Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 03, 2016 | May. 01, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Kraft Heinz Co | |
Entity Central Index Key | 1,637,459 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 3, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --01-01 | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,215,955,228 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Income Statement [Abstract] | ||
Net sales | $ 6,570 | $ 2,478 |
Cost of products sold | 4,192 | 1,631 |
Gross profit | 2,378 | 847 |
Selling, general and administrative expenses | 865 | 338 |
Operating income | 1,513 | 509 |
Interest expense | 249 | 201 |
Other expense/(income), net | (8) | (39) |
Income/(loss) before income taxes | 1,272 | 347 |
Provision for/(benefit from) income taxes | 372 | 68 |
Net income/(loss) | 900 | 279 |
Net income/(loss) attributable to noncontrolling interest | 4 | 3 |
Net income/(loss) attributable to Kraft Heinz | 896 | 276 |
Preferred dividends | 0 | 180 |
Net income/(loss) attributable to common shareholders | $ 896 | $ 96 |
Earnings Per Share [Abstract] | ||
Basic earnings/(loss) per share (in dollars per share) | $ 0.74 | $ 0.26 |
Diluted earnings/(loss) per share (in dollars per share) | 0.73 | 0.24 |
Dividends declared (in dollars per share) | $ 0.575 | $ 0 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income/(loss) | $ 900 | $ 279 |
Other comprehensive income/(loss), net of tax: | ||
Foreign currency translation adjustments | 272 | (794) |
Net deferred gains/(losses) on net investment hedges | (60) | 432 |
Net postemployment benefit gains/(losses) | 0 | (1) |
Reclassification of net postemployment benefit losses/(gains) | (54) | 0 |
Net deferred gains/(losses) on cash flow hedges | (18) | (67) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (22) | 1 |
Total other comprehensive income/(loss) | 118 | (429) |
Total comprehensive income/(loss) | 1,018 | (150) |
Comprehensive income/(loss) attributable to noncontrolling interest | 11 | (11) |
Comprehensive income/(loss) attributable to Kraft Heinz | $ 1,007 | $ (139) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Apr. 03, 2016 | Jan. 03, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 4,199 | $ 4,837 |
Trade receivables (net of allowances of $32 at April 3, 2016 and at January 3, 2016) | 939 | 871 |
Sold receivables | 805 | 583 |
Inventories | 2,892 | 2,618 |
Other current assets | 977 | 871 |
Total current assets | 9,812 | 9,780 |
Property, plant and equipment, net | 6,434 | 6,524 |
Goodwill | 43,542 | 43,051 |
Intangible assets, net | 62,049 | 62,120 |
Other assets | 1,436 | 1,498 |
TOTAL ASSETS | 123,273 | 122,973 |
LIABILITIES AND EQUITY | ||
Trade payables | 2,773 | 2,844 |
Accrued marketing | 867 | 856 |
Accrued postemployment costs | 164 | 328 |
Income taxes payable | 575 | 417 |
Interest payable | 266 | 401 |
Dividends payable | 794 | 762 |
Other current liabilities | 1,291 | 1,324 |
Total current liabilities | 6,730 | 6,932 |
Long-term debt | 25,167 | 25,151 |
Deferred income taxes | 21,659 | 21,497 |
Accrued postemployment costs | 2,380 | 2,405 |
Other liabilities | 737 | 752 |
TOTAL LIABILITIES | $ 56,673 | $ 56,737 |
Commitments and Contingencies (Note 12) | ||
Redeemable noncontrolling interest | $ 21 | $ 23 |
9.00% Series A cumulative compounding redeemable preferred stock, 80,000 authorized and issued shares at April 3, 2016 and January 3, 2016, $.01 par value | 8,320 | 8,320 |
Equity: | ||
Common stock, $.01 par value (5,000,000,000 shares authorized at April 3, 2016 and January 3, 2016; 1,216,075,938 shares issued and 1,215,541,052 shares outstanding at April 3, 2016; 1,214,391,614 shares issued and 1,213,978,752 shares outstanding at January 3, 2016) | 12 | 12 |
Additional paid-in capital | 58,438 | 58,375 |
Retained earnings/(deficit) | 193 | 0 |
Accumulated other comprehensive income/(losses) | (560) | (671) |
Treasury stock, at cost | (40) | (31) |
Total shareholders' equity | 58,043 | 57,685 |
Noncontrolling interest | 216 | 208 |
TOTAL EQUITY | 58,259 | 57,893 |
TOTAL LIABILITIES AND EQUITY | $ 123,273 | $ 122,973 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Apr. 03, 2016 | Jan. 03, 2016 | |
Receivables, allowances | $ 32 | $ 32 |
Common stock, shares issued | 1,216,075,938 | 1,214,391,614 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 5,000,000,000 | 5,000,000,000 |
Common stock, shares outstanding | 1,215,541,052 | 1,213,978,752 |
Nine point zero zero percent Series A cumulative compounding redeemable preferred stock | ||
9.00% Series A cumulative compounding redeemable preferred stock, dividend percentage | 9.00% | 9.00% |
9.00% Series A cumulative compounding redeemable preferred stock, 80,000 shares authorized | 80,000 | 80,000 |
9.00% Series A cumulative compounding redeemable preferred stock, 80,000 shares issued | 80,000 | 80,000 |
9.00% Series A cumulative compounding redeemable preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Equity (Unaudited) - 3 months ended Apr. 03, 2016 - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings/ (Deficit) | Accumulated Other Comprehensive Income/(Losses) | Treasury Stock | Noncontrolling Interest |
Beginning balance at Jan. 03, 2016 | $ 57,893 | $ 12 | $ 58,375 | $ 0 | $ (671) | $ (31) | $ 208 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income/(loss) excluding redeemable noncontrolling interest | 900 | 896 | 4 | ||||
Other comprehensive income/(loss) excluding redeemable noncontrolling interest | 115 | 111 | 4 | ||||
Dividends declared-common stock | (699) | (699) | |||||
Exercise of stock options, issuance of other stock awards, and other | 50 | 63 | (4) | (9) | |||
Ending balance at Apr. 03, 2016 | $ 58,259 | $ 12 | $ 58,438 | $ 193 | $ (560) | $ (40) | $ 216 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income/(loss) | $ 900 | $ 279 |
Adjustments to reconcile net income/(loss) to operating cash flows: | ||
Depreciation and amortization | 363 | 90 |
Amortization of postretirement benefit plans prior service credits | (50) | (1) |
Equity award compensation expense | 13 | 2 |
Deferred income tax provision | 27 | (48) |
Pension contributions | (169) | (15) |
Other items, net | (111) | 31 |
Changes in current assets and liabilities: | ||
Trade receivables | (38) | (29) |
Sold receivables | (222) | 9 |
Inventories | (273) | (96) |
Accounts payable | 59 | (63) |
Other current assets | (45) | (41) |
Other current liabilities | (184) | (201) |
Net cash provided by/(used for) operating activities | 270 | (83) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (303) | (53) |
Other investing activities, net | (22) | 4 |
Net cash provided by/(used for) investing activities | (325) | (49) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments of long-term debt | (6) | (1,962) |
Proceeds from issuance of long-term debt | 0 | 2,000 |
Dividends paid-Series A Preferred Stock | 0 | (180) |
Dividends paid-common stock | (667) | 0 |
Other financing activities, net | 46 | (72) |
Net cash provided by/(used for) financing activities | (627) | (214) |
Effect of exchange rate changes on cash and cash equivalents | 44 | (53) |
Net increase/(decrease) | (638) | (399) |
Balance at beginning of period | 4,837 | 2,298 |
Balance at end of period | $ 4,199 | $ 1,899 |
Background and Basis of Present
Background and Basis of Presentation (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Background and Basis of Presentation Basis of Presentation: Our interim condensed consolidated financial statements are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted, in accordance with the rules of the Securities and Exchange Commission (the “SEC”). In management's opinion, these interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary to present fairly our results for the periods presented. The condensed consolidated balance sheet data at January 3, 2016 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. You should read these statements in conjunction with our audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended January 3, 2016. The results for interim periods are not necessarily indicative of future or annual results. Organization: On July 2, 2015 (the “2015 Merger Date”), through a series of transactions, we consummated the merger of Kraft Foods Group, Inc. (“Kraft”) with and into a wholly-owned subsidiary of H.J. Heinz Holding Corporation (“Heinz”) (the “2015 Merger”). At the closing of the 2015 Merger, Heinz was renamed The Kraft Heinz Company (“Kraft Heinz”). Before the consummation of the 2015 Merger, Heinz was controlled by Berkshire Hathaway Inc. (“Berkshire Hathaway”) and 3G Global Food Holdings, L.P. (“3G Capital,” and together with Berkshire Hathaway, the “Sponsors”) following their acquisition of H. J. Heinz Company (the “2013 Merger”) on June 7, 2013 (the “2013 Merger Date”). Immediately prior to the consummation of the 2015 Merger, each share of Heinz issued and outstanding common stock was reclassified and changed into 0.443332 of a share of Kraft Heinz common stock. All share and per share amounts in the condensed consolidated financial statements and related notes have been retroactively adjusted for the historical period presented to give effect to this conversion, including reclassifying an amount equal to the change in value of common stock to additional paid-in capital. In the 2015 Merger, all outstanding shares of Kraft common stock were converted into the right to receive, on a one -for-one basis, shares of Kraft Heinz common stock. Deferred shares and restricted shares of Kraft were converted to deferred shares and restricted shares of Kraft Heinz, as applicable. Changes in Accounting and Reporting: In the third quarter of 2015, we made the following changes in accounting and reporting to harmonize our accounting and reporting as Kraft Heinz: • We made a voluntary change in accounting policy to classify certain warehouse and distribution costs (including shipping and handling costs) associated with the distribution of finished product to our customers as cost of products sold, which were previously recorded in selling, general and administrative expenses (“SG&A”). We made this voluntary change in accounting policy because we believe this presentation is preferable, as the classification in cost of products sold better reflects the cost of producing and distributing products. Additionally, this presentation enhances the comparability of our financial statements with industry peers and aligns with how we now internally manage and review costs. As required by U.S. GAAP, the change has been reflected in the condensed consolidated statements of income through retrospective application of the change in accounting policy. The impact of this change resulted in an increase in cost of products sold and a decrease in SG&A of $151 million for the three months ended March 29, 2015. • We made a voluntary change in accounting policy to classify our trademark and license intangible asset impairments and amortization in SG&A, which were previously recorded in cost of products sold. We made this voluntary change in accounting policy because we believe this presentation is preferable, as removing these expenses from cost of products sold better aligns cost of products sold with costs directly associated with generating revenue. Additionally, this presentation enhances the comparability of our financial statements with industry peers and aligns with how we now internally manage and review costs. As required by U.S. GAAP, the change has been reflected in the condensed consolidated statements of income through retrospective application of the change in accounting policy. The impact of this change was an increase in SG&A and a decrease in cost of products sold by $5 million for the three months ended March 29, 2015. • We determined that we had previously misclassified customer related intangible asset amortization. Such costs were previously included in cost of products sold but should have been included in SG&A. We have revised the classification to report these expenses in SG&A in the condensed consolidated statements of income for the applicable prior period presented. The impact of this revision was to increase SG&A and decrease cost of products sold by $16 million for the three months ended March 29, 2015. This misstatement was not material to any prior period financial statements. Consistent with our consolidated financial statements in our Annual Report on Form 10-K for the year ended January 3, 2016, we separately presented sold receivables on our consolidated balance sheets and consolidated statements of cash flows. Our prior period cash flow balances have been reclassified to conform with the current period presentation. Recently Issued Accounting Standards: In May 2014, the Financial Accounting Standards Board (the “FASB”) issued an accounting standards update (“ASU”) that superseded previously existing revenue recognition guidance. Under this ASU, companies will apply a principles-based five step model to recognize revenue upon the transfer of promised goods or services to customers and in an amount that reflects the consideration for which the company expects to be entitled in exchange for those goods or services. This ASU will be effective beginning in the first quarter of our fiscal year 2018. The ASU may be applied retrospectively to historical periods presented or as a cumulative-effect adjustment as of the date of adoption.We are currently evaluating the impact that this ASU will have on our financial statements and related disclosures. In September 2015, the FASB issued an ASU intended to simplify the accounting for measurement period adjustments in a business combination. Measurement period adjustments are changes to provisional amounts recorded when the accounting for a business combination is incomplete as of the end of a reporting period. The measurement period can extend for up to a year following the transaction date. During the measurement period, companies may make adjustments to provisional amounts when information necessary to complete the measurement is received. The ASU requires companies to recognize these adjustments, including any related impacts to net income, in the reporting period in which the adjustments are determined. Companies are no longer required to retroactively apply measurement period adjustments to all periods presented. We early adopted this ASU in 2015. See Note 2, Merger and Acquisition , for additional information on measurement period adjustments. In February 2016, the FASB issued an ASU that superseded previously existing leasing guidance. The ASU is intended to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The new guidance requires lessees to reflect most leases on their balance sheet as assets and obligations. This ASU will be effective beginning in the first quarter of our fiscal year 2019. Early adoption is permitted. The new guidance must be adopted using a modified retrospective transition, and provides for certain practical expedients.We are currently evaluating the impact that this ASU will have on our financial statements and related disclosures. In March 2016, the FASB issued an ASU intended to simplify equity-based award accounting and presentation. The ASU impacts income tax accounting related to equity-based awards, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. This ASU will be effective beginning in the first quarter of our fiscal year 2017. Early adoption is permitted. We are currently evaluating the impact that this ASU will have on our financial statements and related disclosures. |
Merger and Acquisition (Notes)
Merger and Acquisition (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Business Combinations [Abstract] | |
Merger and Acquisition | Merger and Acquisition Transaction Overview: The 2015 Merger was accounted for under the acquisition method of accounting for business combinations and Heinz was considered to be the acquiring company. Under the acquisition method of accounting, total consideration exchanged was (in millions): Aggregate fair value of Kraft common stock $ 42,502 $16.50 per share special cash dividend 9,782 Fair value of replacement equity awards 353 Total consideration exchanged $ 52,637 Valuation Assumptions and Preliminary Purchase Price Allocation: We utilized estimated fair values at the 2015 Merger Date for the preliminary allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed. Our purchase price allocation is substantially complete with the exception of identifiable intangible assets and certain income tax accounts. As we continue to integrate Kraft businesses, we may obtain additional information on the acquired identifiable intangible assets which, if significant, could require revisions to preliminary valuation assumptions, estimates and resulting fair values. Amounts for certain income tax accounts are also subject to change pending the filing of Kraft's pre-acquisition tax returns and the receipt of information from taxing authorities, which, if significant, could require revisions to preliminary assumptions and estimates. If we determine that any measurement period adjustments are significant, we will recognize those adjustments, including any related impacts to deferred tax positions, goodwill or net income, in the reporting period in which the adjustments are determined. The preliminary purchase price allocation to assets acquired and liabilities assumed in the transaction was (in millions): Cash $ 314 Other current assets 3,423 Property, plant and equipment 4,193 Identifiable intangible assets 49,749 Other non-current assets 214 Trade and other payables (3,011 ) Long-term debt (9,286 ) Net postemployment benefits and other non-current liabilities (4,734 ) Deferred income tax liabilities (17,416 ) Net assets acquired 23,446 Goodwill on acquisition 29,191 Total consideration 52,637 Fair value of shares exchanged and equity awards 42,855 Total cash consideration paid to Kraft shareholders 9,782 Cash and cash equivalents of Kraft at the 2015 Merger Date 314 Acquisition of business, net of cash on hand $ 9,468 During the first quarter of 2016, we updated the 2015 Merger purchase price allocation to adjust deferred and current income tax liabilities as of the 2015 Merger Date for pre-merger Kraft federal income tax returns and revised estimates. This measurement period adjustment was reflected in the table above as an increase to goodwill of $162 million , with corresponding adjustments to deferred income tax liabilities and trade and other payables. This measurement period adjustment is also reflected in our goodwill table in Note 5, Goodwill and Intangible Assets . The 2015 Merger preliminarily resulted in $29.2 billion of non tax deductible goodwill relating principally to synergies expected to be achieved from the combined operations and planned growth in new markets. Goodwill has preliminarily been allocated to our segments as shown in Note 5, Goodwill and Intangible Assets . Pro Forma Results: The following table provides unaudited pro forma results, prepared in accordance with ASC 805, for the three months ended March 29, 2015 , as if Kraft had been acquired as of December 30, 2013. For the Three Months Ended March 29, 2015 (in millions, except per share data) Net sales $ 6,830 Net income 738 Basic earnings per share 0.47 Diluted earnings per share 0.46 The unaudited pro forma results include certain preliminary purchase accounting adjustments. We have made pro forma adjustments to exclude deal costs (“Deal Costs”) of $24 million ( $15 million net of tax) for the three months ended March 29, 2015 , because such costs are nonrecurring and are directly attributable to the 2015 Merger. The unaudited pro forma results do not include any anticipated cost savings or other effects of future integration efforts. Unaudited pro forma amounts are not necessarily indicative of results had the 2015 Merger occurred on December 30, 2013 or of future results. |
Integration and Restructuring E
Integration and Restructuring Expenses (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Restructuring and Related Activities [Abstract] | |
Integration and Restructuring Expenses | Integration and Restructuring Expenses Following the 2015 Merger, we announced a multi-year program (the “Integration Program”) designed to reduce costs, integrate, and optimize the combined organization. As part of these activities, we incur expenses (primarily employee separations, lease terminations and other direct exit costs) that qualify as exit and disposal costs under U.S. GAAP. We also incur expenses that are an integral component of, and directly attributable to, our restructuring activities, which do not qualify as exit and disposal costs (primarily accelerated depreciation, asset impairments, implementation costs such as new facility relocation and start-up costs, and other incremental costs). Employee severance and other termination benefit packages are primarily determined based on established benefit arrangements, local statutory requirements or historical benefit practices. We recognize the contractual component of these benefits when payment is probable and estimable; additional elements of severance and termination benefits associated with non-recurring benefits are recognized ratably over each employee’s required future service period. Asset-related costs consist primarily of accelerated depreciation, and to a lesser degree asset impairments. Charges for accelerated depreciation are recognized on long-lived assets that will be taken out of service before the end of their normal service, in which case depreciation estimates are revised to reflect the use of the asset over its shortened useful life. Asset impairments establish a new fair value basis for assets held for disposal or sale and those assets are written down to expected net realizable if carrying value exceeds fair value. All other costs are recognized as incurred. Integration Program: We currently expect the Integration Program will result in $1.9 billion of pre-tax costs, with approximately 60% reflected in cost of products sold, comprised of the following categories: • Organization costs ( $650 million ) associated with our plans to streamline and simplify our operating structure, resulting in workforce reduction. These costs will primarily include: severance and employee benefits (cash severance, non-cash severance, including accelerated equity award compensation expense, and pension and other termination benefits). Beginning in August 2015, we announced a new, streamlined structure for our businesses in the United States and Canada segments. This resulted in the reduction of salaried positions across the United States and Canada. We currently expect to eliminate 2,650 positions in connection with this reduction. • Footprint costs ( $1.1 billion ) associated with our plans to optimize our production and supply chain network, resulting in facility closures and consolidations. These costs will primarily include: asset-related costs (accelerated depreciation and asset impairment charges), costs to exit facilities, relocation and start-up costs of new facilities, and severance and employee benefits. On November 4, 2015, we announced the closure of seven factories and began consolidation of our distribution network. In a staged process, production in these locations will shift to other existing factories in the United States and Canada. Overall, we expect to eliminate 2,600 positions in connection with these activities. • Other costs ( $150 million ) incurred as a direct result of restructuring activities, primarily including: contract and lease terminations, professional fees, and other incremental third-party fees. As of April 3, 2016 , we have incurred $1.1 billion of cumulative costs under the Integration Program, including: $590 million of severance and employee benefit costs, $292 million of non-cash asset-related costs, $125 million of other implementation costs, and $63 million of other exit costs. We expect that approximately 60% of the Integration Program expenses will be cash expenditures. Our Integration Program costs during the three months ended April 3, 2016 were (in millions): For the Three Months Ended April 3, 2016 Severance and employee benefit costs $ 28 Asset-related costs 156 Other exit costs 8 Other implementation costs 49 $ 241 At April 3, 2016 , the total Integration Program liability related primarily to the elimination of general salaried and footprint-related positions across the United States and Canada, 2,650 of whom have left the company by April 3, 2016 . The liability balance associated with the Integration Program, which qualifies as U.S. GAAP exit and disposal costs, was (in millions): Severance and Employee Benefit Costs Other Exit Costs (a) Total Balance at January 3, 2016 $ 185 $ 23 $ 208 Charges 28 8 36 Cash payments (48 ) (22 ) (70 ) Non-cash utilization (9 ) — (9 ) Balance at April 3, 2016 $ 156 $ 9 $ 165 (a) Other exit costs primarily represent contract and lease terminations. We expect that a substantial portion of the April 3, 2016 Integration Program liability will be paid in 2016. Restructuring Activities: Prior to the 2015 Merger, we executed a number of other restructuring activities focused primarily on work force reduction and factory closure and consolidation. Those programs, which are substantially complete, resulted in the elimination of 8,100 positions and cumulative $560 million severance and employee benefit costs, $340 million non-cash asset-related costs, and $360 million other exit costs through April 3, 2016 . Related to these restructuring activities, we incurred expenses of $19 million for the three months ended April 3, 2016 . As of April 3, 2016 , the liability balance associated with active restructuring projects, which qualifies as U.S. GAAP exit and disposal costs, was (in millions): Severance and Employee Benefit Costs Other Exit Costs (a) Total Balance at January 3, 2016 $ 25 $ 30 $ 55 Charges 10 1 11 Cash payments (20 ) (1 ) (21 ) Balance at April 3, 2016 $ 15 $ 30 $ 45 (a) Other exit costs primarily represent contract and lease terminations. Total Integration and Restructuring: Our total Integration Program and restructuring expenses were (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 Severance and employee benefit costs - COGS $ 6 $ 10 Severance and employee benefit costs - SG&A 32 2 Asset-related costs - COGS 142 3 Asset-related costs - SG&A 14 — Other exit costs - COGS 33 17 Other exit costs - SG&A 33 11 $ 260 $ 43 We do not include Integration Program and restructuring expenses within Segment Adjusted EBITDA. See Note 14, Segment Reporting , for additional information on our segment structure. The pre-tax impact of allocating such expenses to our segments would have been (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 United States $ 199 $ 9 Canada 18 1 Europe 15 25 Rest of World — 4 Non-Operating 28 4 $ 260 $ 43 |
Inventories (Notes)
Inventories (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories at April 3, 2016 and January 3, 2016 were (in millions): April 3, 2016 January 3, 2016 Packaging and ingredients $ 624 $ 563 Work in process 411 393 Finished product 1,857 1,662 Inventories $ 2,892 $ 2,618 The increase in inventories in the first quarter of 2016 is primarily due to an increase in inventory production ahead of planned facility closures and consolidations under our Integration Program, combined with the impact of seasonality. See Note 3, Integration and Restructuring Expenses, for additional information on the Integration Program. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill: In the first quarter of 2016, we moved certain of our export businesses and their related goodwill balances from our United States segment to our Rest of World and Europe segments. We have reflected this change in all historical periods presented. Accordingly, the segment goodwill balances at January 3, 2016 reflect a decrease of $2.5 billion in the United States, an increase of $2.5 billion in Rest of World, and an increase of $57 million in Europe. Changes in the carrying amount of goodwill from January 3, 2016 to April 3, 2016 , by segment, were (in millions): United States Canada Europe Rest of World Total Balance at January 3, 2016 $ 31,227 $ 4,796 $ 3,209 $ 3,819 $ 43,051 2015 Merger measurement period adjustments 162 — — — 162 Translation adjustments — 297 (74 ) 106 329 Balance at April 3, 2016 $ 31,389 $ 5,093 $ 3,135 $ 3,925 $ 43,542 In connection with the 2015 Merger, we recorded $29.2 billion of goodwill in purchase accounting, representing the preliminary fair value as of the 2015 Merger Date. As of the issuance date of this report, the assignment of goodwill to reporting units was also preliminary. During the first quarter of 2016, we updated the 2015 Merger purchase price allocation to adjust deferred and current income tax liabilities as of the 2015 Merger Date for pre-merger Kraft federal income tax returns and revised estimates. This measurement period adjustment was reflected in the table above as an increase of $162 million to goodwill in the United States segment. See Note 2, Merger and Acquisition , for additional information on this measurement period adjustment. We test goodwill for impairment at least annually in the second quarter or when a triggering event occurs. We performed our annual impairment testing in the second quarter of 2015, prior to the completion of the 2015 Merger. During our annual goodwill impairment test, we noted that the historical Heinz North America Consumer Products reporting unit had an estimated fair value in excess of its carrying value of less than 10% . If our current expectations of future growth rates are not met or if valuation factors outside of our control, such as discount rates, change unfavorably, the estimated fair value of our goodwill could be adversely affected, leading to a potential impairment in the future. No events occurred during the three months ended April 3, 2016 that indicated it was more likely than not that our goodwill was impaired. Additionally, there were no accumulated impairment losses to goodwill as of April 3, 2016 . Indefinite-lived intangible assets: In connection with the 2015 Merger, we recorded $45.1 billion of indefinite-lived intangible assets in purchase accounting, representing the preliminary fair values as of the 2015 Merger Date. Indefinite-lived intangible assets, which primarily consisted of trademarks, were $55.8 billion at April 3, 2016 and at January 3, 2016 . We test indefinite-lived intangible assets for impairment at least annually in the second quarter or when a triggering event occurs. We performed our annual impairment testing in the second quarter of 2015, prior to the completion of the 2015 Merger. During our annual indefinite-lived intangible asset impairment testing, we noted that 21 brands had excess fair values over their carrying values of less than 10% . These brands had an aggregate carrying value of $2.5 billion as of the date of our 2015 impairment test. If our current expectations of future growth rates are not met or if valuation factors outside of our control, such as discount rates, change unfavorably, the estimated fair values of our indefinite-lived intangible assets could be adversely affected, leading to potential impairments in the future. No events occurred during the three months ended April 3, 2016 that indicated it was more likely than not that our indefinite-lived intangible assets were impaired. Definite-lived intangible assets: Definite-lived intangible assets at April 3, 2016 and January 3, 2016 were (in millions): April 3, 2016 January 3, 2016 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks $ 2,362 $ (97 ) $ 2,265 $ 2,346 $ (70 ) $ 2,276 Customer-related assets 4,231 (251 ) 3,980 4,218 (209 ) 4,009 Other 14 (3 ) 11 15 (4 ) 11 $ 6,607 $ (351 ) $ 6,256 $ 6,579 $ (283 ) $ 6,296 Amortization expense for definite-lived intangible assets was $66 million for the three months ended April 3, 2016 and $23 million for the three months ended March 29, 2015 . Aside from amortization expense, the changes in definite-lived intangible assets from January 3, 2016 to April 3, 2016 reflect the impact of foreign currency. We estimate that annual amortization expense for definite-lived intangible assets for each of the next five years will be approximately $276 million . |
Income Taxes (Notes)
Income Taxes (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes consists of provisions for federal, state, and foreign income taxes. We operate in an international environment; accordingly, the consolidated income tax rate is a composite rate reflecting the earnings and applicable tax rates in various locations. The effective tax rate for the three months ended April 3, 2016 was 29.2% , reflecting the favorable benefit of pre-tax income in non-U.S. jurisdictions and certain tax exempt income. Our effective tax rate increased in comparison to the effective tax rate of 19.5% for the three months ended March 29, 2015 . The increase in our effective tax rate was driven by the 2015 Merger. With the 2015 Merger, our operations in the United States and Canada increased and resulted in higher blended statutory tax rates and a larger amount of tax exempt income. |
Employees' Stock Incentive Plan
Employees' Stock Incentive Plans (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employees' Stock Incentive Plans | Employees’ Stock Incentive Plans Our annual equity award grants and vesting occurred in the first quarter of 2016. Other off-cycle equity grants may occur throughout the year. Stock Options: Our stock option activity and related information was: Number of Stock Options Weighted Average Exercise Price (per share) Outstanding at January 3, 2016 24,205,612 $ 34.86 Options granted 1,139,620 77.66 Options forfeited (303,636 ) 37.02 Options exercised (1,295,303 ) 34.47 Outstanding at April 3, 2016 23,746,293 36.91 The aggregate intrinsic value of stock options exercised during the period was $54 million for the three months ended April 3, 2016 . Restricted Stock Units: Our restricted stock unit (“RSU”) activity and related information was: Number of Units Weighted Average Grant Date Fair Value (per share) RSUs at January 3, 2016 968,444 $ 70.14 Granted 481,767 77.51 Forfeited (29,141 ) 73.02 Vested (376,961 ) 72.96 RSUs at April 3, 2016 1,044,109 72.44 The aggregate fair value of RSUs that vested during the period was $28 million for the three months ended April 3, 2016 . Total Equity Awards: The compensation cost related to equity awards was primarily recognized in general corporate expenses within SG&A. Equity award compensation cost and the related tax benefit was (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 Pre-tax compensation cost $ 13 $ 2 Tax benefit (4 ) (1 ) After-tax compensation cost $ 9 $ 1 Unrecognized compensation cost related to unvested equity awards was $129 million at April 3, 2016 and is expected to be recognized over a weighted average period of three years. |
Postemployment Benefits (Notes)
Postemployment Benefits (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Postemployment Benefits | Postemployment Benefits In the first quarter of 2016, we changed the method that we use to estimate the service cost and interest cost components of net pension cost/(benefit) and net postretirement cost/(benefit). We use a full yield curve approach to estimate service cost and interest cost by applying the specific spot rates along the yield curve used to determine the benefit obligation to the relevant projected cash flows. Previously, we estimated service cost and interest cost using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. We made this change to provide a more precise measurement of service cost and interest cost by improving the correlation between projected benefit cash flows and the corresponding spot yield curve rates. The change resulted in a decrease of approximately $20 million in service cost and interest cost in the first quarter of 2016 compared to what our costs would have been under the previous method. This change did not affect the measurement of our total benefit obligations. We have accounted for this change prospectively as a change in accounting estimate. Pension Plans Components of Net Pension Cost/(Benefit): Net pension cost/(benefit) consisted of the following for the three months ended April 3, 2016 and March 29, 2015 (in millions): U.S. Plans Non-U.S. Plans For the Three Months Ended For the Three Months Ended April 3, 2016 March 29, 2015 April 3, 2016 March 29, 2015 Service cost $ 3 $ 1 $ 6 $ 5 Interest cost 53 5 21 21 Expected return on plan assets (74 ) (5 ) (46 ) (43 ) Amortization of unrecognized losses/(gains) — 1 — — Settlements (6 ) — — — Net pension cost/(benefit) $ (24 ) $ 2 $ (19 ) $ (17 ) We capitalized a portion of net pension costs/(benefits) into inventory based on our production activities. These amounts are included in the table above. Employer Contributions: During the three months ended April 3, 2016 , we contributed $161 million to our U.S. pension plans, which included contributions related to the settlement of our U.S. nonqualified pension plan that was terminated effective December 31, 2015. During the three months ended April 3, 2016 , we contributed $8 million to our non-U.S. pension plans. Based on our contribution strategy, we plan to make further contributions of up to approximately $150 million to our U.S. plans and approximately $25 million to our non-U.S. plans during the remainder of 2016. However, our actual contributions may differ due to many factors, including changes in tax, employee benefit, or other laws, tax deductibility, significant differences between expected and actual pension asset performance or interest rates, or other factors. Postretirement Plans Components of Net Postretirement Cost/(Benefit): Net postretirement cost/(benefit) consisted of the following for the three months ended April 3, 2016 and March 29, 2015 (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 Service cost $ 4 $ 1 Interest cost 16 2 Amortization of prior service costs/(credits) (82 ) (1 ) Net postretirement cost /(benefit) $ (62 ) $ 2 We capitalized a portion of net postretirement costs/(benefits) into inventory based on our production activities. These amounts are included in the table above. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income/(Losses) (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income/(Losses) | Accumulated Other Comprehensive Income/(Losses) The components of, and changes in, accumulated other comprehensive income/(losses) were as follows (net of tax): Foreign Currency Translation Adjustments Net Postemployment Benefit Plan Adjustments Net Cash Flow Hedge Adjustments Total (in millions) Balance as of January 3, 2016 $ (1,646 ) $ 922 $ 53 $ (671 ) Foreign currency translation adjustments 265 — — 265 Net deferred gains/(losses) on net investment hedges (60 ) — — (60 ) Reclassification of net postemployment benefit losses/(gains) — (54 ) — (54 ) Net deferred gains/(losses) on cash flow hedges — — (18 ) (18 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income — — (22 ) (22 ) Total other comprehensive income/(loss) 205 (54 ) (40 ) 111 Balance as of April 3, 2016 $ (1,441 ) $ 868 $ 13 $ (560 ) Reclassification of net postemployment benefit losses/(gains) included amounts reclassified to net income and amounts reclassified to inventory (consistent with our capitalization policy). The tax benefit/(expense) recorded in and associated with each component of other comprehensive income/(loss) for the three months ended April 3, 2016 and March 29, 2015 were as follows (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 Net deferred gains/(losses) on net investment hedges $ 24 $ (319 ) Net postemployment benefit gains/(losses) — 1 Reclassification of net postemployment benefit losses/(gains) 34 — Net deferred gains/(losses) on cash flow hedges 10 45 Net deferred losses/(gains) on cash flow hedges reclassified to net income 4 2 The amounts reclassified from accumulated other comprehensive income/(losses) in the three months ended April 3, 2016 and March 29, 2015 were as follows (in millions): Accumulated Other Comprehensive Income/(Losses) Component Reclassified from Accumulated Other Comprehensive Income/(Losses) Affected Line Item in the Statement Where Net Income is Presented For the Three Months Ended April 3, 2016 March 29, 2015 Losses/(gains) on cash flow hedges: Foreign exchange contracts $ (1 ) $ 1 Net sales Foreign exchange contracts (29 ) (5 ) Cost of products sold Foreign exchange contracts 3 (1 ) Other expense/(income), net Interest rate contracts 1 4 Interest expense Losses/(gains) on cash flow hedges before income taxes (26 ) (1 ) Losses/(gains) on cash flow hedges income taxes 4 2 Losses/(gains) on cash flow hedges $ (22 ) $ 1 Losses/(gains) on postemployment benefits: Amortization of unrecognized losses/(gains) $ — $ 1 (a) Amortization of prior service costs/(credits) (82 ) (1 ) (a) Settlement and curtailments losses/(gains) (6 ) — (a) Losses/(gains) on postemployment benefits before income taxes (88 ) — Losses/(gains) on postemployment benefits income taxes 34 — Losses/(gains) on postemployment benefits $ (54 ) $ — (a) These components are included in the computation of net periodic postemployment benefit costs. See Note 8, Postemployment Benefits , for additional information. In this note we have excluded activity and balances related to noncontrolling interest (which was primarily comprised of foreign currency translation adjustments) due to its insignificance. |
Financial Instruments (Notes)
Financial Instruments (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments See our consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended January 3, 2016 for additional information on our overall risk management strategies, our use of derivatives, and our related accounting policies. Derivative Volume: The notional values of our derivative instruments at April 3, 2016 and January 3, 2016 were (in millions): Notional Amount April 3, 2016 January 3, 2016 Commodity contracts $ 667 $ 787 Foreign exchange contracts 3,312 3,458 Cross-currency contracts 4,328 4,328 Fair Value of Derivative Instruments: The fair values and the levels within the fair value hierarchy of derivative instruments recorded on the condensed consolidated balance sheets at April 3, 2016 and January 3, 2016 were (in millions): April 3, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs Significant Unobservable Inputs Total Fair Value Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Derivatives designated as hedging instruments: Foreign exchange contracts $ — $ — $ 24 $ 34 $ — $ — $ 24 $ 34 Cross-currency contracts — — 531 — — — 531 — Derivatives not designated as hedging instruments: Commodity contracts 26 22 — 6 — — 26 28 Foreign exchange contracts — — 43 7 — — 43 7 Cross-currency contracts — — 40 — — — 40 — Total fair value $ 26 $ 22 $ 638 $ 47 $ — $ — $ 664 $ 69 January 3, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Derivatives designated as hedging instruments: Foreign exchange contracts $ — $ — $ 46 $ 6 $ — $ — $ 46 $ 6 Cross-currency contracts — — 605 — — — 605 — Derivatives not designated as hedging instruments: Commodity contracts 24 29 1 7 — — 25 36 Foreign exchange contracts — — 88 13 — — 88 13 Cross-currency contracts — — 47 — — — 47 — Total fair value $ 24 $ 29 $ 787 $ 26 $ — $ — $ 811 $ 55 Our derivative financial instruments are subject to master netting arrangements that allow for the offset of assets and liabilities in the event of default or early termination of the contract. We elect to record the gross assets and liabilities of our derivative financial instruments on the condensed consolidated balance sheets. If the derivative financial instruments had been netted on the condensed consolidated balance sheets, the asset and liability positions each would have been reduced by $54 million at April 3, 2016 and $44 million at January 3, 2016 . No material amounts of collateral were received or posted on our derivative assets and liabilities at April 3, 2016 . Level 1 financial assets and liabilities consist of commodity future and options contracts and are valued using quoted prices in active markets for identical assets and liabilities. Level 2 financial assets and liabilities consist of commodity forwards, foreign exchange forwards, and cross-currency swaps. Commodity forwards are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied by the notional amount. Foreign exchange forwards are valued using an income approach based on observable market forward rates less the contract rate multiplied by the notional amount. Cross-currency swaps are valued based on observable market spot and swap rates. Our calculation of the fair value of financial instruments takes into consideration the risk of nonperformance, including counterparty credit risk. There have been no transfers between Levels 1, 2, and 3 in any period presented. The fair values of our asset derivatives are recorded within other current assets and other assets. The fair values of our liability derivatives are recorded within other current liabilities and other liabilities. Net Investment Hedging: At April 3, 2016 , the principal amounts of foreign denominated debt designated as net investment hedges totaled €750 million and £400 million . At April 3, 2016 , our cross-currency swaps consisted of: Instrument Notional (local) (in billions) Notional (USD) (in billions) Maturity Cross-currency swap £ 0.8 $ 1.4 October 2019 Cross-currency swap € 0.9 1.1 October 2019 Cross-currency swap C$ 1.8 1.6 December 2019 Hedge Coverage: At April 3, 2016 , we had entered into contracts designated as hedging instruments, which hedge transactions for the following durations: • foreign currency contracts for periods not exceeding the next two years, and • cross-currency contracts for periods not exceeding the next four years. At April 3, 2016 , we had entered into contracts not designated as hedging instruments, which hedge economic risks for the following durations: • commodity contracts for periods not exceeding the next 12 months, • foreign exchange contracts for periods not exceeding the next two years, and • cross-currency contracts for periods not exceeding the next three years. Hedge Ineffectiveness: We record pre-tax gains or losses reclassified from accumulated other comprehensive income/(losses) due to ineffectiveness in: • other expense/(income), net for foreign exchange contracts related to forecasted transactions. Deferred Hedging Gains and Losses: Based on our valuation at April 3, 2016 and assuming market rates remain constant through contract maturities, we expect to transfer unrealized gains of $9 million (net of taxes) for foreign currency cash flow hedges to net income during the next 12 months. We expect transfers to net income of unrealized losses for interest rate cash flow hedges during the next 12 months to be insignificant. Derivative Impact on the Statements of Income and Statements of Comprehensive Income: The following tables present the pre-tax effect of derivative instruments on the condensed consolidated statements of income and statements of comprehensive income for the three months ended April 3, 2016 and March 29, 2015 (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 Commodity Contracts Foreign Exchange Cross-Currency Contracts Interest Rate Contracts Commodity Contracts Foreign Exchange Cross-Currency Contracts Interest Rate Derivatives designated as hedging instruments: Cash flow hedges: Gains/(losses) recognized in other comprehensive income (effective portion) $ — $ (27 ) $ — $ — $ — $ 8 $ — $ (120 ) Net investment hedges: Gains/(losses) recognized in other comprehensive income (effective portion) — — (65 ) — — — 751 — Total gains/(losses) recognized in other comprehensive income (effective portion) $ — $ (27 ) $ (65 ) $ — $ — $ 8 $ 751 $ (120 ) Cash flow hedges reclassified to net income/(loss): Net sales $ — $ 1 $ — $ — $ — $ (1 ) $ — $ — Cost of products sold (effective portion) — 29 — — — 5 — — Other expense/(income), net — (3 ) — — — 1 — — Interest expense — — — (1 ) — — — (4 ) — 27 — (1 ) — 5 — (4 ) Derivatives not designated as hedging instruments: Gains/(losses) on derivatives recognized in cost of products sold (18 ) — — — — — — — Gains/(losses) on derivatives recognized in other expense/(income), net — (75 ) (7 ) — — 49 — 11 (18 ) (75 ) (7 ) — — 49 — 11 Total gains/(losses) recognized in statements of income $ (18 ) $ (48 ) $ (7 ) $ (1 ) $ — $ 54 $ — $ 7 Related to our non-derivative, foreign denominated debt instruments designated as net investment hedges, we recognized a $19 million pre-tax loss in other comprehensive income/(loss) for the three months ended April 3, 2016 . |
Venezuela - Foreign Currency an
Venezuela - Foreign Currency and Inflation (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Foreign Currency [Abstract] | |
Venezuela - Foreign Currency and Inflation | Venezuela - Foreign Currency and Inflation In February 2016, the Venezuela government announced the following changes to its foreign currency exchange mechanisms, which were effective on March 10, 2016: • the official exchange rate of BsF 6.30 per U.S. dollar, which was available through the government-operated National Center of Foreign Commerce (“CENCOEX”), was devalued to BsF 10 per U.S. dollar; • the CENCOEX was replaced with the Sistema de Divisa Protegida (“DIPRO”), which is available for purchases and sales of essential items, including food products; • the Complimentary System of Foreign Currency Acquirement (“SICAD”) was eliminated; and • the Marginal Currency System (“SIMADI”) was replaced with the Sistema de Divisa Complementaria (“DICOM”), which is available for all transactions not covered by DIPRO and is a free-floating exchange format. At April 3, 2016, there were two exchange rates legally available to us for converting Venezuelan bolivars to U.S. dollars, including: • the official exchange rate of BsF 10 per U.S. dollar available through DIPRO; and • the DICOM rate, which has averaged approximately BsF 201 per U.S. dollar since commencement of trading, and was BsF 276 per U.S. dollar at April 3, 2016. We have had limited access to, and settlements at, the official exchange rate of BsF 6.30 and no settlements at the official exchange rate of BsF 10 per U.S. dollar during the three months ended April 3, 2016 . We had outstanding requests of $26 million at April 3, 2016 for payment of invoices for the purchase of ingredients and packaging materials for the years from 2012 through 2015, all of which were requested for payment at the BsF 6.30 per U.S. dollar rate. Due to the continued lack of liquidity and increasing economic uncertainty, as of April 3, 2016 , we continue to believe that the DICOM rate (formerly SIMADI) is the most appropriate legally available rate. Our Venezuelan subsidiary recognized net sales of $18 million and operating income of $7 million for the three months ended April 3, 2016 . Our results of operations in Venezuela reflect a controlled subsidiary. However, the continuing economic uncertainty, strict labor laws, and evolving government controls over imports, prices, currency exchange and payments present a challenging operating environment. Increased restrictions imposed by the Venezuelan government could impact our ability to control our Venezuelan operations and could lead us to deconsolidate our Venezuelan subsidiary in the future. |
Commitments, Contingencies and
Commitments, Contingencies and Debt (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Debt | Commitments, Contingencies and Debt Legal Proceedings: We are routinely involved in legal proceedings, claims, and governmental inquiries, inspections or investigations (“Legal Matters”) arising in the ordinary course of our business. On April 1, 2015, the Commodity Futures Trading Commission (“CFTC”) filed a formal complaint against Mondelēz International and Kraft in the U.S. District Court for the Northern District of Illinois, Eastern Division, related to activities involving the trading of December 2011 wheat futures contracts. The complaint alleges that Mondelēz International and Kraft (1) manipulated or attempted to manipulate the wheat markets during the fall of 2011, (2) violated position limit levels for wheat futures, and (3) engaged in non-competitive trades by trading both sides of exchange-for-physical Chicago Board of Trade wheat contracts. As previously disclosed by Kraft, these activities arose prior to the October 1, 2012 spin-off of Kraft by Mondelēz International to its shareholders and involve the business now owned and operated by Mondelēz International or its affiliates. The Separation and Distribution Agreement between Kraft and Mondelēz International, dated as of September 27, 2012, governs the allocation of liabilities between Mondelēz International and Kraft and, accordingly, Mondelēz International will predominantly bear the costs of this matter and any monetary penalties or other payments that the CFTC may impose. We do not expect this matter to have a material adverse effect on our financial condition, results of operations, or business. As previously disclosed, six lawsuits were filed in connection with the 2015 Merger against Kraft, members of its board of directors, Heinz, Kite Merger Sub Corp., and Kite Merger Sub LLC. The plaintiffs in these matters alleged, among other things, that (i) the Registration Statement on Form S-4 relating to the 2015 Merger contained material omissions and misleading statements, and (ii) the members of the Kraft board of directors breached their fiduciary duties in connection with the 2015 Merger. The plaintiffs sought, among other things, injunctive relief and damages. As disclosed in Kraft’s Form 8-K filed on June 24, 2015, on June 23, 2015, Kraft entered into a memorandum of understanding with the plaintiffs providing for the settlement of all of these lawsuits. On October 28, 2015, we executed a stipulation of settlement with the plaintiffs formalizing the terms of the memorandum of understanding. On November 10, 2015, the U.S. District Court for the Eastern District of Virginia issued an order preliminarily approving the settlement and providing for notice to Kraft’s shareholders regarding the proposed settlement. On March 10, 2016, the Court issued a final order approving the settlement. In accordance with the Stipulation of Settlement and final order, all claims against defendants in these matters have been dismissed with prejudice. While we cannot predict with certainty the results of Legal Matters in which we are currently involved or may in the future be involved, we do not expect that the ultimate costs to resolve any of the Legal Matters that are currently pending will have a material adverse effect on our financial condition or results of operations. Fair Value of Debt: At April 3, 2016 , the aggregate fair value of our total debt was $27.0 billion as compared with the carrying value of $25.3 billion . We determined the fair value of our long-term debt using Level 2 inputs. Fair values are generally estimated based on quoted market prices for identical or similar instruments. Series A Preferred Stock: We currently intend to redeem the 9.00% Series A Cumulative Compounding Redeemable Preferred Stock (“Series A Preferred Stock”) during the second quarter of 2016. We expect to fund this redemption primarily through the issuance of new debt securities, as well as other sources of liquidity, including our commercial paper program, U.S. securitization program, and cash on hand. |
Earnings Per Share (Notes)
Earnings Per Share (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share As a result of the stock conversion prior to the 2015 Merger, all historical per share data, numbers of shares, and numbers of equity awards outstanding were retroactively adjusted. See Note 1, Background and Basis of Presentation , for additional information. Our earnings per common share (“EPS”) for the three months ended April 3, 2016 and March 29, 2015 were: For the Three Months Ended April 3, 2016 March 29, 2015 (in millions, except per share amounts) Basic Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 896 $ 96 Weighted average shares of common stock outstanding 1,215 377 Net earnings/(loss) $ 0.74 $ 0.26 Diluted Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 896 $ 96 Weighted average shares of common stock outstanding 1,215 377 Effect of dilutive securities: Warrants — 21 Equity awards 10 1 Weighted average shares of common stock outstanding, including dilutive effect 1,225 399 Net earnings/(loss) $ 0.73 $ 0.24 We use the treasury stock method to calculate the dilutive effect of outstanding warrants and equity awards in the denominator for diluted earnings per common share. Anti-dilutive shares were 3 million for the three months ended April 3, 2016 . There were no anti-dilutive shares for the three months ended March 29, 2015 . |
Segment Reporting (Notes)
Segment Reporting (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We manufacture and market food and beverage products, including condiments and sauces, cheese and dairy, meals, meats, refreshment beverages, coffee, and other grocery products, throughout the world. We manage and report our operating results through four segments. We have three reportable segments defined by geographic region: United States, Canada, and Europe. Our remaining businesses are combined and disclosed as “Rest of World”. Rest of World is comprised of three operating segments: Asia Pacific, Latin America, and Russia, India, the Middle East and Africa (“RIMEA”). Management evaluates segment performance based on several factors including net sales and segment adjusted earnings before interest, tax, depreciation, and amortization (“Segment Adjusted EBITDA”). Management uses Segment Adjusted EBITDA to evaluate segment performance and allocate resources. Segment Adjusted EBITDA assists 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 core operations. These items include depreciation and amortization (including amortization of postretirement benefit plans prior service credits), equity award compensation expense, integration and restructuring expenses, merger costs, unrealized gains and 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 segment operating results), impairment losses, gains/(losses) associated with the sale of a business, nonmonetary currency devaluation, and certain general corporate expenses. In addition, consistent with the manner in which management evaluates segment performance and allocates resources, Segment Adjusted EBITDA includes the operating results of Kraft on a pro forma basis, as if Kraft had been acquired as of December 30, 2013. There are no pro forma adjustments to any of the numbers disclosed in this note to the condensed consolidated financial statements except for the Segment Adjusted EBITDA reconciliation. In the first quarter of 2016, we moved certain historical Kraft export businesses from our United States segment to our Rest of World and Europe segments to align with our long-term go-to-market strategies. We began to manage and report our results reflecting this change in the first quarter of 2016 and have reflected this change in all pro forma historical information presented. The impact of this change is not material to current or prior period results. This change did not impact our Integration Program and restructuring expenses disclosed by segment in Note 3, Integration and Restructuring Expenses. Management does not use assets by segment to evaluate performance or allocate resources and therefore, we do not disclose assets by segment. Our net sales by segment and Segment Adjusted EBITDA were: For the Three Months Ended April 3, 2016 March 29, 2015 (in millions) Net sales: United States $ 4,715 $ 868 Canada 504 121 Europe 553 626 Rest of World 798 863 Total net sales $ 6,570 $ 2,478 For the Three Months Ended April 3, 2016 March 29, 2015 (in millions) Segment Adjusted EBITDA: United States $ 1,493 $ 1,123 Canada 151 113 Europe 177 214 Rest of World 167 190 General corporate expenses (37 ) (31 ) Depreciation and amortization (excluding integration and restructuring expenses) (161 ) (216 ) Integration and restructuring expenses (260 ) (81 ) Merger costs (15 ) (13 ) Unrealized gains/(losses) on commodity hedges 8 2 Nonmonetary currency devaluation (1 ) — Equity award compensation expense (excluding integration and restructuring expenses) (9 ) (19 ) Other pro forma adjustments — (773 ) Operating income 1,513 509 Interest expense 249 201 Other expense/(income), net (8 ) (39 ) Income/(loss) before income taxes $ 1,272 $ 347 Our net sales by product category were: For the Three Months Ended April 3, 2016 March 29, 2015 (in millions) Condiments and sauces $ 1,576 $ 1,230 Cheese and dairy 1,384 — Ambient meals 586 334 Frozen and chilled meals 620 471 Meats and seafood 705 44 Refreshment beverages 407 — Coffee 392 — Infant and nutrition 191 253 Desserts, toppings and baking 206 — Nuts and salted snacks 264 — Other 239 146 Total net sales $ 6,570 $ 2,478 |
Supplemental Financial Informat
Supplemental Financial Information (Notes) | 3 Months Ended |
Apr. 03, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information We fully and unconditionally guarantee the notes issued by our 100% owned operating subsidiary, Kraft Heinz Foods Company. See Note 12, Debt, in our Annual Report on Form 10-K, for additional descriptions of these guarantees. None of our other subsidiaries guarantee these notes. Set forth below are the condensed consolidating financial statements presenting the results of operations, financial position and cash flows of The Kraft Heinz Company (as parent guarantor), Kraft Heinz Foods Company (as subsidiary issuer of the notes), and the non-guarantor subsidiaries on a combined basis and eliminations necessary to arrive at the total reported information on a consolidated basis. This condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or being Registered.” This information is not intended to present the financial position, results of operations, and cash flows of the individual companies or groups of companies in accordance with U.S. GAAP. Eliminations represent adjustments to eliminate investments in subsidiaries and intercompany balances and transactions between or among the parent guarantor, subsidiary issuer, and the non-guarantor subsidiaries. The Kraft Heinz Company Condensed Consolidating Statements of Income For the Three Months Ended April 3, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 4,471 $ 2,241 $ (142 ) $ 6,570 Cost of products sold — 2,832 1,502 (142 ) 4,192 Gross profit — 1,639 739 — 2,378 Selling, general and administrative expenses — 277 588 — 865 Intercompany service fees and other recharges — 1,214 (1,214 ) — — Operating income — 148 1,365 — 1,513 Interest expense — 235 14 — 249 Other expense/(income), net — 31 (39 ) — (8 ) Income/(loss) before income taxes — (118 ) 1,390 — 1,272 Equity in earnings of subsidiaries 896 956 — (1,852 ) — Provision for/(benefit from) income taxes — (58 ) 430 — 372 Net income/(loss) 896 896 960 (1,852 ) 900 Net income/(loss) attributable to noncontrolling interest — — 4 — 4 Net income/(loss) excluding noncontrolling interest $ 896 $ 896 $ 956 $ (1,852 ) $ 896 Comprehensive income/(loss) excluding noncontrolling interest $ 1,007 $ 1,007 $ 1,149 $ (2,156 ) $ 1,007 The Kraft Heinz Company Condensed Consolidating Statements of Income For the Three Months Ended March 29, 2015 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 925 $ 1,612 $ (59 ) $ 2,478 Cost of products sold — 618 1,072 (59 ) 1,631 Gross profit — 307 540 — 847 Selling, general and administrative expenses — 136 202 — 338 Intercompany service fees and other recharges — (11 ) 11 — — Operating income — 182 327 — 509 Interest expense — 166 35 — 201 Other expense/(income), net — (3 ) (36 ) — (39 ) Income/(loss) before income taxes — 19 328 — 347 Equity in earnings of subsidiaries 276 257 — (533 ) — Provision for/(benefit from) income taxes — — 68 — 68 Net income/(loss) 276 276 260 (533 ) 279 Net income/(loss) attributable to noncontrolling interest — — 3 — 3 Net income/(loss) excluding noncontrolling interest $ 276 $ 276 $ 257 $ (533 ) $ 276 Comprehensive income/(loss) excluding noncontrolling interest $ (139 ) $ (139 ) $ (544 ) $ 683 $ (139 ) The Kraft Heinz Company Condensed Consolidating Balance Sheets As of April 3, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 2,561 $ 1,638 $ — $ 4,199 Trade receivables — 66 873 — 939 Receivables due from affiliates — 386 106 (492 ) — Sold receivables — 767 38 — 805 Inventories — 1,943 949 — 2,892 Short-term lending due from affiliates — 3,594 4,038 (7,632 ) — Other current assets — 452 877 (352 ) 977 Total current assets — 9,769 8,519 (8,476 ) 9,812 Property, plant and equipment, net — 4,409 2,025 — 6,434 Goodwill — 10,966 32,576 — 43,542 Investments in subsidiaries 66,363 74,406 — (140,769 ) — Intangible assets, net — 3,803 58,246 — 62,049 Long-term lending due from affiliates — 1,484 2,000 (3,484 ) — Other assets — 529 907 — 1,436 TOTAL ASSETS $ 66,363 $ 105,366 $ 104,273 $ (152,729 ) $ 123,273 LIABILITIES AND EQUITY Short-term lending due to affiliates $ — $ 4,038 $ 3,594 $ (7,632 ) $ — Trade payables — 1,566 1,207 — 2,773 Payables due to affiliates — 106 386 (492 ) — Accrued marketing — 312 555 — 867 Accrued postemployment costs — 150 14 — 164 Income taxes payable — 837 90 (352 ) 575 Interest payable — 261 5 — 266 Dividends payable — 794 — — 794 Other current liabilities — 1,030 261 — 1,291 Total current liabilities — 9,094 6,112 (8,476 ) 6,730 Long-term debt — 24,127 1,040 — 25,167 Long-term borrowings due to affiliates — 2,000 1,700 (3,700 ) — Deferred income taxes — 1,255 20,404 — 21,659 Accrued postemployment costs — 2,106 274 — 2,380 Other liabilities — 421 316 — 737 TOTAL LIABILITIES — 39,003 29,846 (12,176 ) 56,673 Redeemable noncontrolling interest — — 21 — 21 9.00% Series A cumulative compounding redeemable preferred stock 8,320 — — — 8,320 Total shareholders' equity 58,043 66,363 74,190 (140,553 ) 58,043 Noncontrolling interest — — 216 — 216 TOTAL EQUITY 58,043 66,363 74,406 (140,553 ) 58,259 TOTAL LIABILITIES AND EQUITY $ 66,363 $ 105,366 $ 104,273 $ (152,729 ) $ 123,273 The Kraft Heinz Company Condensed Consolidating Balance Sheets As of January 3, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 3,189 $ 1,648 $ — $ 4,837 Trade receivables — 62 809 — 871 Receivables due from affiliates — 555 319 (874 ) — Sold receivables — 554 29 583 Inventories — 1,741 877 — 2,618 Short-term lending due from affiliates — 3,657 4,353 (8,010 ) — Other current assets — 645 443 (217 ) 871 Total current assets — 10,403 8,478 (9,101 ) 9,780 Property, plant and equipment, net — 4,518 2,006 — 6,524 Goodwill — 10,976 32,075 — 43,051 Investments in subsidiaries 66,005 73,105 — (139,110 ) — Intangible assets, net — 3,838 58,282 — 62,120 Long-term lending due from affiliates — 1,700 2,000 (3,700 ) — Other assets — 534 964 — 1,498 TOTAL ASSETS $ 66,005 $ 105,074 $ 103,805 $ (151,911 ) $ 122,973 LIABILITIES AND EQUITY Short-term lending due to affiliates $ — $ 4,353 $ 3,657 $ (8,010 ) $ — Trade payables — 1,612 1,232 — 2,844 Payables due to affiliates — 319 555 (874 ) — Accrued marketing — 359 497 — 856 Accrued postemployment costs — 316 12 — 328 Income taxes payable — 71 563 (217 ) 417 Interest payable — 386 15 — 401 Dividends payable — 762 — — 762 Other current liabilities — 1,053 271 — 1,324 Total current liabilities — 9,231 6,802 (9,101 ) 6,932 Long-term debt — 24,143 1,008 — 25,151 Long-term borrowings due to affiliates — 2,000 1,905 (3,905 ) — Deferred income taxes — 1,278 20,219 — 21,497 Accrued postemployment costs — 2,147 258 — 2,405 Other liabilities — 270 482 — 752 TOTAL LIABILITIES — 39,069 30,674 (13,006 ) 56,737 Redeemable noncontrolling interest — — 23 — 23 9.00% Series A cumulative compounding redeemable preferred stock 8,320 — — — 8,320 Total shareholders' equity 57,685 66,005 72,900 (138,905 ) 57,685 Noncontrolling interest — — 208 — 208 TOTAL EQUITY 57,685 66,005 73,108 (138,905 ) 57,893 TOTAL LIABILITIES AND EQUITY $ 66,005 $ 105,074 $ 103,805 $ (151,911 ) $ 122,973 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended April 3, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ — $ 166 $ 104 $ — $ 270 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (242 ) (61 ) — (303 ) Net proceeds from/(payments on) intercompany lending activities — 423 314 (737 ) — Return of capital 667 — — (667 ) — Other investing activities, net — (19 ) (3 ) — (22 ) Net cash provided by/(used for) investing activities 667 162 250 (1,404 ) (325 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (4 ) (2 ) — (6 ) Net proceeds from/(payments on) intercompany borrowing activities — (314 ) (423 ) 737 — Dividends paid-Series A Preferred Stock — — — — — Dividends paid-common stock (667 ) (667 ) — 667 (667 ) Other financing activities, net — 29 17 — 46 Net cash provided by/(used for) financing activities (667 ) (956 ) (408 ) 1,404 (627 ) Effect of exchange rate changes on cash and cash equivalents — — 44 — 44 Cash and cash equivalents: Net increase/(decrease) — (628 ) (10 ) — (638 ) Balance at beginning of period — 3,189 1,648 — 4,837 Balance at end of period $ — $ 2,561 $ 1,638 $ — $ 4,199 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 29, 2015 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 180 $ (103 ) $ 20 $ (180 ) $ (83 ) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (26 ) (27 ) — (53 ) Net proceeds from/(payments on) intercompany lending activities — (609 ) (747 ) 1,356 — Return of capital — 5 — (5 ) — Other investing activities, net — (1 ) 5 — 4 Net cash provided by/(used for) investing activities — (631 ) (769 ) 1,351 (49 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (1,960 ) (2 ) — (1,962 ) Proceeds from issuance of long-term debt — 2,000 — — 2,000 Net proceeds from/(payments on) intercompany borrowing activities — 747 609 (1,356 ) — Dividends paid-Series A Preferred Stock (180 ) — — — (180 ) Dividends paid-common stock — (180 ) — 180 — Other intercompany capital stock transactions — — (5 ) 5 — Other financing activities, net — (16 ) (56 ) — (72 ) Net cash provided by/(used for) financing activities (180 ) 591 546 (1,171 ) (214 ) Effect of exchange rate changes on cash and cash equivalents — — (53 ) — (53 ) Cash and cash equivalents: Net increase/(decrease) — (143 ) (256 ) — (399 ) Balance at beginning of period — 541 1,757 — 2,298 Balance at end of period $ — $ 398 $ 1,501 $ — $ 1,899 |
Background and Basis of Prese23
Background and Basis of Presentation (Policies) | 3 Months Ended |
Apr. 03, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards: In May 2014, the Financial Accounting Standards Board (the “FASB”) issued an accounting standards update (“ASU”) that superseded previously existing revenue recognition guidance. Under this ASU, companies will apply a principles-based five step model to recognize revenue upon the transfer of promised goods or services to customers and in an amount that reflects the consideration for which the company expects to be entitled in exchange for those goods or services. This ASU will be effective beginning in the first quarter of our fiscal year 2018. The ASU may be applied retrospectively to historical periods presented or as a cumulative-effect adjustment as of the date of adoption.We are currently evaluating the impact that this ASU will have on our financial statements and related disclosures. In September 2015, the FASB issued an ASU intended to simplify the accounting for measurement period adjustments in a business combination. Measurement period adjustments are changes to provisional amounts recorded when the accounting for a business combination is incomplete as of the end of a reporting period. The measurement period can extend for up to a year following the transaction date. During the measurement period, companies may make adjustments to provisional amounts when information necessary to complete the measurement is received. The ASU requires companies to recognize these adjustments, including any related impacts to net income, in the reporting period in which the adjustments are determined. Companies are no longer required to retroactively apply measurement period adjustments to all periods presented. We early adopted this ASU in 2015. See Note 2, Merger and Acquisition , for additional information on measurement period adjustments. In February 2016, the FASB issued an ASU that superseded previously existing leasing guidance. The ASU is intended to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The new guidance requires lessees to reflect most leases on their balance sheet as assets and obligations. This ASU will be effective beginning in the first quarter of our fiscal year 2019. Early adoption is permitted. The new guidance must be adopted using a modified retrospective transition, and provides for certain practical expedients.We are currently evaluating the impact that this ASU will have on our financial statements and related disclosures. In March 2016, the FASB issued an ASU intended to simplify equity-based award accounting and presentation. The ASU impacts income tax accounting related to equity-based awards, the classification of awards as either equity or liabilities, and the classification on the statement of cash flows. This ASU will be effective beginning in the first quarter of our fiscal year 2017. Early adoption is permitted. We are currently evaluating the impact that this ASU will have on our financial statements and related disclosures. |
Merger and Acquisition (Tables)
Merger and Acquisition (Tables) - Kraft Foods Group, Inc. | 3 Months Ended |
Apr. 03, 2016 | |
Business Acquisition [Line Items] | |
Business Combination, Schedule of Consideration Exchanged | Under the acquisition method of accounting, total consideration exchanged was (in millions): Aggregate fair value of Kraft common stock $ 42,502 $16.50 per share special cash dividend 9,782 Fair value of replacement equity awards 353 Total consideration exchanged $ 52,637 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The preliminary purchase price allocation to assets acquired and liabilities assumed in the transaction was (in millions): Cash $ 314 Other current assets 3,423 Property, plant and equipment 4,193 Identifiable intangible assets 49,749 Other non-current assets 214 Trade and other payables (3,011 ) Long-term debt (9,286 ) Net postemployment benefits and other non-current liabilities (4,734 ) Deferred income tax liabilities (17,416 ) Net assets acquired 23,446 Goodwill on acquisition 29,191 Total consideration 52,637 Fair value of shares exchanged and equity awards 42,855 Total cash consideration paid to Kraft shareholders 9,782 Cash and cash equivalents of Kraft at the 2015 Merger Date 314 Acquisition of business, net of cash on hand $ 9,468 |
Business Acquisition, Pro Forma Information | The following table provides unaudited pro forma results, prepared in accordance with ASC 805, for the three months ended March 29, 2015 , as if Kraft had been acquired as of December 30, 2013. For the Three Months Ended March 29, 2015 (in millions, except per share data) Net sales $ 6,830 Net income 738 Basic earnings per share 0.47 Diluted earnings per share 0.46 |
Integration and Restructuring25
Integration and Restructuring Expenses (Tables) | 3 Months Ended |
Apr. 03, 2016 | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Costs by Type and Income Statement Location | Our total Integration Program and restructuring expenses were (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 Severance and employee benefit costs - COGS $ 6 $ 10 Severance and employee benefit costs - SG&A 32 2 Asset-related costs - COGS 142 3 Asset-related costs - SG&A 14 — Other exit costs - COGS 33 17 Other exit costs - SG&A 33 11 $ 260 $ 43 |
Restructuring Costs Excluded from Segments | The pre-tax impact of allocating such expenses to our segments would have been (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 United States $ 199 $ 9 Canada 18 1 Europe 15 25 Rest of World — 4 Non-Operating 28 4 $ 260 $ 43 |
Integration Program | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve by Type of Cost | The liability balance associated with the Integration Program, which qualifies as U.S. GAAP exit and disposal costs, was (in millions): Severance and Employee Benefit Costs Other Exit Costs (a) Total Balance at January 3, 2016 $ 185 $ 23 $ 208 Charges 28 8 36 Cash payments (48 ) (22 ) (70 ) Non-cash utilization (9 ) — (9 ) Balance at April 3, 2016 $ 156 $ 9 $ 165 (a) Other exit costs primarily represent contract and lease terminations. |
Restructuring Costs by Type and Income Statement Location | Our Integration Program costs during the three months ended April 3, 2016 were (in millions): For the Three Months Ended April 3, 2016 Severance and employee benefit costs $ 28 Asset-related costs 156 Other exit costs 8 Other implementation costs 49 $ 241 |
Restructuring Activities | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve by Type of Cost | As of April 3, 2016 , the liability balance associated with active restructuring projects, which qualifies as U.S. GAAP exit and disposal costs, was (in millions): Severance and Employee Benefit Costs Other Exit Costs (a) Total Balance at January 3, 2016 $ 25 $ 30 $ 55 Charges 10 1 11 Cash payments (20 ) (1 ) (21 ) Balance at April 3, 2016 $ 15 $ 30 $ 45 (a) Other exit costs primarily represent contract and lease terminations. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Apr. 03, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories at April 3, 2016 and January 3, 2016 were (in millions): April 3, 2016 January 3, 2016 Packaging and ingredients $ 624 $ 563 Work in process 411 393 Finished product 1,857 1,662 Inventories $ 2,892 $ 2,618 |
Goodwill and Intangible Asset27
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Apr. 03, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying amount of goodwill | Changes in the carrying amount of goodwill from January 3, 2016 to April 3, 2016 , by segment, were (in millions): United States Canada Europe Rest of World Total Balance at January 3, 2016 $ 31,227 $ 4,796 $ 3,209 $ 3,819 $ 43,051 2015 Merger measurement period adjustments 162 — — — 162 Translation adjustments — 297 (74 ) 106 329 Balance at April 3, 2016 $ 31,389 $ 5,093 $ 3,135 $ 3,925 $ 43,542 |
Schedule of definite-lived intangible assets by major asset class | Definite-lived intangible assets at April 3, 2016 and January 3, 2016 were (in millions): April 3, 2016 January 3, 2016 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks $ 2,362 $ (97 ) $ 2,265 $ 2,346 $ (70 ) $ 2,276 Customer-related assets 4,231 (251 ) 3,980 4,218 (209 ) 4,009 Other 14 (3 ) 11 15 (4 ) 11 $ 6,607 $ (351 ) $ 6,256 $ 6,579 $ (283 ) $ 6,296 |
Employees' Stock Incentive Pl28
Employees' Stock Incentive Plans (Tables) | 3 Months Ended |
Apr. 03, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | Our stock option activity and related information was: Number of Stock Options Weighted Average Exercise Price (per share) Outstanding at January 3, 2016 24,205,612 $ 34.86 Options granted 1,139,620 77.66 Options forfeited (303,636 ) 37.02 Options exercised (1,295,303 ) 34.47 Outstanding at April 3, 2016 23,746,293 36.91 |
Schedule of Share-based Compensation, RSU Activity | Our restricted stock unit (“RSU”) activity and related information was: Number of Units Weighted Average Grant Date Fair Value (per share) RSUs at January 3, 2016 968,444 $ 70.14 Granted 481,767 77.51 Forfeited (29,141 ) 73.02 Vested (376,961 ) 72.96 RSUs at April 3, 2016 1,044,109 72.44 |
Schedule of Compensation Costs Related to Equity Plans | Equity award compensation cost and the related tax benefit was (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 Pre-tax compensation cost $ 13 $ 2 Tax benefit (4 ) (1 ) After-tax compensation cost $ 9 $ 1 |
Postemployment Benefits (Tables
Postemployment Benefits (Tables) | 3 Months Ended |
Apr. 03, 2016 | |
Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Components of Net Cost/(Benefit) | Net pension cost/(benefit) consisted of the following for the three months ended April 3, 2016 and March 29, 2015 (in millions): U.S. Plans Non-U.S. Plans For the Three Months Ended For the Three Months Ended April 3, 2016 March 29, 2015 April 3, 2016 March 29, 2015 Service cost $ 3 $ 1 $ 6 $ 5 Interest cost 53 5 21 21 Expected return on plan assets (74 ) (5 ) (46 ) (43 ) Amortization of unrecognized losses/(gains) — 1 — — Settlements (6 ) — — — Net pension cost/(benefit) $ (24 ) $ 2 $ (19 ) $ (17 ) |
Postretirement Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Components of Net Cost/(Benefit) | Net postretirement cost/(benefit) consisted of the following for the three months ended April 3, 2016 and March 29, 2015 (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 Service cost $ 4 $ 1 Interest cost 16 2 Amortization of prior service costs/(credits) (82 ) (1 ) Net postretirement cost /(benefit) $ (62 ) $ 2 |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Income/(Losses) (Tables) | 3 Months Ended |
Apr. 03, 2016 | |
Equity [Abstract] | |
Components of and Changes in Accumulated Other Comprehensive Income/(Losses) | The components of, and changes in, accumulated other comprehensive income/(losses) were as follows (net of tax): Foreign Currency Translation Adjustments Net Postemployment Benefit Plan Adjustments Net Cash Flow Hedge Adjustments Total (in millions) Balance as of January 3, 2016 $ (1,646 ) $ 922 $ 53 $ (671 ) Foreign currency translation adjustments 265 — — 265 Net deferred gains/(losses) on net investment hedges (60 ) — — (60 ) Reclassification of net postemployment benefit losses/(gains) — (54 ) — (54 ) Net deferred gains/(losses) on cash flow hedges — — (18 ) (18 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income — — (22 ) (22 ) Total other comprehensive income/(loss) 205 (54 ) (40 ) 111 Balance as of April 3, 2016 $ (1,441 ) $ 868 $ 13 $ (560 ) |
Tax Benefit/(Expense) Associated with each Component of Other Comprehensive Income/(Loss) | The tax benefit/(expense) recorded in and associated with each component of other comprehensive income/(loss) for the three months ended April 3, 2016 and March 29, 2015 were as follows (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 Net deferred gains/(losses) on net investment hedges $ 24 $ (319 ) Net postemployment benefit gains/(losses) — 1 Reclassification of net postemployment benefit losses/(gains) 34 — Net deferred gains/(losses) on cash flow hedges 10 45 Net deferred losses/(gains) on cash flow hedges reclassified to net income 4 2 |
Amounts Reclassified From Accumulated Other Comprehensive Income/(Losses) | The amounts reclassified from accumulated other comprehensive income/(losses) in the three months ended April 3, 2016 and March 29, 2015 were as follows (in millions): Accumulated Other Comprehensive Income/(Losses) Component Reclassified from Accumulated Other Comprehensive Income/(Losses) Affected Line Item in the Statement Where Net Income is Presented For the Three Months Ended April 3, 2016 March 29, 2015 Losses/(gains) on cash flow hedges: Foreign exchange contracts $ (1 ) $ 1 Net sales Foreign exchange contracts (29 ) (5 ) Cost of products sold Foreign exchange contracts 3 (1 ) Other expense/(income), net Interest rate contracts 1 4 Interest expense Losses/(gains) on cash flow hedges before income taxes (26 ) (1 ) Losses/(gains) on cash flow hedges income taxes 4 2 Losses/(gains) on cash flow hedges $ (22 ) $ 1 Losses/(gains) on postemployment benefits: Amortization of unrecognized losses/(gains) $ — $ 1 (a) Amortization of prior service costs/(credits) (82 ) (1 ) (a) Settlement and curtailments losses/(gains) (6 ) — (a) Losses/(gains) on postemployment benefits before income taxes (88 ) — Losses/(gains) on postemployment benefits income taxes 34 — Losses/(gains) on postemployment benefits $ (54 ) $ — (a) These components are included in the computation of net periodic postemployment benefit costs. See Note 8, Postemployment Benefits , for additional information. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Apr. 03, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts of outstanding derivative positions | The notional values of our derivative instruments at April 3, 2016 and January 3, 2016 were (in millions): Notional Amount April 3, 2016 January 3, 2016 Commodity contracts $ 667 $ 787 Foreign exchange contracts 3,312 3,458 Cross-currency contracts 4,328 4,328 |
Schedule of derivative fair values and levels within the fair value hierarchy on the balance sheets | The fair values and the levels within the fair value hierarchy of derivative instruments recorded on the condensed consolidated balance sheets at April 3, 2016 and January 3, 2016 were (in millions): April 3, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs Significant Unobservable Inputs Total Fair Value Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Derivatives designated as hedging instruments: Foreign exchange contracts $ — $ — $ 24 $ 34 $ — $ — $ 24 $ 34 Cross-currency contracts — — 531 — — — 531 — Derivatives not designated as hedging instruments: Commodity contracts 26 22 — 6 — — 26 28 Foreign exchange contracts — — 43 7 — — 43 7 Cross-currency contracts — — 40 — — — 40 — Total fair value $ 26 $ 22 $ 638 $ 47 $ — $ — $ 664 $ 69 January 3, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities Derivatives designated as hedging instruments: Foreign exchange contracts $ — $ — $ 46 $ 6 $ — $ — $ 46 $ 6 Cross-currency contracts — — 605 — — — 605 — Derivatives not designated as hedging instruments: Commodity contracts 24 29 1 7 — — 25 36 Foreign exchange contracts — — 88 13 — — 88 13 Cross-currency contracts — — 47 — — — 47 — Total fair value $ 24 $ 29 $ 787 $ 26 $ — $ — $ 811 $ 55 |
Schedule of cross-currency swap derivatives | At April 3, 2016 , our cross-currency swaps consisted of: Instrument Notional (local) (in billions) Notional (USD) (in billions) Maturity Cross-currency swap £ 0.8 $ 1.4 October 2019 Cross-currency swap € 0.9 1.1 October 2019 Cross-currency swap C$ 1.8 1.6 December 2019 |
Schedule of gains/(losses) recognized in statements of operations | The following tables present the pre-tax effect of derivative instruments on the condensed consolidated statements of income and statements of comprehensive income for the three months ended April 3, 2016 and March 29, 2015 (in millions): For the Three Months Ended April 3, 2016 March 29, 2015 Commodity Contracts Foreign Exchange Cross-Currency Contracts Interest Rate Contracts Commodity Contracts Foreign Exchange Cross-Currency Contracts Interest Rate Derivatives designated as hedging instruments: Cash flow hedges: Gains/(losses) recognized in other comprehensive income (effective portion) $ — $ (27 ) $ — $ — $ — $ 8 $ — $ (120 ) Net investment hedges: Gains/(losses) recognized in other comprehensive income (effective portion) — — (65 ) — — — 751 — Total gains/(losses) recognized in other comprehensive income (effective portion) $ — $ (27 ) $ (65 ) $ — $ — $ 8 $ 751 $ (120 ) Cash flow hedges reclassified to net income/(loss): Net sales $ — $ 1 $ — $ — $ — $ (1 ) $ — $ — Cost of products sold (effective portion) — 29 — — — 5 — — Other expense/(income), net — (3 ) — — — 1 — — Interest expense — — — (1 ) — — — (4 ) — 27 — (1 ) — 5 — (4 ) Derivatives not designated as hedging instruments: Gains/(losses) on derivatives recognized in cost of products sold (18 ) — — — — — — — Gains/(losses) on derivatives recognized in other expense/(income), net — (75 ) (7 ) — — 49 — 11 (18 ) (75 ) (7 ) — — 49 — 11 Total gains/(losses) recognized in statements of income $ (18 ) $ (48 ) $ (7 ) $ (1 ) $ — $ 54 $ — $ 7 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Apr. 03, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Our earnings per common share (“EPS”) for the three months ended April 3, 2016 and March 29, 2015 were: For the Three Months Ended April 3, 2016 March 29, 2015 (in millions, except per share amounts) Basic Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 896 $ 96 Weighted average shares of common stock outstanding 1,215 377 Net earnings/(loss) $ 0.74 $ 0.26 Diluted Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 896 $ 96 Weighted average shares of common stock outstanding 1,215 377 Effect of dilutive securities: Warrants — 21 Equity awards 10 1 Weighted average shares of common stock outstanding, including dilutive effect 1,225 399 Net earnings/(loss) $ 0.73 $ 0.24 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Apr. 03, 2016 | |
Segment Reporting [Abstract] | |
Net Sales by Segment | Our net sales by segment and Segment Adjusted EBITDA were: For the Three Months Ended April 3, 2016 March 29, 2015 (in millions) Net sales: United States $ 4,715 $ 868 Canada 504 121 Europe 553 626 Rest of World 798 863 Total net sales $ 6,570 $ 2,478 |
Segment Adjusted EBITDA | For the Three Months Ended April 3, 2016 March 29, 2015 (in millions) Segment Adjusted EBITDA: United States $ 1,493 $ 1,123 Canada 151 113 Europe 177 214 Rest of World 167 190 General corporate expenses (37 ) (31 ) Depreciation and amortization (excluding integration and restructuring expenses) (161 ) (216 ) Integration and restructuring expenses (260 ) (81 ) Merger costs (15 ) (13 ) Unrealized gains/(losses) on commodity hedges 8 2 Nonmonetary currency devaluation (1 ) — Equity award compensation expense (excluding integration and restructuring expenses) (9 ) (19 ) Other pro forma adjustments — (773 ) Operating income 1,513 509 Interest expense 249 201 Other expense/(income), net (8 ) (39 ) Income/(loss) before income taxes $ 1,272 $ 347 |
Net Sales by Product | Our net sales by product category were: For the Three Months Ended April 3, 2016 March 29, 2015 (in millions) Condiments and sauces $ 1,576 $ 1,230 Cheese and dairy 1,384 — Ambient meals 586 334 Frozen and chilled meals 620 471 Meats and seafood 705 44 Refreshment beverages 407 — Coffee 392 — Infant and nutrition 191 253 Desserts, toppings and baking 206 — Nuts and salted snacks 264 — Other 239 146 Total net sales $ 6,570 $ 2,478 |
Supplemental Financial Inform34
Supplemental Financial Information (Tables) | 3 Months Ended |
Apr. 03, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Consolidating Statements of Income | The Kraft Heinz Company Condensed Consolidating Statements of Income For the Three Months Ended April 3, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 4,471 $ 2,241 $ (142 ) $ 6,570 Cost of products sold — 2,832 1,502 (142 ) 4,192 Gross profit — 1,639 739 — 2,378 Selling, general and administrative expenses — 277 588 — 865 Intercompany service fees and other recharges — 1,214 (1,214 ) — — Operating income — 148 1,365 — 1,513 Interest expense — 235 14 — 249 Other expense/(income), net — 31 (39 ) — (8 ) Income/(loss) before income taxes — (118 ) 1,390 — 1,272 Equity in earnings of subsidiaries 896 956 — (1,852 ) — Provision for/(benefit from) income taxes — (58 ) 430 — 372 Net income/(loss) 896 896 960 (1,852 ) 900 Net income/(loss) attributable to noncontrolling interest — — 4 — 4 Net income/(loss) excluding noncontrolling interest $ 896 $ 896 $ 956 $ (1,852 ) $ 896 Comprehensive income/(loss) excluding noncontrolling interest $ 1,007 $ 1,007 $ 1,149 $ (2,156 ) $ 1,007 The Kraft Heinz Company Condensed Consolidating Statements of Income For the Three Months Ended March 29, 2015 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 925 $ 1,612 $ (59 ) $ 2,478 Cost of products sold — 618 1,072 (59 ) 1,631 Gross profit — 307 540 — 847 Selling, general and administrative expenses — 136 202 — 338 Intercompany service fees and other recharges — (11 ) 11 — — Operating income — 182 327 — 509 Interest expense — 166 35 — 201 Other expense/(income), net — (3 ) (36 ) — (39 ) Income/(loss) before income taxes — 19 328 — 347 Equity in earnings of subsidiaries 276 257 — (533 ) — Provision for/(benefit from) income taxes — — 68 — 68 Net income/(loss) 276 276 260 (533 ) 279 Net income/(loss) attributable to noncontrolling interest — — 3 — 3 Net income/(loss) excluding noncontrolling interest $ 276 $ 276 $ 257 $ (533 ) $ 276 Comprehensive income/(loss) excluding noncontrolling interest $ (139 ) $ (139 ) $ (544 ) $ 683 $ (139 ) |
Condensed Consolidating Balance Sheets | The Kraft Heinz Company Condensed Consolidating Balance Sheets As of April 3, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 2,561 $ 1,638 $ — $ 4,199 Trade receivables — 66 873 — 939 Receivables due from affiliates — 386 106 (492 ) — Sold receivables — 767 38 — 805 Inventories — 1,943 949 — 2,892 Short-term lending due from affiliates — 3,594 4,038 (7,632 ) — Other current assets — 452 877 (352 ) 977 Total current assets — 9,769 8,519 (8,476 ) 9,812 Property, plant and equipment, net — 4,409 2,025 — 6,434 Goodwill — 10,966 32,576 — 43,542 Investments in subsidiaries 66,363 74,406 — (140,769 ) — Intangible assets, net — 3,803 58,246 — 62,049 Long-term lending due from affiliates — 1,484 2,000 (3,484 ) — Other assets — 529 907 — 1,436 TOTAL ASSETS $ 66,363 $ 105,366 $ 104,273 $ (152,729 ) $ 123,273 LIABILITIES AND EQUITY Short-term lending due to affiliates $ — $ 4,038 $ 3,594 $ (7,632 ) $ — Trade payables — 1,566 1,207 — 2,773 Payables due to affiliates — 106 386 (492 ) — Accrued marketing — 312 555 — 867 Accrued postemployment costs — 150 14 — 164 Income taxes payable — 837 90 (352 ) 575 Interest payable — 261 5 — 266 Dividends payable — 794 — — 794 Other current liabilities — 1,030 261 — 1,291 Total current liabilities — 9,094 6,112 (8,476 ) 6,730 Long-term debt — 24,127 1,040 — 25,167 Long-term borrowings due to affiliates — 2,000 1,700 (3,700 ) — Deferred income taxes — 1,255 20,404 — 21,659 Accrued postemployment costs — 2,106 274 — 2,380 Other liabilities — 421 316 — 737 TOTAL LIABILITIES — 39,003 29,846 (12,176 ) 56,673 Redeemable noncontrolling interest — — 21 — 21 9.00% Series A cumulative compounding redeemable preferred stock 8,320 — — — 8,320 Total shareholders' equity 58,043 66,363 74,190 (140,553 ) 58,043 Noncontrolling interest — — 216 — 216 TOTAL EQUITY 58,043 66,363 74,406 (140,553 ) 58,259 TOTAL LIABILITIES AND EQUITY $ 66,363 $ 105,366 $ 104,273 $ (152,729 ) $ 123,273 The Kraft Heinz Company Condensed Consolidating Balance Sheets As of January 3, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 3,189 $ 1,648 $ — $ 4,837 Trade receivables — 62 809 — 871 Receivables due from affiliates — 555 319 (874 ) — Sold receivables — 554 29 583 Inventories — 1,741 877 — 2,618 Short-term lending due from affiliates — 3,657 4,353 (8,010 ) — Other current assets — 645 443 (217 ) 871 Total current assets — 10,403 8,478 (9,101 ) 9,780 Property, plant and equipment, net — 4,518 2,006 — 6,524 Goodwill — 10,976 32,075 — 43,051 Investments in subsidiaries 66,005 73,105 — (139,110 ) — Intangible assets, net — 3,838 58,282 — 62,120 Long-term lending due from affiliates — 1,700 2,000 (3,700 ) — Other assets — 534 964 — 1,498 TOTAL ASSETS $ 66,005 $ 105,074 $ 103,805 $ (151,911 ) $ 122,973 LIABILITIES AND EQUITY Short-term lending due to affiliates $ — $ 4,353 $ 3,657 $ (8,010 ) $ — Trade payables — 1,612 1,232 — 2,844 Payables due to affiliates — 319 555 (874 ) — Accrued marketing — 359 497 — 856 Accrued postemployment costs — 316 12 — 328 Income taxes payable — 71 563 (217 ) 417 Interest payable — 386 15 — 401 Dividends payable — 762 — — 762 Other current liabilities — 1,053 271 — 1,324 Total current liabilities — 9,231 6,802 (9,101 ) 6,932 Long-term debt — 24,143 1,008 — 25,151 Long-term borrowings due to affiliates — 2,000 1,905 (3,905 ) — Deferred income taxes — 1,278 20,219 — 21,497 Accrued postemployment costs — 2,147 258 — 2,405 Other liabilities — 270 482 — 752 TOTAL LIABILITIES — 39,069 30,674 (13,006 ) 56,737 Redeemable noncontrolling interest — — 23 — 23 9.00% Series A cumulative compounding redeemable preferred stock 8,320 — — — 8,320 Total shareholders' equity 57,685 66,005 72,900 (138,905 ) 57,685 Noncontrolling interest — — 208 — 208 TOTAL EQUITY 57,685 66,005 73,108 (138,905 ) 57,893 TOTAL LIABILITIES AND EQUITY $ 66,005 $ 105,074 $ 103,805 $ (151,911 ) $ 122,973 |
Condensed Consolidating Statements of Cash Flows | The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended April 3, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ — $ 166 $ 104 $ — $ 270 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (242 ) (61 ) — (303 ) Net proceeds from/(payments on) intercompany lending activities — 423 314 (737 ) — Return of capital 667 — — (667 ) — Other investing activities, net — (19 ) (3 ) — (22 ) Net cash provided by/(used for) investing activities 667 162 250 (1,404 ) (325 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (4 ) (2 ) — (6 ) Net proceeds from/(payments on) intercompany borrowing activities — (314 ) (423 ) 737 — Dividends paid-Series A Preferred Stock — — — — — Dividends paid-common stock (667 ) (667 ) — 667 (667 ) Other financing activities, net — 29 17 — 46 Net cash provided by/(used for) financing activities (667 ) (956 ) (408 ) 1,404 (627 ) Effect of exchange rate changes on cash and cash equivalents — — 44 — 44 Cash and cash equivalents: Net increase/(decrease) — (628 ) (10 ) — (638 ) Balance at beginning of period — 3,189 1,648 — 4,837 Balance at end of period $ — $ 2,561 $ 1,638 $ — $ 4,199 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended March 29, 2015 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 180 $ (103 ) $ 20 $ (180 ) $ (83 ) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (26 ) (27 ) — (53 ) Net proceeds from/(payments on) intercompany lending activities — (609 ) (747 ) 1,356 — Return of capital — 5 — (5 ) — Other investing activities, net — (1 ) 5 — 4 Net cash provided by/(used for) investing activities — (631 ) (769 ) 1,351 (49 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (1,960 ) (2 ) — (1,962 ) Proceeds from issuance of long-term debt — 2,000 — — 2,000 Net proceeds from/(payments on) intercompany borrowing activities — 747 609 (1,356 ) — Dividends paid-Series A Preferred Stock (180 ) — — — (180 ) Dividends paid-common stock — (180 ) — 180 — Other intercompany capital stock transactions — — (5 ) 5 — Other financing activities, net — (16 ) (56 ) — (72 ) Net cash provided by/(used for) financing activities (180 ) 591 546 (1,171 ) (214 ) Effect of exchange rate changes on cash and cash equivalents — — (53 ) — (53 ) Cash and cash equivalents: Net increase/(decrease) — (143 ) (256 ) — (399 ) Balance at beginning of period — 541 1,757 — 2,298 Balance at end of period $ — $ 398 $ 1,501 $ — $ 1,899 |
Background and Basis of Prese35
Background and Basis of Presentation Organization - Additional Information (Details) | Jul. 02, 2015shares |
H.J. Heinz Holding Corporation | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |
Business Acquisition, Common Stock of Parent, Conversion Ratio to Common Stock of Successor Company | 0.443332 |
Kraft Foods Group, Inc | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |
Business Acquisition, Common Stock of Subsidiary, Conversion Ratio to Common Stock of Parent | 1 |
Background and Basis of Prese36
Background and Basis of Presentation Changes in Accounting and Reporting - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 29, 2015USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |
Revision to Previously Misclassified Customer Related Intangible Asset Amortization Effect of Revision on Selling, General, and Administrative Expenses | $ 16 |
Revision to Previously Misclassified Customer Related Intangible Asset Amortization Effect of Revision on Costs of Products Sold | (16) |
Change to Accounting Policy for Certain Warehouse and Distribution Costs | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |
Change in Accounting Policy Effect of Change on Selling, General, and Administrative Expenses | (151) |
Change in Accounting Policy Effect of Change on Costs of Products Sold | 151 |
Change to Accounting Policy for Trademark and License Intangible Asset Impairments and Amortization | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |
Change in Accounting Policy Effect of Change on Selling, General, and Administrative Expenses | 5 |
Change in Accounting Policy Effect of Change on Costs of Products Sold | $ (5) |
Merger and Acquisition Addition
Merger and Acquisition Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Apr. 03, 2016 | Mar. 29, 2015 | Jan. 03, 2016 | Jul. 02, 2015 | |
Business Acquisition [Line Items] | ||||
Goodwill, 2015 Merger measurement period adjustments | $ 162 | |||
Deferred income tax liabilities, 2015 Merger measurement period adjustments | 162 | |||
Goodwill on acquisition | 43,542 | $ 43,051 | $ 29,200 | |
Kraft Foods Group, Inc. | ||||
Business Acquisition [Line Items] | ||||
Goodwill on acquisition | $ 29,191 | |||
Business acquisition, pro forma adjustments, business acquisition costs | $ 24 | |||
Business acquisition, pro forma adjustments, business acquisition costs, net of tax | $ 15 | |||
United States | ||||
Business Acquisition [Line Items] | ||||
Goodwill, 2015 Merger measurement period adjustments | 162 | |||
Deferred income tax liabilities, 2015 Merger measurement period adjustments | 162 | |||
Goodwill on acquisition | $ 31,389 | $ 31,227 |
Merger and Acquisition Consider
Merger and Acquisition Consideration Transferred (Details) - Kraft Foods Group, Inc. $ / shares in Units, $ in Millions | Jul. 02, 2015USD ($)$ / shares |
Business Acquisition [Line Items] | |
Fair value of shares exchanged and equity awards | $ 42,855 |
$16.50 per share special cash dividend | 9,782 |
Fair value of replacement equity awards | 42,855 |
Total consideration exchanged | $ 52,637 |
Special Cash Dividend | Kraft Shareholders | |
Business Acquisition [Line Items] | |
Special cash dividend, common stock (in dollars per share) | $ / shares | $ 16.50 |
Common Stock | |
Business Acquisition [Line Items] | |
Fair value of shares exchanged and equity awards | $ 42,502 |
Fair value of replacement equity awards | 42,502 |
Equity Securities | |
Business Acquisition [Line Items] | |
Fair value of shares exchanged and equity awards | 353 |
Fair value of replacement equity awards | $ 353 |
Merger and Acquisition Recogniz
Merger and Acquisition Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Jul. 02, 2015 | Apr. 03, 2016 | Jan. 03, 2016 |
Business Acquisition [Line Items] | |||
Identifiable intangible assets | $ 45,100 | ||
Goodwill on acquisition | 29,200 | $ 43,542 | $ 43,051 |
Kraft Foods Group, Inc. | |||
Business Acquisition [Line Items] | |||
Cash | 314 | ||
Other current assets | 3,423 | ||
Property, plant and equipment | 4,193 | ||
Identifiable intangible assets | 49,749 | ||
Other non-current assets | 214 | ||
Trade and other payables | (3,011) | ||
Long-term debt | (9,286) | ||
Net postemployment benefits and other noncurrent liabilities | (4,734) | ||
Deferred income tax liabilities | (17,416) | ||
Net assets acquired | 23,446 | ||
Goodwill on acquisition | 29,191 | ||
Total consideration exchanged | 52,637 | ||
Fair value of shares exchanged and equity awards | 42,855 | ||
Total cash consideration paid to Kraft shareholders | 9,782 | ||
Acquisition of business, net of cash on hand | $ 9,468 |
Merger and Acquisition Pro Form
Merger and Acquisition Pro Forma (Details) - Kraft Foods Group, Inc. $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 29, 2015USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Net sales | $ | $ 6,830 |
Net income | $ | $ 738 |
Basic (loss)/earnings per share (in dollars per share) | $ / shares | $ 0.47 |
Diluted (loss)/earnings per share (in dollars per share) | $ / shares | $ 0.46 |
Integration and Restructuring41
Integration and Restructuring Expenses Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 34 Months Ended | |
Apr. 03, 2016USD ($)employeefactory | Mar. 29, 2015USD ($) | Apr. 03, 2016USD ($)employee | Apr. 03, 2016USD ($)employee | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, incurred costs | $ 260 | $ 43 | ||
Integration Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring, expected costs | $ 1,900 | $ 1,900 | $ 1,900 | |
Restructuring and related cost, expected cost, classified as costs of products sold, percent | 60.00% | 60.00% | 60.00% | |
Restructuring and related cost, incurred costs | $ 241 | $ 1,100 | ||
Restructuring and related cost, expected cost, cash expenditures, percent | 60.00% | 60.00% | 60.00% | |
Number, positions eliminated | employee | 2,650 | |||
Restructuring Activities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, incurred costs | $ 19 | |||
Number, positions eliminated | employee | 8,100 | |||
Severance and Employee Benefit Costs | Integration Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring, expected costs | $ 650 | $ 650 | $ 650 | |
Restructuring and related cost, expected number of positions eliminated | employee | 2,650 | |||
Restructuring and related cost, incurred costs | $ 28 | 590 | ||
Severance and Employee Benefit Costs | Restructuring Activities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring, costs incurred to date | 560 | 560 | 560 | |
Asset-Related Costs | Integration Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring, expected costs | $ 1,100 | 1,100 | 1,100 | |
Restructuring and related cost, expected number of positions eliminated | employee | 2,600 | |||
Restructuring and related activities, number of facilities eliminated | factory | 7 | |||
Restructuring and related cost, incurred costs | $ 156 | 292 | ||
Asset-Related Costs | Restructuring Activities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring, costs incurred to date | 340 | 340 | 340 | |
Other Exit Costs | Integration Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring, expected costs | 150 | 150 | 150 | |
Charges | 8 | 63 | ||
Other Exit Costs | Restructuring Activities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring, costs incurred to date | 360 | 360 | $ 360 | |
Other Implementation Costs | Integration Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, incurred costs | $ 49 | $ 125 |
Integration and Restructuring42
Integration and Restructuring Expenses Integration Program Reserve Roll-forward (Details) - Integration Program $ in Millions | 3 Months Ended |
Apr. 03, 2016USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 208 |
Charges | 36 |
Cash payments | (70) |
Non-cash utilization | (9) |
Ending Balance | 165 |
Severance and Employee Benefit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 185 |
Charges | 28 |
Cash payments | (48) |
Non-cash utilization | (9) |
Ending Balance | 156 |
Other Exit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 23 |
Charges | 8 |
Cash payments | (22) |
Non-cash utilization | 0 |
Ending Balance | $ 9 |
Integration and Restructuring43
Integration and Restructuring Expenses Integration Program Costs by Type (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | Apr. 03, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, incurred costs | $ 260 | $ 43 | |
Integration Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, incurred costs | 241 | $ 1,100 | |
Severance and Employee Benefit Costs | Integration Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, incurred costs | 28 | 590 | |
Asset-Related Costs | Integration Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, incurred costs | 156 | 292 | |
Other Exit Costs | Integration Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Charges | 8 | 63 | |
Other Implementation Costs | Integration Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, incurred costs | $ 49 | $ 125 |
Integration and Restructuring44
Integration and Restructuring Expenses Restructuring Reserve Roll-forward (Details) - Restructuring Activities $ in Millions | 3 Months Ended |
Apr. 03, 2016USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 55 |
Charges | 11 |
Cash payments | (21) |
Ending Balance | 45 |
Severance and Employee Benefit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 25 |
Charges | 10 |
Cash payments | (20) |
Ending Balance | 15 |
Other Exit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 30 |
Charges | 1 |
Cash payments | (1) |
Ending Balance | $ 30 |
Integration and Restructuring45
Integration and Restructuring Expenses Restructuring Costs by Type and Income Statement Location (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred costs | $ 260 | $ 43 |
Severance and Employee Benefit Costs | Cost of products sold | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred costs | 6 | 10 |
Severance and Employee Benefit Costs | Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred costs | 32 | 2 |
Asset-Related Costs | Cost of products sold | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred costs | 142 | 3 |
Asset-Related Costs | Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred costs | 14 | 0 |
Other Exit Costs | Cost of products sold | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred costs | 33 | 17 |
Other Exit Costs | Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred costs | $ 33 | $ 11 |
Integration and Restructuring46
Integration and Restructuring Expenses Restructuring Costs Excluded from Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred costs | $ 260 | $ 43 |
United States | ||
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred costs | 199 | 9 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred costs | 18 | 1 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred costs | 15 | 25 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred costs | 0 | 4 |
Non-Operating | ||
Segment Reporting Information [Line Items] | ||
Restructuring and related cost, incurred costs | $ 28 | $ 4 |
Inventories Components of Inven
Inventories Components of Inventories (Details) - USD ($) $ in Millions | Apr. 03, 2016 | Jan. 03, 2016 |
Inventory Disclosure [Abstract] | ||
Packaging and ingredients | $ 624 | $ 563 |
Work in process | 411 | 393 |
Finished product | 1,857 | 1,662 |
Inventories | $ 2,892 | $ 2,618 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets Goodwill by Segment (Details) $ in Millions | 3 Months Ended |
Apr. 03, 2016USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 43,051 |
Goodwill, 2015 Merger measurement period adjustments | 162 |
Goodwill, translation adjustments | 329 |
Goodwill, ending balance | 43,542 |
United States | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 31,227 |
Goodwill, 2015 Merger measurement period adjustments | 162 |
Goodwill, translation adjustments | 0 |
Goodwill, ending balance | 31,389 |
Canada | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 4,796 |
Goodwill, 2015 Merger measurement period adjustments | 0 |
Goodwill, translation adjustments | 297 |
Goodwill, ending balance | 5,093 |
Europe | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 3,209 |
Goodwill, 2015 Merger measurement period adjustments | 0 |
Goodwill, translation adjustments | (74) |
Goodwill, ending balance | 3,135 |
Rest of World | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 3,819 |
Goodwill, 2015 Merger measurement period adjustments | 0 |
Goodwill, translation adjustments | 106 |
Goodwill, ending balance | $ 3,925 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets Goodwill-Additional Information (Details) - USD ($) | 3 Months Ended | |||
Apr. 03, 2016 | Jan. 03, 2016 | Jul. 02, 2015 | Mar. 30, 2015 | |
Goodwill [Line Items] | ||||
Goodwill on acquisition | $ 43,542,000,000 | $ 43,051,000,000 | $ 29,200,000,000 | |
Goodwill, 2015 Merger measurement period adjustments | 162,000,000 | |||
Deferred income tax liabilities, 2015 Merger measurement period adjustments | 162,000,000 | |||
Reporting unit, percentage of fair value in excess of carrying amount (less than) | 10.00% | |||
Goodwill, accumulated impairment loss | 0 | |||
United States | ||||
Goodwill [Line Items] | ||||
Goodwill on acquisition | 31,389,000,000 | 31,227,000,000 | ||
Goodwill, 2015 Merger measurement period adjustments | 162,000,000 | |||
Deferred income tax liabilities, 2015 Merger measurement period adjustments | 162,000,000 | |||
Rest of World | ||||
Goodwill [Line Items] | ||||
Goodwill on acquisition | 3,925,000,000 | 3,819,000,000 | ||
Goodwill, 2015 Merger measurement period adjustments | 0 | |||
Europe | ||||
Goodwill [Line Items] | ||||
Goodwill on acquisition | 3,135,000,000 | $ 3,209,000,000 | ||
Goodwill, 2015 Merger measurement period adjustments | 0 | |||
Goodwill | United States | ||||
Goodwill [Line Items] | ||||
Goodwill, prior period reclassification adjustment | (2,500,000,000) | |||
Goodwill | Rest of World | ||||
Goodwill [Line Items] | ||||
Goodwill, prior period reclassification adjustment | 2,500,000,000 | |||
Goodwill | Europe | ||||
Goodwill [Line Items] | ||||
Goodwill, prior period reclassification adjustment | $ 57,000,000 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets Indefinite-Lived Intangible Assets-Additional Information (Details) $ in Billions | Mar. 30, 2015USD ($)Brand | Apr. 03, 2016USD ($) | Jan. 03, 2016USD ($) | Jul. 02, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Identifiable intangible assets | $ 45.1 | |||
Indefinite-lived intangible assets | $ 55.8 | $ 55.8 | ||
Number of brands with fair values that exceed carrying amounts by less than ten percent | Brand | 21 | |||
Indefinite-lived intangible assets, aggregate carrying value of intangibles with a fair value that exceeds the carrying amount | $ 2.5 | |||
Indefinite-lived intangible assets, percentage of fair value in excess of carrying amount (less than) | 10.00% |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets Definite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Apr. 03, 2016 | Jan. 03, 2016 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | $ 6,607 | $ 6,579 |
Accumulated Amortization | (351) | (283) |
Net | 6,256 | 6,296 |
Trademarks | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 2,362 | 2,346 |
Accumulated Amortization | (97) | (70) |
Net | 2,265 | 2,276 |
Customer-related assets | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 4,231 | 4,218 |
Accumulated Amortization | (251) | (209) |
Net | 3,980 | 4,009 |
Other | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 14 | 15 |
Accumulated Amortization | (3) | (4) |
Net | $ 11 | $ 11 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets Definite-Lived Intangible Assets-Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 66 | $ 23 |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 276 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 276 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 276 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 276 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 276 |
Income Taxes Additional Informa
Income Taxes Additional Information (Details) | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 29.20% | 19.50% |
Employees' Stock Incentive Pl54
Employees' Stock Incentive Plans Additional Information (Details) $ in Millions | 3 Months Ended |
Apr. 03, 2016USD ($) | |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 54 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | 28 |
Stock Options and RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 129 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years |
Employees' Stock Incentive Pl55
Employees' Stock Incentive Plans Schedule of Share-based Compensation, Stock Options, Activity (Details) | 3 Months Ended |
Apr. 03, 2016$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ / shares | $ 34.86 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ / shares | 77.66 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ / shares | 37.02 |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | $ / shares | 34.47 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ / shares | $ 36.91 |
Roll-forward of Stock Option Activity (in shares) | |
Beginning balance | shares | 24,205,612 |
Options granted | shares | 1,139,620 |
Options forfeited | shares | (303,636) |
Options exercised | shares | (1,295,303) |
Ending balance | shares | 23,746,293 |
Employees' Stock Incentive Pl56
Employees' Stock Incentive Plans Schedule of Share-based Compensation, RSU Activity (Details) - RSUs | 3 Months Ended |
Apr. 03, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shared-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Weighted Average Grant Date Fair Value | $ / shares | $ 70.14 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | 77.51 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period, Weighted Average Grant Date Fair Value | $ / shares | 73.02 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ / shares | 72.96 |
Shared-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Weighted Average Grant Date Fair Value | $ / shares | $ 72.44 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Beginning balance | shares | 968,444 |
RSUs granted | shares | 481,767 |
RSUs forfeited | shares | (29,141) |
RSUs vested | shares | (376,961) |
Ending balance | shares | 1,044,109 |
Employees' Stock Incentive Pl57
Employees' Stock Incentive Plans Schedule of Compensation Costs Related to Equity Plans (Details) - Stock Options and RSUs - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Pre-tax compensation cost | $ 13 | $ 2 |
Tax benefit | (4) | (1) |
After-tax compensation cost | $ 9 | $ 1 |
Postemployment Benefits Postemp
Postemployment Benefits Postemployment Benefit Plans-Additional Information (Details) $ in Millions | 3 Months Ended |
Apr. 03, 2016USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Impact of change in accounting estimate on service cost and interest cost | $ (20) |
U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer contribution | 161 |
Estimated future employer contributions in current fiscal year | 150 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer contribution | 8 |
Estimated future employer contributions in current fiscal year | $ 25 |
Postemployment Benefits Pension
Postemployment Benefits Pension Plans-Components of Net Pension Cost/(Benefit)-(Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 3 | $ 1 |
Interest cost | 53 | 5 |
Expected return on plan assets | (74) | (5) |
Amortization of unrecognized losses/(gains) | 0 | 1 |
Settlements | (6) | 0 |
Defined benefit plan net cost/(benefit) | (24) | 2 |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 6 | 5 |
Interest cost | 21 | 21 |
Expected return on plan assets | (46) | (43) |
Amortization of unrecognized losses/(gains) | 0 | 0 |
Settlements | 0 | 0 |
Defined benefit plan net cost/(benefit) | $ (19) | $ (17) |
Postemployment Benefits Postret
Postemployment Benefits Postretirement Plans-Components of Net Postretirement Cost/(Benefit) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Amortization of prior service costs/(credits) | $ (50) | $ (1) |
Postretirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 4 | 1 |
Interest cost | 16 | 2 |
Amortization of prior service costs/(credits) | (82) | (1) |
Defined benefit plan net cost/(benefit) | $ (62) | $ 2 |
Accumulated Other Comprehensi61
Accumulated Other Comprehensive Income/(Losses) Components of and Changes in Accumulated Other Comprehensive Income/(Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | $ (671) | |
Foreign currency translation adjustments | 272 | $ (794) |
Net deferred gains/(losses) on net investment hedges | (60) | 432 |
Reclassification of net postemployment benefit losses/(gains) | (54) | 0 |
Net deferred gains/(losses) on cash flow hedges | (18) | (67) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (22) | 1 |
Ending Balance | (560) | |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (1,646) | |
Foreign currency translation adjustments | 265 | |
Net deferred gains/(losses) on net investment hedges | (60) | |
Reclassification of net postemployment benefit losses/(gains) | 0 | |
Net deferred gains/(losses) on cash flow hedges | 0 | |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | 0 | |
Total other comprehensive income/(loss) | 205 | |
Ending Balance | (1,441) | |
Net Postemployment Benefit Plan Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | 922 | |
Foreign currency translation adjustments | 0 | |
Net deferred gains/(losses) on net investment hedges | 0 | |
Reclassification of net postemployment benefit losses/(gains) | (54) | |
Net deferred gains/(losses) on cash flow hedges | 0 | |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | 0 | |
Total other comprehensive income/(loss) | (54) | |
Ending Balance | 868 | |
Net Cash Flow Hedge Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | 53 | |
Foreign currency translation adjustments | 0 | |
Net deferred gains/(losses) on net investment hedges | 0 | |
Reclassification of net postemployment benefit losses/(gains) | 0 | |
Net deferred gains/(losses) on cash flow hedges | (18) | |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (22) | |
Total other comprehensive income/(loss) | (40) | |
Ending Balance | 13 | |
Accumulated Other Comprehensive Income/(Losses) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (671) | |
Foreign currency translation adjustments | 265 | |
Net deferred gains/(losses) on net investment hedges | (60) | |
Reclassification of net postemployment benefit losses/(gains) | (54) | 0 |
Net deferred gains/(losses) on cash flow hedges | (18) | |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (22) | $ 1 |
Total other comprehensive income/(loss) | 111 | |
Ending Balance | $ (560) |
Accumulated Other Comprehensi62
Accumulated Other Comprehensive Income/(Losses) Tax Benefit/(Expense) Associated with each Component of Other Comprehensive Income/(Loss) (Details) - AOCI Attributable to Parent - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Net deferred gains/(losses) on net investment hedges | $ 24 | $ (319) |
Net postemployment benefit gains/(losses) | 0 | 1 |
Reclassification of net postemployment benefit losses/(gains) | 34 | 0 |
Net deferred gains/(losses) on cash flow hedges | 10 | 45 |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | $ 4 | $ 2 |
Accumulated Other Comprehensi63
Accumulated Other Comprehensive Income/(Losses) Amounts Reclassified from Accumulated Other Comprehensive Income/(Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Losses/(gains) on cash flow hedges | $ (22) | $ 1 |
Losses/(gains) on postemployment benefits | (54) | 0 |
AOCI Attributable to Parent | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Losses/(gains) on cash flow hedges before income taxes | (26) | (1) |
Losses/(gains) on cash flow hedges income taxes | 4 | 2 |
Losses/(gains) on cash flow hedges | (22) | 1 |
Amortization of unrecognized losses/(gains) | 0 | 1 |
Amortization of prior service costs/(credits) | (82) | (1) |
Settlement and curtailments losses/(gains) | (6) | 0 |
Losses/(gains) on postemployment benefits before income taxes | (88) | 0 |
Losses/(gains) on postemployment benefits income taxes | 34 | 0 |
Losses/(gains) on postemployment benefits | (54) | 0 |
AOCI Attributable to Parent | Foreign exchange contracts | Net sales | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Losses/(gains) on cash flow hedges before income taxes | (1) | 1 |
AOCI Attributable to Parent | Foreign exchange contracts | Cost of products sold | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Losses/(gains) on cash flow hedges before income taxes | (29) | (5) |
AOCI Attributable to Parent | Foreign exchange contracts | Other expense/(income), net | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Losses/(gains) on cash flow hedges before income taxes | 3 | (1) |
AOCI Attributable to Parent | Interest rate contracts | Interest expense | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Losses/(gains) on cash flow hedges before income taxes | $ 1 | $ 4 |
Financial Instruments Additiona
Financial Instruments Additional Information (Details) € in Millions, £ in Millions, $ in Millions | 3 Months Ended | |||||
Apr. 03, 2016USD ($) | Mar. 29, 2015USD ($) | Apr. 03, 2016GBP (£) | Apr. 03, 2016USD ($) | Apr. 03, 2016EUR (€) | Jan. 03, 2016USD ($) | |
Derivative [Line Items] | ||||||
Derivative, collateral, obligation to return cash | $ 54 | $ 44 | ||||
Derivative, collateral, right to reclaim cash | 54 | $ 44 | ||||
Net deferred gains/(losses) on net investment hedges | $ 60 | $ (432) | ||||
Commodity contracts | Not designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 12 months | |||||
Foreign exchange contracts | ||||||
Derivative [Line Items] | ||||||
Cash flow hedge gain (loss) to be reclassified within 12 months | $ 9 | |||||
Foreign exchange contracts | Designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 2 years | |||||
Foreign exchange contracts | Not designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 2 years | |||||
Cross-currency contracts | Euro Member Countries, Euro | ||||||
Derivative [Line Items] | ||||||
Derivative asset, notional amount | 1,100 | |||||
Cross-currency contracts | United Kingdom, Pounds | ||||||
Derivative [Line Items] | ||||||
Derivative asset, notional amount | $ 1,400 | |||||
Cross-currency contracts | Designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 4 years | |||||
Cross-currency contracts | Not designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 3 years | |||||
Net Investment Hedging | Designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Net deferred gains/(losses) on net investment hedges | $ 19 | |||||
Net Investment Hedging | Debt | Designated as hedging instrument | Euro Member Countries, Euro | ||||||
Derivative [Line Items] | ||||||
Derivative, amount of hedged item | € | € 750 | |||||
Net Investment Hedging | Debt | Designated as hedging instrument | United Kingdom, Pounds | ||||||
Derivative [Line Items] | ||||||
Derivative, amount of hedged item | £ | £ 400 |
Financial Instruments Outstandi
Financial Instruments Outstanding Notional Amounts (Details) - USD ($) $ in Millions | Apr. 03, 2016 | Jan. 03, 2016 |
Commodity contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 667 | $ 787 |
Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | 3,312 | 3,458 |
Cross-currency contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 4,328 | $ 4,328 |
Financial Instruments Fair Valu
Financial Instruments Fair Values (Details) - USD ($) $ in Millions | Apr. 03, 2016 | Jan. 03, 2016 |
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | $ 664 | $ 811 |
Derivative liability, fair value, gross liability | 69 | 55 |
Commodity contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 26 | 25 |
Derivative liability, fair value, gross liability | 28 | 36 |
Foreign exchange contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 24 | 46 |
Derivative liability, fair value, gross liability | 34 | 6 |
Foreign exchange contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 43 | 88 |
Derivative liability, fair value, gross liability | 7 | 13 |
Cross-currency contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 531 | 605 |
Derivative liability, fair value, gross liability | 0 | 0 |
Cross-currency contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 40 | 47 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 1 | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 26 | 24 |
Derivative liability, fair value, gross liability | 22 | 29 |
Level 1 | Commodity contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 26 | 24 |
Derivative liability, fair value, gross liability | 22 | 29 |
Level 1 | Foreign exchange contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 1 | Foreign exchange contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 1 | Cross-currency contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 1 | Cross-currency contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 2 | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 638 | 787 |
Derivative liability, fair value, gross liability | 47 | 26 |
Level 2 | Commodity contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 1 |
Derivative liability, fair value, gross liability | 6 | 7 |
Level 2 | Foreign exchange contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 24 | 46 |
Derivative liability, fair value, gross liability | 34 | 6 |
Level 2 | Foreign exchange contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 43 | 88 |
Derivative liability, fair value, gross liability | 7 | 13 |
Level 2 | Cross-currency contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 531 | 605 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 2 | Cross-currency contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 40 | 47 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 3 | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 3 | Commodity contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 3 | Foreign exchange contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 3 | Foreign exchange contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 3 | Cross-currency contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 3 | Cross-currency contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 0 | 0 |
Derivative liability, fair value, gross liability | $ 0 | $ 0 |
Financial Instruments Cross-Cur
Financial Instruments Cross-Currency Swaps (Details) - Apr. 03, 2016 - Cross-currency contracts € in Billions, £ in Billions, CAD in Billions, $ in Billions | GBP (£) | USD ($) | EUR (€) | CAD |
United Kingdom, Pounds | ||||
Derivative [Line Items] | ||||
Derivative liability, notional amount | £ | £ 0.8 | |||
Derivative asset, notional amount | $ 1.4 | |||
Euro Member Countries, Euro | ||||
Derivative [Line Items] | ||||
Derivative liability, notional amount | € | € 0.9 | |||
Derivative asset, notional amount | 1.1 | |||
Canada, Dollars | ||||
Derivative [Line Items] | ||||
Derivative liability, notional amount | CAD | CAD 1.8 | |||
Derivative asset, notional amount | $ 1.6 |
Financial Instruments Gain_(Los
Financial Instruments Gain/(Loss) Recognized in Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | $ (18) | $ 0 |
Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (48) | 54 |
Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (7) | 0 |
Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (1) | 7 |
Designated as hedging instrument | Commodity contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Designated as hedging instrument | Foreign exchange contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | (27) | 8 |
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 27 | 5 |
Designated as hedging instrument | Cross-currency contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | (65) | 751 |
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Designated as hedging instrument | Interest rate contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | (120) |
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (1) | (4) |
Not designated as hedging instrument | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (18) | 0 |
Not designated as hedging instrument | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (75) | 49 |
Not designated as hedging instrument | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (7) | 0 |
Not designated as hedging instrument | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 11 |
Not designated as hedging instrument | Cost of products sold | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (18) | 0 |
Not designated as hedging instrument | Cost of products sold | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Not designated as hedging instrument | Cost of products sold | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Not designated as hedging instrument | Cost of products sold | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Not designated as hedging instrument | Other income/(expense), net | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Not designated as hedging instrument | Other income/(expense), net | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (75) | 49 |
Not designated as hedging instrument | Other income/(expense), net | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (7) | 0 |
Not designated as hedging instrument | Other income/(expense), net | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 11 |
Cash Flow Hedging | Designated as hedging instrument | Commodity contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Foreign exchange contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | (27) | 8 |
Cash Flow Hedging | Designated as hedging instrument | Cross-currency contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest rate contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | (120) |
Cash Flow Hedging | Designated as hedging instrument | Net sales | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Net sales | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 1 | (1) |
Cash Flow Hedging | Designated as hedging instrument | Net sales | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Net sales | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Commodity contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gain/(loss) recognized in income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Foreign exchange contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gain/(loss) recognized in income (effective portion) | 29 | 5 |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Cross-currency contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gain/(loss) recognized in income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Interest rate contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gain/(loss) recognized in income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (3) | 1 |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statement of income | (1) | (4) |
Net Investment Hedging | Designated as hedging instrument | Commodity contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 |
Net Investment Hedging | Designated as hedging instrument | Foreign exchange contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 |
Net Investment Hedging | Designated as hedging instrument | Cross-currency contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | (65) | 751 |
Net Investment Hedging | Designated as hedging instrument | Interest rate contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | $ 0 | $ 0 |
Venezuela - Foreign Currency 69
Venezuela - Foreign Currency and Inflation Additional Information (Details) $ in Millions | 3 Months Ended | |
Apr. 03, 2016USD ($)exchange_rateVEF / $ | Mar. 09, 2016VEF / $ | |
Foreign Currency [Line Items] | ||
Number of exchange rates legally available to us in Venezuela | exchange_rate | 2 | |
Outstanding requests for currency settlements at the official exchange rate | $ | $ 26 | |
Net Sales Attributable to Venezuela | $ | 18 | |
Operating Income/(Loss) Attributable to Venezuela | $ | $ 7 | |
Official CENCOEX BsF Rate | ||
Foreign Currency [Line Items] | ||
Foreign currency exchange rate, translation | VEF / $ | 10 | 6.30 |
Venezuelan BsF on DICOM Market, Period End Average | ||
Foreign Currency [Line Items] | ||
Foreign currency exchange rate, translation | VEF / $ | 201 | |
Venezuelan BsF on DICOM Market, Period End Spot | ||
Foreign Currency [Line Items] | ||
Foreign currency exchange rate, translation | VEF / $ | 276 |
Commitments, Contingencies an70
Commitments, Contingencies and Debt Legal Proceedings (Details) | Apr. 03, 2016lawsuit |
Loss Contingency [Abstract] | |
Loss Contingency, Number of Lawsuits | 6 |
Commitments, Contingencies an71
Commitments, Contingencies and Debt Fair Value of Debt (Details) $ in Billions | Apr. 03, 2016USD ($) |
Debt Disclosure [Abstract] | |
Long-term Debt, Fair Value | $ 27 |
Long-term Debt, Carrying Value | $ 25.3 |
Commitments, Contingencies an72
Commitments, Contingencies and Debt Series A Preferred Stock (Details) | 3 Months Ended | 12 Months Ended |
Apr. 03, 2016 | Jan. 03, 2016 | |
Nine point zero zero percent Series A cumulative compounding redeemable preferred stock | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
9.00% Series A cumulative compounding redeemable preferred stock, dividend percentage | 9.00% | 9.00% |
Earnings Per Share Basic and Di
Earnings Per Share Basic and Diluted (Loss)/Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Basic EPS | ||
Net income/(loss) attributable to common shareholders | $ 896 | $ 96 |
Weighted average shares of common stock outstanding (in shares) | 1,215 | 377 |
Basic earnings/(loss) per share (in dollars per share) | $ 0.74 | $ 0.26 |
Diluted EPS | ||
Net earnings/(loss) attributable to common shareholders | $ 896 | $ 96 |
Weighted average shares of common stock, including dilutive effect (in shares) | 1,225 | 399 |
Effect of dilutive warrants on basic earnings/(loss) per common share (in shares) | 0 | 21 |
Effect of dilutive stock options on basic earnings/(loss) per common share (in shares) | 10 | 1 |
Diluted earnings/(loss) per share (in dollars per share) | $ 0.73 | $ 0.24 |
Earnings Per Share Additional I
Earnings Per Share Additional Information (Details) - shares | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive shares excluded from computation of earnings per share | 3,000,000 | 0 |
Segment Reporting Additional In
Segment Reporting Additional Information (Details) | 3 Months Ended |
Apr. 03, 2016segment | |
Segment Reporting [Abstract] | |
Number of segments | 4 |
Number of reportable segments | 3 |
Number of operating segments in Rest of World reportable segment | 3 |
Segment Reporting Net Sales by
Segment Reporting Net Sales by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 6,570 | $ 2,478 |
United States | ||
Segment Reporting Information [Line Items] | ||
Net sales | 4,715 | 868 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Net sales | 504 | 121 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Net sales | 553 | 626 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 798 | $ 863 |
Segment Reporting Segment Adjus
Segment Reporting Segment Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Segment Reporting Information [Line Items] | ||
General corporate expenses | $ (37) | $ (31) |
Depreciation and amortization (excluding integration and restructuring expenses) | (161) | (216) |
Integration and restructuring expenses | (260) | (81) |
Merger costs | (15) | (13) |
Unrealized gains/(losses) on commodity hedges | 8 | 2 |
Nonmonetary currency devaluation | (1) | 0 |
Equity award compensation expense (excluding integration and restructuring expenses) | (9) | (19) |
Other pro forma adjustments | 0 | (773) |
Operating income | 1,513 | 509 |
Interest expense | 249 | 201 |
Other expense/(income), net | (8) | (39) |
Income/(loss) before income taxes | 1,272 | 347 |
United States | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA | 1,493 | 1,123 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA | 151 | 113 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA | 177 | 214 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA | $ 167 | $ 190 |
Segment Reporting Net Sales b78
Segment Reporting Net Sales by Product (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Revenue from External Customer [Line Items] | ||
Net sales | $ 6,570 | $ 2,478 |
Condiments and sauces | ||
Revenue from External Customer [Line Items] | ||
Net sales | 1,576 | 1,230 |
Cheese and dairy | ||
Revenue from External Customer [Line Items] | ||
Net sales | 1,384 | 0 |
Ambient meals | ||
Revenue from External Customer [Line Items] | ||
Net sales | 586 | 334 |
Frozen and chilled meals | ||
Revenue from External Customer [Line Items] | ||
Net sales | 620 | 471 |
Meats and seafood | ||
Revenue from External Customer [Line Items] | ||
Net sales | 705 | 44 |
Refreshment beverages | ||
Revenue from External Customer [Line Items] | ||
Net sales | 407 | 0 |
Coffee | ||
Revenue from External Customer [Line Items] | ||
Net sales | 392 | 0 |
Infant and nutrition | ||
Revenue from External Customer [Line Items] | ||
Net sales | 191 | 253 |
Desserts, toppings and baking | ||
Revenue from External Customer [Line Items] | ||
Net sales | 206 | 0 |
Nuts and salted snacks | ||
Revenue from External Customer [Line Items] | ||
Net sales | 264 | 0 |
Other | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 239 | $ 146 |
Supplemental Financial Inform79
Supplemental Financial Information Additional Information (Details) | 3 Months Ended |
Apr. 03, 2016 | |
Business Combinations [Abstract] | |
Percentage of Subsidiary Owned by Parent | 100.00% |
Supplemental Financial Inform80
Supplemental Financial Information Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Condensed Income Statements, Captions [Line Items] | ||
Net sales | $ 6,570 | $ 2,478 |
Cost of products sold | 4,192 | 1,631 |
Gross profit | 2,378 | 847 |
Selling, general and administrative expenses | 865 | 338 |
Intercompany Expense (Income) | 0 | 0 |
Operating income | 1,513 | 509 |
Interest expense | 249 | 201 |
Other expense/(income), net | (8) | (39) |
Income/(loss) before income taxes | 1,272 | 347 |
Equity in earnings of subsidiaries | 0 | 0 |
Provision for/(benefit from) income taxes | 372 | 68 |
Net income/(loss) | 900 | 279 |
Net income/(loss) attributable to noncontrolling interest | 4 | 3 |
Net income/(loss) attributable to Kraft Heinz | 896 | 276 |
Comprehensive (loss)/income excluding noncontrolling interest | 1,007 | (139) |
Parent Guarantor | ||
Condensed Income Statements, Captions [Line Items] | ||
Net sales | 0 | 0 |
Cost of products sold | 0 | 0 |
Gross profit | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 |
Intercompany Expense (Income) | 0 | 0 |
Operating income | 0 | 0 |
Interest expense | 0 | 0 |
Other expense/(income), net | 0 | 0 |
Income/(loss) before income taxes | 0 | 0 |
Equity in earnings of subsidiaries | 896 | 276 |
Provision for/(benefit from) income taxes | 0 | 0 |
Net income/(loss) | 896 | 276 |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 |
Net income/(loss) attributable to Kraft Heinz | 896 | 276 |
Comprehensive (loss)/income excluding noncontrolling interest | 1,007 | (139) |
Subsidiary Issuer | ||
Condensed Income Statements, Captions [Line Items] | ||
Net sales | 4,471 | 925 |
Cost of products sold | 2,832 | 618 |
Gross profit | 1,639 | 307 |
Selling, general and administrative expenses | 277 | 136 |
Intercompany Expense (Income) | 1,214 | (11) |
Operating income | 148 | 182 |
Interest expense | 235 | 166 |
Other expense/(income), net | 31 | (3) |
Income/(loss) before income taxes | (118) | 19 |
Equity in earnings of subsidiaries | 956 | 257 |
Provision for/(benefit from) income taxes | (58) | 0 |
Net income/(loss) | 896 | 276 |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 |
Net income/(loss) attributable to Kraft Heinz | 896 | 276 |
Comprehensive (loss)/income excluding noncontrolling interest | 1,007 | (139) |
Non-Guarantor Subsidiaries | ||
Condensed Income Statements, Captions [Line Items] | ||
Net sales | 2,241 | 1,612 |
Cost of products sold | 1,502 | 1,072 |
Gross profit | 739 | 540 |
Selling, general and administrative expenses | 588 | 202 |
Intercompany Expense (Income) | (1,214) | 11 |
Operating income | 1,365 | 327 |
Interest expense | 14 | 35 |
Other expense/(income), net | (39) | (36) |
Income/(loss) before income taxes | 1,390 | 328 |
Equity in earnings of subsidiaries | 0 | 0 |
Provision for/(benefit from) income taxes | 430 | 68 |
Net income/(loss) | 960 | 260 |
Net income/(loss) attributable to noncontrolling interest | 4 | 3 |
Net income/(loss) attributable to Kraft Heinz | 956 | 257 |
Comprehensive (loss)/income excluding noncontrolling interest | 1,149 | (544) |
Eliminations | ||
Condensed Income Statements, Captions [Line Items] | ||
Net sales | (142) | (59) |
Cost of products sold | (142) | (59) |
Gross profit | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 |
Intercompany Expense (Income) | 0 | 0 |
Operating income | 0 | 0 |
Interest expense | 0 | 0 |
Other expense/(income), net | 0 | 0 |
Income/(loss) before income taxes | 0 | 0 |
Equity in earnings of subsidiaries | (1,852) | (533) |
Provision for/(benefit from) income taxes | 0 | 0 |
Net income/(loss) | (1,852) | (533) |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 |
Net income/(loss) attributable to Kraft Heinz | (1,852) | (533) |
Comprehensive (loss)/income excluding noncontrolling interest | $ (2,156) | $ 683 |
Supplemental Financial Inform81
Supplemental Financial Information Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Apr. 03, 2016 | Jan. 03, 2016 | Jul. 02, 2015 | Mar. 29, 2015 | Dec. 28, 2014 | |
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Cash and cash equivalents | $ 4,199 | $ 4,837 | $ 1,899 | $ 2,298 | |
Trade receivables | 939 | 871 | |||
Sold receivables | 805 | 583 | |||
Inventories | 2,892 | 2,618 | |||
Short-term lending due from affiliates | 0 | 0 | |||
Short-term lending due from affiliates | 0 | 0 | |||
Other current assets | 977 | 871 | |||
Total current assets | 9,812 | 9,780 | |||
Property, plant and equipment, net | 6,434 | 6,524 | |||
Goodwill | 43,542 | 43,051 | $ 29,200 | ||
Investments in subsidiaries | 0 | 0 | |||
Intangible assets, net | 62,049 | 62,120 | |||
Long-term lending due from affiliates | 0 | 0 | |||
Other assets | 1,436 | 1,498 | |||
TOTAL ASSETS | 123,273 | 122,973 | |||
Short-term lending due to affiliates | 0 | 0 | |||
Short-term lending due to affiliates | 0 | 0 | |||
Trade payables | 2,773 | 2,844 | |||
Accrued marketing | 867 | 856 | |||
Accrued postemployment costs | 164 | 328 | |||
Income taxes payable | 575 | 417 | |||
Interest payable | 266 | 401 | |||
Dividends payable | 794 | 762 | |||
Other current liabilities | 1,291 | 1,324 | |||
Total current liabilities | 6,730 | 6,932 | |||
Long-term debt | 25,167 | 25,151 | |||
Long-term borrowings due to affiliates | 0 | 0 | |||
Deferred income taxes | 21,659 | 21,497 | |||
Accrued postemployment costs | 2,380 | 2,405 | |||
Other liabilities | 737 | 752 | |||
TOTAL LIABILITIES | 56,673 | 56,737 | |||
Redeemable noncontrolling interest | 21 | 23 | |||
9.00% Series A cumulative compounding redeemable preferred stock, 80,000 authorized and issued shares at April 3, 2016 and January 3, 2016, $.01 par value | 8,320 | 8,320 | |||
Total shareholders' equity | 58,043 | 57,685 | |||
Noncontrolling interest | 216 | 208 | |||
TOTAL EQUITY | 58,259 | 57,893 | |||
TOTAL LIABILITIES AND EQUITY | 123,273 | 122,973 | |||
Parent Guarantor | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |
Trade receivables | 0 | 0 | |||
Sold receivables | 0 | 0 | |||
Inventories | 0 | 0 | |||
Short-term lending due from affiliates | 0 | 0 | |||
Short-term lending due from affiliates | 0 | 0 | |||
Other current assets | 0 | 0 | |||
Total current assets | 0 | 0 | |||
Property, plant and equipment, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Investments in subsidiaries | 66,363 | 66,005 | |||
Intangible assets, net | 0 | 0 | |||
Long-term lending due from affiliates | 0 | 0 | |||
Other assets | 0 | 0 | |||
TOTAL ASSETS | 66,363 | 66,005 | |||
Short-term lending due to affiliates | 0 | 0 | |||
Short-term lending due to affiliates | 0 | 0 | |||
Trade payables | 0 | 0 | |||
Accrued marketing | 0 | 0 | |||
Accrued postemployment costs | 0 | 0 | |||
Income taxes payable | 0 | 0 | |||
Interest payable | 0 | 0 | |||
Dividends payable | 0 | 0 | |||
Other current liabilities | 0 | 0 | |||
Total current liabilities | 0 | 0 | |||
Long-term debt | 0 | 0 | |||
Long-term borrowings due to affiliates | 0 | 0 | |||
Deferred income taxes | 0 | 0 | |||
Accrued postemployment costs | 0 | 0 | |||
Other liabilities | 0 | 0 | |||
TOTAL LIABILITIES | 0 | 0 | |||
Redeemable noncontrolling interest | 0 | 0 | |||
9.00% Series A cumulative compounding redeemable preferred stock, 80,000 authorized and issued shares at April 3, 2016 and January 3, 2016, $.01 par value | 8,320 | 8,320 | |||
Total shareholders' equity | 58,043 | 57,685 | |||
Noncontrolling interest | 0 | 0 | |||
TOTAL EQUITY | 58,043 | 57,685 | |||
TOTAL LIABILITIES AND EQUITY | 66,363 | 66,005 | |||
Subsidiary Issuer | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Cash and cash equivalents | 2,561 | 3,189 | 398 | 541 | |
Trade receivables | 66 | 62 | |||
Sold receivables | 767 | 554 | |||
Inventories | 1,943 | 1,741 | |||
Short-term lending due from affiliates | 3,594 | 3,657 | |||
Short-term lending due from affiliates | 386 | 555 | |||
Other current assets | 452 | 645 | |||
Total current assets | 9,769 | 10,403 | |||
Property, plant and equipment, net | 4,409 | 4,518 | |||
Goodwill | 10,966 | 10,976 | |||
Investments in subsidiaries | 74,406 | 73,105 | |||
Intangible assets, net | 3,803 | 3,838 | |||
Long-term lending due from affiliates | 1,484 | 1,700 | |||
Other assets | 529 | 534 | |||
TOTAL ASSETS | 105,366 | 105,074 | |||
Short-term lending due to affiliates | 4,038 | 4,353 | |||
Short-term lending due to affiliates | 106 | 319 | |||
Trade payables | 1,566 | 1,612 | |||
Accrued marketing | 312 | 359 | |||
Accrued postemployment costs | 150 | 316 | |||
Income taxes payable | 837 | 71 | |||
Interest payable | 261 | 386 | |||
Dividends payable | 794 | 762 | |||
Other current liabilities | 1,030 | 1,053 | |||
Total current liabilities | 9,094 | 9,231 | |||
Long-term debt | 24,127 | 24,143 | |||
Long-term borrowings due to affiliates | 2,000 | 2,000 | |||
Deferred income taxes | 1,255 | 1,278 | |||
Accrued postemployment costs | 2,106 | 2,147 | |||
Other liabilities | 421 | 270 | |||
TOTAL LIABILITIES | 39,003 | 39,069 | |||
Redeemable noncontrolling interest | 0 | 0 | |||
9.00% Series A cumulative compounding redeemable preferred stock, 80,000 authorized and issued shares at April 3, 2016 and January 3, 2016, $.01 par value | 0 | 0 | |||
Total shareholders' equity | 66,363 | 66,005 | |||
Noncontrolling interest | 0 | 0 | |||
TOTAL EQUITY | 66,363 | 66,005 | |||
TOTAL LIABILITIES AND EQUITY | 105,366 | 105,074 | |||
Non-Guarantor Subsidiaries | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Cash and cash equivalents | 1,638 | 1,648 | 1,501 | 1,757 | |
Trade receivables | 873 | 809 | |||
Sold receivables | 38 | 29 | |||
Inventories | 949 | 877 | |||
Short-term lending due from affiliates | 4,038 | 4,353 | |||
Short-term lending due from affiliates | 106 | 319 | |||
Other current assets | 877 | 443 | |||
Total current assets | 8,519 | 8,478 | |||
Property, plant and equipment, net | 2,025 | 2,006 | |||
Goodwill | 32,576 | 32,075 | |||
Investments in subsidiaries | 0 | 0 | |||
Intangible assets, net | 58,246 | 58,282 | |||
Long-term lending due from affiliates | 2,000 | 2,000 | |||
Other assets | 907 | 964 | |||
TOTAL ASSETS | 104,273 | 103,805 | |||
Short-term lending due to affiliates | 3,594 | 3,657 | |||
Short-term lending due to affiliates | 386 | 555 | |||
Trade payables | 1,207 | 1,232 | |||
Accrued marketing | 555 | 497 | |||
Accrued postemployment costs | 14 | 12 | |||
Income taxes payable | 90 | 563 | |||
Interest payable | 5 | 15 | |||
Dividends payable | 0 | 0 | |||
Other current liabilities | 261 | 271 | |||
Total current liabilities | 6,112 | 6,802 | |||
Long-term debt | 1,040 | 1,008 | |||
Long-term borrowings due to affiliates | 1,700 | 1,905 | |||
Deferred income taxes | 20,404 | 20,219 | |||
Accrued postemployment costs | 274 | 258 | |||
Other liabilities | 316 | 482 | |||
TOTAL LIABILITIES | 29,846 | 30,674 | |||
Redeemable noncontrolling interest | 21 | 23 | |||
9.00% Series A cumulative compounding redeemable preferred stock, 80,000 authorized and issued shares at April 3, 2016 and January 3, 2016, $.01 par value | 0 | 0 | |||
Total shareholders' equity | 74,190 | 72,900 | |||
Noncontrolling interest | 216 | 208 | |||
TOTAL EQUITY | 74,406 | 73,108 | |||
TOTAL LIABILITIES AND EQUITY | 104,273 | 103,805 | |||
Eliminations | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 | |
Trade receivables | 0 | $ 0 | |||
Sold receivables | 0 | ||||
Inventories | 0 | $ 0 | |||
Short-term lending due from affiliates | (7,632) | (8,010) | |||
Short-term lending due from affiliates | (492) | (874) | |||
Other current assets | (352) | (217) | |||
Total current assets | (8,476) | (9,101) | |||
Property, plant and equipment, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Investments in subsidiaries | (140,769) | (139,110) | |||
Intangible assets, net | 0 | 0 | |||
Long-term lending due from affiliates | (3,484) | (3,700) | |||
Other assets | 0 | 0 | |||
TOTAL ASSETS | (152,729) | (151,911) | |||
Short-term lending due to affiliates | (7,632) | (8,010) | |||
Short-term lending due to affiliates | (492) | (874) | |||
Trade payables | 0 | 0 | |||
Accrued marketing | 0 | 0 | |||
Accrued postemployment costs | 0 | 0 | |||
Income taxes payable | (352) | (217) | |||
Interest payable | 0 | 0 | |||
Dividends payable | 0 | 0 | |||
Other current liabilities | 0 | 0 | |||
Total current liabilities | (8,476) | (9,101) | |||
Long-term debt | 0 | 0 | |||
Long-term borrowings due to affiliates | (3,700) | (3,905) | |||
Deferred income taxes | 0 | 0 | |||
Accrued postemployment costs | 0 | 0 | |||
Other liabilities | 0 | 0 | |||
TOTAL LIABILITIES | (12,176) | (13,006) | |||
Redeemable noncontrolling interest | 0 | 0 | |||
9.00% Series A cumulative compounding redeemable preferred stock, 80,000 authorized and issued shares at April 3, 2016 and January 3, 2016, $.01 par value | 0 | 0 | |||
Total shareholders' equity | (140,553) | (138,905) | |||
Noncontrolling interest | 0 | 0 | |||
TOTAL EQUITY | (140,553) | (138,905) | |||
TOTAL LIABILITIES AND EQUITY | $ (152,729) | $ (151,911) | |||
Nine point zero zero percent Series A cumulative compounding redeemable preferred stock | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
9.00% Series A cumulative compounding redeemable preferred stock, dividend percentage | 9.00% | 9.00% |
Supplemental Financial Inform82
Supplemental Financial Information Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2016 | Mar. 29, 2015 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | $ 270 | $ (83) |
Capital expenditures | (303) | (53) |
Net proceeds from/(payments on) intercompany lending activities | 0 | 0 |
Return of capital | 0 | 0 |
Other investing activities, net | (22) | 4 |
Net cash provided by/(used for) investing activities | (325) | (49) |
Repayments of long-term debt | (6) | (1,962) |
Proceeds from issuance of long-term debt | 0 | 2,000 |
Net proceeds from/(payments on) intercompany borrowing activities | 0 | 0 |
Dividends paid-Series A Preferred Stock | 0 | (180) |
Dividends paid-common stock | (667) | 0 |
Other intercompany capital stock transactions | 0 | |
Other financing activities, net | 46 | (72) |
Net cash provided by/(used for) financing activities | (627) | (214) |
Effect of exchange rate changes on cash and cash equivalents | 44 | (53) |
Net increase/(decrease) | (638) | (399) |
Balance at beginning of period | 4,837 | 2,298 |
Balance at end of period | 4,199 | 1,899 |
Parent Guarantor | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | 0 | 180 |
Capital expenditures | 0 | 0 |
Net proceeds from/(payments on) intercompany lending activities | 0 | 0 |
Return of capital | 667 | 0 |
Other investing activities, net | 0 | 0 |
Net cash provided by/(used for) investing activities | 667 | 0 |
Repayments of long-term debt | 0 | 0 |
Proceeds from issuance of long-term debt | 0 | |
Net proceeds from/(payments on) intercompany borrowing activities | 0 | 0 |
Dividends paid-Series A Preferred Stock | 0 | (180) |
Dividends paid-common stock | (667) | 0 |
Other intercompany capital stock transactions | 0 | |
Other financing activities, net | 0 | 0 |
Net cash provided by/(used for) financing activities | (667) | (180) |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase/(decrease) | 0 | 0 |
Balance at beginning of period | 0 | 0 |
Balance at end of period | 0 | 0 |
Subsidiary Issuer | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | 166 | (103) |
Capital expenditures | (242) | (26) |
Net proceeds from/(payments on) intercompany lending activities | 423 | (609) |
Return of capital | 0 | 5 |
Other investing activities, net | (19) | (1) |
Net cash provided by/(used for) investing activities | 162 | (631) |
Repayments of long-term debt | (4) | (1,960) |
Proceeds from issuance of long-term debt | 2,000 | |
Net proceeds from/(payments on) intercompany borrowing activities | (314) | 747 |
Dividends paid-Series A Preferred Stock | 0 | 0 |
Dividends paid-common stock | (667) | (180) |
Other intercompany capital stock transactions | 0 | |
Other financing activities, net | 29 | (16) |
Net cash provided by/(used for) financing activities | (956) | 591 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase/(decrease) | (628) | (143) |
Balance at beginning of period | 3,189 | 541 |
Balance at end of period | 2,561 | 398 |
Non-Guarantor Subsidiaries | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | 104 | 20 |
Capital expenditures | (61) | (27) |
Net proceeds from/(payments on) intercompany lending activities | 314 | (747) |
Return of capital | 0 | 0 |
Other investing activities, net | (3) | 5 |
Net cash provided by/(used for) investing activities | 250 | (769) |
Repayments of long-term debt | (2) | (2) |
Proceeds from issuance of long-term debt | 0 | |
Net proceeds from/(payments on) intercompany borrowing activities | (423) | 609 |
Dividends paid-Series A Preferred Stock | 0 | 0 |
Dividends paid-common stock | 0 | 0 |
Other intercompany capital stock transactions | (5) | |
Other financing activities, net | 17 | (56) |
Net cash provided by/(used for) financing activities | (408) | 546 |
Effect of exchange rate changes on cash and cash equivalents | 44 | (53) |
Net increase/(decrease) | (10) | (256) |
Balance at beginning of period | 1,648 | 1,757 |
Balance at end of period | 1,638 | 1,501 |
Eliminations | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | 0 | (180) |
Capital expenditures | 0 | 0 |
Net proceeds from/(payments on) intercompany lending activities | (737) | 1,356 |
Return of capital | (667) | (5) |
Other investing activities, net | 0 | 0 |
Net cash provided by/(used for) investing activities | (1,404) | 1,351 |
Repayments of long-term debt | 0 | 0 |
Proceeds from issuance of long-term debt | 0 | |
Net proceeds from/(payments on) intercompany borrowing activities | 737 | (1,356) |
Dividends paid-Series A Preferred Stock | 0 | 0 |
Dividends paid-common stock | 667 | 180 |
Other intercompany capital stock transactions | 5 | |
Other financing activities, net | 0 | 0 |
Net cash provided by/(used for) financing activities | 1,404 | (1,171) |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase/(decrease) | 0 | 0 |
Balance at beginning of period | 0 | 0 |
Balance at end of period | $ 0 | $ 0 |