability to successfully execute our strategic initiatives; the impacts of our international operations; economic and political conditions in the United States and in various other nations where we do business; changes in our management team or other key personnel and our 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; impacts of natural events in the locations in which we or our customers, suppliers, distributors, or regulators operate; our ownership structure; our indebtedness and ability to pay such 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; increased pension, labor and people-related expenses; 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 Commissions ongoing investigation, as well as potential additional subpoenas, litigation, and regulatory proceedings; an inability to remediate the material weaknesses in our internal control over financial reporting or additional material weaknesses or other deficiencies in the future or the failure to maintain an effective system of internal controls; our failure to prepare and timely file our periodic reports; the restatement of certain of our previously issued consolidated financial statements, which resulted in unanticipated costs and may affect investor confidence and raise reputational issues; our ability to protect intellectual property rights; tax law changes or interpretations; the impact of future sales of our common stock in the public markets; our ability to continue to pay a regular dividend and the amounts of any such dividends; volatility of capital markets and other macroeconomic factors; a downgrade in our credit rating; and other factors. For additional information on these and other factors that could affect our forward-looking statements, see Item 1A, Risk Factors, disclosed in our Annual Report on Form 10-K for the year ended December 28, 2019. We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this report, except as required by applicable law or regulation.
Introduction
Background:
In the first quarter of our fiscal year 2020, we reorganized our segments. For informational purposes only, we have furnished this exhibit to present the effects of these changes to certain previously disclosed financial information, including certain unaudited information related to our results of operations by segment and non-GAAP financial measures, for the years ended December 28, 2019, December 29, 2018, and December 30, 2017, as well as for each of the three months ended March 30, 2019, June 29, 2019, September 28, 2019, and December 28, 2019. The segment reorganization in the first quarter of our fiscal year 2020 had no impact on our consolidated financial statements for any of the periods presented in our Annual Report on Form 10-K for the year ended December 28, 2019 (2019 Form 10-K) filed on February 14, 2020.
The following unaudited financial information is based on our historical financial statements after giving effect to the segment reorganization in the first quarter of our fiscal year 2020. You should read this report in conjunction with our audited consolidated financial statements and related notes in our 2019 Form 10-K. The financial information contained in this report is not indicative of future or annual results.
Segment Changes:
As previously described in our 2019 Form 10-K, prior to the reorganization of our segments in the first quarter of our fiscal year 2020, we managed and reported our operating results through four segments. We had three reportable segments defined by geographic region: United States, Canada, and Europe, Middle East, and Africa (EMEA). Our remaining businesses were combined and disclosed as Rest of World. Rest of World comprised two operating segments: Latin America and Asia Pacific (APAC).
During the third quarter of our fiscal year 2019, certain organizational changes were announced that impacted our fiscal year 2020 internal reporting and reportable segments. As a result of these changes, we combined our EMEA, Latin America, and APAC zones to form the International zone. In addition, we moved our Puerto Rico business from the Latin America zone to the United States zone to consolidate and streamline the management of our product categories and supply chain.
Therefore, effective in the first quarter of 2020, we manage and report our operating results through three reportable segments defined by geographic region: United States, International, and Canada.
1
Results of Operations by Segment
In this supplemental information, we disclose certain non-GAAP financial measures. These non-GAAP financial measures assist management in comparing our 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 our underlying operations. For additional information and reconciliations from GAAP financial measures see the Non-GAAP Financial Measures section.
Management evaluates segment performance based on several factors, including net sales, Organic Net Sales, and Segment Adjusted EBITDA. Organic Net Sales is a non-GAAP financial measure. See the Non-GAAP Financial Measures section for additional information. Segment 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 integration and restructuring expenses); in addition to these adjustments, we exclude, when they occur, the impacts of integration and restructuring expenses, deal costs, unrealized gains/(losses) on commodity hedges (the unrealized gains and losses are recorded in general corporate expenses until realized; once realized, the gains and losses are recorded in the applicable segments operating results), impairment losses, and equity award compensation expense (excluding integration and restructuring expenses). Segment Adjusted EBITDA is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.
2019 compared to 2018 | 2018 compared to 2017 | |||||||||||||||
For the Year Ended | ||||||||||||||||
December 28, 2019 |
December 29, 2018 |
December 29, 2018 |
December 30, 2017 |
|||||||||||||
(in millions) | ||||||||||||||||
United States |
||||||||||||||||
Net sales |
$ | 17,844 | $ | 18,218 | $ | 18,218 | $ | 18,324 | ||||||||
Organic Net Sales(a) |
17,844 | 18,218 | 18,218 | 18,324 | ||||||||||||
Segment Adjusted EBITDA |
4,829 | 5,242 | 5,242 | 5,898 | ||||||||||||
International |
||||||||||||||||
Net sales |
5,251 | 5,877 | 5,877 | 5,575 | ||||||||||||
Organic Net Sales(a) |
5,417 | 5,443 | 5,533 | 5,210 | ||||||||||||
Segment Adjusted EBITDA |
1,004 | 1,335 | 1,335 | 1,238 | ||||||||||||
Canada |
||||||||||||||||
Net sales |
1,882 | 2,173 | 2,173 | 2,177 | ||||||||||||
Organic Net Sales(a) |
1,700 | 1,732 | 1,735 | 1,747 | ||||||||||||
Segment Adjusted EBITDA |
487 | 608 | 608 | 636 | ||||||||||||
(a) This is a non-GAAP financial measure. See the Non-GAAP Financial Measures section for more information.
For the Three Months Ended | ||||||||||||||||
March 30, 2019 |
June 29, 2019 |
September 28, 2019 |
December 28, 2019 |
|||||||||||||
(in millions) | ||||||||||||||||
United States |
||||||||||||||||
Net sales |
$ | 4,224 | $ | 4,533 | $ | 4,385 | $ | 4,702 | ||||||||
Organic Net Sales(a) |
4,224 | 4,533 | 4,385 | 4,702 | ||||||||||||
Segment Adjusted EBITDA |
1,139 | 1,257 | 1,160 | 1,273 | ||||||||||||
International |
||||||||||||||||
Net sales |
1,285 | 1,313 | 1,276 | 1,377 | ||||||||||||
Organic Net Sales(a) |
1,327 | 1,383 | 1,313 | 1,394 | ||||||||||||
Segment Adjusted EBITDA |
238 | 267 | 260 | 239 | ||||||||||||
Canada |
||||||||||||||||
Net sales |
450 | 560 | 415 | 457 | ||||||||||||
Organic Net Sales(a) |
376 | 450 | 418 | 456 | ||||||||||||
Segment Adjusted EBITDA |
121 | 143 | 107 | 116 | ||||||||||||
(a) This is a non-GAAP financial measure. See the Non-GAAP Financial Measures section for more information.
2
Non-GAAP Financial Measures
The non-GAAP financial measures we provide in this report should be viewed in addition to, and not as an alternative for, results prepared in accordance with U.S. GAAP.
To supplement the consolidated financial statements prepared in accordance with U.S. GAAP, we have presented Organic Net Sales, Adjusted EBITDA, and Constant Currency Adjusted EBITDA, 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 U.S. GAAP financial measures, such as net sales, net income/(loss), or other measures prescribed by U.S. GAAP, and there are limitations to using non-GAAP financial measures.
Management uses these non-GAAP financial measures to assist in comparing our 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 our underlying operations. Management believes that presenting our non-GAAP financial measures (i.e., Organic Net Sales, Adjusted EBITDA, and Constant Currency Adjusted EBITDA) 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 our results. We believe that the presentation of these non-GAAP financial measures, when considered together with the corresponding U.S. GAAP financial measures and the reconciliations to those measures, provides investors with additional understanding of the factors and trends affecting our 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. We calculate the impact of currency on net sales by holding exchange rates constant at the previous years exchange rate, with the exception of highly inflationary subsidiaries, for which we calculate the previous years results using the current years exchange rate. Organic Net Sales is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our 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 integration and restructuring expenses); in addition to these adjustments, we exclude, when they occur, the impacts of integration and restructuring expenses, deal costs, unrealized losses/(gains) on commodity hedges, impairment losses, and equity award compensation expense (excluding integration and restructuring expenses). We also present Adjusted EBITDA on a constant currency basis. We calculate the impact of currency on Adjusted EBITDA by holding exchange rates constant at the previous years exchange rate, with the exception of highly inflationary subsidiaries, for which we calculate the previous years results using the current years exchange rate. Adjusted EBITDA and Constant Currency Adjusted EBITDA are tools that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.
3
The Kraft Heinz Company
Reconciliation of Net Sales to Organic Net Sales
For the Year Ended
(dollars in millions)
(Unaudited)
Net Sales | Impact of Currency |
Acquisitions and Divestitures |
Organic Net Sales |
|||||||||||||
December 28, 2019 |
||||||||||||||||
United States |
$ | 17,844 | $ | | $ | | $ | 17,844 | ||||||||
International |
5,251 | (217) | 51 | 5,417 | ||||||||||||
Canada |
1,882 | (45) | 227 | 1,700 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 24,977 | $ | (262) | $ | 278 | $ | 24,961 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
December 29, 2018 |
||||||||||||||||
United States |
$ | 18,218 | $ | | $ | | $ | 18,218 | ||||||||
International |
5,877 | 243 | 191 | 5,443 | ||||||||||||
Canada |
2,173 | | 441 | 1,732 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 26,268 | $ | 243 | $ | 632 | $ | 25,393 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Year-over-year growth rates |
||||||||||||||||
United States |
(2.0)% | 0.0 pp | 0.0 pp | (2.0)% | ||||||||||||
International |
(10.6)% | (7.6) pp | (2.5) pp | (0.5)% | ||||||||||||
Canada |
(13.4)% | (2.1) pp | (9.4) pp | (1.9)% | ||||||||||||
Kraft Heinz |
(4.9)% | (1.9) pp | (1.3) pp | (1.7)% |
4
The Kraft Heinz Company
Reconciliation of Net Sales to Organic Net Sales
For the Year Ended
(dollars in millions)
(Unaudited)
Net Sales | Impact of Currency |
Acquisitions and Divestitures |
Organic Net Sales |
|||||||||||||
December 29, 2018 |
||||||||||||||||
United States |
$ | 18,218 | $ | | $ | | $ | 18,218 | ||||||||
International |
5,877 | (9) | 353 | 5,533 | ||||||||||||
Canada |
2,173 | (5) | 443 | 1,735 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 26,268 | $ | (14) | $ | 796 | $ | 25,486 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
December 30, 2017 |
||||||||||||||||
United States |
$ | 18,324 | $ | | $ | | $ | 18,324 | ||||||||
International |
5,575 | 144 | 221 | 5,210 | ||||||||||||
Canada |
2,177 | | 430 | 1,747 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 26,076 | $ | 144 | $ | 651 | $ | 25,281 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Year-over-year growth rates |
||||||||||||||||
United States |
(0.6)% | 0.0 pp | 0.0 pp | (0.6)% | ||||||||||||
International |
5.4% | (3.0) pp | 2.2 pp | 6.2% | ||||||||||||
Canada |
(0.2)% | (0.3) pp | 0.7 pp | (0.6)% | ||||||||||||
Kraft Heinz |
0.7% | (0.6) pp | 0.5 pp | 0.8% |
5
The Kraft Heinz Company
Reconciliation of Net Sales to Organic Net Sales
For the Three Months Ended
(dollars in millions)
(Unaudited)
Net Sales | Impact of Currency |
Acquisitions and Divestitures |
Organic Net Sales |
|||||||||||||
March 30, 2019 |
||||||||||||||||
United States |
$ | 4,224 | $ | | $ | | $ | 4,224 | ||||||||
International |
1,285 | (93) | 51 | 1,327 | ||||||||||||
Canada |
450 | (21) | 95 | 376 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 5,959 | $ | (114) | $ | 146 | $ | 5,927 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
March 31, 2018 |
||||||||||||||||
United States |
$ | 4,387 | $ | | $ | | $ | 4,387 | ||||||||
International |
1,433 | 39 | 68 | 1,326 | ||||||||||||
Canada |
484 | | 93 | 391 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 6,304 | $ | 39 | $ | 161 | $ | 6,104 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Year-over-year growth rates |
||||||||||||||||
United States |
(3.7)% | 0.0 pp | 0.0 pp | (3.7)% | ||||||||||||
International |
(10.4)% | (9.1) pp | (1.3) pp | % | ||||||||||||
Canada |
(7.0)% | (4.5) pp | 1.3 pp | (3.8)% | ||||||||||||
Kraft Heinz |
(5.5)% | (2.4) pp | (0.2) pp | (2.9)% |
6
The Kraft Heinz Company
Reconciliation of Net Sales to Organic Net Sales
For the Three Months Ended
(dollars in millions)
(Unaudited)
Net Sales | Impact of Currency |
Acquisitions and Divestitures |
Organic Net Sales |
|||||||||||||
June 29, 2019 |
||||||||||||||||
United States |
$ | 4,533 | $ | | $ | | $ | 4,533 | ||||||||
International |
1,313 | (70) | | 1,383 | ||||||||||||
Canada |
560 | (21) | 131 | 450 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 6,406 | $ | (91) | $ | 131 | $ | 6,366 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
June 30, 2018 |
||||||||||||||||
United States |
$ | 4,538 | $ | | $ | | $ | 4,538 | ||||||||
International |
1,588 | 101 | 74 | 1,413 | ||||||||||||
Canada |
564 | | 111 | 453 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 6,690 | $ | 101 | $ | 185 | $ | 6,404 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Year-over-year growth rates |
||||||||||||||||
United States |
(0.1)% | 0.0 pp | 0.0 pp | (0.1)% | ||||||||||||
International |
(17.2)% | (10.3) pp | (4.9) pp | (2.0)% | ||||||||||||
Canada |
(0.7)% | (3.6) pp | 3.8 pp | (0.9)% | ||||||||||||
Kraft Heinz |
(4.2)% | (2.8) pp | (0.8) pp | (0.6)% |
7
The Kraft Heinz Company
Reconciliation of Net Sales to Organic Net Sales
For the Three Months Ended
(dollars in millions)
(Unaudited)
Net Sales | Impact of Currency |
Acquisitions and Divestitures |
Organic Net Sales |
|||||||||||||
September 28, 2019 |
||||||||||||||||
United States |
$ | 4,385 | $ | | $ | | $ | 4,385 | ||||||||
International |
1,276 | (37) | | 1,313 | ||||||||||||
Canada |
415 | (4) | 1 | 418 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 6,076 | $ | (41) | $ | 1 | $ | 6,116 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
September 29, 2018 |
||||||||||||||||
United States |
$ | 4,457 | $ | | $ | | $ | 4,457 | ||||||||
International |
1,401 | 71 | 23 | 1,307 | ||||||||||||
Canada |
525 | | 104 | 421 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 6,383 | $ | 71 | $ | 127 | $ | 6,185 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Year-over-year growth rates |
||||||||||||||||
United States |
(1.6)% | 0.0 pp | 0.0 pp | (1.6)% | ||||||||||||
International |
(8.9)% | (7.6) pp | (1.8) pp | 0.5% | ||||||||||||
Canada |
(21.1)% | (0.8) pp | (19.8) pp | (0.5)% | ||||||||||||
Kraft Heinz |
(4.8)% | (1.7) pp | (2.0) pp | (1.1)% |
8
The Kraft Heinz Company
Reconciliation of Net Sales to Organic Net Sales
For the Three Months Ended
(dollars in millions)
(Unaudited)
Net Sales | Impact of Currency |
Acquisitions and Divestitures |
Organic Net Sales |
|||||||||||||
December 28, 2019 |
||||||||||||||||
United States |
$ | 4,702 | $ | | $ | | $ | 4,702 | ||||||||
International |
1,377 | (17) | | 1,394 | ||||||||||||
Canada |
457 | 1 | | 456 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 6,536 | $ | (16) | $ | | $ | 6,552 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
December 29, 2018 |
||||||||||||||||
United States |
$ | 4,836 | $ | | $ | | $ | 4,836 | ||||||||
International |
1,455 | 32 | 26 | 1,397 | ||||||||||||
Canada |
600 | | 133 | 467 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Kraft Heinz |
$ | 6,891 | $ | 32 | $ | 159 | $ | 6,700 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Year-over-year growth rates |
||||||||||||||||
United States |
(2.8)% | 0.0 pp | 0.0 pp | (2.8)% | ||||||||||||
International |
(5.4)% | (3.3) pp | (1.8) pp | (0.3)% | ||||||||||||
Canada |
(23.8)% | 0.1 pp | (21.4) pp | (2.5)% | ||||||||||||
Kraft Heinz |
(5.1)% | (0.6) pp | (2.3) pp | (2.2)% |
9
The Kraft Heinz Company
Reconciliation of Net Income/(Loss) to Adjusted EBITDA
For the Year Ended
(dollars in millions)
(Unaudited)
December 28, 2019 |
December 29, 2018 |
December 30, 2017 |
||||||||||
Net income/(loss) |
$ | 1,933 | $ | (10,254) | $ | 10,932 | ||||||
Interest expense |
1,361 | 1,284 | 1,234 | |||||||||
Other expense/(income) |
(952) | (168) | (627) | |||||||||
Provision for/(benefit from) income taxes |
728 | (1,067) | (5,482) | |||||||||
|
|
|
|
|
|
|||||||
Operating income/(loss) |
3,070 | (10,205) | 6,057 | |||||||||
Depreciation and amortization (excluding integration and restructuring expenses) |
985 | 919 | 907 | |||||||||
Integration and restructuring expenses |
102 | 297 | 583 | |||||||||
Deal costs |
19 | 23 | | |||||||||
Unrealized losses/(gains) on commodity hedges |
(57) | 21 | 19 | |||||||||
Impairment losses |
1,899 | 15,936 | 49 | |||||||||
Equity award compensation expense (excluding integration and restructuring expenses) |
46 | 33 | 49 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA |
$ | 6,064 | $ | 7,024 | $ | 7,664 | ||||||
|
|
|
|
|
|
|||||||
10
The Kraft Heinz Company
Reconciliation of Net Income/(Loss) to Adjusted EBITDA
For the Three Months Ended
(dollars in millions)
(Unaudited)
March 30, 2019 |
June 29, 2019 |
September 28, 2019 |
December 28, 2019 |
|||||||||||||
Net income/(loss) |
$ | 404 | $ | 448 | $ | 898 | $ | 183 | ||||||||
Interest expense |
321 | 316 | 398 | 326 | ||||||||||||
Other expense/(income) |
(380) | (133) | (380) | (59) | ||||||||||||
Provision for/(benefit from) income taxes |
217 | 103 | 264 | 144 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income/(loss) |
562 | 734 | 1,180 | 594 | ||||||||||||
Depreciation and amortization (excluding integration and restructuring expenses) |
234 | 253 | 243 | 255 | ||||||||||||
Integration and restructuring expenses |
27 | 14 | 15 | 46 | ||||||||||||
Deal costs |
8 | 5 | 6 | | ||||||||||||
Unrealized losses/(gains) on commodity hedges |
(29) | (10) | 9 | (27) | ||||||||||||
Impairment losses |
620 | 598 | 5 | 676 | ||||||||||||
Equity award compensation expense (excluding integration and restructuring expenses) |
9 | 6 | 11 | 20 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 1,431 | $ | 1,600 | $ | 1,469 | $ | 1,564 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
11
The Kraft Heinz Company
Reconciliation of Net Income/(Loss) to Adjusted EBITDA
For the Three Months Ended
(dollars in millions)
(Unaudited)
March 31, 2018 |
June 30, 2018 |
September 29, 2018 |
December 29, 2018 |
|||||||||||||
Net income/(loss) |
$ | 1,003 | $ | 753 | $ | 618 | $ | (12,628) | ||||||||
Interest expense |
317 | 316 | 326 | 325 | ||||||||||||
Other expense/(income) |
(90) | (20) | (71) | 13 | ||||||||||||
Provision for/(benefit from) income taxes |
270 | 308 | 201 | (1,846) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income/(loss) |
1,500 | 1,357 | 1,074 | (14,136) | ||||||||||||
Depreciation and amortization (excluding integration and restructuring expenses) |
199 | 235 | 245 | 240 | ||||||||||||
Integration and restructuring expenses |
90 | 93 | 32 | 82 | ||||||||||||
Deal costs |
9 | 7 | 3 | 4 | ||||||||||||
Unrealized losses/(gains) on commodity hedges |
2 | 3 | 6 | 10 | ||||||||||||
Impairment losses |
| 234 | 217 | 15,485 | ||||||||||||
Equity award compensation expense (excluding integration and restructuring expenses) |
7 | 20 | 17 | (11) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 1,807 | $ | 1,949 | $ | 1,594 | $ | 1,674 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
12
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA to Constant Currency Adjusted EBITDA
For the Year Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA | Impact of Currency | Constant Currency Adjusted EBITDA |
||||||||||
December 28, 2019 |
||||||||||||
United States |
$ | 4,829 | $ | | $ | 4,829 | ||||||
International |
1,004 | (38) | 1,042 | |||||||||
Canada |
487 | (12) | 499 | |||||||||
General corporate expenses |
(256) | 4 | (260) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 6,064 | $ | (46) | $ | 6,110 | ||||||
|
|
|
|
|
|
|||||||
December 29, 2018 |
||||||||||||
United States |
$ | 5,242 | $ | | $ | 5,242 | ||||||
International |
1,335 | 170 | 1,165 | |||||||||
Canada |
608 | | 608 | |||||||||
General corporate expenses |
(161) | | (161) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 7,024 | $ | 170 | $ | 6,854 | ||||||
|
|
|
|
|
|
|||||||
Year-over-year growth rates |
||||||||||||
United States |
(7.9)% | 0.0 pp | (7.9)% | |||||||||
International |
(24.8)% | (14.3) pp | (10.5)% | |||||||||
Canada |
(19.9)% | (1.9) pp | (18.0)% | |||||||||
General corporate expenses |
58.6% | (2.5) pp | 61.1% | |||||||||
Kraft Heinz |
(13.7)% | (2.8) pp | (10.9)% | |||||||||
13
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA to Constant Currency Adjusted EBITDA
For the Year Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA | Impact of Currency | Constant Currency Adjusted EBITDA |
||||||||||
December 29, 2018 |
||||||||||||
United States |
$ | 5,242 | $ | | $ | 5,242 | ||||||
International |
1,335 | 15 | 1,320 | |||||||||
Canada |
608 | (2) | 610 | |||||||||
General corporate expenses |
(161) | (2) | (159) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 7,024 | $ | 11 | $ | 7,013 | ||||||
|
|
|
|
|
|
|||||||
December 30, 2017 |
||||||||||||
United States |
$ | 5,898 | $ | | $ | 5,898 | ||||||
International |
1,238 | 56 | 1,182 | |||||||||
Canada |
636 | | 636 | |||||||||
General corporate expenses |
(108) | | (108) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 7,664 | $ | 56 | $ | 7,608 | ||||||
|
|
|
|
|
|
|||||||
Year-over-year growth rates |
||||||||||||
United States |
(11.1)% | 0.0 pp | (11.1)% | |||||||||
International |
7.9% | (3.8) pp | 11.7% | |||||||||
Canada |
(4.4)% | (0.3) pp | (4.1)% | |||||||||
General corporate expenses |
48.6% | 1.9 pp | 46.7% | |||||||||
Kraft Heinz |
(8.3)% | (0.5) pp | (7.8)% |
14
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA to Constant Currency Adjusted EBITDA
For the Three Months Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA | Impact of Currency | Constant Currency Adjusted EBITDA |
||||||||||
March 30, 2019 |
||||||||||||
United States |
$ | 1,139 | $ | | $ | 1,139 | ||||||
International |
238 | (17) | 255 | |||||||||
Canada |
121 | (6) | 127 | |||||||||
General corporate expenses |
(67) | 2 | (69) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 1,431 | $ | (21) | $ | 1,452 | ||||||
|
|
|
|
|
|
|||||||
March 31, 2018 |
||||||||||||
United States |
$ | 1,396 | $ | | $ | 1,396 | ||||||
International |
322 | 25 | 297 | |||||||||
Canada |
134 | | 134 | |||||||||
General corporate expenses |
(45) | | (45) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 1,807 | $ | 25 | $ | 1,782 | ||||||
|
|
|
|
|
|
|||||||
Year-over-year growth rates |
||||||||||||
United States |
(18.4)% | 0.0 pp | (18.4)% | |||||||||
International |
(25.9)% | (11.6) pp | (14.3)% | |||||||||
Canada |
(10.3)% | (4.3) pp | (6.0)% | |||||||||
General corporate expenses |
48.2% | (2.5) pp | 50.7% | |||||||||
Kraft Heinz |
(20.8)% | (2.3) pp | (18.5)% |
15
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA to Constant Currency Adjusted EBITDA
For the Three Months Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA | Impact of Currency | Constant Currency Adjusted EBITDA |
||||||||||
June 29, 2019 |
||||||||||||
United States |
$ | 1,257 | $ | | $ | 1,257 | ||||||
International |
267 | (14) | 281 | |||||||||
Canada |
143 | (5) | 148 | |||||||||
General corporate expenses |
(67) | 1 | (68) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 1,600 | $ | (18) | $ | 1,618 | ||||||
|
|
|
|
|
|
|||||||
June 30, 2018 |
||||||||||||
United States |
$ | 1,408 | $ | | $ | 1,408 | ||||||
International |
412 | 76 | 336 | |||||||||
Canada |
173 | | 173 | |||||||||
General corporate expenses |
(44) | | (44) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 1,949 | $ | 76 | $ | 1,873 | ||||||
|
|
|
|
|
|
|||||||
Year-over-year growth rates |
||||||||||||
United States |
(10.7)% | 0.0 pp | (10.7)% | |||||||||
International |
(35.3)% | (18.8) pp | (16.5)% | |||||||||
Canada |
(17.0)% | (2.8) pp | (14.2)% | |||||||||
General corporate expenses |
51.9% | (2.7) pp | 54.6% | |||||||||
Kraft Heinz |
(17.9)% | (4.3) pp | (13.6)% |
16
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA to Constant Currency Adjusted EBITDA
For the Three Months Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA | Impact of Currency | Constant Currency Adjusted EBITDA |
||||||||||
September 28, 2019 |
||||||||||||
United States |
$ | 1,160 | $ | | $ | 1,160 | ||||||
International |
260 | (8) | 268 | |||||||||
Canada |
107 | (1) | 108 | |||||||||
General corporate expenses |
(58) | 1 | (59) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 1,469 | $ | (8) | $ | 1,477 | ||||||
|
|
|
|
|
|
|||||||
September 29, 2018 |
||||||||||||
United States |
$ | 1,182 | $ | | $ | 1,182 | ||||||
International |
307 | 46 | 261 | |||||||||
Canada |
144 | | 144 | |||||||||
General corporate expenses |
(39) | | (39) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 1,594 | $ | 46 | $ | 1,548 | ||||||
|
|
|
|
|
|
|||||||
Year-over-year growth rates |
||||||||||||
United States |
(1.8)% | 0.0 pp | (1.8)% | |||||||||
International |
(15.4)% | (18.0) pp | 2.6% | |||||||||
Canada |
(25.7)% | (0.8) pp | (24.9)% | |||||||||
General corporate expenses |
49.8% | (2.8) pp | 52.6% | |||||||||
Kraft Heinz |
(7.8)% | (3.2) pp | (4.6)% |
17
The Kraft Heinz Company
Reconciliation of Adjusted EBITDA to Constant Currency Adjusted EBITDA
For the Three Months Ended
(dollars in millions)
(Unaudited)
Adjusted EBITDA | Impact of Currency | Constant Currency Adjusted EBITDA |
||||||||||
December 28, 2019 |
||||||||||||
United States |
$ | 1,273 | $ | | $ | 1,273 | ||||||
International |
239 | 1 | 238 | |||||||||
Canada |
116 | | 116 | |||||||||
General corporate expenses |
(64) | | (64) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 1,564 | $ | 1 | $ | 1,563 | ||||||
|
|
|
|
|
|
|||||||
December 29, 2018 |
||||||||||||
United States |
$ | 1,256 | $ | | $ | 1,256 | ||||||
International |
294 | 23 | 271 | |||||||||
Canada |
157 | | 157 | |||||||||
General corporate expenses |
(33) | | (33) | |||||||||
|
|
|
|
|
|
|||||||
Kraft Heinz |
$ | 1,674 | $ | 23 | $ | 1,651 | ||||||
|
|
|
|
|
|
|||||||
Year-over-year growth rates |
||||||||||||
United States |
1.3% | 0.0 pp | 1.3% | |||||||||
International |
(18.6)% | (7.0) pp | (11.6)% | |||||||||
Canada |
(26.1)% | 0.2 pp | (26.3)% | |||||||||
General corporate expenses |
92.2% | (2.2) pp | 94.4% | |||||||||
Kraft Heinz |
(6.6)% | (1.3) pp | (5.3)% |
18