Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 02, 2016 | Oct. 30, 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 | Oct. 2, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
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 | 1,217,270,219 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 6,267 | $ 6,120 | $ 19,630 | $ 11,214 |
Cost of products sold | 4,049 | 4,492 | 12,503 | 7,857 |
Gross profit | 2,218 | 1,628 | 7,127 | 3,357 |
Selling, general and administrative expenses | 805 | 1,229 | 2,565 | 2,005 |
Operating income | 1,413 | 399 | 4,562 | 1,352 |
Interest expense | 311 | 460 | 824 | 1,055 |
Other expense/(income), net | (3) | 108 | (5) | 314 |
Income/(loss) before income taxes | 1,105 | (169) | 3,743 | (17) |
Provision for/(benefit from) income taxes | 262 | (49) | 1,045 | (16) |
Net income/(loss) | 843 | (120) | 2,698 | (1) |
Net income/(loss) attributable to noncontrolling interest | 1 | 3 | 10 | 10 |
Net income/(loss) attributable to Kraft Heinz | 842 | (123) | 2,688 | (11) |
Preferred dividends | 0 | 180 | 180 | 540 |
Net income/(loss) attributable to common shareholders | $ 842 | $ (303) | $ 2,508 | $ (551) |
Earnings Per Share [Abstract] | ||||
Basic earnings/(loss) per share (in dollars per share) | $ 0.69 | $ (0.27) | $ 2.06 | $ (0.87) |
Diluted earnings/(loss) per share (in dollars per share) | 0.69 | (0.27) | 2.05 | (0.87) |
Dividends declared (in dollars per share) | $ 0.6 | $ 0.55 | $ 1.75 | $ 0.55 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income/(loss) | $ 843 | $ (120) | $ 2,698 | $ (1) |
Other comprehensive income/(loss), net of tax: | ||||
Foreign currency translation adjustments | (148) | (1,023) | (294) | (1,456) |
Net deferred gains/(losses) on net investment hedges | 34 | 195 | 79 | 421 |
Net postemployment benefit gains/(losses) arising during the period | (145) | 892 | (145) | 873 |
Reclassification of net postemployment benefit losses/(gains) | (39) | (11) | (143) | (4) |
Net deferred gains/(losses) on cash flow hedges | 31 | 45 | (1) | (32) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (26) | (9) | (44) | 129 |
Total other comprehensive income/(loss) | (293) | 89 | (548) | (69) |
Total comprehensive income/(loss) | 550 | (31) | 2,150 | (70) |
Comprehensive income/(loss) attributable to noncontrolling interest | 3 | (14) | 19 | (20) |
Comprehensive income/(loss) attributable to Kraft Heinz | $ 547 | $ (17) | $ 2,131 | $ (50) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Oct. 02, 2016 | Jan. 03, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 3,920 | $ 4,837 |
Trade receivables (net of allowances of $28 at October 2, 2016 and $32 at January 3, 2016) | 855 | 871 |
Sold receivables | 208 | 583 |
Inventories | 3,108 | 2,618 |
Other current assets | 852 | 871 |
Total current assets | 8,943 | 9,780 |
Property, plant and equipment, net | 6,490 | 6,524 |
Goodwill | 44,518 | 43,051 |
Intangible assets, net | 59,620 | 62,120 |
Other assets | 1,509 | 1,498 |
TOTAL ASSETS | 121,080 | 122,973 |
LIABILITIES AND EQUITY | ||
Commercial paper and other short-term debt | 653 | 4 |
Current portion of long-term debt | 2,047 | 79 |
Trade payables | 3,456 | 2,844 |
Accrued marketing | 708 | 856 |
Accrued postemployment costs | 164 | 328 |
Income taxes payable | 142 | 417 |
Interest payable | 311 | 401 |
Dividends payable | 769 | 762 |
Other current liabilities | 1,164 | 1,241 |
Total current liabilities | 9,414 | 6,932 |
Long-term debt | 29,980 | 25,151 |
Deferred income taxes | 20,706 | 21,497 |
Accrued postemployment costs | 2,367 | 2,405 |
Other liabilities | 745 | 752 |
TOTAL LIABILITIES | 63,212 | 56,737 |
Commitments and Contingencies (Note 12) | ||
Redeemable noncontrolling interest | 0 | 23 |
9.00% cumulative compounding preferred stock, Series A, no shares authorized and issued at October 2, 2016 and 80,000 authorized and issued shares at January 3, 2016, $0.01 par value | 0 | 8,320 |
Equity: | ||
Common stock, $0.01 par value (5,000,000,000 shares authorized at October 2, 2016 and January 3, 2016; 1,218,595,543 shares issued and 1,217,580,024 shares outstanding at October 2, 2016; 1,214,391,614 shares issued and 1,213,978,752 shares outstanding at January 3, 2016) | 12 | 12 |
Additional paid-in capital | 58,567 | 58,375 |
Retained earnings/(deficit) | 374 | 0 |
Accumulated other comprehensive income/(losses) | (1,229) | (671) |
Treasury stock, at cost | (82) | (31) |
Total shareholders' equity | 57,642 | 57,685 |
Noncontrolling interest | 226 | 208 |
TOTAL EQUITY | 57,868 | 57,893 |
TOTAL LIABILITIES AND EQUITY | $ 121,080 | $ 122,973 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Oct. 02, 2016 | Jan. 03, 2016 | |
Receivables, allowances | $ 28 | $ 32 |
Common stock, shares issued | 1,218,595,543 | 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 | 1,217,580,024 | 1,213,978,752 |
Nine point zero zero percent cumulative compounding preferred stock, Series A | ||
9.00% cumulative compounding preferred stock, Series A, dividend percentage | 9.00% | 9.00% |
9.00% cumulative compounding preferred stock, Series A, shares authorized | 0 | 80,000 |
9.00% cumulative compounding preferred stock, Series A, shares issued | 0 | 80,000 |
9.00% cumulative compounding preferred stock, Series A, par value | $ 0.01 | $ 0.01 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Equity (Unaudited) - 9 months ended Oct. 02, 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 | 2,698 | 2,688 | 10 | ||||
Other comprehensive income/(loss) excluding redeemable noncontrolling interest | (550) | (558) | 8 | ||||
Dividends declared-Series A Preferred Stock | (180) | (180) | |||||
Dividends declared-common stock | (2,130) | (2,130) | |||||
Exercise of stock options, issuance of other stock awards, and other | 137 | 192 | (4) | (51) | |||
Ending balance at Oct. 02, 2016 | $ 57,868 | $ 12 | $ 58,567 | $ 374 | $ (1,229) | $ (82) | $ 226 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 02, 2016 | Sep. 27, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income/(loss) | $ 2,698 | $ (1) |
Adjustments to reconcile net income/(loss) to operating cash flows: | ||
Depreciation and amortization | 1,010 | 402 |
Amortization of postretirement benefit plans prior service credits | (217) | (31) |
Equity award compensation expense | 38 | 98 |
Deferred income tax provision | (28) | (562) |
Pension contributions | (332) | (47) |
Nonmonetary currency devaluation | 18 | 234 |
Other items, net | (140) | 508 |
Changes in current assets and liabilities: | ||
Trade receivables | 32 | 196 |
Sold receivables | 375 | 78 |
Inventories | (481) | 23 |
Accounts payable | 480 | (97) |
Other current assets | (58) | 22 |
Other current liabilities | (529) | (77) |
Net cash provided by/(used for) operating activities | 2,866 | 746 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (836) | (366) |
Payments to acquire Kraft Foods Group, Inc., net of cash acquired | 0 | (9,468) |
Proceeds from net investment hedges | 84 | 481 |
Other investing activities, net | 10 | (48) |
Net cash provided by/(used for) investing activities | (742) | (9,401) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments of long-term debt | (74) | (12,308) |
Proceeds from issuance of long-term debt | 6,981 | 14,823 |
Proceeds from issuance of commercial paper | 4,296 | 0 |
Repayments of commercial paper | (3,660) | 0 |
Proceeds from issuance of common stock to Sponsors | 0 | 10,000 |
Dividends paid-Series A Preferred Stock | (180) | (540) |
Dividends paid-common stock | (2,123) | (637) |
Redemption of Series A Preferred Stock | (8,320) | 0 |
Other financing activities, net | 56 | (147) |
Net cash provided by/(used for) financing activities | (3,024) | 11,191 |
Effect of exchange rate changes on cash and cash equivalents | (17) | (397) |
Net increase/(decrease) | (917) | 2,139 |
Balance at beginning of period | 4,837 | 2,298 |
Balance at end of period | $ 3,920 | $ 4,437 |
Background and Basis of Present
Background and Basis of Presentation (Notes) | 9 Months Ended |
Oct. 02, 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. and 3G Global Food Holdings, L.P. (together, the “Sponsors”), following their acquisition of H. J. Heinz Company (the “2013 Merger”) on June 7, 2013 (the “2013 Merger Date”). Changes in Accounting and Reporting: 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 related to the 2015 Merger. 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, but we expect that the adoption will significantly increase the assets and liabilities on our consolidated balance sheets. 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. In August 2016, the FASB issued an ASU related to the classification of certain cash payments and cash receipts on the statement of cash flows. This ASU provides guidance on eight specific cash flow classification matters in order to reduce current and future diversity in practice. The ASU will be effective beginning in the first quarter of our fiscal year 2018. Early adoption is permitted. The guidance related to each of the eight separate classification matters must be adopted in the same period using a retrospective transition method. 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) | 9 Months Ended |
Oct. 02, 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 Purchase Price Allocation: We utilized estimated fair values at the 2015 Merger Date to allocate the total consideration exchanged to the net tangible and intangible assets acquired and liabilities assumed. Such allocation was final as of July 3, 2016. During the first half of 2016, we made measurement period adjustments to the preliminary purchase price allocation primarily reflecting (i) a decrease in indefinite-lived intangible assets of $2.0 billion , (ii) a decrease in deferred income tax liabilities of $564 million , and (iii) an increase in goodwill of $1.4 billion . We made these measurement period adjustments to reflect facts and circumstances that existed as of the 2015 Merger Date and did not result from intervening events subsequent to such date. The final 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 4,179 Identifiable intangible assets 47,771 Other non-current assets 214 Trade and other payables (3,026 ) Long-term debt (9,286 ) Net postemployment benefits and other non-current liabilities (4,739 ) Deferred income tax liabilities (16,675 ) Net assets acquired 22,175 Goodwill on acquisition 30,462 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 The 2015 Merger resulted in $30.5 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 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 and nine months ended September 27, 2015 , as if Kraft had been acquired as of December 30, 2013. For the Three Months Ended For the Nine Months Ended September 27, 2015 September 27, 2015 (in millions, except per share data) Net sales $ 6,363 $ 20,323 Net income 12 1,116 Basic earnings per share (0.14 ) 0.48 Diluted earnings per share (0.14 ) 0.47 The unaudited pro forma results include certain purchase accounting adjustments. We have made pro forma adjustments to exclude deal costs of $96 million ( $59 million net of tax) for the three months and $166 million ( $102 million net of tax) for the nine months ended September 27, 2015 , and to exclude $347 million ( $213 million net of tax) of non-cash costs related to the fair value step-up of Kraft’s inventory (“Inventory Step-up Costs”) for the three and nine months ended September 27, 2015 , because such costs are non-recurring and are directly attributable to the 2015 Merger. These expenses were included in the prior year pro forma results. The unaudited pro forma results do not include any anticipated cost savings or other effects of future integration or restructuring 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) | 9 Months Ended |
Oct. 02, 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, as well as integrate and optimize the combined organization. As part of the Integration Program, 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 value 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 primarily include severance and employee benefits (cash severance, non-cash severance, including accelerated equity award compensation expense, and pension and other termination benefits). 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. Overall, we expect to eliminate 3,350 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 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 our plans to close seven factories and began a consolidation of our distribution network. On September 13, 2016, we announced that one of the previously announced seven factories, our Fullerton, California factory, would remain open. In a staged process, production in the other six locations is shifting to other existing factories in the United States and Canada. Overall, we expect to close six factories and eliminate 1,900 positions in connection with these activities. • Other costs ( $150 million ) incurred as a direct result of integration activities, primarily including contract and lease terminations, professional fees, and other incremental third-party fees. As of October 2, 2016 , we have incurred approximately $1.6 billion of cumulative costs under the Integration Program, including: $676 million of severance and employee benefit costs, $539 million of non-cash asset-related costs, $241 million of other implementation costs, and $95 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 and nine months ended October 2, 2016 were (in millions): For the Three Months Ended For the Nine Months Ended October 2, 2016 October 2, 2016 Severance and employee benefit costs $ 56 $ 114 Asset-related costs 98 403 Other exit costs 15 40 Other implementation costs 53 165 $ 222 $ 722 At October 2, 2016 , the total Integration Program liability related primarily to the elimination of general salaried and footprint-related positions across the United States and Canada, 3,250 of whom have left the company by October 2, 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 114 40 154 Cash payments (153 ) (48 ) (201 ) Non-cash utilization (25 ) — (25 ) Balance at October 2, 2016 $ 121 $ 15 $ 136 (a) Other exit costs primarily represent contract and lease terminations. We expect that a substantial portion of the Integration Program liability as of October 2, 2016 will be paid in 2016. Restructuring Activities: Prior to the 2015 Merger, we executed a number of other restructuring activities focused primarily on workforce reduction and factory closure and consolidation, which were substantially complete as of October 2, 2016 . These programs, and other programs, resulted in the elimination of 8,250 positions and cumulative $569 million severance and employee benefit costs, $337 million non-cash asset-related costs, and $390 million other exit costs through October 2, 2016 . Related to these restructuring activities, we incurred expenses of $15 million for the three months and $59 million for the nine months ended October 2, 2016 . As of October 2, 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 18 1 19 Cash payments (31 ) (5 ) (36 ) Balance at October 2, 2016 $ 12 $ 26 $ 38 (a) Other exit costs primarily represent contract and lease terminations. We expect that a substantial portion of the active restructuring projects liability as of October 2, 2016 will be paid in 2016. Total Integration and Restructuring: Our total Integration Program and restructuring expenses recorded in cost of products sold and selling, general and administrative expenses (“SG&A”) were (in millions): For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 Severance and employee benefit costs - COGS $ 14 $ 85 $ 43 $ 104 Severance and employee benefit costs - SG&A 43 311 89 324 Asset-related costs - COGS 89 49 368 83 Asset-related costs - SG&A 9 — 35 — Other exit costs - COGS 49 25 121 48 Other exit costs - SG&A 33 12 125 28 $ 237 $ 482 $ 781 $ 587 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 For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 United States $ 161 $ 365 $ 607 $ 405 Canada 16 39 43 51 Europe 4 72 32 106 Rest of World 1 1 1 10 Non-Operating 55 5 98 15 $ 237 $ 482 $ 781 $ 587 |
Inventories (Notes)
Inventories (Notes) | 9 Months Ended |
Oct. 02, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories at October 2, 2016 and January 3, 2016 were (in millions): October 2, 2016 January 3, 2016 Packaging and ingredients $ 656 $ 563 Work in process 405 393 Finished product 2,047 1,662 Inventories $ 3,108 $ 2,618 The increase in inventories as of October 2, 2016 was 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) | 9 Months Ended |
Oct. 02, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill: Changes in the carrying amount of goodwill from January 3, 2016 to October 2, 2016 , by segment, were (in millions): United States Canada Europe Rest of World Total Balance at January 3, 2016 $ 32,290 $ 4,796 $ 3,182 $ 2,783 $ 43,051 2015 Merger measurement period adjustments 1,433 — — — 1,433 Translation adjustments — 251 (311 ) 94 34 Balance at October 2, 2016 $ 33,723 $ 5,047 $ 2,871 $ 2,877 $ 44,518 In connection with the 2015 Merger, we recorded $30.5 billion of goodwill in purchase accounting, representing the fair value as of the 2015 Merger Date. As of July 3, 2016, the assignment of goodwill to reporting units was final. During the first half of 2016, we made measurement period adjustments to the 2015 Merger purchase price allocation, resulting in an increase of $1.4 billion to goodwill in the United States segment. See Note 2, Merger and Acquisition , for additional information on these measurement period adjustments. 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 $1,473 million in the United States, an increase of $1,443 million in Rest of World, and an increase of $30 million in Europe. These amounts represent the final allocation of goodwill associated with these export businesses. In the third quarter of 2016, we announced planned changes to our segment structure. We expect that these changes will become effective December 31, 2016. For additional information on these changes, see Note 14, Segment Reporting , to the condensed consolidated financial statements. We test goodwill for impairment at least annually in the second quarter or when a triggering event occurs. We performed our 2016 annual impairment testing in the second quarter of 2016. There was no impairment of goodwill as a result of our testing; however we noted that one reporting unit within the Rest of World segment had an estimated fair value in excess of its carrying value of less than 10% . The goodwill carrying value of this reporting unit was $48 million as of April 4, 2016 (our goodwill impairment testing date). Our goodwill balance consists of a large number of individual reporting units and had an aggregate carrying value of $44.5 billion as of October 2, 2016 . As a majority of our goodwill was recently recorded in connection with the 2013 Merger and the 2015 Merger, representing fair values as of those merger dates, there is not a significant excess of fair values over carry values as of October 2, 2016. We have a risk of future impairment to the extent that individual reporting unit performance does not meet our projections. Additionally, if our current assumptions and estimates, including projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors, are not met, or if valuation factors outside of our control 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 October 2, 2016 that indicated it was more likely than not that our goodwill was impaired. There were no accumulated impairment losses to goodwill as of October 2, 2016 . Indefinite-lived intangible assets: In connection with the 2015 Merger, we recorded $43.1 billion of indefinite-lived intangible assets in purchase accounting, representing the fair values as of the 2015 Merger Date. Indefinite-lived intangible assets, which primarily consisted of trademarks, were (in millions): Balance at January 3, 2016 $ 55,824 2015 Merger measurement period adjustments (1,978 ) Translation adjustments (328 ) Balance at October 2, 2016 $ 53,518 We test indefinite-lived intangible assets for impairment at least annually in the second quarter or when a triggering event occurs. We performed our 2016 annual impairment testing in the second quarter of 2016. There was no impairment of indefinite-lived intangibles as a result of our testing; however, we noted that seven brands each had excess fair value over its carrying value of less than 10% . These brands had an aggregate carrying value of $6.1 billion at April 4, 2016 (our indefinite-lived intangible asset impairment testing date). Of the $6.1 billion aggregate carrying value, $5.6 billion was attributable to Velveeta , Lunchables , Maxwell House , and Cracker Barrel . Our indefinite-lived intangible assets primarily consist of a large number of individual brands and had an aggregate carrying value of $53.5 billion as of October 2, 2016 . As a majority of our indefinite-lived intangible assets were recently recorded in connection with the 2013 Merger and the 2015 Merger, representing fair values as of those merger dates, there is not a significant excess of fair values over carry values as of October 2, 2016. We have a risk of future impairment to the extent individual brand performance does not meet our projections. Additionally, if our current assumptions and estimates, including projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors, are not met, or if valuation factors outside of our control 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 October 2, 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 October 2, 2016 and January 3, 2016 were (in millions): October 2, 2016 January 3, 2016 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks $ 2,357 $ (148 ) $ 2,209 $ 2,346 $ (70 ) $ 2,276 Customer-related assets 4,217 (333 ) 3,884 4,218 (209 ) 4,009 Other 12 (3 ) 9 15 (4 ) 11 $ 6,586 $ (484 ) $ 6,102 $ 6,579 $ (283 ) $ 6,296 Amortization expense for definite-lived intangible assets was $66 million for the three months and $198 million for the nine months ended October 2, 2016 and was $66 million for the three months and $111 million for the nine months ended September 27, 2015 . Aside from amortization expense, the changes in definite-lived intangible assets from January 3, 2016 to October 2, 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 $275 million . |
Income Taxes (Notes)
Income Taxes (Notes) | 9 Months Ended |
Oct. 02, 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 was an expense of 23.7% for the three months and 27.9% for the nine months ended October 2, 2016 , in comparison to the benefit of 29.1% for the three months and 92.4% for the nine months ended September 27, 2015 . Our current effective tax rate reflects the favorable benefit of non-U.S. jurisdictions with lower tax rates, the U.S. manufacturing deduction, as well as the deferred tax effect of statutory tax rate changes and adjustments. The change in our effective tax rate for the three and nine months ended October 2, 2016 compared to the three and nine months ended September 27, 2015 was driven by the 2015 Merger as well as the impact of tax law changes and deferred tax adjustments. With the 2015 Merger, our operations in the United States and Canada increased, resulting in an unfavorable impact to the effective tax rate of higher blended statutory tax rates and a favorable impact to the effective tax rate of a larger U.S. manufacturing deduction. |
Employees' Stock Incentive Plan
Employees' Stock Incentive Plans (Notes) | 9 Months Ended |
Oct. 02, 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 1,466,626 79.78 Options forfeited (760,613 ) 49.51 Options exercised (3,701,021 ) 35.04 Outstanding at October 2, 2016 21,210,604 37.41 The aggregate intrinsic value of stock options exercised during the period was $170 million for the nine months ended October 2, 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 503,659 77.52 Forfeited (118,585 ) 75.12 Vested (489,631 ) 72.96 RSUs at October 2, 2016 863,887 72.12 The aggregate fair value of RSUs that vested during the period was $38 million for the nine months ended October 2, 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 For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 Pre-tax compensation cost $ 12 $ 91 $ 38 $ 98 Tax benefit (4 ) (34 ) (12 ) (37 ) After-tax compensation cost $ 8 $ 57 $ 26 $ 61 Unrecognized compensation cost related to unvested equity awards was $97 million at October 2, 2016 and is expected to be recognized over a weighted average period of three years. |
Postemployment Benefits (Notes)
Postemployment Benefits (Notes) | 9 Months Ended |
Oct. 02, 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 in service and interest cost of approximately $20 million in the three months ended October 2, 2016 and approximately $60 million in the nine months ended October 2, 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 and nine months ended October 2, 2016 and September 27, 2015 (in millions): For the Three Months Ended For the Nine Months Ended U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 Service cost $ 3 $ 22 $ 6 $ 8 $ 10 $ 25 $ 18 $ 18 Interest cost 52 82 21 30 158 91 64 73 Expected return on plan assets (73 ) (86 ) (44 ) (55 ) (221 ) (94 ) (137 ) (140 ) Amortization of unrecognized losses/(gains) — 1 — — — 3 — — Settlements 26 — — 8 20 — — 19 Curtailments — (1 ) — (7 ) — (1 ) — (9 ) Special/contractual termination benefits — 3 — 4 — 3 — 4 Net pension cost/(benefit) $ 8 $ 21 $ (17 ) $ (12 ) $ (33 ) $ 27 $ (55 ) $ (35 ) We capitalized a portion of net pension costs/(benefits) into inventory based on our production activities. These amounts are included in the table above. In the third quarter of 2016, we approved the wind up of our Canadian salaried and Canadian hourly defined benefit pension plans effective December 31, 2016. This action had no impact on the condensed consolidated statements of income, condensed consolidated balance sheets, or condensed consolidated statements of cash flows as at and for the three and nine months ended October 2, 2016. Employer Contributions: During the nine months ended October 2, 2016 , we contributed $311 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 nine months ended October 2, 2016 , we contributed $21 million to our non-U.S. pension plans. Based on our contribution strategy, we plan to make further contributions of up to approximately $5 million to our non-U.S. plans during the remainder of 2016. We are not planning to make any further contributions to our U.S. plans during the remainder of 2016. However, our actual contributions and plans may change 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 and nine months ended October 2, 2016 and September 27, 2015 (in millions): For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 Service cost $ 3 $ 7 $ 11 $ 9 Interest cost 13 33 43 37 Amortization of prior service costs/(credits) (90 ) (28 ) (252 ) (31 ) Curtailments — 1 — 1 Net postretirement cost/(benefit) $ (74 ) $ 13 $ (198 ) $ 16 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) | 9 Months Ended |
Oct. 02, 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 (304 ) — — (304 ) Net deferred gains/(losses) on net investment hedges 79 — — 79 Net postemployment benefit gains/(losses) — (145 ) — (145 ) Reclassification of net postemployment benefit losses/(gains) — (143 ) — (143 ) Net deferred gains/(losses) on cash flow hedges — — (1 ) (1 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income — — (44 ) (44 ) Total other comprehensive income/(loss) (225 ) (288 ) (45 ) (558 ) Balance as of October 2, 2016 $ (1,871 ) $ 634 $ 8 $ (1,229 ) Reclassification of net postemployment benefit losses/(gains) included amounts reclassified to net income and amounts reclassified into inventory (consistent with our capitalization policy). The gross amount and related tax benefit/(expense) recorded in, and associated with, each component of other comprehensive income/(loss) for the three and nine months ended October 2, 2016 and September 27, 2015 were as follows (in millions): For the Three Months Ended October 2, 2016 September 27, 2015 Before Tax Amount Tax Net of Tax Amount Before Tax Amount Tax Net of Tax Amount Foreign currency translation adjustments $ (151 ) $ — $ (151 ) $ (1,006 ) $ — $ (1,006 ) Net deferred gains/(losses) on net investment hedges 34 — 34 240 (45 ) 195 Net actuarial gains/(losses) arising during the period (405 ) 154 (251 ) (54 ) 23 (31 ) Prior service credits/(costs) arising during the period 172 (66 ) 106 1,500 (577 ) 923 Reclassification of net postemployment benefit losses/(gains) (64 ) 25 (39 ) (19 ) 8 (11 ) Net deferred gains/(losses) on cash flow hedges 33 (2 ) 31 53 (8 ) 45 Net deferred losses/(gains) on cash flow hedges reclassified to net income (23 ) (3 ) (26 ) (15 ) 6 (9 ) For the Nine Months Ended October 2, 2016 September 27, 2015 Before Tax Amount Tax Net of Tax Amount Before Tax Amount Tax Net of Tax Amount Foreign currency translation adjustments $ (304 ) $ — $ (304 ) $ (1,426 ) $ — $ (1,426 ) Net deferred gains/(losses) on net investment hedges 144 (65 ) 79 661 (240 ) 421 Net actuarial gains/(losses) arising during the period (405 ) 154 (251 ) (79 ) 29 (50 ) Prior service credits/(costs) arising during the period 172 (66 ) 106 1,500 (577 ) 923 Reclassification of net postemployment benefit losses/(gains) (232 ) 89 (143 ) (9 ) 5 (4 ) Net deferred gains/(losses) on cash flow hedges (12 ) 11 (1 ) (67 ) 35 (32 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income (43 ) (1 ) (44 ) 207 (78 ) 129 In the third quarter of 2016, we determined that we had misstated the prior service credit related to the postretirement plan amendment recognized in the third quarter 2015 financial statements. This misstatement had an impact on other comprehensive income/(losses) for the three and nine months ended October 2, 2016 and September 27, 2015. Accordingly, in the third quarter of 2016, we recorded a correction to reduce accrued postemployment costs by $107 million , reduce deferred income taxes by $41 million , and increase accumulated other comprehensive income/(losses) by $66 million on the condensed consolidated balance sheet at October 2, 2016. This correction is reflected in prior service credits/(costs) arising during the period in the tables above. This misstatement was not material to our current or any prior period financial statements. The amounts reclassified from accumulated other comprehensive income/(losses) in the three and nine months ended October 2, 2016 and September 27, 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 For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 Losses/(gains) on cash flow hedges: Foreign exchange contracts $ — $ — $ (3 ) $ 2 Net sales Foreign exchange contracts (1 ) (16 ) (34 ) (32 ) Cost of products sold Foreign exchange contracts (23 ) — (9 ) (1 ) Other expense/(income), net Interest rate contracts 1 1 3 238 Interest expense Losses/(gains) on cash flow hedges before income taxes (23 ) (15 ) (43 ) 207 Losses/(gains) on cash flow hedges income taxes (3 ) 6 (1 ) (78 ) Losses/(gains) on cash flow hedges $ (26 ) $ (9 ) $ (44 ) $ 129 Losses/(gains) on postemployment benefits: Amortization of unrecognized losses/(gains) $ — $ 1 $ — $ 3 (a) Amortization of prior service costs/(credits) (90 ) (28 ) (252 ) (31 ) (a) Settlement and curtailments losses/(gains) 26 8 20 19 (a) Losses/(gains) on postemployment benefits before income taxes (64 ) (19 ) (232 ) (9 ) Losses/(gains) on postemployment benefits income taxes 25 8 89 5 Losses/(gains) on postemployment benefits $ (39 ) $ (11 ) $ (143 ) $ (4 ) (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) | 9 Months Ended |
Oct. 02, 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 October 2, 2016 and January 3, 2016 were (in millions): Notional Amount October 2, 2016 January 3, 2016 Commodity contracts $ 475 $ 787 Foreign exchange contracts 2,466 3,458 Cross-currency contracts 3,173 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 October 2, 2016 and January 3, 2016 were (in millions): October 2, 2016 Quoted Prices in Active Markets for Identical Assets 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 $ — $ — $ 32 $ 17 $ — $ — $ 32 $ 17 Cross-currency contracts — — 479 — — — 479 — Derivatives not designated as hedging instruments: Commodity contracts 22 10 — 2 — — 22 12 Foreign exchange contracts — — 29 19 — — 29 19 Cross-currency contracts — — 41 — — — 41 — Total fair value $ 22 $ 10 $ 581 $ 38 $ — $ — $ 603 $ 48 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 $30 million at October 2, 2016 and $44 million at January 3, 2016 . No material amounts of collateral were received or posted on our derivative assets and liabilities at October 2, 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: In May 2016, we issued €1.8 billion aggregate principal amount of Euro denominated notes (see Note 12, Commitments, Contingencies and Debt ). The principal amounts of these foreign denominated notes were designated as net investment hedges. Concurrently, we fully unwound our then-outstanding Euro swap (USD notional amount of $1.1 billion ). At October 2, 2016 , the principal amounts of foreign denominated debt designated as net investment hedges totaled €2,550 million and £400 million . At October 2, 2016 , our cross-currency swaps designated as net investment hedges consisted of: Instrument Notional (local) (in billions) Notional (USD) (in billions) Maturity Cross-currency swap £ 0.8 $ 1.4 October 2019 Cross-currency swap C$ 1.8 1.6 December 2019 Hedge Coverage: At October 2, 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 October 2, 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 12 months, 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 October 2, 2016 and assuming market rates remain constant through contract maturities, we expect transfers to net income/(loss) of unrealized gains for foreign currency cash flow hedges during the next 12 months to be $10 million . Additionally, we expect transfers to net income/(loss) 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 and nine months ended October 2, 2016 and September 27, 2015 (in millions): For the Three Months Ended October 2, 2016 September 27, 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) $ — $ 33 $ — $ — $ — $ 53 $ — $ — Net investment hedges: Gains/(losses) recognized in other comprehensive income (effective portion) — — 49 — — — 218 — Total gains/(losses) recognized in other comprehensive income (effective portion) $ — $ 33 $ 49 $ — $ — $ 53 $ 218 $ — Cash flow hedges reclassified to net income/(loss): Net sales $ — $ — $ — $ — $ — $ — $ — $ — Cost of products sold (effective portion) — 1 — — — 16 — — Other expense/(income), net — 23 — — — — — — Interest expense — — — (1 ) — — — (1 ) — 24 — (1 ) — 16 — (1 ) Derivatives not designated as hedging instruments: Gains/(losses) on derivatives recognized in cost of products sold (17 ) — — — (21 ) — — — Gains/(losses) on derivatives recognized in other expense/(income), net — (4 ) 2 — — 9 46 (3 ) (17 ) (4 ) 2 — (21 ) 9 46 (3 ) Total gains/(losses) recognized in statements of income $ (17 ) $ 20 $ 2 $ (1 ) $ (21 ) $ 25 $ 46 $ (4 ) For the Nine Months Ended October 2, 2016 September 27, 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) $ — $ (4 ) $ — $ (8 ) $ — $ 44 $ — $ (111 ) Net investment hedges: Gains/(losses) recognized in other comprehensive income (effective portion) — 46 74 — — — 639 — Total gains/(losses) recognized in other comprehensive income (effective portion) $ — $ 42 $ 74 $ (8 ) $ — $ 44 $ 639 $ (111 ) Cash flow hedges reclassified to net income/(loss): Net sales $ — $ 3 $ — $ — $ — $ (2 ) $ — $ — Cost of products sold (effective portion) — 34 — — — 32 — — Other expense/(income), net — 9 — — — 1 — — Interest expense — — — (3 ) — — — (238 ) — 46 — (3 ) — 31 — (238 ) Derivatives not designated as hedging instruments: Gains/(losses) on derivatives recognized in cost of products sold (6 ) — — — (21 ) — — — Gains/(losses) on derivatives recognized in other expense/(income), net — (61 ) (6 ) — — 42 46 8 (6 ) (61 ) (6 ) — (21 ) 42 46 8 Total gains/(losses) recognized in statements of income $ (6 ) $ (15 ) $ (6 ) $ (3 ) $ (21 ) $ 73 $ 46 $ (230 ) Related to our non-derivative, foreign denominated debt instruments designated as net investment hedges, we recognized a pre-tax loss of $15 million for the three months and a pre-tax gain of $24 million for the nine months ended October 2, 2016 , and we recognized a pre-tax gain of $22 million for the three and nine months ended September 27, 2015. These amounts were recognized in other comprehensive income/(loss) for the periods then ended. |
Venezuela - Foreign Currency an
Venezuela - Foreign Currency and Inflation (Notes) | 9 Months Ended |
Oct. 02, 2016 | |
Foreign Currency [Abstract] | |
Venezuela - Foreign Currency and Inflation | Venezuela - Foreign Currency and Inflation We apply highly inflationary accounting to the results of our Venezuelan subsidiary and include these results in our condensed consolidated financial statements. Our results of operations in Venezuela reflect a controlled subsidiary. We continue to have sufficient currency liquidity and pricing flexibility to run our operations. 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 or further deterioration of the economic environment could impact our ability to control our Venezuelan operations and could lead us to deconsolidate our Venezuelan subsidiary in the future. At October 2, 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 the Sistema de Divisa Protegida (“DIPRO”), which is available for purchases and sales of essential items, including food products, and • an alternative exchange rate available through the Sistema de Divisa Complementaria (“DICOM”), which is available for all transactions not covered by DIPRO and is a free-floating exchange rate format. The DICOM rate (formerly SIMADI) averaged BsF 646 per U.S. dollar for the three months and BsF 441 per U.S. dollar for the nine months ended October 2, 2016 , and was BsF 659 per U.S. dollar at October 2, 2016 . During the three and nine months ended October 2, 2016, we have had access to U.S. dollars at DICOM rates. As of October 2, 2016 , we believe that the DICOM rate is the most appropriate legally available rate at which to translate the results of our Venezuelan subsidiary. We have had limited access to, and settlements at, the former official exchange rate of BsF 6.30 per U.S. dollar during the three and nine months ended October 2, 2016 (as of March 10, 2016, the official exchange rate was devalued to BsF 10 per U.S. dollar). We have had no settlements at the current official exchange rate of BsF 10 per U.S. dollar during the three and nine months ended October 2, 2016 . We had outstanding requests of $26 million at October 2, 2016 for payment of invoices for the purchase of ingredients and packaging materials for the years 2012 through 2015, all of which were requested for payment at BsF 6.30 per U.S. dollar. We remeasured the net monetary assets and operating results of our Venezuelan subsidiary, resulting in a nonmonetary currency devaluation gain of $6 million for the three months and loss of $1 million for the nine months ended October 2, 2016 , which was recorded in other expense/(income), net, in the condensed consolidated statements of income for such periods. During the second quarter of 2016, the DICOM rate deteriorated significantly, from BsF 276 per U.S. dollar as of April 3, 2016 to BsF 628 per U.S. dollar as of July 3, 2016. Accordingly, as of July 3, 2016, we assessed the nonmonetary assets of our Venezuelan subsidiary for impairment, resulting in a $53 million loss to write down property, plant and equipment, net, and prepaid spare parts, which was recorded within cost of products sold in the condensed consolidated statements of income for that period. Prior to June 28, 2015, we used the official exchange rate of BsF 6.30 per U.S. dollar to translate the results of our Venezuelan subsidiary. In June 2015, due to the continued lack of liquidity and increasing economic uncertainty, we reevaluated the rate used to remeasure the monetary assets and liabilities of our Venezuelan subsidiary. We determined that the DICOM rate was the most appropriate legally available rate. At June 28, 2015, we remeasured the net monetary assets of our Venezuelan subsidiary at the then SIMADI rate of BsF 197.7 per U.S. dollar, resulting in a nonmonetary currency devaluation of $234 million , which was recorded in other expense/(income), net, in the condensed consolidated statements of income for the second quarter of 2015. Additionally, we assessed the nonmonetary assets of our Venezuelan subsidiary for impairment, which resulted in a $49 million loss to write down inventory to the lower of cost or market, which was recorded in cost of products sold in the condensed consolidated statements of income for the second quarter of 2015. |
Commitments, Contingencies and
Commitments, Contingencies and Debt (Notes) | 9 Months Ended |
Oct. 02, 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, Inc. (“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. 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. Debt Borrowing Arrangements: On May 4, 2016, together with Kraft Heinz Foods Company, our wholly owned operating subsidiary, we entered into the first amendment (the “First Amendment”) to the credit agreement dated as of July 6, 2015 (the “Credit Agreement”) described in our Annual Report on Form 10-K for the year ended January 3, 2016 . Among other things, the First Amendment (a) provided for a one time modification of the extension period of the Credit Agreement, (b) increased the letter of credit sublimit from $150 million to $300 million , and (c) expanded the available currencies in which revolving loans can be issued with the mutual consent of Kraft Heinz Foods Company and the applicable lender. In connection with the First Amendment, the maturity date of the revolving loans and commitments under the Credit Agreement was extended from July 6, 2020 to July 6, 2021. The obligations under the Credit Agreement are guaranteed by Kraft Heinz Foods Company in the case of indebtedness and other liabilities of any subsidiary borrower and by Kraft Heinz in the case of indebtedness and other liabilities of any subsidiary borrower and Kraft Heinz Foods Company. The Credit Agreement contains representations, warranties, covenants and events of default that are typical for this type of facility. During the second quarter of 2016, together with Kraft Heinz Foods Company, we commenced a commercial paper program. As of October 2, 2016, we had $639 million of commercial paper outstanding, which had a weighted average interest rate of 0.925% . There was no commercial paper outstanding at January 3, 2016. Debt Issuance: The carrying value of our long-term debt, including the current portion, was $32.0 billion at October 2, 2016 and $25.2 billion at January 3, 2016. The increase during the period was driven by new issuances of long-term debt during the second quarter of 2016 , as described below. • On May 24, 2016, we completed the sale of $2.0 billion aggregate principal amount of 3.000% Senior Notes due June 1, 2026 (the “2026 Notes”) and $3.0 billion aggregate principal amount of 4.375% Senior Notes due June 1, 2046 (the “2046 Notes” and, together with the 2026 Notes, the “U.S. Dollar Notes”). Interest on the U.S. Dollar Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2016. • On May 25, 2016, we completed the sale of €550 million aggregate principal amount of 1.500% Senior Notes due May 24, 2024 (the “2024 Notes”) and €1,250 million aggregate principal amount of 2.250% Senior Notes due May 25, 2028 (the “2028 Notes” and, together with the 2024 Notes, the “Euro Notes”). Interest on the 2024 Notes is payable annually in arrears on May 24 of each year, beginning on May 24, 2017. Interest on the 2028 Notes is payable annually in arrears on May 25 of each year, beginning on May 25, 2017. We used the net proceeds from the U.S. Dollar Notes and Euro Notes issuances primarily to redeem all outstanding shares of our 9.00% cumulative compounding preferred stock, Series A (“Series A Preferred Stock”), for $8.3 billion . The U.S. Dollar Notes and the Euro Notes were issued by Kraft Heinz Foods Company and are fully and unconditionally guaranteed as to payment of principal, premium, if any, and interest on a senior unsecured basis by Kraft Heinz. The U.S. Dollar Notes and the Euro Notes contain customary covenants and events of default. We incurred debt issuance costs related to the sale of the U.S. Dollar Notes and the Euro Notes of $52 million , which is reflected as a direct deduction of our long-term debt balance on the condensed consolidated balance sheets at October 2, 2016 . Fair Value of Debt: At October 2, 2016 , the aggregate fair value of our total debt was $35.6 billion . We determined the fair value of our short-term debt using Level 1 quoted prices in active markets. 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 As noted above, o n June 7, 2016, we redeemed all outstanding shares of our Series A Preferred Stock . We funded this redemption primarily through the issuance of the U.S. Dollar Notes and Euro Notes, as well as other sources of liquidity, including our commercial paper program, U.S. securitization program, and cash on hand. In connection with the redemption, all Series A Preferred Stock was canceled and automatically retired. Additionally, on June 7, 2016, we filed a Certificate of Retirement of Series A Preferred Stock, which reduced the number of our preferred shares authorized by 80,000 to 920,000 and eliminated all references to the Series A Preferred Stock from our Certificate of Incorporation. Financing Arrangements In May 2016, we amended our U.S. securitization program. Under the new terms, we receive cash consideration of up to $800 million and a receivable for the remainder of the purchase price (the “Deferred Purchase Price”). This program expires in May 2017. There were no significant changes to our other accounts receivable securitization and factoring programs (the “Programs”) during the nine months ended October 2, 2016 . See Note 15, Financing Arrangements, to our consolidated financial statements for the year ended January 3, 2016 in our Annual Report on Form 10-K for additional information on the Programs. The cash consideration and carrying amount of receivables removed from the condensed consolidated balance sheets in connection with the Programs were $902 million at October 2, 2016 and $267 million at January 3, 2016 . The fair value of the Deferred Purchase Price for the Programs was $208 million at October 2, 2016 and $583 million at January 3, 2016 . The Deferred Purchase Price is included in sold receivables on the condensed consolidated balance sheets and had a carrying value which approximated its fair value at October 2, 2016 and January 3, 2016 . Redeemable Noncontrolling Interest In April 2016, the minority partner in our Brazilian subsidiary, Coniexpress S.A. Industrias Alimenticias (“Coniexpress”), exercised a put option that required us to purchase its 5% equity interest in the subsidiary for $21 million . The redemption value was determined based on a specified formula within the shareholders’ agreement between our Brazilian subsidiary and the minority partner. An adjustment was made to retained earnings to record the carrying value at the maximum redemption value immediately prior to this transaction. As this exercise did not result in a change in control of Coniexpress, it was accounted for as an equity transaction. We now own 100% of Coniexpress. |
Earnings Per Share (Notes)
Earnings Per Share (Notes) | 9 Months Ended |
Oct. 02, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Our earnings per common share (“EPS”) for the three and nine months ended October 2, 2016 and September 27, 2015 were: For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 (in millions, except per share amounts) Basic Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 842 $ (303 ) $ 2,508 $ (551 ) Weighted average shares of common stock outstanding 1,218 1,142 1,216 633 Net earnings/(loss) $ 0.69 $ (0.27 ) $ 2.06 $ (0.87 ) Diluted Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 842 $ (303 ) $ 2,508 $ (551 ) Weighted average shares of common stock outstanding 1,218 1,142 1,216 633 Effect of dilutive securities: Equity awards 10 — 10 — Weighted average shares of common stock outstanding, including dilutive effect 1,228 1,142 1,226 633 Net earnings/(loss) $ 0.69 $ (0.27 ) $ 2.05 $ (0.87 ) We use the treasury stock method to calculate the dilutive effect of outstanding equity awards in the denominator for diluted earnings per common share. Due to the net loss attributable to common shareholders in the three and nine months ended September 27, 2015 , the dilutive effects of equity awards and warrants were excluded because their inclusion would have had an anti-dilutive effect on earnings per share. Anti-dilutive shares were 1 million for the three months and 3 million for the nine months ended October 2, 2016 and were 12 million for the three months and 19 million for the nine months ended September 27, 2015 . |
Segment Reporting (Notes)
Segment Reporting (Notes) | 9 Months Ended |
Oct. 02, 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”). In the third quarter of 2016, we announced our plans to move the businesses comprising our RIMEA operating segment into our other existing segments to align with our global growth strategy. These plans include (i) moving our Russia business into the Europe reportable segment and (ii) moving the remaining RIMEA businesses into our Asia Pacific operating segment. We expect that these changes will become effective December 31, 2016. As a result, in the fourth quarter of 2016, we expect to restate our Europe and Rest of World segments to reflect these changes. 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 historical periods 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 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 is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations. 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’s operating results), impairment losses, gains/(losses) on 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. Management does not use assets by segment to evaluate performance or allocate resources. Therefore, we do not disclose assets by segment. Our net sales by segment and Segment Adjusted EBITDA were: For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 (in millions) Net sales: United States $ 4,395 $ 4,206 $ 13,802 $ 5,951 Canada 550 539 1,692 804 Europe 513 600 1,644 1,846 Rest of World 809 775 2,492 2,613 Total net sales $ 6,267 $ 6,120 $ 19,630 $ 11,214 For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 (in millions) Segment Adjusted EBITDA: United States $ 1,349 $ 1,033 $ 4,360 $ 3,364 Canada 148 110 491 374 Europe 183 223 572 662 Rest of World 150 152 525 570 General corporate expenses (27 ) (36 ) (107 ) (106 ) Depreciation and amortization (excluding integration and restructuring expenses) (116 ) (193 ) (401 ) (619 ) Integration and restructuring expenses (237 ) (482 ) (781 ) (681 ) Merger costs (4 ) (139 ) (33 ) (193 ) Unrealized gains/(losses) on commodity hedges (22 ) — 23 23 Impairment losses — — (53 ) (58 ) Gains/(losses) on sale of business — — — 21 Nonmonetary currency devaluation (1 ) — (4 ) (49 ) Equity award compensation expense (excluding integration and restructuring expenses) (10 ) (16 ) (30 ) (60 ) Other pro forma adjustments — (253 ) — (1,896 ) Operating income 1,413 399 4,562 1,352 Interest expense 311 460 824 1,055 Other expense/(income), net (3 ) 108 (5 ) 314 Income/(loss) before income taxes $ 1,105 $ (169 ) $ 3,743 $ (17 ) In 2016, we reorganized the products within our product categories to reflect how we manage our business. We have reflected this change for all historical periods presented. Our net sales by product category were: For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 (in millions) Condiments and sauces $ 1,670 $ 1,532 $ 5,073 $ 4,209 Cheese and dairy 1,292 1,184 4,045 1,184 Ambient meals 567 592 1,703 1,231 Frozen and chilled meals 552 634 1,731 1,511 Meats and seafood 648 685 2,093 781 Refreshment beverages 375 353 1,226 353 Coffee 335 310 1,071 310 Infant and nutrition 171 190 577 707 Desserts, toppings and baking 212 203 647 203 Nuts and salted snacks 238 243 760 243 Other 207 194 704 482 Total net sales $ 6,267 $ 6,120 $ 19,630 $ 11,214 |
Supplemental Financial Informat
Supplemental Financial Information (Notes) | 9 Months Ended |
Oct. 02, 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 wholly owned operating subsidiary, Kraft Heinz Foods Company. See Note 12, Debt, to our consolidated financial statements for the year ended January 3, 2016 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 Kraft Heinz (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 October 2, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 4,206 $ 2,233 $ (172 ) $ 6,267 Cost of products sold — 2,700 1,521 (172 ) 4,049 Gross profit — 1,506 712 — 2,218 Selling, general and administrative expenses — 194 611 — 805 Intercompany service fees and other recharges — 795 (795 ) — — Operating income — 517 896 — 1,413 Interest expense — 294 17 — 311 Other expense/(income), net — (20 ) 17 — (3 ) Income/(loss) before income taxes — 243 862 — 1,105 Provision for/(benefit from) income taxes — (199 ) 461 — 262 Equity in earnings of subsidiaries 842 400 — (1,242 ) — Net income/(loss) 842 842 401 (1,242 ) 843 Net income/(loss) attributable to noncontrolling interest — — 1 — 1 Net income/(loss) excluding noncontrolling interest $ 842 $ 842 $ 400 $ (1,242 ) $ 842 Comprehensive income/(loss) excluding noncontrolling interest $ 547 $ 547 $ 285 $ (832 ) $ 547 The Kraft Heinz Company Condensed Consolidating Statements of Income For the Three Months Ended September 27, 2015 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 3,963 $ 2,285 $ (128 ) $ 6,120 Cost of products sold — 2,887 1,733 (128 ) 4,492 Gross profit — 1,076 552 — 1,628 Selling, general and administrative expenses — 684 545 — 1,229 Intercompany service fees and other recharges — 626 (626 ) — — Operating income — (234 ) 633 — 399 Interest expense — 447 13 — 460 Other expense/(income), net — (8 ) 116 — 108 Income/(loss) before income taxes — (673 ) 504 — (169 ) Provision for/(benefit from) income taxes — (462 ) 413 — (49 ) Equity in earnings of subsidiaries (123 ) 88 — 35 — Net income/(loss) (123 ) (123 ) 91 35 (120 ) Net income/(loss) attributable to noncontrolling interest — — 3 — 3 Net income/(loss) excluding noncontrolling interest $ (123 ) $ (123 ) $ 88 $ 35 $ (123 ) Comprehensive income/(loss) excluding noncontrolling interest $ (17 ) $ (17 ) $ (727 ) $ 744 $ (17 ) The Kraft Heinz Company Condensed Consolidating Statements of Income For the Nine Months Ended October 2, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 13,156 $ 6,948 $ (474 ) $ 19,630 Cost of products sold — 8,273 4,704 (474 ) 12,503 Gross profit — 4,883 2,244 — 7,127 Selling, general and administrative expenses — 778 1,787 — 2,565 Intercompany service fees and other recharges — 3,320 (3,320 ) — — Operating income — 785 3,777 — 4,562 Interest expense — 782 42 — 824 Other expense/(income), net — 66 (71 ) — (5 ) Income/(loss) before income taxes — (63 ) 3,806 — 3,743 Provision for/(benefit from) income taxes — (349 ) 1,394 — 1,045 Equity in earnings of subsidiaries 2,688 2,402 — (5,090 ) — Net income/(loss) 2,688 2,688 2,412 (5,090 ) 2,698 Net income/(loss) attributable to noncontrolling interest — — 10 — 10 Net income/(loss) excluding noncontrolling interest $ 2,688 $ 2,688 $ 2,402 $ (5,090 ) $ 2,688 Comprehensive income/(loss) excluding noncontrolling interest $ 2,131 $ 2,131 $ 2,013 $ (4,144 ) $ 2,131 The Kraft Heinz Company Condensed Consolidating Statements of Income For the Nine Months Ended September 27, 2015 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 5,820 $ 5,638 $ (244 ) $ 11,214 Cost of products sold — 4,157 3,944 (244 ) 7,857 Gross profit — 1,663 1,694 — 3,357 Selling, general and administrative expenses — 986 1,019 — 2,005 Intercompany service fees and other recharges — 619 (619 ) — — Operating income — 58 1,294 — 1,352 Interest expense — 973 82 — 1,055 Other expense/(income), net — 121 193 — 314 Income/(loss) before income taxes — (1,036 ) 1,019 — (17 ) Provision for/(benefit from) income taxes — (573 ) 557 — (16 ) Equity in earnings of subsidiaries (11 ) 452 — (441 ) — Net income/(loss) (11 ) (11 ) 462 (441 ) (1 ) Net income/(loss) attributable to noncontrolling interest — — 10 — 10 Net income/(loss) excluding noncontrolling interest $ (11 ) $ (11 ) $ 452 $ (441 ) $ (11 ) Comprehensive income/(loss) excluding noncontrolling interest $ (50 ) $ (50 ) $ (922 ) $ 972 $ (50 ) The Kraft Heinz Company Condensed Consolidating Balance Sheets As of October 2, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 2,131 $ 1,789 $ — $ 3,920 Trade receivables — — 855 — 855 Receivables due from affiliates — 873 101 (974 ) — Dividends due from affiliates 769 — — (769 ) — Sold receivables — — 208 — 208 Inventories — 2,061 1,047 — 3,108 Short-term lending due from affiliates — 1,790 3,027 (4,817 ) — Other current assets — 2,037 423 (1,608 ) 852 Total current assets 769 8,892 7,450 (8,168 ) 8,943 Property, plant and equipment, net — 4,236 2,254 — 6,490 Goodwill — 11,093 33,425 — 44,518 Investments in subsidiaries 57,642 72,963 — (130,605 ) — Intangible assets, net — 3,400 56,220 — 59,620 Long-term lending due from affiliates — 1,700 2,000 (3,700 ) — Other assets — 548 961 — 1,509 TOTAL ASSETS $ 58,411 $ 102,832 $ 102,310 $ (142,473 ) $ 121,080 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 639 $ 14 $ — $ 653 Current portion of long-term debt — 2,028 19 — 2,047 Short-term lending due to affiliates — 3,027 1,790 (4,817 ) — Trade payables — 1,982 1,474 — 3,456 Payables due to affiliates — 101 873 (974 ) — Accrued marketing — 220 488 — 708 Accrued postemployment costs — 150 14 — 164 Income taxes payable — 576 1,174 (1,608 ) 142 Interest payable — 300 11 — 311 Dividends payable 769 — — — 769 Dividends due to affiliates — 769 — (769 ) — Other current liabilities — 873 291 — 1,164 Total current liabilities 769 10,665 6,148 (8,168 ) 9,414 Long-term debt — 28,970 1,010 — 29,980 Long-term borrowings due to affiliates — 2,000 1,917 (3,917 ) — Deferred income taxes — 1,104 19,602 — 20,706 Accrued postemployment costs — 2,100 267 — 2,367 Other liabilities — 351 394 — 745 TOTAL LIABILITIES 769 45,190 29,338 (12,085 ) 63,212 Redeemable noncontrolling interest — — — — — Total shareholders’ equity 57,642 57,642 72,746 (130,388 ) 57,642 Noncontrolling interest — — 226 — 226 TOTAL EQUITY 57,642 57,642 72,972 (130,388 ) 57,868 TOTAL LIABILITIES AND EQUITY $ 58,411 $ 102,832 $ 102,310 $ (142,473 ) $ 121,080 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 Commercial paper and other short-term debt $ — $ — $ 4 $ — $ 4 Current portion of long-term debt — 65 14 — 79 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 — 988 253 — 1,241 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% cumulative compounding preferred stock, Series A 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 Nine Months Ended October 2, 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 $ 1,636 $ 1,821 $ 1,045 $ (1,636 ) $ 2,866 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (605 ) (231 ) — (836 ) Proceeds from net investment hedges — 84 — — 84 Net proceeds from/(payments on) intercompany lending activities — 565 (74 ) (491 ) — Additional investments in subsidiaries — (10 ) — 10 — Return of capital 8,987 — — (8,987 ) — Other investing activities, net — 41 (31 ) — 10 Net cash provided by/(used for) investing activities 8,987 75 (336 ) (9,468 ) (742 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (69 ) (5 ) — (74 ) Proceeds from issuance of long-term debt — 6,978 3 — 6,981 Proceeds from issuance of commercial paper — 4,296 — — 4,296 Repayments of commercial paper — (3,660 ) — — (3,660 ) Net proceeds from/(payments on) intercompany borrowing activities — 74 (565 ) 491 — Dividends paid-Series A Preferred Stock (180 ) — — — (180 ) Dividends paid-common stock (2,123 ) (2,303 ) — 2,303 (2,123 ) Redemption of Series A Preferred Stock (8,320 ) — — — (8,320 ) Other intercompany capital stock transactions — (8,320 ) 10 8,310 — Other financing activities, net — 50 6 — 56 Net cash provided by/(used for) financing activities (10,623 ) (2,954 ) (551 ) 11,104 (3,024 ) Effect of exchange rate changes on cash and cash equivalents — — (17 ) — (17 ) Cash and cash equivalents: Net increase/(decrease) — (1,058 ) 141 — (917 ) Balance at beginning of period — 3,189 1,648 — 4,837 Balance at end of period $ — $ 2,131 $ 1,789 $ — $ 3,920 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 27, 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 $ (88 ) $ 834 $ (180 ) $ 746 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (181 ) (185 ) — (366 ) Proceeds from net investment hedges — 481 — — 481 Net proceeds from/(payments on) intercompany lending activities — 721 (346 ) (375 ) — Payments to acquire Kraft Foods Group, Inc., net of cash acquired — (9,535 ) 67 — (9,468 ) Additional investments in subsidiaries (10,000 ) — — 10,000 — Return of capital 997 5 — (1,002 ) — Other investing activities, net — (34 ) (14 ) — (48 ) Net cash provided by/(used for) investing activities (9,003 ) (8,543 ) (478 ) 8,623 (9,401 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (12,282 ) (26 ) — (12,308 ) Proceeds from issuance of long-term debt — 14,033 790 — 14,823 Net proceeds from/(payments on) intercompany borrowing activities — 346 (721 ) 375 — Proceeds from issuance of common stock 10,000 10,000 — (10,000 ) 10,000 Dividends paid-Series A Preferred Stock (540 ) — — — (540 ) Dividends paid-common stock (637 ) (1,177 ) — 1,177 (637 ) Other intercompany capital stock transactions — — (5 ) 5 — Other financing activities, net — (95 ) (52 ) — (147 ) Net cash provided by/(used for) financing activities 8,823 10,825 (14 ) (8,443 ) 11,191 Effect of exchange rate changes on cash and cash equivalents — — (397 ) — (397 ) Cash and cash equivalents: Net increase/(decrease) — 2,194 (55 ) — 2,139 Balance at beginning of period — 541 1,757 — 2,298 Balance at end of period $ — $ 2,735 $ 1,702 $ — $ 4,437 |
Background and Basis of Prese23
Background and Basis of Presentation (Policies) | 9 Months Ended |
Oct. 02, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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. |
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 related to the 2015 Merger. 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, but we expect that the adoption will significantly increase the assets and liabilities on our consolidated balance sheets. 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. In August 2016, the FASB issued an ASU related to the classification of certain cash payments and cash receipts on the statement of cash flows. This ASU provides guidance on eight specific cash flow classification matters in order to reduce current and future diversity in practice. The ASU will be effective beginning in the first quarter of our fiscal year 2018. Early adoption is permitted. The guidance related to each of the eight separate classification matters must be adopted in the same period using a retrospective transition method. 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. | 9 Months Ended |
Oct. 02, 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 final 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 4,179 Identifiable intangible assets 47,771 Other non-current assets 214 Trade and other payables (3,026 ) Long-term debt (9,286 ) Net postemployment benefits and other non-current liabilities (4,739 ) Deferred income tax liabilities (16,675 ) Net assets acquired 22,175 Goodwill on acquisition 30,462 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 and nine months ended September 27, 2015 , as if Kraft had been acquired as of December 30, 2013. For the Three Months Ended For the Nine Months Ended September 27, 2015 September 27, 2015 (in millions, except per share data) Net sales $ 6,363 $ 20,323 Net income 12 1,116 Basic earnings per share (0.14 ) 0.48 Diluted earnings per share (0.14 ) 0.47 |
Integration and Restructuring25
Integration and Restructuring Expenses (Tables) | 9 Months Ended |
Oct. 02, 2016 | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Costs by Type and Income Statement Location | Our total Integration Program and restructuring expenses recorded in cost of products sold and selling, general and administrative expenses (“SG&A”) were (in millions): For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 Severance and employee benefit costs - COGS $ 14 $ 85 $ 43 $ 104 Severance and employee benefit costs - SG&A 43 311 89 324 Asset-related costs - COGS 89 49 368 83 Asset-related costs - SG&A 9 — 35 — Other exit costs - COGS 49 25 121 48 Other exit costs - SG&A 33 12 125 28 $ 237 $ 482 $ 781 $ 587 |
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 For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 United States $ 161 $ 365 $ 607 $ 405 Canada 16 39 43 51 Europe 4 72 32 106 Rest of World 1 1 1 10 Non-Operating 55 5 98 15 $ 237 $ 482 $ 781 $ 587 |
Integration Program | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Costs by Type and Income Statement Location | Our Integration Program costs during the three and nine months ended October 2, 2016 were (in millions): For the Three Months Ended For the Nine Months Ended October 2, 2016 October 2, 2016 Severance and employee benefit costs $ 56 $ 114 Asset-related costs 98 403 Other exit costs 15 40 Other implementation costs 53 165 $ 222 $ 722 |
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 114 40 154 Cash payments (153 ) (48 ) (201 ) Non-cash utilization (25 ) — (25 ) Balance at October 2, 2016 $ 121 $ 15 $ 136 (a) Other exit costs primarily represent contract and lease terminations. |
Restructuring Activities | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve by Type of Cost | As of October 2, 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 18 1 19 Cash payments (31 ) (5 ) (36 ) Balance at October 2, 2016 $ 12 $ 26 $ 38 (a) Other exit costs primarily represent contract and lease terminations. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Oct. 02, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories at October 2, 2016 and January 3, 2016 were (in millions): October 2, 2016 January 3, 2016 Packaging and ingredients $ 656 $ 563 Work in process 405 393 Finished product 2,047 1,662 Inventories $ 3,108 $ 2,618 |
Goodwill and Intangible Asset27
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Oct. 02, 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 October 2, 2016 , by segment, were (in millions): United States Canada Europe Rest of World Total Balance at January 3, 2016 $ 32,290 $ 4,796 $ 3,182 $ 2,783 $ 43,051 2015 Merger measurement period adjustments 1,433 — — — 1,433 Translation adjustments — 251 (311 ) 94 34 Balance at October 2, 2016 $ 33,723 $ 5,047 $ 2,871 $ 2,877 $ 44,518 |
Changes in the carrying amount of indefinite-lived intangible assets | Indefinite-lived intangible assets, which primarily consisted of trademarks, were (in millions): Balance at January 3, 2016 $ 55,824 2015 Merger measurement period adjustments (1,978 ) Translation adjustments (328 ) Balance at October 2, 2016 $ 53,518 |
Schedule of definite-lived intangible assets by major asset class | Definite-lived intangible assets at October 2, 2016 and January 3, 2016 were (in millions): October 2, 2016 January 3, 2016 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks $ 2,357 $ (148 ) $ 2,209 $ 2,346 $ (70 ) $ 2,276 Customer-related assets 4,217 (333 ) 3,884 4,218 (209 ) 4,009 Other 12 (3 ) 9 15 (4 ) 11 $ 6,586 $ (484 ) $ 6,102 $ 6,579 $ (283 ) $ 6,296 |
Employees' Stock Incentive Pl28
Employees' Stock Incentive Plans (Tables) | 9 Months Ended |
Oct. 02, 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 1,466,626 79.78 Options forfeited (760,613 ) 49.51 Options exercised (3,701,021 ) 35.04 Outstanding at October 2, 2016 21,210,604 37.41 |
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 503,659 77.52 Forfeited (118,585 ) 75.12 Vested (489,631 ) 72.96 RSUs at October 2, 2016 863,887 72.12 |
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 For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 Pre-tax compensation cost $ 12 $ 91 $ 38 $ 98 Tax benefit (4 ) (34 ) (12 ) (37 ) After-tax compensation cost $ 8 $ 57 $ 26 $ 61 |
Postemployment Benefits (Tables
Postemployment Benefits (Tables) | 9 Months Ended |
Oct. 02, 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 and nine months ended October 2, 2016 and September 27, 2015 (in millions): For the Three Months Ended For the Nine Months Ended U.S. Plans Non-U.S. Plans U.S. Plans Non-U.S. Plans October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 Service cost $ 3 $ 22 $ 6 $ 8 $ 10 $ 25 $ 18 $ 18 Interest cost 52 82 21 30 158 91 64 73 Expected return on plan assets (73 ) (86 ) (44 ) (55 ) (221 ) (94 ) (137 ) (140 ) Amortization of unrecognized losses/(gains) — 1 — — — 3 — — Settlements 26 — — 8 20 — — 19 Curtailments — (1 ) — (7 ) — (1 ) — (9 ) Special/contractual termination benefits — 3 — 4 — 3 — 4 Net pension cost/(benefit) $ 8 $ 21 $ (17 ) $ (12 ) $ (33 ) $ 27 $ (55 ) $ (35 ) |
Postretirement Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Components of Net Cost/(Benefit) | Net postretirement cost/(benefit) consisted of the following for the three and nine months ended October 2, 2016 and September 27, 2015 (in millions): For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 Service cost $ 3 $ 7 $ 11 $ 9 Interest cost 13 33 43 37 Amortization of prior service costs/(credits) (90 ) (28 ) (252 ) (31 ) Curtailments — 1 — 1 Net postretirement cost/(benefit) $ (74 ) $ 13 $ (198 ) $ 16 |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Income/(Losses) (Tables) - Accumulated Other Comprehensive Income/(Losses) | 9 Months Ended |
Oct. 02, 2016 | |
Accumulated Other Comprehensive Income/(Losses) [Line Items] | |
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 (304 ) — — (304 ) Net deferred gains/(losses) on net investment hedges 79 — — 79 Net postemployment benefit gains/(losses) — (145 ) — (145 ) Reclassification of net postemployment benefit losses/(gains) — (143 ) — (143 ) Net deferred gains/(losses) on cash flow hedges — — (1 ) (1 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income — — (44 ) (44 ) Total other comprehensive income/(loss) (225 ) (288 ) (45 ) (558 ) Balance as of October 2, 2016 $ (1,871 ) $ 634 $ 8 $ (1,229 ) |
Gross Amount and Related Tax Benefit/(Expense) Recorded in and Associated with each Component of Other Comprehensive Income/(Loss) | The gross amount and related tax benefit/(expense) recorded in, and associated with, each component of other comprehensive income/(loss) for the three and nine months ended October 2, 2016 and September 27, 2015 were as follows (in millions): For the Three Months Ended October 2, 2016 September 27, 2015 Before Tax Amount Tax Net of Tax Amount Before Tax Amount Tax Net of Tax Amount Foreign currency translation adjustments $ (151 ) $ — $ (151 ) $ (1,006 ) $ — $ (1,006 ) Net deferred gains/(losses) on net investment hedges 34 — 34 240 (45 ) 195 Net actuarial gains/(losses) arising during the period (405 ) 154 (251 ) (54 ) 23 (31 ) Prior service credits/(costs) arising during the period 172 (66 ) 106 1,500 (577 ) 923 Reclassification of net postemployment benefit losses/(gains) (64 ) 25 (39 ) (19 ) 8 (11 ) Net deferred gains/(losses) on cash flow hedges 33 (2 ) 31 53 (8 ) 45 Net deferred losses/(gains) on cash flow hedges reclassified to net income (23 ) (3 ) (26 ) (15 ) 6 (9 ) For the Nine Months Ended October 2, 2016 September 27, 2015 Before Tax Amount Tax Net of Tax Amount Before Tax Amount Tax Net of Tax Amount Foreign currency translation adjustments $ (304 ) $ — $ (304 ) $ (1,426 ) $ — $ (1,426 ) Net deferred gains/(losses) on net investment hedges 144 (65 ) 79 661 (240 ) 421 Net actuarial gains/(losses) arising during the period (405 ) 154 (251 ) (79 ) 29 (50 ) Prior service credits/(costs) arising during the period 172 (66 ) 106 1,500 (577 ) 923 Reclassification of net postemployment benefit losses/(gains) (232 ) 89 (143 ) (9 ) 5 (4 ) Net deferred gains/(losses) on cash flow hedges (12 ) 11 (1 ) (67 ) 35 (32 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income (43 ) (1 ) (44 ) 207 (78 ) 129 |
Amounts Reclassified From Accumulated Other Comprehensive Income/(Losses) | The amounts reclassified from accumulated other comprehensive income/(losses) in the three and nine months ended October 2, 2016 and September 27, 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 For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 Losses/(gains) on cash flow hedges: Foreign exchange contracts $ — $ — $ (3 ) $ 2 Net sales Foreign exchange contracts (1 ) (16 ) (34 ) (32 ) Cost of products sold Foreign exchange contracts (23 ) — (9 ) (1 ) Other expense/(income), net Interest rate contracts 1 1 3 238 Interest expense Losses/(gains) on cash flow hedges before income taxes (23 ) (15 ) (43 ) 207 Losses/(gains) on cash flow hedges income taxes (3 ) 6 (1 ) (78 ) Losses/(gains) on cash flow hedges $ (26 ) $ (9 ) $ (44 ) $ 129 Losses/(gains) on postemployment benefits: Amortization of unrecognized losses/(gains) $ — $ 1 $ — $ 3 (a) Amortization of prior service costs/(credits) (90 ) (28 ) (252 ) (31 ) (a) Settlement and curtailments losses/(gains) 26 8 20 19 (a) Losses/(gains) on postemployment benefits before income taxes (64 ) (19 ) (232 ) (9 ) Losses/(gains) on postemployment benefits income taxes 25 8 89 5 Losses/(gains) on postemployment benefits $ (39 ) $ (11 ) $ (143 ) $ (4 ) (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) | 9 Months Ended |
Oct. 02, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts of outstanding derivative positions | The notional values of our derivative instruments at October 2, 2016 and January 3, 2016 were (in millions): Notional Amount October 2, 2016 January 3, 2016 Commodity contracts $ 475 $ 787 Foreign exchange contracts 2,466 3,458 Cross-currency contracts 3,173 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 October 2, 2016 and January 3, 2016 were (in millions): October 2, 2016 Quoted Prices in Active Markets for Identical Assets 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 $ — $ — $ 32 $ 17 $ — $ — $ 32 $ 17 Cross-currency contracts — — 479 — — — 479 — Derivatives not designated as hedging instruments: Commodity contracts 22 10 — 2 — — 22 12 Foreign exchange contracts — — 29 19 — — 29 19 Cross-currency contracts — — 41 — — — 41 — Total fair value $ 22 $ 10 $ 581 $ 38 $ — $ — $ 603 $ 48 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 October 2, 2016 , our cross-currency swaps designated as net investment hedges consisted of: Instrument Notional (local) (in billions) Notional (USD) (in billions) Maturity Cross-currency swap £ 0.8 $ 1.4 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 and nine months ended October 2, 2016 and September 27, 2015 (in millions): For the Three Months Ended October 2, 2016 September 27, 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) $ — $ 33 $ — $ — $ — $ 53 $ — $ — Net investment hedges: Gains/(losses) recognized in other comprehensive income (effective portion) — — 49 — — — 218 — Total gains/(losses) recognized in other comprehensive income (effective portion) $ — $ 33 $ 49 $ — $ — $ 53 $ 218 $ — Cash flow hedges reclassified to net income/(loss): Net sales $ — $ — $ — $ — $ — $ — $ — $ — Cost of products sold (effective portion) — 1 — — — 16 — — Other expense/(income), net — 23 — — — — — — Interest expense — — — (1 ) — — — (1 ) — 24 — (1 ) — 16 — (1 ) Derivatives not designated as hedging instruments: Gains/(losses) on derivatives recognized in cost of products sold (17 ) — — — (21 ) — — — Gains/(losses) on derivatives recognized in other expense/(income), net — (4 ) 2 — — 9 46 (3 ) (17 ) (4 ) 2 — (21 ) 9 46 (3 ) Total gains/(losses) recognized in statements of income $ (17 ) $ 20 $ 2 $ (1 ) $ (21 ) $ 25 $ 46 $ (4 ) For the Nine Months Ended October 2, 2016 September 27, 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) $ — $ (4 ) $ — $ (8 ) $ — $ 44 $ — $ (111 ) Net investment hedges: Gains/(losses) recognized in other comprehensive income (effective portion) — 46 74 — — — 639 — Total gains/(losses) recognized in other comprehensive income (effective portion) $ — $ 42 $ 74 $ (8 ) $ — $ 44 $ 639 $ (111 ) Cash flow hedges reclassified to net income/(loss): Net sales $ — $ 3 $ — $ — $ — $ (2 ) $ — $ — Cost of products sold (effective portion) — 34 — — — 32 — — Other expense/(income), net — 9 — — — 1 — — Interest expense — — — (3 ) — — — (238 ) — 46 — (3 ) — 31 — (238 ) Derivatives not designated as hedging instruments: Gains/(losses) on derivatives recognized in cost of products sold (6 ) — — — (21 ) — — — Gains/(losses) on derivatives recognized in other expense/(income), net — (61 ) (6 ) — — 42 46 8 (6 ) (61 ) (6 ) — (21 ) 42 46 8 Total gains/(losses) recognized in statements of income $ (6 ) $ (15 ) $ (6 ) $ (3 ) $ (21 ) $ 73 $ 46 $ (230 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Oct. 02, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Our earnings per common share (“EPS”) for the three and nine months ended October 2, 2016 and September 27, 2015 were: For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 (in millions, except per share amounts) Basic Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 842 $ (303 ) $ 2,508 $ (551 ) Weighted average shares of common stock outstanding 1,218 1,142 1,216 633 Net earnings/(loss) $ 0.69 $ (0.27 ) $ 2.06 $ (0.87 ) Diluted Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 842 $ (303 ) $ 2,508 $ (551 ) Weighted average shares of common stock outstanding 1,218 1,142 1,216 633 Effect of dilutive securities: Equity awards 10 — 10 — Weighted average shares of common stock outstanding, including dilutive effect 1,228 1,142 1,226 633 Net earnings/(loss) $ 0.69 $ (0.27 ) $ 2.05 $ (0.87 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Oct. 02, 2016 | |
Segment Reporting [Abstract] | |
Net Sales by Segment | Our net sales by segment and Segment Adjusted EBITDA were: For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 (in millions) Net sales: United States $ 4,395 $ 4,206 $ 13,802 $ 5,951 Canada 550 539 1,692 804 Europe 513 600 1,644 1,846 Rest of World 809 775 2,492 2,613 Total net sales $ 6,267 $ 6,120 $ 19,630 $ 11,214 |
Segment Adjusted EBITDA | For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 (in millions) Segment Adjusted EBITDA: United States $ 1,349 $ 1,033 $ 4,360 $ 3,364 Canada 148 110 491 374 Europe 183 223 572 662 Rest of World 150 152 525 570 General corporate expenses (27 ) (36 ) (107 ) (106 ) Depreciation and amortization (excluding integration and restructuring expenses) (116 ) (193 ) (401 ) (619 ) Integration and restructuring expenses (237 ) (482 ) (781 ) (681 ) Merger costs (4 ) (139 ) (33 ) (193 ) Unrealized gains/(losses) on commodity hedges (22 ) — 23 23 Impairment losses — — (53 ) (58 ) Gains/(losses) on sale of business — — — 21 Nonmonetary currency devaluation (1 ) — (4 ) (49 ) Equity award compensation expense (excluding integration and restructuring expenses) (10 ) (16 ) (30 ) (60 ) Other pro forma adjustments — (253 ) — (1,896 ) Operating income 1,413 399 4,562 1,352 Interest expense 311 460 824 1,055 Other expense/(income), net (3 ) 108 (5 ) 314 Income/(loss) before income taxes $ 1,105 $ (169 ) $ 3,743 $ (17 ) |
Net Sales by Product | Our net sales by product category were: For the Three Months Ended For the Nine Months Ended October 2, 2016 September 27, 2015 October 2, 2016 September 27, 2015 (in millions) Condiments and sauces $ 1,670 $ 1,532 $ 5,073 $ 4,209 Cheese and dairy 1,292 1,184 4,045 1,184 Ambient meals 567 592 1,703 1,231 Frozen and chilled meals 552 634 1,731 1,511 Meats and seafood 648 685 2,093 781 Refreshment beverages 375 353 1,226 353 Coffee 335 310 1,071 310 Infant and nutrition 171 190 577 707 Desserts, toppings and baking 212 203 647 203 Nuts and salted snacks 238 243 760 243 Other 207 194 704 482 Total net sales $ 6,267 $ 6,120 $ 19,630 $ 11,214 |
Supplemental Financial Inform34
Supplemental Financial Information (Tables) | 9 Months Ended |
Oct. 02, 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 October 2, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 4,206 $ 2,233 $ (172 ) $ 6,267 Cost of products sold — 2,700 1,521 (172 ) 4,049 Gross profit — 1,506 712 — 2,218 Selling, general and administrative expenses — 194 611 — 805 Intercompany service fees and other recharges — 795 (795 ) — — Operating income — 517 896 — 1,413 Interest expense — 294 17 — 311 Other expense/(income), net — (20 ) 17 — (3 ) Income/(loss) before income taxes — 243 862 — 1,105 Provision for/(benefit from) income taxes — (199 ) 461 — 262 Equity in earnings of subsidiaries 842 400 — (1,242 ) — Net income/(loss) 842 842 401 (1,242 ) 843 Net income/(loss) attributable to noncontrolling interest — — 1 — 1 Net income/(loss) excluding noncontrolling interest $ 842 $ 842 $ 400 $ (1,242 ) $ 842 Comprehensive income/(loss) excluding noncontrolling interest $ 547 $ 547 $ 285 $ (832 ) $ 547 The Kraft Heinz Company Condensed Consolidating Statements of Income For the Three Months Ended September 27, 2015 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 3,963 $ 2,285 $ (128 ) $ 6,120 Cost of products sold — 2,887 1,733 (128 ) 4,492 Gross profit — 1,076 552 — 1,628 Selling, general and administrative expenses — 684 545 — 1,229 Intercompany service fees and other recharges — 626 (626 ) — — Operating income — (234 ) 633 — 399 Interest expense — 447 13 — 460 Other expense/(income), net — (8 ) 116 — 108 Income/(loss) before income taxes — (673 ) 504 — (169 ) Provision for/(benefit from) income taxes — (462 ) 413 — (49 ) Equity in earnings of subsidiaries (123 ) 88 — 35 — Net income/(loss) (123 ) (123 ) 91 35 (120 ) Net income/(loss) attributable to noncontrolling interest — — 3 — 3 Net income/(loss) excluding noncontrolling interest $ (123 ) $ (123 ) $ 88 $ 35 $ (123 ) Comprehensive income/(loss) excluding noncontrolling interest $ (17 ) $ (17 ) $ (727 ) $ 744 $ (17 ) The Kraft Heinz Company Condensed Consolidating Statements of Income For the Nine Months Ended October 2, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 13,156 $ 6,948 $ (474 ) $ 19,630 Cost of products sold — 8,273 4,704 (474 ) 12,503 Gross profit — 4,883 2,244 — 7,127 Selling, general and administrative expenses — 778 1,787 — 2,565 Intercompany service fees and other recharges — 3,320 (3,320 ) — — Operating income — 785 3,777 — 4,562 Interest expense — 782 42 — 824 Other expense/(income), net — 66 (71 ) — (5 ) Income/(loss) before income taxes — (63 ) 3,806 — 3,743 Provision for/(benefit from) income taxes — (349 ) 1,394 — 1,045 Equity in earnings of subsidiaries 2,688 2,402 — (5,090 ) — Net income/(loss) 2,688 2,688 2,412 (5,090 ) 2,698 Net income/(loss) attributable to noncontrolling interest — — 10 — 10 Net income/(loss) excluding noncontrolling interest $ 2,688 $ 2,688 $ 2,402 $ (5,090 ) $ 2,688 Comprehensive income/(loss) excluding noncontrolling interest $ 2,131 $ 2,131 $ 2,013 $ (4,144 ) $ 2,131 The Kraft Heinz Company Condensed Consolidating Statements of Income For the Nine Months Ended September 27, 2015 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 5,820 $ 5,638 $ (244 ) $ 11,214 Cost of products sold — 4,157 3,944 (244 ) 7,857 Gross profit — 1,663 1,694 — 3,357 Selling, general and administrative expenses — 986 1,019 — 2,005 Intercompany service fees and other recharges — 619 (619 ) — — Operating income — 58 1,294 — 1,352 Interest expense — 973 82 — 1,055 Other expense/(income), net — 121 193 — 314 Income/(loss) before income taxes — (1,036 ) 1,019 — (17 ) Provision for/(benefit from) income taxes — (573 ) 557 — (16 ) Equity in earnings of subsidiaries (11 ) 452 — (441 ) — Net income/(loss) (11 ) (11 ) 462 (441 ) (1 ) Net income/(loss) attributable to noncontrolling interest — — 10 — 10 Net income/(loss) excluding noncontrolling interest $ (11 ) $ (11 ) $ 452 $ (441 ) $ (11 ) Comprehensive income/(loss) excluding noncontrolling interest $ (50 ) $ (50 ) $ (922 ) $ 972 $ (50 ) |
Condensed Consolidating Balance Sheets | The Kraft Heinz Company Condensed Consolidating Balance Sheets As of October 2, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 2,131 $ 1,789 $ — $ 3,920 Trade receivables — — 855 — 855 Receivables due from affiliates — 873 101 (974 ) — Dividends due from affiliates 769 — — (769 ) — Sold receivables — — 208 — 208 Inventories — 2,061 1,047 — 3,108 Short-term lending due from affiliates — 1,790 3,027 (4,817 ) — Other current assets — 2,037 423 (1,608 ) 852 Total current assets 769 8,892 7,450 (8,168 ) 8,943 Property, plant and equipment, net — 4,236 2,254 — 6,490 Goodwill — 11,093 33,425 — 44,518 Investments in subsidiaries 57,642 72,963 — (130,605 ) — Intangible assets, net — 3,400 56,220 — 59,620 Long-term lending due from affiliates — 1,700 2,000 (3,700 ) — Other assets — 548 961 — 1,509 TOTAL ASSETS $ 58,411 $ 102,832 $ 102,310 $ (142,473 ) $ 121,080 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 639 $ 14 $ — $ 653 Current portion of long-term debt — 2,028 19 — 2,047 Short-term lending due to affiliates — 3,027 1,790 (4,817 ) — Trade payables — 1,982 1,474 — 3,456 Payables due to affiliates — 101 873 (974 ) — Accrued marketing — 220 488 — 708 Accrued postemployment costs — 150 14 — 164 Income taxes payable — 576 1,174 (1,608 ) 142 Interest payable — 300 11 — 311 Dividends payable 769 — — — 769 Dividends due to affiliates — 769 — (769 ) — Other current liabilities — 873 291 — 1,164 Total current liabilities 769 10,665 6,148 (8,168 ) 9,414 Long-term debt — 28,970 1,010 — 29,980 Long-term borrowings due to affiliates — 2,000 1,917 (3,917 ) — Deferred income taxes — 1,104 19,602 — 20,706 Accrued postemployment costs — 2,100 267 — 2,367 Other liabilities — 351 394 — 745 TOTAL LIABILITIES 769 45,190 29,338 (12,085 ) 63,212 Redeemable noncontrolling interest — — — — — Total shareholders’ equity 57,642 57,642 72,746 (130,388 ) 57,642 Noncontrolling interest — — 226 — 226 TOTAL EQUITY 57,642 57,642 72,972 (130,388 ) 57,868 TOTAL LIABILITIES AND EQUITY $ 58,411 $ 102,832 $ 102,310 $ (142,473 ) $ 121,080 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 Commercial paper and other short-term debt $ — $ — $ 4 $ — $ 4 Current portion of long-term debt — 65 14 — 79 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 — 988 253 — 1,241 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% cumulative compounding preferred stock, Series A 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 Nine Months Ended October 2, 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 $ 1,636 $ 1,821 $ 1,045 $ (1,636 ) $ 2,866 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (605 ) (231 ) — (836 ) Proceeds from net investment hedges — 84 — — 84 Net proceeds from/(payments on) intercompany lending activities — 565 (74 ) (491 ) — Additional investments in subsidiaries — (10 ) — 10 — Return of capital 8,987 — — (8,987 ) — Other investing activities, net — 41 (31 ) — 10 Net cash provided by/(used for) investing activities 8,987 75 (336 ) (9,468 ) (742 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (69 ) (5 ) — (74 ) Proceeds from issuance of long-term debt — 6,978 3 — 6,981 Proceeds from issuance of commercial paper — 4,296 — — 4,296 Repayments of commercial paper — (3,660 ) — — (3,660 ) Net proceeds from/(payments on) intercompany borrowing activities — 74 (565 ) 491 — Dividends paid-Series A Preferred Stock (180 ) — — — (180 ) Dividends paid-common stock (2,123 ) (2,303 ) — 2,303 (2,123 ) Redemption of Series A Preferred Stock (8,320 ) — — — (8,320 ) Other intercompany capital stock transactions — (8,320 ) 10 8,310 — Other financing activities, net — 50 6 — 56 Net cash provided by/(used for) financing activities (10,623 ) (2,954 ) (551 ) 11,104 (3,024 ) Effect of exchange rate changes on cash and cash equivalents — — (17 ) — (17 ) Cash and cash equivalents: Net increase/(decrease) — (1,058 ) 141 — (917 ) Balance at beginning of period — 3,189 1,648 — 4,837 Balance at end of period $ — $ 2,131 $ 1,789 $ — $ 3,920 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 27, 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 $ (88 ) $ 834 $ (180 ) $ 746 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures — (181 ) (185 ) — (366 ) Proceeds from net investment hedges — 481 — — 481 Net proceeds from/(payments on) intercompany lending activities — 721 (346 ) (375 ) — Payments to acquire Kraft Foods Group, Inc., net of cash acquired — (9,535 ) 67 — (9,468 ) Additional investments in subsidiaries (10,000 ) — — 10,000 — Return of capital 997 5 — (1,002 ) — Other investing activities, net — (34 ) (14 ) — (48 ) Net cash provided by/(used for) investing activities (9,003 ) (8,543 ) (478 ) 8,623 (9,401 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt — (12,282 ) (26 ) — (12,308 ) Proceeds from issuance of long-term debt — 14,033 790 — 14,823 Net proceeds from/(payments on) intercompany borrowing activities — 346 (721 ) 375 — Proceeds from issuance of common stock 10,000 10,000 — (10,000 ) 10,000 Dividends paid-Series A Preferred Stock (540 ) — — — (540 ) Dividends paid-common stock (637 ) (1,177 ) — 1,177 (637 ) Other intercompany capital stock transactions — — (5 ) 5 — Other financing activities, net — (95 ) (52 ) — (147 ) Net cash provided by/(used for) financing activities 8,823 10,825 (14 ) (8,443 ) 11,191 Effect of exchange rate changes on cash and cash equivalents — — (397 ) — (397 ) Cash and cash equivalents: Net increase/(decrease) — 2,194 (55 ) — 2,139 Balance at beginning of period — 541 1,757 — 2,298 Balance at end of period $ — $ 2,735 $ 1,702 $ — $ 4,437 |
Merger and Acquisition Addition
Merger and Acquisition Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 27, 2015 | Jul. 03, 2016 | Oct. 02, 2016 | Sep. 27, 2015 | Jan. 03, 2016 | Jul. 02, 2015 | |
Business Acquisition [Line Items] | ||||||
2015 Merger measurement period adjustments | $ 1,433 | |||||
Deferred income tax liabilities, 2015 Merger measurement period adjustments | $ 564 | |||||
Goodwill on acquisition | 44,518 | $ 43,051 | $ 30,500 | |||
Kraft Foods Group, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill on acquisition | $ 30,462 | |||||
Deal costs | $ 96 | $ 166 | ||||
Deal costs, net of tax | 59 | 102 | ||||
Inventory step-up costs | 347 | 347 | ||||
Inventory step-up costs, net of tax | $ 213 | $ 213 | ||||
Indefinite-lived Intangible Assets | ||||||
Business Acquisition [Line Items] | ||||||
2015 Merger measurement period adjustments | (2,000) | $ (1,978) | ||||
Goodwill | ||||||
Business Acquisition [Line Items] | ||||||
2015 Merger measurement period adjustments | $ 1,400 |
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 replacement equity awards | $ 42,855 |
$16.50 per share special cash dividend | 9,782 |
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 replacement equity awards | $ 42,502 |
Equity Securities | |
Business Acquisition [Line Items] | |
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 | Oct. 02, 2016 | Sep. 27, 2015 | Jan. 03, 2016 |
Business Acquisition [Line Items] | ||||
Identifiable intangible assets | $ 43,100 | |||
Goodwill on acquisition | 30,500 | $ 44,518 | $ 43,051 | |
Acquisition of business, net of cash on hand | $ 0 | $ 9,468 | ||
Kraft Foods Group, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash | 314 | |||
Other current assets | 3,423 | |||
Property, plant and equipment | 4,179 | |||
Identifiable intangible assets | 47,771 | |||
Other non-current assets | 214 | |||
Trade and other payables | (3,026) | |||
Long-term debt | (9,286) | |||
Net postemployment benefits and other non-current liabilities | (4,739) | |||
Deferred income tax liabilities | (16,675) | |||
Net assets acquired | 22,175 | |||
Goodwill on acquisition | 30,462 | |||
Total consideration | 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. - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 27, 2015 | Sep. 27, 2015 | |
Business Acquisition [Line Items] | ||
Net sales | $ 6,363 | $ 20,323 |
Net income | $ 12 | $ 1,116 |
Basic (loss)/earnings per share (in dollars per share) | $ (0.14) | $ 0.48 |
Diluted (loss)/earnings per share (in dollars per share) | $ (0.14) | $ 0.47 |
Integration and Restructuring39
Integration and Restructuring Expenses Additional Information (Details) $ in Millions | Sep. 13, 2016factory | Nov. 04, 2015factory | Oct. 02, 2016USD ($) | Sep. 27, 2015USD ($) | Oct. 02, 2016USD ($)employee | Sep. 27, 2015USD ($) | Oct. 02, 2016USD ($)employee | Oct. 02, 2016USD ($)employee |
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring and related cost, incurred costs | $ 237 | $ 482 | $ 781 | $ 587 | ||||
Integration Program | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring, expected costs | $ 1,900 | $ 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% | 60.00% | ||||
Restructuring and related cost, incurred costs | $ 222 | $ 722 | $ 1,600 | |||||
Restructuring and related cost, expected cost, cash expenditures, percent | 60.00% | 60.00% | 60.00% | 60.00% | ||||
Number, positions eliminated | employee | 3,250 | |||||||
Restructuring Activities | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring and related cost, incurred costs | $ 15 | $ 59 | ||||||
Number, positions eliminated | employee | 8,250 | |||||||
Severance and Employee Benefit Costs | Integration Program | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring, expected costs | 650 | $ 650 | $ 650 | $ 650 | ||||
Restructuring and related cost, expected number of positions eliminated | employee | 3,350 | |||||||
Restructuring and related cost, incurred costs | 56 | $ 114 | 676 | |||||
Severance and Employee Benefit Costs | Restructuring Activities | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring, costs incurred to date | 569 | 569 | 569 | 569 | ||||
Asset-Related Costs | Integration Program | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring, expected costs | 1,100 | $ 1,100 | 1,100 | 1,100 | ||||
Restructuring and related cost, expected number of positions eliminated | employee | 1,900 | |||||||
Restructuring and related activities, number of facilities eliminated | factory | 6 | 7 | ||||||
Restructuring and related cost, incurred costs | 98 | $ 403 | 539 | |||||
Asset-Related Costs | Restructuring Activities | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring, costs incurred to date | 337 | 337 | 337 | 337 | ||||
Other Exit Costs | Integration Program | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring, expected costs | 150 | 150 | 150 | 150 | ||||
Restructuring and related cost, incurred costs | 15 | 40 | 95 | |||||
Other Exit Costs | Restructuring Activities | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring, costs incurred to date | 390 | 390 | 390 | $ 390 | ||||
Other Implementation Costs | Integration Program | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Restructuring and related cost, incurred costs | $ 53 | $ 165 | $ 241 |
Integration and Restructuring40
Integration and Restructuring Expenses Integration Program Reserve Roll-forward (Details) - Integration Program $ in Millions | 9 Months Ended |
Oct. 02, 2016USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 208 |
Charges | 154 |
Cash payments | (201) |
Non-cash utilization | (25) |
Ending Balance | 136 |
Severance and Employee Benefit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 185 |
Charges | 114 |
Cash payments | (153) |
Non-cash utilization | (25) |
Ending Balance | 121 |
Other Exit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 23 |
Charges | 40 |
Cash payments | (48) |
Non-cash utilization | 0 |
Ending Balance | $ 15 |
Integration and Restructuring41
Integration and Restructuring Expenses Integration Program Costs by Type (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 15 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, incurred costs | $ 237 | $ 482 | $ 781 | $ 587 | |
Integration Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, incurred costs | 222 | 722 | $ 1,600 | ||
Severance and Employee Benefit Costs | Integration Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, incurred costs | 56 | 114 | 676 | ||
Asset-Related Costs | Integration Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, incurred costs | 98 | 403 | 539 | ||
Other Exit Costs | Integration Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, incurred costs | 15 | 40 | 95 | ||
Other Implementation Costs | Integration Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, incurred costs | $ 53 | $ 165 | $ 241 |
Integration and Restructuring42
Integration and Restructuring Expenses Restructuring Reserve Roll-forward (Details) - Restructuring Activities $ in Millions | 9 Months Ended |
Oct. 02, 2016USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 55 |
Charges | 19 |
Cash payments | (36) |
Ending Balance | 38 |
Severance and Employee Benefit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 25 |
Charges | 18 |
Cash payments | (31) |
Ending Balance | 12 |
Other Exit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 30 |
Charges | 1 |
Cash payments | (5) |
Ending Balance | $ 26 |
Integration and Restructuring43
Integration and Restructuring Expenses Restructuring Costs by Type and Income Statement Location (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, incurred costs | $ 237 | $ 482 | $ 781 | $ 587 |
Severance and Employee Benefit Costs | Cost of products sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, incurred costs | 14 | 85 | 43 | 104 |
Severance and Employee Benefit Costs | Selling, general and administrative expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, incurred costs | 43 | 311 | 89 | 324 |
Asset-Related Costs | Cost of products sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, incurred costs | 89 | 49 | 368 | 83 |
Asset-Related Costs | Selling, general and administrative expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, incurred costs | 9 | 0 | 35 | 0 |
Other Exit Costs | Cost of products sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, incurred costs | 49 | 25 | 121 | 48 |
Other Exit Costs | Selling, general and administrative expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, incurred costs | $ 33 | $ 12 | $ 125 | $ 28 |
Integration and Restructuring44
Integration and Restructuring Expenses Restructuring Costs Excluded from Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Segment Reporting Information [Line Items] | ||||
Restructuring and related cost, incurred costs | $ 237 | $ 482 | $ 781 | $ 587 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring and related cost, incurred costs | 161 | 365 | 607 | 405 |
Canada | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring and related cost, incurred costs | 16 | 39 | 43 | 51 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring and related cost, incurred costs | 4 | 72 | 32 | 106 |
Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring and related cost, incurred costs | 1 | 1 | 1 | 10 |
Non-Operating | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring and related cost, incurred costs | $ 55 | $ 5 | $ 98 | $ 15 |
Inventories Components of Inven
Inventories Components of Inventories (Details) - USD ($) $ in Millions | Oct. 02, 2016 | Jan. 03, 2016 |
Inventory Disclosure [Abstract] | ||
Packaging and ingredients | $ 656 | $ 563 |
Work in process | 405 | 393 |
Finished product | 2,047 | 1,662 |
Inventories | $ 3,108 | $ 2,618 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets Goodwill by Segment (Details) - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended |
Jul. 03, 2016 | Oct. 02, 2016 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 43,051 | $ 43,051 |
2015 Merger measurement period adjustments | 1,433 | |
Goodwill, translation adjustments | 34 | |
Goodwill, ending balance | 44,518 | |
United States | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 32,290 | 32,290 |
2015 Merger measurement period adjustments | 1,400 | 1,433 |
Goodwill, translation adjustments | 0 | |
Goodwill, ending balance | 33,723 | |
Canada | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 4,796 | 4,796 |
2015 Merger measurement period adjustments | 0 | |
Goodwill, translation adjustments | 251 | |
Goodwill, ending balance | 5,047 | |
Europe | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 3,182 | 3,182 |
2015 Merger measurement period adjustments | 0 | |
Goodwill, translation adjustments | (311) | |
Goodwill, ending balance | 2,871 | |
Rest of World | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 2,783 | 2,783 |
2015 Merger measurement period adjustments | 0 | |
Goodwill, translation adjustments | 94 | |
Goodwill, ending balance | $ 2,877 |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets Goodwill-Additional Information (Details) | Apr. 04, 2016USD ($)reporting_unit | Jan. 03, 2016USD ($) | Jul. 03, 2016USD ($) | Oct. 02, 2016USD ($) | Jul. 02, 2015USD ($) |
Goodwill [Line Items] | |||||
Goodwill | $ 43,051,000,000 | $ 44,518,000,000 | $ 30,500,000,000 | ||
2015 Merger measurement period adjustments | 1,433,000,000 | ||||
Goodwill, Impairment Loss | $ 0 | ||||
Number of Reporting Units With Fair Value That Exceeds Carrying Value of Less Than Ten Percent | reporting_unit | 1 | ||||
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 10.00% | ||||
Reporting unit, goodwill carrying value with a fair value that exceeds the carrying amount by less than ten percent | $ 48,000,000 | ||||
Goodwill, Impaired, Accumulated Impairment Loss | 0 | ||||
United States | |||||
Goodwill [Line Items] | |||||
Goodwill | 32,290,000,000 | 33,723,000,000 | |||
2015 Merger measurement period adjustments | $ 1,400,000,000 | 1,433,000,000 | |||
United States | Goodwill | |||||
Goodwill [Line Items] | |||||
Prior Period Reclassification Adjustment | 1,473,000,000 | ||||
Rest of World | |||||
Goodwill [Line Items] | |||||
Goodwill | 2,783,000,000 | 2,877,000,000 | |||
2015 Merger measurement period adjustments | 0 | ||||
Rest of World | Goodwill | |||||
Goodwill [Line Items] | |||||
Prior Period Reclassification Adjustment | (1,443,000,000) | ||||
Europe | |||||
Goodwill [Line Items] | |||||
Goodwill | 3,182,000,000 | 2,871,000,000 | |||
2015 Merger measurement period adjustments | $ 0 | ||||
Europe | Goodwill | |||||
Goodwill [Line Items] | |||||
Prior Period Reclassification Adjustment | $ (30,000,000) |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets Indefinite-lived Intangible Assets (Details) - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended |
Jul. 03, 2016 | Oct. 02, 2016 | |
Indefinite-lived Intangible Assets [Roll Forward] | ||
Indefinite-lived intangible assets, beginning balance | $ 55,824 | $ 55,824 |
2015 Merger measurement period adjustments | 1,433 | |
Indefinite-lived intangible assets, translation adjustments | (328) | |
Indefinite-lived intangible assets, ending balance | 53,518 | |
Indefinite-lived Intangible Assets | ||
Indefinite-lived Intangible Assets [Roll Forward] | ||
2015 Merger measurement period adjustments | $ (2,000) | $ (1,978) |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets Indefinite-Lived Intangible Assets-Additional Information (Details) | Apr. 04, 2016USD ($)Brand | Oct. 02, 2016USD ($) | Jan. 03, 2016USD ($) | Jul. 02, 2015USD ($) |
Indefinite-lived Intangible Assets [Line Items] | ||||
Identifiable intangible assets | $ 43,100,000,000 | |||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 0 | |||
Number of brands with fair values that exceed carrying amounts by less than ten percent | Brand | 7 | |||
Indefinite-lived intangible assets, percentage of fair value in excess of carrying amount (less than) | 10.00% | |||
Indefinite-lived intangible assets, aggregate carrying value of intangibles with a fair value that exceeds the carrying amount | $ 6,100,000,000 | |||
Indefinite-lived intangible assets | $ 53,518,000,000 | $ 55,824,000,000 | ||
Velveeta, Lunchables, Maxwell House, and Cracker Barrel | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Indefinite-lived intangible assets, aggregate carrying value of intangibles with a fair value that exceeds the carrying amount | $ 5,600,000,000 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets Definite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Oct. 02, 2016 | Jan. 03, 2016 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | $ 6,586 | $ 6,579 |
Accumulated Amortization | (484) | (283) |
Net | 6,102 | 6,296 |
Trademarks | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 2,357 | 2,346 |
Accumulated Amortization | (148) | (70) |
Net | 2,209 | 2,276 |
Customer-related assets | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 4,217 | 4,218 |
Accumulated Amortization | (333) | (209) |
Net | 3,884 | 4,009 |
Other | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 12 | 15 |
Accumulated Amortization | (3) | (4) |
Net | $ 9 | $ 11 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets Definite-Lived Intangible Assets-Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 66 | $ 66 | $ 198 | $ 111 |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 275 | 275 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 275 | 275 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 275 | 275 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 275 | 275 | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 275 | $ 275 |
Income Taxes Additional Informa
Income Taxes Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 23.70% | 29.10% | 27.90% | 92.40% |
Employees' Stock Incentive Pl53
Employees' Stock Incentive Plans Additional Information (Details) $ in Millions | 9 Months Ended |
Oct. 02, 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 | $ 170 |
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 | 38 |
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 | $ 97 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years |
Employees' Stock Incentive Pl54
Employees' Stock Incentive Plans Schedule of Share-based Compensation, Stock Options, Activity (Details) | 9 Months Ended |
Oct. 02, 2016$ / sharesshares | |
Roll-forward of Stock Option Activity (in shares) | |
Beginning balance | shares | 24,205,612 |
Options granted | shares | 1,466,626 |
Options forfeited | shares | (760,613) |
Options exercised | shares | (3,701,021) |
Ending balance | shares | 21,210,604 |
Option outstanding at period start, weighted average exercise price (in dollars per share) | $ / shares | $ 34.86 |
Options granted, weighted average exercise price (in dollars per share) | $ / shares | 79.78 |
Options forfeited, weighted average exercise price (in dollars per share) | $ / shares | 49.51 |
Options forfeited, weighted average exercise price (in dollars per share) | $ / shares | 35.04 |
Options outstanding at period end, weighted average exercise price (in dollars per share) | $ / shares | $ 37.41 |
Employees' Stock Incentive Pl55
Employees' Stock Incentive Plans Schedule of Share-based Compensation, RSU Activity (Details) - RSUs | 9 Months Ended |
Oct. 02, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Beginning balance | shares | 968,444 |
RSUs granted | shares | 503,659 |
RSUs forfeited | shares | (118,585) |
RSUs vested | shares | (489,631) |
Ending balance | shares | 863,887 |
RSUs outstanding at period start, weighted average exercise price (in dollars per share) | $ / shares | $ 70.14 |
Granted, weighted average exercise price (in dollars per share) | $ / shares | 77.52 |
Forfeited, weighted average exercise price (in dollars per share) | $ / shares | 75.12 |
Vested, weighted average exercise price (in dollars per share) | $ / shares | 72.96 |
RSUs outstanding at period end, weighted average exercise price (in dollars per share) | $ / shares | $ 72.12 |
Employees' Stock Incentive Pl56
Employees' Stock Incentive Plans Schedule of Compensation Costs Related to Equity Plans (Details) - Stock Options and RSUs - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Pre-tax compensation cost | $ 12 | $ 91 | $ 38 | $ 98 |
Tax benefit | (4) | (34) | (12) | (37) |
After-tax compensation cost | $ 8 | $ 57 | $ 26 | $ 61 |
Postemployment Benefits Postemp
Postemployment Benefits Postemployment Benefit Plans-Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Oct. 02, 2016 | Oct. 02, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Impact of change in accounting estimate on service cost and interest cost | $ (20) | $ (60) |
U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer contribution | 311 | |
Estimated future employer contributions in current fiscal year | 0 | |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Employer contribution | 21 | |
Estimated future employer contributions in current fiscal year | $ 5 |
Postemployment Benefits Pension
Postemployment Benefits Pension Plans-Components of Net Pension Cost/(Benefit)-(Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 3 | $ 22 | $ 10 | $ 25 |
Interest cost | 52 | 82 | 158 | 91 |
Expected return on plan assets | (73) | (86) | (221) | (94) |
Amortization of unrecognized losses/(gains) | 0 | 1 | 0 | 3 |
Settlements | 26 | 0 | 20 | 0 |
Curtailments | 0 | (1) | 0 | (1) |
Special/contractual termination benefits | 0 | 3 | 0 | 3 |
Defined benefit plan net cost/(benefit) | 8 | 21 | (33) | 27 |
Non-U.S. Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 6 | 8 | 18 | 18 |
Interest cost | 21 | 30 | 64 | 73 |
Expected return on plan assets | (44) | (55) | (137) | (140) |
Amortization of unrecognized losses/(gains) | 0 | 0 | 0 | 0 |
Settlements | 0 | 8 | 0 | 19 |
Curtailments | 0 | (7) | 0 | (9) |
Special/contractual termination benefits | 0 | 4 | 0 | 4 |
Defined benefit plan net cost/(benefit) | $ (17) | $ (12) | $ (55) | $ (35) |
Postemployment Benefits Postret
Postemployment Benefits Postretirement Plans-Components of Net Postretirement Cost/(Benefit) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Amortization of prior service costs/(credits) | $ (217) | $ (31) | ||
Postretirement Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 3 | $ 7 | 11 | 9 |
Interest cost | 13 | 33 | 43 | 37 |
Amortization of prior service costs/(credits) | (90) | (28) | (252) | (31) |
Curtailments | 0 | 1 | 0 | 1 |
Defined benefit plan net cost/(benefit) | $ (74) | $ 13 | $ (198) | $ 16 |
Accumulated Other Comprehensi60
Accumulated Other Comprehensive Income/(Losses) Components of and Changes in Accumulated Other Comprehensive Income/(Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | $ (671) | |||
Foreign currency translation adjustments | $ (148) | $ (1,023) | (294) | $ (1,456) |
Net deferred gains/(losses) on net investment hedges | 34 | 195 | 79 | 421 |
Reclassification of net postemployment benefit losses/(gains) | (39) | (11) | (143) | (4) |
Net deferred gains/(losses) on cash flow hedges | 31 | 45 | (1) | (32) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (26) | (9) | (44) | 129 |
Ending Balance | (1,229) | (1,229) | ||
Foreign Currency Translation Adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (1,646) | |||
Foreign currency translation adjustments | (304) | |||
Net deferred gains/(losses) on net investment hedges | 79 | |||
Net postemployment benefit gains/(losses) arising during the period | 0 | |||
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) | (225) | |||
Ending Balance | (1,871) | (1,871) | ||
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 | |||
Net postemployment benefit gains/(losses) arising during the period | (145) | |||
Reclassification of net postemployment benefit losses/(gains) | (143) | |||
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) | (288) | |||
Ending Balance | 634 | 634 | ||
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 | |||
Net postemployment benefit gains/(losses) arising during the period | 0 | |||
Reclassification of net postemployment benefit losses/(gains) | 0 | |||
Net deferred gains/(losses) on cash flow hedges | (1) | |||
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (44) | |||
Total other comprehensive income/(loss) | (45) | |||
Ending Balance | 8 | 8 | ||
Accumulated Other Comprehensive Income/(Losses) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (671) | |||
Foreign currency translation adjustments | (151) | (1,006) | (304) | (1,426) |
Net deferred gains/(losses) on net investment hedges | 34 | 195 | 79 | 421 |
Net postemployment benefit gains/(losses) arising during the period | (145) | |||
Reclassification of net postemployment benefit losses/(gains) | (39) | (11) | (143) | (4) |
Net deferred gains/(losses) on cash flow hedges | 31 | 45 | (1) | (32) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | (26) | $ (9) | (44) | $ 129 |
Total other comprehensive income/(loss) | (558) | |||
Ending Balance | $ (1,229) | $ (1,229) |
Accumulated Other Comprehensi61
Accumulated Other Comprehensive Income/(Losses) Gross Amount and Related Tax Benefit/(Expense) Recorded in and Associated with each Component of Other Comprehensive Income/(Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||||
Foreign currency translation adjustments-Net of Tax Amount | $ (148) | $ (1,023) | $ (294) | $ (1,456) |
Net deferred gains/(losses) on net investment hedges-Net of Tax Amount | 34 | 195 | 79 | 421 |
Net actuarial gains/(losses) arising during the period-Net of Tax Amount | (145) | 892 | (145) | 873 |
Reclassification of net postemployment benefit losses/(gains)-Net of Tax | (39) | (11) | (143) | (4) |
Net deferred gains/(losses) on cash flow hedges-Net of Tax Amount | 31 | 45 | (1) | (32) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income-Net of Tax Amount | (26) | (9) | (44) | 129 |
AOCI Attributable to Parent | ||||
Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||||
Foreign currency translation adjustments-Before Tax Amount | (151) | (1,006) | (304) | (1,426) |
Foreign currency translation adjustments-Tax | 0 | 0 | 0 | 0 |
Foreign currency translation adjustments-Net of Tax Amount | (151) | (1,006) | (304) | (1,426) |
Net deferred gains/(losses) on net investment hedges-Before Tax Amount | 34 | 240 | 144 | 661 |
Net deferred gains/(losses) on net investment hedges-Tax | 0 | (45) | (65) | (240) |
Net deferred gains/(losses) on net investment hedges-Net of Tax Amount | 34 | 195 | 79 | 421 |
Net actuarial gains/(losses) arising during the period-Before Tax Amount | (405) | (54) | (405) | (79) |
Net actuarial gains/(losses) arising during the period-Tax | 154 | 23 | 154 | 29 |
Net actuarial gains/(losses) arising during the period-Net of Tax Amount | (251) | (31) | (251) | (50) |
Prior service credits/(costs) arising during the period-Before Tax Amount | 172 | 1,500 | 172 | 1,500 |
Prior service credits/(costs) arising during the period-Tax | (66) | (577) | (66) | (577) |
Prior service credits/(costs) arising during the period-Net of Tax Amount | 106 | 923 | 106 | 923 |
Reclassification of net postemployment benefit losses/(gains)-Before Tax Amount | (64) | (19) | (232) | (9) |
Reclassification of net postemployment benefit losses/(gains)-Tax | 25 | 8 | 89 | 5 |
Reclassification of net postemployment benefit losses/(gains)-Net of Tax | (39) | (11) | (143) | (4) |
Net deferred gains/(losses) on cash flow hedges-Before Tax Amount | 33 | 53 | (12) | (67) |
Net deferred gains/(losses) on cash flow hedges-Tax | (2) | (8) | 11 | 35 |
Net deferred gains/(losses) on cash flow hedges-Net of Tax Amount | 31 | 45 | (1) | (32) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income-Before Tax Amount | (23) | (15) | (43) | 207 |
Net deferred losses/(gains) on cash flow hedges reclassified to net income-Tax | (3) | 6 | (1) | (78) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income-Net of Tax Amount | $ (26) | $ (9) | $ (44) | $ 129 |
Accumulated Other Comprehensi62
Accumulated Other Comprehensive Income/(Losses) Additional Information (Details) - USD ($) $ in Millions | Oct. 02, 2016 | Jan. 03, 2016 |
Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Accrued postemployment costs | $ (164) | $ (328) |
Deferred income taxes | (20,706) | (21,497) |
Accumulated other comprehensive income/(losses) | (1,229) | $ (671) |
Misstatement of Prior Service Credit Related to Postretirement Plan Amendment | ||
Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Accrued postemployment costs | 107 | |
Deferred income taxes | 41 | |
Accumulated other comprehensive income/(losses) | $ 66 |
Accumulated Other Comprehensi63
Accumulated Other Comprehensive Income/(Losses) Amounts Reclassified from Accumulated Other Comprehensive Income/(Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||||
Net deferred losses/(gains) on cash flow hedges reclassified to net income-Net of Tax Amount | $ (26) | $ (9) | $ (44) | $ 129 |
Reclassification of net postemployment benefit losses/(gains)-Net of Tax | (39) | (11) | (143) | (4) |
AOCI Attributable to Parent | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||||
Losses/(gains) on cash flow hedges before income taxes | (23) | (15) | (43) | 207 |
Losses/(gains) on cash flow hedges income taxes | (3) | 6 | (1) | (78) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income-Net of Tax Amount | (26) | (9) | (44) | 129 |
Amortization of unrecognized losses/(gains) | 0 | 1 | 0 | 3 |
Amortization of prior service costs/(credits) | (90) | (28) | (252) | (31) |
Settlement and curtailments losses/(gains) | 26 | 8 | 20 | 19 |
Losses/(gains) on postemployment benefits before income taxes | (64) | (19) | (232) | (9) |
Losses/(gains) on postemployment benefits income taxes | 25 | 8 | 89 | 5 |
Reclassification of net postemployment benefit losses/(gains)-Net of Tax | (39) | (11) | (143) | (4) |
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 | 0 | 0 | (3) | 2 |
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 | (1) | (16) | (34) | (32) |
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 | (23) | 0 | (9) | (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 | $ 1 | $ 3 | $ 238 |
Financial Instruments Additiona
Financial Instruments Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | Jan. 03, 2016 | |
Derivative [Line Items] | |||||
Derivative, collateral, obligation to return cash | $ 30 | $ 30 | $ 44 | ||
Derivative, collateral, right to reclaim cash | 30 | 30 | $ 44 | ||
Foreign currency cash flow hedge gain (loss) to be reclassified during next 12 months | 10 | $ 10 | |||
Commodity contracts | Not designated as hedging instrument | |||||
Derivative [Line Items] | |||||
Derivative, term | 12 months | ||||
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 | 12 months | ||||
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, before tax | $ (15) | $ 22 | $ 24 | $ 22 |
Financial Instruments Outstandi
Financial Instruments Outstanding Notional Amounts (Details) - USD ($) $ in Millions | Oct. 02, 2016 | Jan. 03, 2016 |
Commodity contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 475 | $ 787 |
Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | 2,466 | 3,458 |
Cross-currency contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 3,173 | $ 4,328 |
Financial Instruments Fair Valu
Financial Instruments Fair Values (Details) - USD ($) $ in Millions | Oct. 02, 2016 | Jan. 03, 2016 |
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | $ 603 | $ 811 |
Derivative liability, fair value, gross liability | 48 | 55 |
Commodity contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 22 | 25 |
Derivative liability, fair value, gross liability | 12 | 36 |
Foreign exchange contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 32 | 46 |
Derivative liability, fair value, gross liability | 17 | 6 |
Foreign exchange contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 29 | 88 |
Derivative liability, fair value, gross liability | 19 | 13 |
Cross-currency contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 479 | 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 | 41 | 47 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 1 | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 22 | 24 |
Derivative liability, fair value, gross liability | 10 | 29 |
Level 1 | Commodity contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 22 | 24 |
Derivative liability, fair value, gross liability | 10 | 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 | 581 | 787 |
Derivative liability, fair value, gross liability | 38 | 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 | 2 | 7 |
Level 2 | Foreign exchange contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 32 | 46 |
Derivative liability, fair value, gross liability | 17 | 6 |
Level 2 | Foreign exchange contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 29 | 88 |
Derivative liability, fair value, gross liability | 19 | 13 |
Level 2 | Cross-currency contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 479 | 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 | 41 | 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 Net Inves
Financial Instruments Net Investment Hedging (Details) € in Millions, £ in Millions, CAD in Billions, $ in Billions | Oct. 02, 2016USD ($) | Oct. 02, 2016GBP (£) | Oct. 02, 2016EUR (€) | Oct. 02, 2016CAD | May 31, 2016EUR (€) |
United Kingdom, Pounds | Cross-currency contracts | |||||
Derivative [Line Items] | |||||
Derivative asset, notional amount | $ 1.4 | £ 800 | |||
Canada, Dollars | Cross-currency contracts | |||||
Derivative [Line Items] | |||||
Derivative liability, notional amount | 1.6 | CAD 1.8 | |||
Net Investment Hedging | Designated as hedging instrument | United Kingdom, Pounds | Debt | |||||
Derivative [Line Items] | |||||
Derivative, amount of hedged item | £ | £ 400 | ||||
Net Investment Hedging | Designated as hedging instrument | Euro Member Countries, Euro | Debt | |||||
Derivative [Line Items] | |||||
Derivative, amount of hedged item | $ 1.1 | € 2,550 | |||
One Point Five Zero Zero Percent Senior Notes Due May 24, 2024 and Two Point Two Five Zero Percent Senior Notes Due May 25, 2028 [Member] | Net Investment Hedging | Designated as hedging instrument | Euro Member Countries, Euro | Debt | |||||
Derivative [Line Items] | |||||
Derivative, amount of hedged item | € | € 1,800 |
Financial Instruments Gain_(Los
Financial Instruments Gain/(Loss) Recognized in Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Commodity contracts | ||||
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | $ (17) | $ (21) | $ (6) | $ (21) |
Foreign exchange contracts | ||||
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | 20 | 25 | (15) | 73 |
Cross-currency contracts | ||||
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | 2 | 46 | (6) | 46 |
Interest rate contracts | ||||
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | (1) | (4) | (3) | (230) |
Designated as hedging instrument | Commodity contracts | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 | 0 | 0 |
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | 0 | 0 | 0 | 0 |
Designated as hedging instrument | Foreign exchange contracts | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Net gains recognized in other comprehensive loss (effective portion) | 33 | 53 | 42 | 44 |
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | 24 | 16 | 46 | 31 |
Designated as hedging instrument | Cross-currency contracts | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Net gains recognized in other comprehensive loss (effective portion) | 49 | 218 | 74 | 639 |
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | 0 | 0 | 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 | 0 | (8) | (111) |
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | (1) | (1) | (3) | (238) |
Not designated as hedging instrument | Commodity contracts | ||||
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | (17) | (21) | (6) | (21) |
Not designated as hedging instrument | Foreign exchange contracts | ||||
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | (4) | 9 | (61) | 42 |
Not designated as hedging instrument | Cross-currency contracts | ||||
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | 2 | 46 | (6) | 46 |
Not designated as hedging instrument | Interest rate contracts | ||||
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | 0 | (3) | 0 | 8 |
Not designated as hedging instrument | Cost of products sold | Commodity contracts | ||||
Derivatives not designated as hedging instruments: | ||||
Total amount recognized in statement of income | (17) | (21) | (6) | (21) |
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 | 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 | 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 | 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 | 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 | (4) | 9 | (61) | 42 |
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 | 2 | 46 | (6) | 46 |
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 | (3) | 0 | 8 |
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 | 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) | 33 | 53 | (4) | 44 |
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 | 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 | 0 | (8) | (111) |
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 | 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 | 0 | 0 | 3 | (2) |
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 | 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 | 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 | 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) | 1 | 16 | 34 | 32 |
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 | 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 | 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 | 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 | 23 | 0 | 9 | 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 | 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 | 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 | 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 | 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 | 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) | (1) | (3) | (238) |
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 | 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 | 46 | 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) | 49 | 218 | 74 | 639 |
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 | $ 0 | $ 0 |
Venezuela - Foreign Currency 69
Venezuela - Foreign Currency and Inflation Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Oct. 02, 2016USD ($)exchange_rateVEF / $ | Jul. 03, 2016USD ($)VEF / $ | Jun. 28, 2015USD ($)VEF / $ | Oct. 02, 2016USD ($)exchange_rateVEF / $ | Apr. 03, 2016VEF / $ | Mar. 09, 2016VEF / $ | |
Foreign Currency [Line Items] | ||||||
Number of exchange rates legally available to us in Venezuela | exchange_rate | 2 | 2 | ||||
Foreign currency exchange rate, translation | 197.7 | |||||
Foreign currency translation loss/(gain) | $ | $ 6 | $ (234) | $ (1) | |||
Impairment loss on long-lived assets | $ | $ 53 | |||||
Inventory write-down to lower of cost or market | $ | $ 49 | |||||
Outstanding requests for currency settlements at the official exchange rate | $ | $ 26 | $ 26 | ||||
Official CENCOEX BsF Rate | ||||||
Foreign Currency [Line Items] | ||||||
Foreign currency exchange rate, translation | 10 | 10 | 6.30 | |||
Venezuelan BsF on DICOM market, quarter-to-date average | ||||||
Foreign Currency [Line Items] | ||||||
Foreign currency exchange rate, translation | 646 | 646 | ||||
Venezuelan BsF on DICOM market, year-to-date average | ||||||
Foreign Currency [Line Items] | ||||||
Foreign currency exchange rate, translation | 441 | 441 | ||||
Venezuelan BsF on DICOM market, period end spot | ||||||
Foreign Currency [Line Items] | ||||||
Foreign currency exchange rate, translation | 659 | 628 | 659 | 276 |
Commitments, Contingencies an70
Commitments, Contingencies and Debt Debt (Details) | 9 Months Ended | 12 Months Ended | |||||
Oct. 02, 2016USD ($) | Sep. 27, 2015USD ($) | Jan. 03, 2016USD ($) | May 25, 2016EUR (€) | May 24, 2016USD ($) | May 04, 2016USD ($) | May 03, 2016USD ($) | |
Other Commitments [Line Items] | |||||||
Revolving credit facility letter of credit sub-facility maximum borrowing capacity | $ 300,000,000 | $ 150,000,000 | |||||
Commercial paper | $ 639,000,000 | $ 0 | |||||
Commercial paper, weighted average interest rate | 0.925% | ||||||
Carrying value of long-term debt, including current portion | $ 32,000,000,000 | $ 25,200,000,000 | |||||
Redemption of Series A Preferred Stock | 8,320,000,000 | $ 0 | |||||
Debt issuance costs | 52,000,000 | ||||||
Fair value of total debt | $ 35,600,000,000 | ||||||
Nine point zero zero percent cumulative compounding preferred stock, Series A | |||||||
Other Commitments [Line Items] | |||||||
9.00% cumulative compounding preferred stock, Series A, dividend percentage | 9.00% | 9.00% | |||||
Redemption of Series A Preferred Stock | $ 8,300,000,000 | ||||||
Three Point Zero Zero Zero Percent Senior Notes Due June 1, 2026 | |||||||
Other Commitments [Line Items] | |||||||
Debt instrument, face amount | $ 2,000,000,000 | ||||||
Debt instrument, interest rate, stated percentage | 3.00% | ||||||
Four Point Three Seven Five Percent Senior Notes Due June 1, 2046 | |||||||
Other Commitments [Line Items] | |||||||
Debt instrument, face amount | $ 3,000,000,000 | ||||||
Debt instrument, interest rate, stated percentage | 4.375% | ||||||
One Point Five Zero Zero Percent Senior Notes Due May 24, 2024 | |||||||
Other Commitments [Line Items] | |||||||
Debt instrument, face amount | € | € 550,000,000 | ||||||
Debt instrument, interest rate, stated percentage | 1.50% | ||||||
Two Point Two Five Zero Percent Senior Notes Due May 25, 2028 | |||||||
Other Commitments [Line Items] | |||||||
Debt instrument, face amount | € | € 1,250,000,000 | ||||||
Debt instrument, interest rate, stated percentage | 2.25% |
Commitments, Contingencies an71
Commitments, Contingencies and Debt Series A Preferred Stock (Details) - shares | Jun. 07, 2016 | Oct. 02, 2016 | Jan. 03, 2016 |
Preferred Units [Line Items] | |||
Preferred stock, shares authorized | 920,000 | ||
Nine point zero zero percent cumulative compounding preferred stock, Series A | |||
Preferred Units [Line Items] | |||
Series A Preferred Stock redeemed during the period, shares | 80,000 | ||
Preferred stock, shares authorized | 0 | 80,000 |
Commitments, Contingencies an72
Commitments, Contingencies and Debt Financing Arrangements (Details) - USD ($) $ in Millions | Oct. 02, 2016 | May 31, 2016 | Jan. 03, 2016 |
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||
Receivables derecognized under receivables securitization program | $ 902 | $ 267 | |
Fair value of deferred purchase price | $ 208 | $ 583 | |
Maximum | |||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||
Amount of amended U.S. securitization program | $ 800 |
Commitments, Contingencies an73
Commitments, Contingencies and Debt Redeemable Noncontrolling Interest (Details) - Coniexpress Sa Industrias Alimenticias - USD ($) $ in Millions | 1 Months Ended | |
Apr. 30, 2016 | Oct. 02, 2016 | |
Noncontrolling Interest [Line Items] | ||
Redeemable Noncontrolling Interest, Additional Interest Acquired During the Period, Percentage | 5.00% | |
Payments for Repurchase of Redeemable Noncontrolling Interest | $ 21 | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
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 | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Basic EPS | ||||
Net income/(loss) attributable to common shareholders | $ 842 | $ (303) | $ 2,508 | $ (551) |
Weighted average shares of common stock outstanding (in shares) | 1,218 | 1,142 | 1,216 | 633 |
Basic earnings/(loss) per share (in dollars per share) | $ 0.69 | $ (0.27) | $ 2.06 | $ (0.87) |
Diluted EPS | ||||
Net earnings/(loss) attributable to common shareholders | $ 842 | $ (303) | $ 2,508 | $ (551) |
Effect of dilutive stock options on basic earnings/(loss) per common share (in shares) | 10 | 0 | 10 | 0 |
Weighted average shares of common stock, including dilutive effect (in shares) | 1,228 | 1,142 | 1,226 | 633 |
Diluted earnings/(loss) per share (in dollars per share) | $ 0.69 | $ (0.27) | $ 2.05 | $ (0.87) |
Earnings Per Share Additional I
Earnings Per Share Additional Information (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive shares excluded from computation of earnings per share | 1 | 12 | 3 | 19 |
Segment Reporting Additional In
Segment Reporting Additional Information (Details) | 9 Months Ended |
Oct. 02, 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 | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 6,267 | $ 6,120 | $ 19,630 | $ 11,214 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 4,395 | 4,206 | 13,802 | 5,951 |
Canada | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 550 | 539 | 1,692 | 804 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 513 | 600 | 1,644 | 1,846 |
Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 809 | $ 775 | $ 2,492 | $ 2,613 |
Segment Reporting Segment Adjus
Segment Reporting Segment Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Segment Reporting Information [Line Items] | ||||
General corporate expenses | $ (27) | $ (36) | $ (107) | $ (106) |
Depreciation and amortization (excluding integration and restructuring expenses) | (116) | (193) | (401) | (619) |
Integration and restructuring expenses | (237) | (482) | (781) | (681) |
Merger costs | (4) | (139) | (33) | (193) |
Unrealized gains/(losses) on commodity hedges | (22) | 0 | 23 | 23 |
Impairment losses | 0 | 0 | (53) | (58) |
Gains/(losses) on sale of business | 0 | 0 | 0 | 21 |
Nonmonetary currency devaluation | (1) | 0 | (4) | (49) |
Equity award compensation expense (excluding integration and restructuring expenses) | (10) | (16) | (30) | (60) |
Other pro forma adjustments | 0 | (253) | 0 | (1,896) |
Operating income | 1,413 | 399 | 4,562 | 1,352 |
Interest expense | 311 | 460 | 824 | 1,055 |
Other expense/(income), net | (3) | 108 | (5) | 314 |
Income/(loss) before income taxes | 1,105 | (169) | 3,743 | (17) |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Segment Adjusted EBITDA | 1,349 | 1,033 | 4,360 | 3,364 |
Canada | ||||
Segment Reporting Information [Line Items] | ||||
Segment Adjusted EBITDA | 148 | 110 | 491 | 374 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Segment Adjusted EBITDA | 183 | 223 | 572 | 662 |
Rest of World | ||||
Segment Reporting Information [Line Items] | ||||
Segment Adjusted EBITDA | $ 150 | $ 152 | $ 525 | $ 570 |
Segment Reporting Net Sales b79
Segment Reporting Net Sales by Product (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Revenue from External Customer [Line Items] | ||||
Net sales | $ 6,267 | $ 6,120 | $ 19,630 | $ 11,214 |
Condiments and sauces | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 1,670 | 1,532 | 5,073 | 4,209 |
Cheese and dairy | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 1,292 | 1,184 | 4,045 | 1,184 |
Ambient meals | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 567 | 592 | 1,703 | 1,231 |
Frozen and chilled meals | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 552 | 634 | 1,731 | 1,511 |
Meats and seafood | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 648 | 685 | 2,093 | 781 |
Refreshment beverages | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 375 | 353 | 1,226 | 353 |
Coffee | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 335 | 310 | 1,071 | 310 |
Infant and nutrition | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 171 | 190 | 577 | 707 |
Desserts, toppings and baking | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 212 | 203 | 647 | 203 |
Nuts and salted snacks | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 238 | 243 | 760 | 243 |
Other | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 207 | $ 194 | $ 704 | $ 482 |
Supplemental Financial Inform80
Supplemental Financial Information Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | |
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | $ 6,267 | $ 6,120 | $ 19,630 | $ 11,214 |
Cost of products sold | 4,049 | 4,492 | 12,503 | 7,857 |
Gross profit | 2,218 | 1,628 | 7,127 | 3,357 |
Selling, general and administrative expenses | 805 | 1,229 | 2,565 | 2,005 |
Intercompany service fees and other recharges | 0 | 0 | 0 | 0 |
Operating income | 1,413 | 399 | 4,562 | 1,352 |
Interest expense | 311 | 460 | 824 | 1,055 |
Other expense/(income), net | (3) | 108 | (5) | 314 |
Income/(loss) before income taxes | 1,105 | (169) | 3,743 | (17) |
Provision for/(benefit from) income taxes | 262 | (49) | 1,045 | (16) |
Equity in earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net income/(loss) | 843 | (120) | 2,698 | (1) |
Net income/(loss) attributable to noncontrolling interest | 1 | 3 | 10 | 10 |
Net income/(loss) attributable to Kraft Heinz | 842 | (123) | 2,688 | (11) |
Comprehensive income/(loss) excluding noncontrolling interest | 547 | (17) | 2,131 | (50) |
Eliminations | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | (172) | (128) | (474) | (244) |
Cost of products sold | (172) | (128) | (474) | (244) |
Gross profit | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 | 0 | 0 |
Intercompany service fees and other recharges | 0 | 0 | 0 | 0 |
Operating income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Other expense/(income), net | 0 | 0 | 0 | 0 |
Income/(loss) before income taxes | 0 | 0 | 0 | 0 |
Provision for/(benefit from) income taxes | 0 | 0 | 0 | 0 |
Equity in earnings of subsidiaries | (1,242) | 35 | (5,090) | (441) |
Net income/(loss) | (1,242) | 35 | (5,090) | (441) |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income/(loss) attributable to Kraft Heinz | (1,242) | 35 | (5,090) | (441) |
Comprehensive income/(loss) excluding noncontrolling interest | (832) | 744 | (4,144) | 972 |
Parent Guarantor | Reportable Legal Entities | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Cost of products sold | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 | 0 | 0 |
Intercompany service fees and other recharges | 0 | 0 | 0 | 0 |
Operating income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Other expense/(income), net | 0 | 0 | 0 | 0 |
Income/(loss) before income taxes | 0 | 0 | 0 | 0 |
Provision for/(benefit from) income taxes | 0 | 0 | 0 | 0 |
Equity in earnings of subsidiaries | 842 | (123) | 2,688 | (11) |
Net income/(loss) | 842 | (123) | 2,688 | (11) |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income/(loss) attributable to Kraft Heinz | 842 | (123) | 2,688 | (11) |
Comprehensive income/(loss) excluding noncontrolling interest | 547 | (17) | 2,131 | (50) |
Subsidiary Issuer | Reportable Legal Entities | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | 4,206 | 3,963 | 13,156 | 5,820 |
Cost of products sold | 2,700 | 2,887 | 8,273 | 4,157 |
Gross profit | 1,506 | 1,076 | 4,883 | 1,663 |
Selling, general and administrative expenses | 194 | 684 | 778 | 986 |
Intercompany service fees and other recharges | 795 | 626 | 3,320 | 619 |
Operating income | 517 | (234) | 785 | 58 |
Interest expense | 294 | 447 | 782 | 973 |
Other expense/(income), net | (20) | (8) | 66 | 121 |
Income/(loss) before income taxes | 243 | (673) | (63) | (1,036) |
Provision for/(benefit from) income taxes | (199) | (462) | (349) | (573) |
Equity in earnings of subsidiaries | 400 | 88 | 2,402 | 452 |
Net income/(loss) | 842 | (123) | 2,688 | (11) |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 | 0 | 0 |
Net income/(loss) attributable to Kraft Heinz | 842 | (123) | 2,688 | (11) |
Comprehensive income/(loss) excluding noncontrolling interest | 547 | (17) | 2,131 | (50) |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | 2,233 | 2,285 | 6,948 | 5,638 |
Cost of products sold | 1,521 | 1,733 | 4,704 | 3,944 |
Gross profit | 712 | 552 | 2,244 | 1,694 |
Selling, general and administrative expenses | 611 | 545 | 1,787 | 1,019 |
Intercompany service fees and other recharges | (795) | (626) | (3,320) | (619) |
Operating income | 896 | 633 | 3,777 | 1,294 |
Interest expense | 17 | 13 | 42 | 82 |
Other expense/(income), net | 17 | 116 | (71) | 193 |
Income/(loss) before income taxes | 862 | 504 | 3,806 | 1,019 |
Provision for/(benefit from) income taxes | 461 | 413 | 1,394 | 557 |
Equity in earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net income/(loss) | 401 | 91 | 2,412 | 462 |
Net income/(loss) attributable to noncontrolling interest | 1 | 3 | 10 | 10 |
Net income/(loss) attributable to Kraft Heinz | 400 | 88 | 2,402 | 452 |
Comprehensive income/(loss) excluding noncontrolling interest | $ 285 | $ (727) | $ 2,013 | $ (922) |
Supplemental Financial Inform81
Supplemental Financial Information Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 02, 2016 | Sep. 27, 2015 | Oct. 02, 2016 | Sep. 27, 2015 | Jan. 03, 2016 | Jul. 02, 2015 | Dec. 28, 2014 | |
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Cash and cash equivalents | $ 3,920 | $ 4,437 | $ 3,920 | $ 4,437 | $ 4,837 | $ 2,298 | |
Trade receivables | 855 | 855 | 871 | ||||
Receivables due from affiliates | 0 | 0 | 0 | ||||
Dividends due from affiliates | 0 | 0 | |||||
Sold receivables | 208 | 208 | 583 | ||||
Inventories | 3,108 | 3,108 | 2,618 | ||||
Short-term lending due from affiliates | 0 | 0 | 0 | ||||
Other current assets | 852 | 852 | 871 | ||||
Total current assets | 8,943 | 8,943 | 9,780 | ||||
Property, plant and equipment, net | 6,490 | 6,490 | 6,524 | ||||
Goodwill | 44,518 | 44,518 | 43,051 | $ 30,500 | |||
Investments in subsidiaries | 0 | 0 | 0 | ||||
Intangible assets, net | 59,620 | 59,620 | 62,120 | ||||
Long-term lending due from affiliates | 0 | 0 | 0 | ||||
Other assets | 1,509 | 1,509 | 1,498 | ||||
TOTAL ASSETS | 121,080 | 121,080 | 122,973 | ||||
Commercial paper and other short-term debt | 653 | 653 | 4 | ||||
Current portion of long-term debt | 2,047 | 2,047 | 79 | ||||
Short-term lending due to affiliates | 0 | 0 | 0 | ||||
Trade payables | 3,456 | 3,456 | 2,844 | ||||
Payables due to affiliates | 0 | 0 | 0 | ||||
Accrued marketing | 708 | 708 | 856 | ||||
Accrued postemployment costs | 164 | 164 | 328 | ||||
Income taxes payable | 142 | 142 | 417 | ||||
Interest payable | 311 | 311 | 401 | ||||
Dividends payable | 769 | 769 | 762 | ||||
Dividends due to affiliates | 0 | 0 | |||||
Other current liabilities | 1,164 | 1,164 | 1,241 | ||||
Total current liabilities | 9,414 | 9,414 | 6,932 | ||||
Long-term debt | 29,980 | 29,980 | 25,151 | ||||
Long-term borrowings due to affiliates | 0 | 0 | 0 | ||||
Deferred income taxes | 20,706 | 20,706 | 21,497 | ||||
Accrued postemployment costs | 2,367 | 2,367 | 2,405 | ||||
Other liabilities | 745 | 745 | 752 | ||||
TOTAL LIABILITIES | 63,212 | 63,212 | 56,737 | ||||
Redeemable noncontrolling interest | 0 | 0 | 23 | ||||
9.00% cumulative compounding preferred stock, Series A, no shares authorized and issued at October 2, 2016 and 80,000 authorized and issued shares at January 3, 2016, $0.01 par value | 0 | 0 | 8,320 | ||||
Equity in earnings of subsidiaries | 0 | 0 | 0 | 0 | |||
Total shareholders' equity | 57,642 | 57,642 | 57,685 | ||||
Noncontrolling interest | 226 | 226 | 208 | ||||
TOTAL EQUITY | 57,868 | 57,868 | 57,893 | ||||
TOTAL LIABILITIES AND EQUITY | 121,080 | $ 121,080 | $ 122,973 | ||||
Nine point zero zero percent cumulative compounding preferred stock, Series A | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
9.00% cumulative compounding preferred stock, Series A, dividend percentage | 9.00% | 9.00% | |||||
Eliminations | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Cash and cash equivalents | 0 | 0 | $ 0 | 0 | $ 0 | 0 | |
Trade receivables | 0 | 0 | 0 | ||||
Receivables due from affiliates | (974) | (974) | (874) | ||||
Dividends due from affiliates | (769) | (769) | |||||
Sold receivables | 0 | 0 | |||||
Inventories | 0 | 0 | 0 | ||||
Short-term lending due from affiliates | (4,817) | (4,817) | (8,010) | ||||
Other current assets | (1,608) | (1,608) | (217) | ||||
Total current assets | (8,168) | (8,168) | (9,101) | ||||
Property, plant and equipment, net | 0 | 0 | 0 | ||||
Goodwill | 0 | 0 | 0 | ||||
Investments in subsidiaries | (130,605) | (130,605) | (139,110) | ||||
Intangible assets, net | 0 | 0 | 0 | ||||
Long-term lending due from affiliates | (3,700) | (3,700) | (3,700) | ||||
Other assets | 0 | 0 | 0 | ||||
TOTAL ASSETS | (142,473) | (142,473) | (151,911) | ||||
Commercial paper and other short-term debt | 0 | 0 | 0 | ||||
Current portion of long-term debt | 0 | 0 | 0 | ||||
Short-term lending due to affiliates | (4,817) | (4,817) | (8,010) | ||||
Trade payables | 0 | 0 | 0 | ||||
Payables due to affiliates | (974) | (974) | (874) | ||||
Accrued marketing | 0 | 0 | 0 | ||||
Accrued postemployment costs | 0 | 0 | 0 | ||||
Income taxes payable | (1,608) | (1,608) | (217) | ||||
Interest payable | 0 | 0 | 0 | ||||
Dividends payable | 0 | 0 | 0 | ||||
Dividends due to affiliates | (769) | (769) | |||||
Other current liabilities | 0 | 0 | 0 | ||||
Total current liabilities | (8,168) | (8,168) | (9,101) | ||||
Long-term debt | 0 | 0 | 0 | ||||
Long-term borrowings due to affiliates | (3,917) | (3,917) | (3,905) | ||||
Deferred income taxes | 0 | 0 | 0 | ||||
Accrued postemployment costs | 0 | 0 | 0 | ||||
Other liabilities | 0 | 0 | 0 | ||||
TOTAL LIABILITIES | (12,085) | (12,085) | (13,006) | ||||
Redeemable noncontrolling interest | 0 | 0 | 0 | ||||
9.00% cumulative compounding preferred stock, Series A, no shares authorized and issued at October 2, 2016 and 80,000 authorized and issued shares at January 3, 2016, $0.01 par value | 0 | ||||||
Equity in earnings of subsidiaries | (1,242) | 35 | (5,090) | (441) | |||
Total shareholders' equity | (130,388) | (130,388) | (138,905) | ||||
Noncontrolling interest | 0 | 0 | 0 | ||||
TOTAL EQUITY | (130,388) | (130,388) | (138,905) | ||||
TOTAL LIABILITIES AND EQUITY | (142,473) | (142,473) | (151,911) | ||||
Parent Guarantor | Reportable Legal Entities | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | 0 | 0 | |
Trade receivables | 0 | 0 | 0 | ||||
Receivables due from affiliates | 0 | 0 | 0 | ||||
Dividends due from affiliates | 769 | 769 | |||||
Sold receivables | 0 | 0 | 0 | ||||
Inventories | 0 | 0 | 0 | ||||
Short-term lending due from affiliates | 0 | 0 | 0 | ||||
Other current assets | 0 | 0 | 0 | ||||
Total current assets | 769 | 769 | 0 | ||||
Property, plant and equipment, net | 0 | 0 | 0 | ||||
Goodwill | 0 | 0 | 0 | ||||
Investments in subsidiaries | 57,642 | 57,642 | 66,005 | ||||
Intangible assets, net | 0 | 0 | 0 | ||||
Long-term lending due from affiliates | 0 | 0 | 0 | ||||
Other assets | 0 | 0 | 0 | ||||
TOTAL ASSETS | 58,411 | 58,411 | 66,005 | ||||
Commercial paper and other short-term debt | 0 | 0 | 0 | ||||
Current portion of long-term debt | 0 | 0 | 0 | ||||
Short-term lending due to affiliates | 0 | 0 | 0 | ||||
Trade payables | 0 | 0 | 0 | ||||
Payables due to affiliates | 0 | 0 | 0 | ||||
Accrued marketing | 0 | 0 | 0 | ||||
Accrued postemployment costs | 0 | 0 | 0 | ||||
Income taxes payable | 0 | 0 | 0 | ||||
Interest payable | 0 | 0 | 0 | ||||
Dividends payable | 769 | 769 | 0 | ||||
Dividends due to affiliates | 0 | 0 | |||||
Other current liabilities | 0 | 0 | 0 | ||||
Total current liabilities | 769 | 769 | 0 | ||||
Long-term debt | 0 | 0 | 0 | ||||
Long-term borrowings due to affiliates | 0 | 0 | 0 | ||||
Deferred income taxes | 0 | 0 | 0 | ||||
Accrued postemployment costs | 0 | 0 | 0 | ||||
Other liabilities | 0 | 0 | 0 | ||||
TOTAL LIABILITIES | 769 | 769 | 0 | ||||
Redeemable noncontrolling interest | 0 | 0 | 0 | ||||
9.00% cumulative compounding preferred stock, Series A, no shares authorized and issued at October 2, 2016 and 80,000 authorized and issued shares at January 3, 2016, $0.01 par value | 8,320 | ||||||
Equity in earnings of subsidiaries | 842 | (123) | 2,688 | (11) | |||
Total shareholders' equity | 57,642 | 57,642 | 57,685 | ||||
Noncontrolling interest | 0 | 0 | 0 | ||||
TOTAL EQUITY | 57,642 | 57,642 | 57,685 | ||||
TOTAL LIABILITIES AND EQUITY | 58,411 | 58,411 | 66,005 | ||||
Subsidiary Issuer | Reportable Legal Entities | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Cash and cash equivalents | 2,131 | 2,735 | 2,131 | 2,735 | 3,189 | 541 | |
Trade receivables | 0 | 0 | 62 | ||||
Receivables due from affiliates | 873 | 873 | 555 | ||||
Dividends due from affiliates | 0 | 0 | |||||
Sold receivables | 0 | 0 | 554 | ||||
Inventories | 2,061 | 2,061 | 1,741 | ||||
Short-term lending due from affiliates | 1,790 | 1,790 | 3,657 | ||||
Other current assets | 2,037 | 2,037 | 645 | ||||
Total current assets | 8,892 | 8,892 | 10,403 | ||||
Property, plant and equipment, net | 4,236 | 4,236 | 4,518 | ||||
Goodwill | 11,093 | 11,093 | 10,976 | ||||
Investments in subsidiaries | 72,963 | 72,963 | 73,105 | ||||
Intangible assets, net | 3,400 | 3,400 | 3,838 | ||||
Long-term lending due from affiliates | 1,700 | 1,700 | 1,700 | ||||
Other assets | 548 | 548 | 534 | ||||
TOTAL ASSETS | 102,832 | 102,832 | 105,074 | ||||
Commercial paper and other short-term debt | 639 | 639 | 0 | ||||
Current portion of long-term debt | 2,028 | 2,028 | 65 | ||||
Short-term lending due to affiliates | 3,027 | 3,027 | 4,353 | ||||
Trade payables | 1,982 | 1,982 | 1,612 | ||||
Payables due to affiliates | 101 | 101 | 319 | ||||
Accrued marketing | 220 | 220 | 359 | ||||
Accrued postemployment costs | 150 | 150 | 316 | ||||
Income taxes payable | 576 | 576 | 71 | ||||
Interest payable | 300 | 300 | 386 | ||||
Dividends payable | 0 | 0 | 762 | ||||
Dividends due to affiliates | 769 | 769 | |||||
Other current liabilities | 873 | 873 | 988 | ||||
Total current liabilities | 10,665 | 10,665 | 9,231 | ||||
Long-term debt | 28,970 | 28,970 | 24,143 | ||||
Long-term borrowings due to affiliates | 2,000 | 2,000 | 2,000 | ||||
Deferred income taxes | 1,104 | 1,104 | 1,278 | ||||
Accrued postemployment costs | 2,100 | 2,100 | 2,147 | ||||
Other liabilities | 351 | 351 | 270 | ||||
TOTAL LIABILITIES | 45,190 | 45,190 | 39,069 | ||||
Redeemable noncontrolling interest | 0 | 0 | 0 | ||||
9.00% cumulative compounding preferred stock, Series A, no shares authorized and issued at October 2, 2016 and 80,000 authorized and issued shares at January 3, 2016, $0.01 par value | 0 | ||||||
Equity in earnings of subsidiaries | 400 | 88 | 2,402 | 452 | |||
Total shareholders' equity | 57,642 | 57,642 | 66,005 | ||||
Noncontrolling interest | 0 | 0 | 0 | ||||
TOTAL EQUITY | 57,642 | 57,642 | 66,005 | ||||
TOTAL LIABILITIES AND EQUITY | 102,832 | 102,832 | 105,074 | ||||
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||||
Cash and cash equivalents | 1,789 | 1,702 | 1,789 | 1,702 | 1,648 | $ 1,757 | |
Trade receivables | 855 | 855 | 809 | ||||
Receivables due from affiliates | 101 | 101 | 319 | ||||
Dividends due from affiliates | 0 | 0 | |||||
Sold receivables | 208 | 208 | 29 | ||||
Inventories | 1,047 | 1,047 | 877 | ||||
Short-term lending due from affiliates | 3,027 | 3,027 | 4,353 | ||||
Other current assets | 423 | 423 | 443 | ||||
Total current assets | 7,450 | 7,450 | 8,478 | ||||
Property, plant and equipment, net | 2,254 | 2,254 | 2,006 | ||||
Goodwill | 33,425 | 33,425 | 32,075 | ||||
Investments in subsidiaries | 0 | 0 | 0 | ||||
Intangible assets, net | 56,220 | 56,220 | 58,282 | ||||
Long-term lending due from affiliates | 2,000 | 2,000 | 2,000 | ||||
Other assets | 961 | 961 | 964 | ||||
TOTAL ASSETS | 102,310 | 102,310 | 103,805 | ||||
Commercial paper and other short-term debt | 14 | 14 | 4 | ||||
Current portion of long-term debt | 19 | 19 | 14 | ||||
Short-term lending due to affiliates | 1,790 | 1,790 | 3,657 | ||||
Trade payables | 1,474 | 1,474 | 1,232 | ||||
Payables due to affiliates | 873 | 873 | 555 | ||||
Accrued marketing | 488 | 488 | 497 | ||||
Accrued postemployment costs | 14 | 14 | 12 | ||||
Income taxes payable | 1,174 | 1,174 | 563 | ||||
Interest payable | 11 | 11 | 15 | ||||
Dividends payable | 0 | 0 | 0 | ||||
Dividends due to affiliates | 0 | 0 | |||||
Other current liabilities | 291 | 291 | 253 | ||||
Total current liabilities | 6,148 | 6,148 | 6,802 | ||||
Long-term debt | 1,010 | 1,010 | 1,008 | ||||
Long-term borrowings due to affiliates | 1,917 | 1,917 | 1,905 | ||||
Deferred income taxes | 19,602 | 19,602 | 20,219 | ||||
Accrued postemployment costs | 267 | 267 | 258 | ||||
Other liabilities | 394 | 394 | 482 | ||||
TOTAL LIABILITIES | 29,338 | 29,338 | 30,674 | ||||
Redeemable noncontrolling interest | 0 | 0 | 23 | ||||
9.00% cumulative compounding preferred stock, Series A, no shares authorized and issued at October 2, 2016 and 80,000 authorized and issued shares at January 3, 2016, $0.01 par value | 0 | ||||||
Equity in earnings of subsidiaries | 0 | $ 0 | 0 | $ 0 | |||
Total shareholders' equity | 72,746 | 72,746 | 72,900 | ||||
Noncontrolling interest | 226 | 226 | 208 | ||||
TOTAL EQUITY | 72,972 | 72,972 | 73,108 | ||||
TOTAL LIABILITIES AND EQUITY | $ 102,310 | $ 102,310 | $ 103,805 |
Supplemental Financial Inform82
Supplemental Financial Information Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 02, 2016 | Sep. 27, 2015 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | $ 2,866 | $ 746 |
Capital expenditures | (836) | (366) |
Proceeds from net investment hedges | 84 | 481 |
Net proceeds from/(payments on) intercompany lending activities | 0 | 0 |
Payments to acquire Kraft Foods Group, Inc., net of cash acquired | 0 | (9,468) |
Additional investments in subsidiaries | 0 | 0 |
Return of capital | 0 | 0 |
Other investing activities, net | 10 | (48) |
Net cash provided by/(used for) investing activities | (742) | (9,401) |
Repayments of long-term debt | (74) | (12,308) |
Proceeds from issuance of long-term debt | 6,981 | 14,823 |
Proceeds from issuance of commercial paper | 4,296 | 0 |
Repayments of commercial paper | (3,660) | 0 |
Net proceeds from/(payments on) intercompany borrowing activities | 0 | 0 |
Proceeds from issuance of common stock to Sponsors | 0 | 10,000 |
Dividends paid-Series A Preferred Stock | (180) | (540) |
Dividends paid-common stock | (2,123) | (637) |
Redemption of Series A Preferred Stock | (8,320) | 0 |
Other intercompany capital stock transactions | 0 | 0 |
Other financing activities, net | 56 | (147) |
Net cash provided by/(used for) financing activities | (3,024) | 11,191 |
Effect of exchange rate changes on cash and cash equivalents | (17) | (397) |
Net increase/(decrease) | (917) | 2,139 |
Balance at beginning of period | 4,837 | 2,298 |
Balance at end of period | 3,920 | 4,437 |
Eliminations | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | (1,636) | (180) |
Capital expenditures | 0 | 0 |
Proceeds from net investment hedges | 0 | 0 |
Net proceeds from/(payments on) intercompany lending activities | (491) | (375) |
Payments to acquire Kraft Foods Group, Inc., net of cash acquired | 0 | |
Additional investments in subsidiaries | 10 | 10,000 |
Return of capital | (8,987) | (1,002) |
Other investing activities, net | 0 | 0 |
Net cash provided by/(used for) investing activities | (9,468) | 8,623 |
Repayments of long-term debt | 0 | 0 |
Proceeds from issuance of long-term debt | 0 | 0 |
Proceeds from issuance of commercial paper | 0 | |
Repayments of commercial paper | 0 | |
Net proceeds from/(payments on) intercompany borrowing activities | 491 | 375 |
Proceeds from issuance of common stock to Sponsors | (10,000) | |
Dividends paid-Series A Preferred Stock | 0 | 0 |
Dividends paid-common stock | 2,303 | 1,177 |
Redemption of Series A Preferred Stock | 0 | |
Other intercompany capital stock transactions | 8,310 | 5 |
Other financing activities, net | 0 | 0 |
Net cash provided by/(used for) financing activities | 11,104 | (8,443) |
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 |
Parent Guarantor | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | 1,636 | 180 |
Capital expenditures | 0 | 0 |
Proceeds from net investment hedges | 0 | 0 |
Net proceeds from/(payments on) intercompany lending activities | 0 | 0 |
Payments to acquire Kraft Foods Group, Inc., net of cash acquired | 0 | |
Additional investments in subsidiaries | 0 | (10,000) |
Return of capital | 8,987 | 997 |
Other investing activities, net | 0 | 0 |
Net cash provided by/(used for) investing activities | 8,987 | (9,003) |
Repayments of long-term debt | 0 | 0 |
Proceeds from issuance of long-term debt | 0 | 0 |
Proceeds from issuance of commercial paper | 0 | |
Repayments of commercial paper | 0 | |
Net proceeds from/(payments on) intercompany borrowing activities | 0 | 0 |
Proceeds from issuance of common stock to Sponsors | 10,000 | |
Dividends paid-Series A Preferred Stock | (180) | (540) |
Dividends paid-common stock | (2,123) | (637) |
Redemption of Series A Preferred Stock | (8,320) | |
Other intercompany capital stock transactions | 0 | 0 |
Other financing activities, net | 0 | 0 |
Net cash provided by/(used for) financing activities | (10,623) | 8,823 |
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 | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | 1,821 | (88) |
Capital expenditures | (605) | (181) |
Proceeds from net investment hedges | 84 | 481 |
Net proceeds from/(payments on) intercompany lending activities | 565 | 721 |
Payments to acquire Kraft Foods Group, Inc., net of cash acquired | (9,535) | |
Additional investments in subsidiaries | (10) | 0 |
Return of capital | 0 | 5 |
Other investing activities, net | 41 | (34) |
Net cash provided by/(used for) investing activities | 75 | (8,543) |
Repayments of long-term debt | (69) | (12,282) |
Proceeds from issuance of long-term debt | 6,978 | 14,033 |
Proceeds from issuance of commercial paper | 4,296 | |
Repayments of commercial paper | (3,660) | |
Net proceeds from/(payments on) intercompany borrowing activities | 74 | 346 |
Proceeds from issuance of common stock to Sponsors | 10,000 | |
Dividends paid-Series A Preferred Stock | 0 | 0 |
Dividends paid-common stock | (2,303) | (1,177) |
Redemption of Series A Preferred Stock | 0 | |
Other intercompany capital stock transactions | (8,320) | 0 |
Other financing activities, net | 50 | (95) |
Net cash provided by/(used for) financing activities | (2,954) | 10,825 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase/(decrease) | (1,058) | 2,194 |
Balance at beginning of period | 3,189 | 541 |
Balance at end of period | 2,131 | 2,735 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net cash provided by/(used for) operating activities | 1,045 | 834 |
Capital expenditures | (231) | (185) |
Proceeds from net investment hedges | 0 | 0 |
Net proceeds from/(payments on) intercompany lending activities | (74) | (346) |
Payments to acquire Kraft Foods Group, Inc., net of cash acquired | 67 | |
Additional investments in subsidiaries | 0 | 0 |
Return of capital | 0 | 0 |
Other investing activities, net | (31) | (14) |
Net cash provided by/(used for) investing activities | (336) | (478) |
Repayments of long-term debt | (5) | (26) |
Proceeds from issuance of long-term debt | 3 | 790 |
Proceeds from issuance of commercial paper | 0 | |
Repayments of commercial paper | 0 | |
Net proceeds from/(payments on) intercompany borrowing activities | (565) | (721) |
Proceeds from issuance of common stock to Sponsors | 0 | |
Dividends paid-Series A Preferred Stock | 0 | 0 |
Dividends paid-common stock | 0 | 0 |
Redemption of Series A Preferred Stock | 0 | |
Other intercompany capital stock transactions | 10 | (5) |
Other financing activities, net | 6 | (52) |
Net cash provided by/(used for) financing activities | (551) | (14) |
Effect of exchange rate changes on cash and cash equivalents | (17) | (397) |
Net increase/(decrease) | 141 | (55) |
Balance at beginning of period | 1,648 | 1,757 |
Balance at end of period | $ 1,789 | $ 1,702 |