Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 01, 2017 | Apr. 29, 2017 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q/A | |
Document Period End Date | Apr. 1, 2017 | |
Amendment Flag | true | |
Amendment Description | The restatement relates to the application of accounting standards update (“ASU”) 2016-15. In August 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-15 related to the classification of certain cash payments and cash receipts on the statement of cash flows. ASU 2016-15 requires companies to classify cash receipts on sold receivables, or consideration received for beneficial interest obtained for transferring trade receivables in securitization transactions, within investing activities in the statement of cash flows. We early adopted ASU 2016-15 during the first quarter of 2017, and this classification should have been made within our statements of cash flows beginning with the Original Form 10-Q, including retrospective application. Our financial statements have been restated to correctly classify cash receipts from the payments on sold receivables (which are cash receipts on the underlying trade receivables that have already been securitized) to cash provided by investing activities (from cash provided by operating activities) within our condensed consolidated statements of cash flows. | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Kraft Heinz Co | |
Entity Central Index Key | 1,637,459 | |
Current Fiscal Year End Date | --12-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1,217,633,003 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Income Statement [Abstract] | ||
Net sales | $ 6,364 | $ 6,570 |
Cost of products sold | 4,063 | 4,192 |
Gross profit | 2,301 | 2,378 |
Selling, general and administrative expenses | 750 | 865 |
Operating income | 1,551 | 1,513 |
Interest expense | 313 | 249 |
Other expense/(income), net | (12) | (8) |
Income/(loss) before income taxes | 1,250 | 1,272 |
Provision for/(benefit from) income taxes | 359 | 372 |
Net income/(loss) | 891 | 900 |
Net income/(loss) attributable to noncontrolling interest | (2) | 4 |
Net income/(loss) attributable to common shareholders | $ 893 | $ 896 |
Earnings Per Share [Abstract] | ||
Basic earnings/(loss) per share (in dollars per share) | $ 0.73 | $ 0.74 |
Diluted earnings/(loss) per share (in dollars per share) | 0.73 | 0.73 |
Dividends declared (in dollars per share) | $ 0.60 | $ 0.575 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income/(loss) | $ 891 | $ 900 |
Other comprehensive income/(loss), net of tax: | ||
Foreign currency translation adjustments | 307 | 272 |
Net deferred gains/(losses) on net investment hedges | (51) | (60) |
Net actuarial gains/(losses) arising during the period | (10) | 0 |
Reclassification of net postemployment benefit losses/(gains) | (55) | (54) |
Net deferred gains/(losses) on cash flow hedges | (34) | (18) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | 20 | (22) |
Total other comprehensive income/(loss) | 177 | 118 |
Total comprehensive income/(loss) | 1,068 | 1,018 |
Comprehensive income/(loss) attributable to noncontrolling interest | (4) | 11 |
Comprehensive income/(loss) attributable to common shareholders | $ 1,072 | $ 1,007 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Apr. 01, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash and cash equivalents | $ 3,242 | $ 4,204 |
Trade receivables (net of allowances of $30 at April 1, 2017 and $20 at December 31, 2016) | 886 | 769 |
Sold receivables | 588 | 129 |
Inventories | 3,151 | 2,684 |
Other current assets | 1,008 | 967 |
Total current assets | 8,875 | 8,753 |
Property, plant and equipment, net | 6,693 | 6,688 |
Goodwill | 44,300 | 44,125 |
Intangible assets, net | 59,330 | 59,297 |
Other assets | 1,604 | 1,617 |
TOTAL ASSETS | 120,802 | 120,480 |
LIABILITIES AND EQUITY | ||
Commercial paper and other short-term debt | 909 | 645 |
Current portion of long-term debt | 2,023 | 2,046 |
Trade payables | 3,936 | 3,996 |
Accrued marketing | 599 | 749 |
Accrued postemployment costs | 157 | 157 |
Income taxes payable | 424 | 255 |
Interest payable | 346 | 415 |
Other current liabilities | 989 | 1,238 |
Total current liabilities | 9,383 | 9,501 |
Long-term debt | 29,748 | 29,713 |
Deferred income taxes | 20,910 | 20,848 |
Accrued postemployment costs | 2,016 | 2,038 |
Other liabilities | 801 | 806 |
TOTAL LIABILITIES | 62,858 | 62,906 |
Commitments and Contingencies (Note 13) | ||
Equity: | ||
Common stock, $0.01 par value (5,000,000,000 shares authorized; 1,220,191,898 shares issued and 1,217,543,284 shares outstanding at April 1, 2017; 1,218,947,088 shares issued and 1,216,475,740 shares outstanding at December 31, 2016) | 12 | 12 |
Additional paid-in capital | 58,642 | 58,593 |
Retained earnings/(deficit) | 750 | 588 |
Accumulated other comprehensive income/(losses) | (1,449) | (1,628) |
Treasury stock, at cost | (223) | (207) |
Total shareholders' equity | 57,732 | 57,358 |
Noncontrolling interest | 212 | 216 |
TOTAL EQUITY | 57,944 | 57,574 |
TOTAL LIABILITIES AND EQUITY | $ 120,802 | $ 120,480 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Apr. 01, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowances | $ 30 | $ 20 |
Common stock, shares issued | 1,220,191,898 | 1,218,947,088 |
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 | 1,217,543,284 | 1,216,475,740 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Equity - 3 months ended Apr. 01, 2017 - 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 Dec. 31, 2016 | $ 57,574 | $ 12 | $ 58,593 | $ 588 | $ (1,628) | $ (207) | $ 216 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income/(loss) | 891 | 893 | (2) | ||||
Other comprehensive income/(loss) | 177 | 179 | (2) | ||||
Dividends declared-common stock | (731) | (731) | |||||
Exercise of stock options, issuance of other stock awards, and other | (33) | (49) | 16 | ||||
Ending balance at Apr. 01, 2017 | $ 57,944 | $ 12 | $ 58,642 | $ 750 | $ (1,449) | $ (223) | $ 212 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (As Restated) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income/(loss) | $ 891 | $ 900 |
Adjustments to reconcile net income/(loss) to operating cash flows: | ||
Depreciation and amortization | 262 | 363 |
Amortization of postretirement benefit plans prior service costs/(credits) | (82) | (50) |
Equity award compensation expense | 11 | 13 |
Deferred income tax provision/(benefit) | 105 | 27 |
Pension contributions | (11) | (169) |
Other items, net | 16 | (111) |
Changes in current assets and liabilities: | ||
Trade receivables | (1,040) | (686) |
Inventories | (492) | (273) |
Accounts payable | 62 | 59 |
Other current assets | (67) | (45) |
Other current liabilities | (270) | (184) |
Net cash provided by/(used for) operating activities | (615) | (156) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash receipts on sold receivables | 464 | 426 |
Capital expenditures | (368) | (303) |
Other investing activities, net | 38 | 10 |
Net cash provided by/(used for) investing activities | 134 | 133 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of commercial paper | 2,324 | 0 |
Repayments of commercial paper | (2,068) | 0 |
Dividends paid-common stock | (736) | (667) |
Other financing activities, net | (25) | 40 |
Net cash provided by/(used for) financing activities | (505) | (627) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 13 | 44 |
Cash, Cash Equivalents, and Restricted Cash [Abstract] | ||
Net increase/(decrease) | (973) | (606) |
Balance at beginning of period | 4,255 | 4,912 |
Balance at end of period | 3,282 | 4,306 |
Beneficial interest obtained in exchange for securitized trade receivables | $ 880 | $ 627 |
Background and Basis of Present
Background and Basis of Presentation (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
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 December 31, 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 December 31, 2016. The results for interim periods are not necessarily indicative of future or annual results. Restatement of Unaudited Condensed Consolidated Financial Statements: We have restated our unaudited condensed consolidated financial statements to correct a misclassification within our condensed consolidated statements of cash flows. The restatement relates to the application of ASU 2016-15, which requires us to classify cash receipts on sold receivables, or consideration received for beneficial interest obtained for transferring trade receivables in securitization transactions, within investing activities, and which requires retrospective application. In addition, in accordance with ASU 2016-15, at inception of the beneficial interest obtained, the interest is no longer presented on a gross basis within net cash provided by/(used for) operating activities and has been disclosed as a non-cash activity. We early adopted ASU 2016-15 during the first quarter of 2017; however, we incorrectly continued to classify cash receipts on sold receivables within operating activities instead of investing activities. The effects of the restatement on the net cash provided by/(used for) operating activities and net cash provided by/(used for) investing activities of our unaudited condensed consolidated statements of cash flows for the three months ended April 1, 2017 and April 3, 2016 are as follows (in millions): For the Three Months Ended April 1, April 3, As Reported Adjustment As Restated As Reported Adjustment As Restated Trade receivables $ (118 ) $ (922 ) $ (1,040 ) $ (38 ) $ (648 ) $ (686 ) Sold receivables (458 ) 458 — (222 ) 222 — Net cash provided by/(used for) operating activities (151 ) (464 ) (615 ) 270 (426 ) (156 ) Cash receipts on sold receivables $ — $ 464 $ 464 $ — $ 426 $ 426 Net cash provided by/(used for) investing activities (330 ) 464 134 (293 ) 426 133 In connection with this restatement, we also corrected other immaterial cash flow misstatements within operating activities, which overstated the amount of beneficial interest obtained in the non-cash exchange from the securitization of trade receivables. There were no impacts to net cash provided by/(used for) financing activities within our unaudited condensed consolidated statements of cash flows and there was no impact on the net increase/(decrease) in cash, cash equivalents, and restricted cash resulting from restatement. The impacts of the restatements have been reflected throughout these unaudited financial statements, including the applicable footnotes, as appropriate. Organization: On July 2, 2015, 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. (“3G Capital”), following their acquisition of H. J. Heinz Company (the “2013 Merger”) on June 7, 2013. Accounting Standards Adopted in the Current Period: In March 2016, the FASB issued ASU 2016-09 related to equity-based award accounting and presentation. Under this guidance, excess tax benefits upon the exercise of share- based payment awards are recognized in our tax provision rather than within equity. Cash flows related to excess tax benefits are classified as operating activities rather than financing activities. Additionally, cash flows related to employee tax withholdings on restricted share vesting are classified as financing activities. This ASU was effective in the first quarter of 2017. We adopted the guidance related to excess tax benefits on a prospective basis. As a result, we recognized a tax benefit of $8 million in our condensed consolidated statement of income for the three months ended April 1, 2017 related to our excess tax benefits upon the exercise of share-based payment awards. We retrospectively adopted the guidance related to cash flow classification of employee tax withholdings on restricted share vesting. There was no related impact on our statement of cash flows for the three months ended April 3, 2016 . Our equity award compensation cost continues to reflect estimated forfeitures. In August 2016, the FASB issued ASU 2016-15 related to the classification of certain cash payments and cash receipts on the statement of cash flows. This ASU provided guidance on eight specific cash flow classification matters, which must be adopted in the same period using a retrospective transition method. We early adopted this ASU in the first quarter of 2017. We now classify consideration received for beneficial interest obtained for transferring trade receivables in securitization transactions as investing activities instead of operating activities. Accordingly, we reclassified $426 million of cash receipts from the payments on sold receivables (which are cash receipts on the underlying trade receivables that have already been securitized) to cash provided by investing activities (from cash provided by operating activities) for the three months ended April 3, 2016. The related impact of the classification of cash receipts on sold receivables on our consolidated statement of cash flows for the year ended December 31, 2016 was $2.6 billion . Additionally, we now classify cash payments for debt prepayment and debt extinguishment costs as cash outflows from financing activities rather than cash outflows from operating activities, which had no impact on our condensed consolidated statements of cash flows for the three months ended April 3, 2016 or our consolidated statement of cash flows for the year ended December 31, 2016. In November 2016, the FASB issued ASU 2016-18 requiring the statement of cash flows to explain the change in restricted cash and restricted cash equivalents, in addition to cash and cash equivalents. We early adopted this ASU in the first quarter of 2017. Accordingly, we restated our cash and cash equivalents balances in the condensed consolidated statements of cash flows to include restricted cash of $51 million at December 31, 2016 , $108 million at April 3, 2016 , and $75 million at January 3, 2016 . Additionally, cash outflows from investing activities related to dividends paid on our Series A Preferred Stock were reduced to reflect $32 million which was moved to escrow and did not reflect a cash disbursement for the three months ended April 3, 2016. As required by the ASU, we have provided a reconciliation from cash and cash equivalents as presented on our condensed consolidated balance sheets to cash, cash equivalents, and restricted cash as reported on our condensed consolidated statements of cash flows. See Note 3, Restricted Cash , for this reconciliation, as well as a discussion of the nature of our restricted cash balances. Recently Issued Accounting Standards: In May 2014, the FASB issued ASU 2014-09, which 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 using a full retrospective method or a modified retrospective transition method, with a cumulative-effect adjustment as of the date of adoption. While we are still evaluating the impact this ASU will have on our financial statements and related disclosures, we have completed our preliminary scoping reviews and have made progress in our assessment phase. We have focused our reviews on the revenue streams in the U.S., Canada, and Europe as they are our most significant. At this time, we believe the potential impacts on our existing accounting policies may be associated with our consumer incentive and trade promotion programs. We will adopt the new standard on January 1, 2018. We are still evaluating our application method. Our ability to adopt using the full retrospective method is dependent on a number of factors, including system readiness, which may include software procured from third-party providers, and finalizing our assessment of information necessary to restate prior period financial statements. In February 2016, the FASB issued ASU 2016-02, which 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. While we are still evaluating the impact this ASU will have on our financial statements and related disclosures, we have initiated our scoping reviews and have made progress in our assessment phase. Based on our initial reviews, we expect that the adoption will increase the assets and liabilities on our condensed consolidated balance sheets. We are still evaluating our adoption date. In October 2016, the FASB issued ASU 2016-16 related to the income tax accounting impacts of intra-entity transfers of assets other than inventory, such as intellectual property and property, plant and equipment. Under the new accounting guidance, current and deferred income taxes should be recognized upon transfer of the assets. Previously, recognition of current and deferred income taxes was prohibited until the asset was sold to an external third party. This ASU will be effective beginning in the first quarter of our fiscal year 2018. Early adoption is permitted but must be adopted in the first interim period of the annual period for which the ASU is adopted. The new guidance must be adopted on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the adoption period. While we are still evaluating the impact that this ASU will have on our financial statements and related disclosures, we will adopt this ASU in the first quarter of 2018. In January 2017, the FASB issued ASU 2017-04 related to goodwill impairment testing. This ASU eliminates Step 2 from the goodwill impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, the entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. Previously, if the fair value of a reporting unit was lower than its carrying amount (Step 1), an entity was required to calculate any impairment charge by comparing the implied fair value of goodwill with its carrying amount (Step 2). Additionally, under the new standard, entities that have reporting units with zero or negative carrying amounts will no longer be required to perform the qualitative assessment to determine whether to perform Step 2 of the goodwill impairment test. As a result, reporting units with zero or negative carrying amounts will generally be expected to pass the simplified impairment test; however, additional disclosure will be required of those entities. This ASU will be effective in the first quarter of our fiscal year 2020. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The new guidance must be adopted on a prospective basis. While we are still evaluating the timing of adoption, we currently do not expect this ASU to have a material impact on our financial statements and related disclosures. In March 2017, the FASB issued ASU 2017-07 related to the presentation of net periodic benefit cost (pension and postretirement cost). Under the new guidance, the service cost component of net periodic benefit cost must be presented in the same statement of income line item as other employee compensation costs arising from services rendered by employees during the period. Other components of net periodic benefit cost must be disaggregated from the service cost component in the statements of income and must be presented outside the operating income subtotal. Additionally, only the service cost component will be eligible for capitalization in assets. The new guidance must be applied retrospectively for the statement of income presentation of service cost components and other net periodic benefit cost components and prospectively for the capitalization of the service cost components. The ASU will become effective in the first quarter of our fiscal year 2018. Early adoption is permitted but must occur within the first interim period of the annual period adopted. We are currently evaluating the impact that this ASU will have on our financial statements and related disclosures. |
Integration and Restructuring E
Integration and Restructuring Expenses (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
Restructuring and Related Activities [Abstract] | |
Integration and Restructuring Expenses | Integration and Restructuring Expenses As part of our restructuring activities, we incur expenses that qualify as exit and disposal costs under U.S. GAAP. These include severance and employee benefit costs and other exit costs. Severance and employee benefit costs primarily relate to cash severance, non-cash severance, including accelerated equity award compensation expense, and pension and other termination benefits. Other exit costs primarily relate to lease and contract terminations. 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 under U.S. GAAP. These include asset-related costs and other implementation costs. Asset-related costs primarily relate to accelerated depreciation and asset impairment charges. Other implementation costs primarily relate to start-up costs of new facilities, professional fees, asset relocation costs, and costs to exit facilities. 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. 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: Following the 2015 Merger, we announced a multi-year program (the “Integration Program”) designed to reduce costs, streamline and simplify our operating structure as well as optimize our production and supply chain network across our businesses in the United States and Canada segments. We expect to incur pre-tax costs of $2.0 billion related to the Integration Program, with approximately 60% reflected in cost of products sold within our United States and Canada segments. These pre-tax costs are comprised of the following categories: • Organization costs ( $400 million ) associated with our plans to streamline and simplify our operating structure, resulting in workforce reduction (primarily severance and employee benefit costs). • Footprint costs ( $1.2 billion ) associated with our plans to optimize our production and supply chain network, resulting in workforce reduction and facility closures and consolidations (primarily asset-related costs and severance and employee benefit costs). • Other costs ( $400 million ) incurred as a direct result of integration activities, including other exit costs (lease and contract terminations) and other implementation costs (professional services and other third-party fees). Overall, as part of the Integration Program, we expect to eliminate 5,150 positions, close net six factories, and consolidate our distribution network. At April 1, 2017 , the total Integration Program liability related primarily to the elimination of general salaried and factory positions across the United States and Canada, 3,800 of whom have left the company by April 1, 2017 . Related to the Integration Program, we incurred costs of $127 million for the three months ended April 1, 2017 and $241 million for the three months ended April 3, 2016 . As of April 1, 2017 , we have incurred approximately $1.8 billion of cumulative costs under the Integration Program, including $715 million of severance and employee benefit costs, $731 million of non-cash asset-related costs, $293 million of other implementation costs, and $104 million of other exit costs. We expect that approximately 60% of the Integration Program expenses will be cash expenditures. Our liability balance for Integration Program costs that qualify as U.S. GAAP exit and disposal costs (i.e., severance and employee benefit costs and other exit costs), was (in millions): Severance and Employee Benefit Costs Other Exit Costs (a) Total Balance at December 31, 2016 $ 99 $ 10 $ 109 Charges 34 9 43 Cash payments (22 ) (1 ) (23 ) Non-cash utilization (8 ) (2 ) (10 ) Balance at April 1, 2017 $ 103 $ 16 $ 119 (a) Other exit costs primarily represent contract and lease terminations. We expect that a substantial portion of the Integration Program liability as of April 1, 2017 will be paid in 2017. Restructuring Activities: In addition to our Integration Program in North America, we have a small number of other restructuring programs globally, which are focused primarily on workforce reduction and factory closure and consolidation. These programs resulted in expenses of of $21 million for the three months ended April 1, 2017 , including $10 million severance and employee benefit costs, $1 million non-cash asset-related costs, and $10 million other implementation costs. Such expenses for the three months ended April 3, 2016 were $19 million , including $10 million severance and employee benefit costs, $8 million other implementation costs, and $1 million other exit costs. Our liability balance for restructuring project costs that qualify as U.S. GAAP exit and disposal costs (i.e., severance and employee benefit costs and other exit costs), was (in millions): Severance and Employee Benefit Costs Other Exit Costs (a) Total Balance at December 31, 2016 $ 12 $ 25 $ 37 Charges 10 — 10 Cash payments (12 ) (1 ) (13 ) Non-cash utilization (4 ) — (4 ) Balance at April 1, 2017 $ 6 $ 24 $ 30 (a) Other exit costs primarily represent contract and lease terminations. We expect the liability for severance and employee benefit costs as of April 1, 2017 to be paid in 2017. The liability for other exit costs primarily relates to lease obligations associated with restructuring programs executed prior to the 2015 Merger. The cash impact of these obligations will continue for the duration of the lease terms, which expire between 2017 and 2026. Total Integration and Restructuring: Total expenses related to our Integration Program and restructuring activities recorded in cost of products sold and selling, general and administrative expenses (“SG&A”) for the years presented were (in millions): For the Three Months Ended April 1, April 3, Severance and employee benefit costs - COGS $ 19 $ 6 Severance and employee benefit costs - SG&A 25 32 Asset-related costs - COGS 75 142 Asset-related costs - SG&A 7 14 Other costs - COGS 9 33 Other costs - SG&A 13 33 $ 148 $ 260 We do not include Integration Program and restructuring expenses within Segment Adjusted EBITDA (as defined in Note 15, Segment Reporting ). The pre-tax impact of allocating such expenses to our segments would have been (in millions): For the Three Months Ended April 1, April 3, United States $ 108 $ 199 Canada 10 18 Europe 14 15 Rest of World — — General corporate expenses 16 28 $ 148 $ 260 |
Restricted Cash (Notes)
Restricted Cash (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Restricted Cash | Restricted Cash The following table provides a reconciliation of cash and cash equivalents, as reported on our condensed consolidated balance sheets, to cash, cash equivalents, and restricted cash, as reported on our condensed consolidated statements of cash flows (in millions): April 1, December 31, 2016 Cash and cash equivalents $ 3,242 $ 4,204 Restricted cash included in other assets (current) 36 42 Restricted cash included in other assets (noncurrent) 4 9 Cash, cash equivalents, and restricted cash $ 3,282 $ 4,255 Our restricted cash primarily relates to withholding taxes on our common stock dividends to 3G Capital. |
Inventories (Notes)
Inventories (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories at April 1, 2017 and December 31, 2016 were (in millions): April 1, 2017 December 31, 2016 Packaging and ingredients $ 716 $ 542 Work in process 493 388 Finished product 1,942 1,754 Inventories $ 3,151 $ 2,684 The increase in inventories in the first quarter of 2017 is primarily due to seasonality, as well as lower net sales for the period. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill: Changes in the carrying amount of goodwill from December 31, 2016 to April 1, 2017 , by segment, were (in millions): United States Canada Europe Rest of World Total Balance at December 31, 2016 $ 33,696 $ 4,913 $ 2,778 $ 2,738 $ 44,125 Translation adjustments — 44 51 80 175 Balance at April 1, 2017 $ 33,696 $ 4,957 $ 2,829 $ 2,818 $ 44,300 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 Europe 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 2016 annual impairment testing date). Our goodwill balance consists of 18 reporting units and had an aggregate carrying value of $44.3 billion as of April 1, 2017 . 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 was not a significant excess of fair values over carrying values as of April 4, 2016 (our 2016 annual impairment testing date). 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 period ended April 1, 2017 that indicated it was more likely than not that our goodwill was impaired. There were no accumulated impairment losses to goodwill as of April 1, 2017 . Indefinite-lived intangible assets: Indefinite-lived intangible assets, which primarily consisted of trademarks, were (in millions): Balance at December 31, 2016 $ 53,307 Translation adjustments 80 Balance at April 1, 2017 $ 53,387 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 2016 annual 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 $53.4 billion as of April 1, 2017 . 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 was not a significant excess of fair values over carrying values as of April 4, 2016 (our 2016 annual impairment testing date). 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 period ended April 1, 2017 that indicated it was more likely than not that our indefinite-lived intangible assets were impaired. Definite-lived intangible assets: Definite-lived intangible assets at April 1, 2017 and December 31, 2016 were (in millions): April 1, 2017 December 31, 2016 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks $ 2,346 $ (199 ) $ 2,147 $ 2,337 $ (172 ) $ 2,165 Customer-related assets 4,199 (413 ) 3,786 4,184 (369 ) 3,815 Other 13 (3 ) 10 13 (3 ) 10 $ 6,558 $ (615 ) $ 5,943 $ 6,534 $ (544 ) $ 5,990 Amortization expense for definite-lived intangible assets was $67 million for the three months ended April 1, 2017 and $66 million for the three months ended April 3, 2016 . Aside from amortization expense, the changes in definite-lived intangible assets from December 31, 2016 to April 1, 2017 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 $270 million . |
Income Taxes (Notes)
Income Taxes (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
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 effective tax rate is a composite rate reflecting the earnings in various locations and the applicable tax rates. Additionally, our quarterly income tax provision is determined based on our estimated full year effective tax rate, adjusted for tax attributable to infrequent or unusual items, which are recognized on a discrete period basis in the income tax provision for the period in which they occur. Our effective tax rate was 28.7% for the three months ended April 1, 2017 , compared to 29.2% for the three months ended April 3, 2016 . The decrease in our effective tax rate was driven by the favorable impact of net discrete items, primarily related to reversals of uncertain tax position reserves in foreign jurisdictions. The favorable impact of current year discrete items was partially offset by the unfavorable impact of a higher percentage of U.S. income reflected in our estimated full year effective tax rate for 2017 compared to 2016. |
Employees' Stock Incentive Plan
Employees' Stock Incentive Plans (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
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 2017. 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 Outstanding at December 31, 2016 20,560,140 $ 37.39 Granted 1,170,685 91.40 Forfeited (126,206 ) 44.78 Exercised (1,126,852 ) 34.00 Outstanding at April 1, 2017 20,477,767 40.62 The aggregate intrinsic value of stock options exercised during the period was $65 million for the three months ended April 1, 2017 . Restricted Stock Units: Our restricted stock unit (“RSU”) activity and related information was: Number of Units Weighted Average Grant Date Fair Value (per share) Outstanding at December 31, 2016 806,744 $ 71.95 Granted 1,640,535 84.97 Forfeited (19,395 ) 76.65 Vested (117,958 ) 72.96 Outstanding at April 1, 2017 2,309,926 81.15 The aggregate fair value of RSUs that vested during the period was $11 million for the three months ended April 1, 2017 . Total Equity Awards: The compensation cost related to equity awards was primarily recognized in general corporate expenses within SG&A. Equity award compensation cost and the related tax benefit was (in millions): For the Three Months Ended April 1, April 3, Pre-tax compensation cost $ 11 $ 13 Tax benefit (3 ) (4 ) After-tax compensation cost $ 8 $ 9 Unrecognized compensation cost related to unvested equity awards was $220 million at April 1, 2017 and is expected to be recognized over a weighted average period of four years. |
Postemployment Benefits (Notes)
Postemployment Benefits (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Postemployment Benefits | Postemployment Benefits Pension Plans Components of Net Pension Cost/(Benefit): Net pension cost/(benefit) consisted of the following (in millions): For the Three Months Ended U.S. Plans Non-U.S. Plans April 1, April 3, April 1, April 3, Service cost $ 3 $ 3 $ 4 $ 6 Interest cost 45 53 16 21 Expected return on plan assets (65 ) (74 ) (43 ) (46 ) Settlements — (6 ) — — Special/contractual termination benefits 7 — 6 — Other 2 — (9 ) — Net pension cost/(benefit) $ (8 ) $ (24 ) $ (26 ) $ (19 ) We capitalized a portion of net pension costs/(benefits) into inventory based on our production activities. These amounts are included in the table above. Employer Contributions: In the first quarter of 2017, we contributed $11 million to our non-U.S. pension plans. We did no t contribute to our U.S. pension plans in the first quarter of 2017. Based on our contribution strategy, we plan to make further contributions of approximately $150 million to our U.S. plans and approximately $45 million to our non-U.S. plans during the remainder of 2017. However, our actual contributions and plans may change due to many factors, including timing of regulatory approval for the windup of our Canadian plans; 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 (in millions): For the Three Months Ended April 1, April 3, Service cost $ 2 $ 4 Interest cost 13 16 Amortization of prior service costs/(credits) (90 ) (82 ) Net postretirement cost/(benefit) $ (75 ) $ (62 ) We capitalized a portion of net postretirement costs/(benefits) into inventory based on our production activities. These amounts are included in the table above. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income/(Losses) (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income/(Losses) | Accumulated Other Comprehensive Income/(Losses) The components of, and changes in, accumulated other comprehensive income/(losses), net of tax, were as follows (in millions): Foreign Currency Translation Adjustments Net Postemployment Benefit Plan Adjustments Net Cash Flow Hedge Adjustments Total Balance as of December 31, 2016 $ (2,412 ) $ 772 $ 12 $ (1,628 ) Foreign currency translation adjustments 309 — — 309 Net deferred gains/(losses) on net investment hedges (51 ) — — (51 ) Net postemployment benefit gains/(losses) arising during the period — (10 ) — (10 ) Reclassification of net postemployment benefit losses/(gains) — (55 ) — (55 ) Net deferred gains/(losses) on cash flow hedges — — (34 ) (34 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income — — 20 20 Total other comprehensive income/(loss) 258 (65 ) (14 ) 179 Balance as of April 1, 2017 $ (2,154 ) $ 707 $ (2 ) $ (1,449 ) 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) were as follows (in millions): For the Three Months Ended April 1, April 3, Before Tax Amount Tax Net of Tax Amount Before Tax Amount Tax Net of Tax Amount Foreign currency translation adjustments $ 309 $ — $ 309 $ 265 $ — $ 265 Net deferred gains/(losses) on net investment hedges (78 ) 27 (51 ) (84 ) 24 (60 ) Net actuarial gains/(losses) arising during the period (12 ) 2 (10 ) — — — Reclassification of net postemployment benefit losses/(gains) (90 ) 35 (55 ) (88 ) 34 (54 ) Net deferred gains/(losses) on cash flow hedges (39 ) 5 (34 ) (28 ) 10 (18 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income 17 3 20 (26 ) 4 (22 ) The amounts reclassified from accumulated other comprehensive income/(losses) 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/(Loss) is Presented For the Three Months Ended April 1, April 3, Losses/(gains) on cash flow hedges: Foreign exchange contracts $ — $ (1 ) Net sales Foreign exchange contracts 1 (29 ) Cost of products sold Foreign exchange contracts 15 3 Other expense/(income), net Interest rate contracts 1 1 Interest expense Losses/(gains) on cash flow hedges before income taxes 17 (26 ) Losses/(gains) on cash flow hedges income taxes 3 4 Losses/(gains) on cash flow hedges $ 20 $ (22 ) Losses/(gains) on postemployment benefits: Amortization of unrecognized losses/(gains) $ — $ — (a) Amortization of prior service costs/(credits) (90 ) (82 ) (a) Settlement and curtailments losses/(gains) — (6 ) (a) Losses/(gains) on postemployment benefits before income taxes (90 ) (88 ) Losses/(gains) on postemployment benefits income taxes 35 34 Losses/(gains) on postemployment benefits $ (55 ) $ (54 ) (a) These components are included in the computation of net periodic postemployment benefit costs. See Note 8, Postemployment Benefits , for additional information. In this note we have excluded activity and balances related to noncontrolling interest (which was primarily comprised of foreign currency translation adjustments) due to its insignificance. |
Financial Instruments (Notes)
Financial Instruments (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
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 December 31, 2016 for additional information on our overall risk management strategies, our use of derivatives, and our related accounting policies. Derivative Volume: The notional values of our derivative instruments at April 1, 2017 and December 31, 2016 were (in millions): Notional Amount April 1, 2017 December 31, 2016 Commodity contracts $ 641 $ 459 Foreign exchange contracts 3,048 2,997 Cross-currency contracts 3,173 3,173 Fair Value of Derivative Instruments: The fair values and the levels within the fair value hierarchy of derivative instruments recorded on the consolidated balance sheets at April 1, 2017 and December 31, 2016 were (in millions): April 1, 2017 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 $ — $ — $ 35 $ 23 $ — $ — $ 35 $ 23 Cross-currency contracts — — 549 40 — — 549 40 Derivatives not designated as hedging instruments: Commodity contracts 16 39 2 3 — — 18 42 Foreign exchange contracts — — 37 1 — — 37 1 Cross-currency contracts — — 43 — — — 43 — Total fair value $ 16 $ 39 $ 666 $ 67 $ — $ — $ 682 $ 106 December 31, 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 $ — $ — $ 69 $ 13 $ — $ — $ 69 $ 13 Cross-currency contracts — — 580 36 — — 580 36 Derivatives not designated as hedging instruments: Commodity contracts 28 7 — — — — 28 7 Foreign exchange contracts — — 35 30 — — 35 30 Cross-currency contracts — — 44 — — — 44 — Total fair value $ 28 $ 7 $ 728 $ 79 $ — $ — $ 756 $ 86 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 consolidated balance sheets. If the derivative financial instruments had been netted on the consolidated balance sheets, the asset and liability positions each would have been reduced by $69 million at April 1, 2017 and $67 million at December 31, 2016 . No material amounts of collateral were received or posted on our derivative assets and liabilities at April 1, 2017 . Level 1 financial assets and liabilities consist of commodity future and options contracts and are valued using quoted prices in active markets for identical assets and liabilities. Level 2 financial assets and liabilities consist of commodity forwards, foreign exchange forwards, and cross-currency swaps. Commodity forwards are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied by the notional amount. Foreign exchange forwards are valued using an income approach based on observable market forward rates less the contract rate multiplied by the notional amount. Cross-currency swaps are valued based on observable market spot and swap rates. Our calculation of the fair value of financial instruments takes into consideration the risk of nonperformance, including counterparty credit risk. There have been no transfers between Levels 1, 2, and 3 in any period presented. The fair values of our asset derivatives are recorded within other current assets and other assets. The fair values of our liability derivatives are recorded within other current liabilities and other liabilities. Net Investment Hedging: At April 1, 2017 , the principal amounts of foreign denominated debt designated as net investment hedges totaled €2,550 million and £400 million . At April 1, 2017 , 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 We also periodically enter into shorter-dated foreign currency contracts that are designated as net investment hedges. At April 1, 2017 , we had a Chinese renminbi foreign currency contract with an aggregate USD notional amount of $120 million . Hedge Coverage: At April 1, 2017 , we had entered into contracts designated as hedging instruments, which hedge transactions for the following durations: • foreign exchange contracts for periods not exceeding the next 14 months and • cross-currency contracts for periods not exceeding the next three years. At April 1, 2017 , 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 18 months, • foreign exchange contracts for periods not exceeding the next 11 months, and • cross-currency contracts for periods not exceeding the next two years. Hedge Ineffectiveness: We record pre-tax gains or losses reclassified from accumulated other comprehensive income/(losses) due to ineffectiveness for foreign exchange contracts related to forecasted transactions in other expense/(income), net. Deferred Hedging Gains and Losses: Based on our valuation at April 1, 2017 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 insignificant. 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 consolidated statements of income and statements of comprehensive income: For the Three Months Ended April 1, April 3, Commodity Contracts Foreign Exchange Cross-Currency Contracts Interest Rate Contracts Commodity Contracts Foreign Exchange Cross-Currency Contracts Interest Rate (in millions) Derivatives designated as hedging instruments: Cash flow hedges: Gains/(losses) recognized in other comprehensive income (effective portion) $ — $ (39 ) $ — $ — $ — $ (27 ) $ — $ — Net investment hedges: Gains/(losses) recognized in other comprehensive income (effective portion) — (4 ) (30 ) — — — (65 ) — Total gains/(losses) recognized in other comprehensive income (effective portion) $ — $ (43 ) $ (30 ) $ — $ — $ (27 ) $ (65 ) $ — Cash flow hedges reclassified to net income/(loss): Net sales $ — $ — $ — $ — $ — $ 1 $ — $ — Cost of products sold (effective portion) — (1 ) — — — 29 — — Other expense/(income), net — (15 ) — — — (3 ) — — Interest expense — — — (1 ) — — — (1 ) — (16 ) — (1 ) — 27 — (1 ) Derivatives not designated as hedging instruments: Gains/(losses) on derivatives recognized in cost of products sold (37 ) — — — (18 ) — — — Gains/(losses) on derivatives recognized in other expense/(income), net — 2 (1 ) — — (75 ) (7 ) — (37 ) 2 (1 ) — (18 ) (75 ) (7 ) — Total gains/(losses) recognized in statements of income $ (37 ) $ (14 ) $ (1 ) $ (1 ) $ (18 ) $ (48 ) $ (7 ) $ (1 ) Related to our non-derivative, foreign denominated debt instruments designated as net investment hedges, we recognized pre-tax losses in other comprehensive income/(loss) of $44 million for the three months ended April 1, 2017 and $19 million for the three months ended April 3, 2016 . |
Financing Arrangements (Notes)
Financing Arrangements (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
Transfers and Servicing [Abstract] | |
Financing Arrangements | Financing Arrangements We utilize accounts receivable securitization and factoring programs (the “Programs”) globally for our working capital needs and to provide efficient liquidity. We operate these Programs such that we generally utilize the majority of the available aggregate cash consideration limits. We account for transfers of receivables pursuant to the Programs as a sale and remove them from our condensed consolidated balance sheets. Under the Programs, we generally receive cash consideration up to a certain limit and record a non-cash exchange for sold receivables for the remainder of the purchase price. We maintain a “beneficial interest,” or a right to collect cash, in the sold receivables. Cash receipts from the payments on sold receivables (which are cash receipts on the underlying trade receivables that have already been securitized in these Programs) is classified as investing activities and presented as cash receipts on sold receivables on our condensed consolidated statements of cash flows. These cash receipts represent the consideration received for beneficial interest obtained for transferring trade receivables in securitization transactions. The carrying value of trade receivables removed from our condensed consolidated balance sheets in connection with the Programs was $1.2 billion at April 1, 2017 and $1.0 billion at December 31, 2016. The carrying value of the sold receivables, which approximated the fair value, was $588 million at April 1, 2017 and $129 million at December 31, 2016. See Note 14, Financing Arrangements , to our consolidated financial statements for the year ended December 31, 2016 in our Annual Report on Form 10-K for additional information on the Programs. |
Venezuela - Foreign Currency an
Venezuela - Foreign Currency and Inflation (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
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 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 April 1, 2017 , 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 the Marginal Currency System “SIMADI”) averaged BsF 694 per U.S. dollar during the first quarter of 2017 and was BsF 710 per U.S. dollar at April 1, 2017 . We have had access to U.S. dollars at DICOM rates in 2017. As of April 1, 2017 , 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 no settlements at the official exchange rate of BsF 10 per U.S. dollar in 2017. At April 1, 2017 , we had outstanding requests of $26 million 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 (the official exchange rate until March 10, 2016). During the three months ended April 1, 2017 , we remeasured the monetary assets and liabilities, as well as the operating results, of our Venezuelan subsidiary at floating DICOM rates. This remeasurement resulted in a nonmonetary currency devaluation loss of $8 million for the three months ended April 1, 2017 , which was recorded in other expense/(income), net, in the condensed consolidated statement of income for the period then ended. We continue to monitor the DICOM rate, and the nonmonetary assets supported by the underlying operations in Venezuela, for impairment. The currency has ranged between BsF 674 and BsF 710 per U.S. dollar from December 31, 2016 to April 1, 2017 . No triggers for impairment resulted from this movement. |
Commitments, Contingencies and
Commitments, Contingencies and Debt (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
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 (formerly known as Kraft Foods Inc.) 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: We had commercial paper outstanding of $900 million at April 1, 2017 and $642 million at December 31, 2016 . See Note 11, Debt , to our consolidated financial statements for the year ended December 31, 2016 in our Annual Report on Form 10-K for additional information on our borrowing arrangements. Fair Value of Debt: At April 1, 2017 , the aggregate fair value of our total debt was $33.4 billion as compared with a carrying value of $32.7 billion . At December 31, 2016 , the aggregate fair value of our total debt was $33.2 billion as compared with a carrying value of $32.4 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: On June 7, 2016, we redeemed all outstanding shares of our 9.00% cumulative compounding preferred stock, Series A (“Series A Preferred Stock”). We funded this redemption primarily through the issuance of long-term debt, 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, and we no longer pay any associated dividends. |
Earnings Per Share (Notes)
Earnings Per Share (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Our earnings per common share (“EPS”) were: For the Three Months Ended April 1, April 3, (in millions, except per share amounts) Basic Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 893 $ 896 Weighted average shares of common stock outstanding 1,217 1,215 Net earnings/(loss) $ 0.73 $ 0.74 Diluted Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 893 $ 896 Weighted average shares of common stock outstanding 1,217 1,215 Effect of dilutive securities: Equity awards 12 10 Weighted average shares of common stock outstanding, including dilutive effect 1,229 1,225 Net earnings/(loss) $ 0.73 $ 0.73 We use the treasury stock method to calculate the dilutive effect of outstanding equity awards in the denominator for diluted earnings per common share. Anti-dilutive shares were 1 million for the three months ended April 1, 2017 and 3 million for the three months ended April 3, 2016 . |
Segment Reporting (Notes)
Segment Reporting (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
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 two operating segments: Latin America; and Asia Pacific, Middle East, and Africa (“AMEA”). In the fourth quarter of 2016, we reorganized our segments to reflect the following: • our Russia business moved from the Rest of World segment to the Europe segment and • management of our Global Procurement Office moved from one of our European subsidiaries to our global headquarters, which resulted in moving the related costs from the Europe segment to general corporate expenses. These changes are reflected in all historical periods presented and did not have a material impact on our financial statements. See Note 18, Segment Reporting , to our consolidated financial statements for the year ended December 31, 2016 in our Annual Report on Form 10-K for additional information related to these changes. 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/(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, and nonmonetary currency devaluation (e.g., remeasurement gains and losses). Management does not use assets by segment to evaluate performance or allocate resources. Therefore, we do not disclose assets by segment. Net sales by segment were (in millions): For the Three Months Ended April 1, April 3, Net sales: United States $ 4,552 $ 4,715 Canada 443 504 Europe 543 583 Rest of World 826 768 Total net sales $ 6,364 $ 6,570 Segment Adjusted EBITDA was (in millions): For the Three Months Ended April 1, April 3, Segment Adjusted EBITDA: United States $ 1,472 $ 1,493 Canada 126 151 Europe 170 180 Rest of World 146 166 General corporate expenses (29 ) (39 ) Depreciation and amortization (excluding integration and restructuring expenses) (132 ) (161 ) Integration and restructuring expenses (148 ) (260 ) Merger costs — (15 ) Unrealized gains/(losses) on commodity hedges (42 ) 8 Nonmonetary currency devaluation — (1 ) Equity award compensation expense (excluding integration and restructuring expenses) (12 ) (9 ) Operating income 1,551 1,513 Interest expense 313 249 Other expense/(income), net (12 ) (8 ) Income/(loss) before income taxes $ 1,250 $ 1,272 In the first quarter of 2017, 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 (in millions): For the Three Months Ended April 1, April 3, Condiments and sauces $ 1,513 $ 1,564 Cheese and dairy 1,299 1,366 Ambient meals 583 590 Frozen and chilled meals 653 627 Meats and seafood 660 696 Refreshment beverages 372 408 Coffee 350 383 Infant and nutrition 188 190 Desserts, toppings and baking 196 210 Nuts and salted snacks 232 260 Other 318 276 Total net sales $ 6,364 $ 6,570 |
Supplemental Financial Informat
Supplemental Financial Information (Notes) | 3 Months Ended |
Apr. 01, 2017 | |
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 11, Debt, to our consolidated financial statements for the year ended December 31, 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 the SEC Regulation S-X Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or being Registered.” This information is not intended to present the financial position, results of operations, and cash flows of the individual companies or groups of companies in accordance with U.S. GAAP. Eliminations represent adjustments to eliminate investments in subsidiaries and intercompany balances and transactions between or among the parent guarantor, subsidiary issuer, and the non-guarantor subsidiaries. The Kraft Heinz Company Condensed Consolidating Statements of Income For the Three Months Ended April 1, 2017 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 4,360 $ 2,166 $ (162 ) $ 6,364 Cost of products sold — 2,714 1,511 (162 ) 4,063 Gross profit — 1,646 655 — 2,301 Selling, general and administrative expenses — 184 566 — 750 Intercompany service fees and other recharges — 1,108 (1,108 ) — — Operating income — 354 1,197 — 1,551 Interest expense — 303 10 — 313 Other expense/(income), net — 17 (29 ) — (12 ) Income/(loss) before income taxes — 34 1,216 — 1,250 Provision for/(benefit from) income taxes — (12 ) 371 — 359 Equity in earnings of subsidiaries 893 847 — (1,740 ) — Net income/(loss) 893 893 845 (1,740 ) 891 Net income/(loss) attributable to noncontrolling interest — — (2 ) — (2 ) Net income/(loss) excluding noncontrolling interest $ 893 $ 893 $ 847 $ (1,740 ) $ 893 Comprehensive income/(loss) excluding noncontrolling interest $ 1,072 $ 1,072 $ 1,842 $ (2,914 ) $ 1,072 The Kraft Heinz Company Condensed Consolidating Statements of Income For the Three Months Ended April 3, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 4,471 $ 2,241 $ (142 ) $ 6,570 Cost of products sold — 2,832 1,502 (142 ) 4,192 Gross profit — 1,639 739 — 2,378 Selling, general and administrative expenses — 277 588 — 865 Intercompany service fees and other recharges — 1,214 (1,214 ) — — Operating income — 148 1,365 — 1,513 Interest expense — 235 14 — 249 Other expense/(income), net — 31 (39 ) — (8 ) Income/(loss) before income taxes — (118 ) 1,390 — 1,272 Provision for/(benefit from) income taxes — (58 ) 430 — 372 Equity in earnings of subsidiaries 896 956 — (1,852 ) — Net income/(loss) 896 896 960 (1,852 ) 900 Net income/(loss) attributable to noncontrolling interest — — 4 — 4 Net income/(loss) excluding noncontrolling interest $ 896 $ 896 $ 956 $ (1,852 ) $ 896 Comprehensive income/(loss) excluding noncontrolling interest $ 1,007 $ 1,007 $ 1,149 $ (2,156 ) $ 1,007 The Kraft Heinz Company Condensed Consolidating Balance Sheets As of April 1, 2017 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 1,929 $ 1,313 $ — $ 3,242 Trade receivables — 30 856 — 886 Receivables due from affiliates — 808 220 (1,028 ) — Dividends due from affiliates 32 — — (32 ) — Sold receivables — — 588 — 588 Inventories — 2,074 1,077 — 3,151 Short-term lending due from affiliates — 1,792 3,062 (4,854 ) — Other current assets — 2,366 227 (1,585 ) 1,008 Total current assets 32 8,999 7,343 (7,499 ) 8,875 Property, plant and equipment, net — 4,424 2,269 — 6,693 Goodwill — 11,067 33,233 — 44,300 Investments in subsidiaries 57,732 71,474 — (129,206 ) — Intangible assets, net — 3,329 56,001 — 59,330 Long-term lending due from affiliates — 1,700 2,000 (3,700 ) — Other assets — 602 1,002 — 1,604 TOTAL ASSETS $ 57,764 $ 101,595 $ 101,848 $ (140,405 ) $ 120,802 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 900 $ 9 $ — $ 909 Current portion of long-term debt — 2,012 11 — 2,023 Short-term lending due to affiliates — 3,062 1,792 (4,854 ) — Trade payables — 2,366 1,570 — 3,936 Payables due to affiliates — 220 808 (1,028 ) — Accrued marketing — 165 434 — 599 Accrued postemployment costs — 144 13 — 157 Income taxes payable — — 2,009 (1,585 ) 424 Interest payable — 340 6 — 346 Dividends due to affiliates — 32 — (32 ) — Other current liabilities 32 378 579 — 989 Total current liabilities 32 9,619 7,231 (7,499 ) 9,383 Long-term debt — 28,762 986 — 29,748 Long-term borrowings due to affiliates — 2,000 1,917 (3,917 ) — Deferred income taxes — 1,367 19,543 — 20,910 Accrued postemployment costs — 1,728 288 — 2,016 Other liabilities — 387 414 — 801 TOTAL LIABILITIES 32 43,863 30,379 (11,416 ) 62,858 Total shareholders’ equity 57,732 57,732 71,257 (128,989 ) 57,732 Noncontrolling interest — — 212 — 212 TOTAL EQUITY 57,732 57,732 71,469 (128,989 ) 57,944 TOTAL LIABILITIES AND EQUITY $ 57,764 $ 101,595 $ 101,848 $ (140,405 ) $ 120,802 The Kraft Heinz Company Condensed Consolidating Balance Sheets As of December 31, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 2,830 $ 1,374 $ — $ 4,204 Trade receivables — 12 757 — 769 Receivables due from affiliates — 712 111 (823 ) — Dividends due from affiliates 39 — — (39 ) — Sold receivables — — 129 — 129 Inventories — 1,759 925 — 2,684 Short-term lending due from affiliates — 1,722 2,956 (4,678 ) — Other current assets — 2,229 447 (1,709 ) 967 Total current assets 39 9,264 6,699 (7,249 ) 8,753 Property, plant and equipment, net — 4,447 2,241 — 6,688 Goodwill — 11,067 33,058 — 44,125 Investments in subsidiaries 57,358 70,877 — (128,235 ) — Intangible assets, net — 3,364 55,933 — 59,297 Long-term lending due from affiliates — 1,700 2,000 (3,700 ) — Other assets — 501 1,116 — 1,617 TOTAL ASSETS $ 57,397 $ 101,220 $ 101,047 $ (139,184 ) $ 120,480 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 642 $ 3 $ — $ 645 Current portion of long-term debt — 2,032 14 — 2,046 Short-term lending due to affiliates — 2,956 1,722 (4,678 ) — Trade payables — 2,376 1,620 — 3,996 Payables due to affiliates — 111 712 (823 ) — Accrued marketing — 277 472 — 749 Accrued postemployment costs — 144 13 — 157 Income taxes payable — — 1,964 (1,709 ) 255 Interest payable — 401 14 — 415 Dividends due to affiliates — 39 — (39 ) — Other current liabilities 39 588 611 — 1,238 Total current liabilities 39 9,566 7,145 (7,249 ) 9,501 Long-term debt — 28,736 977 — 29,713 Long-term borrowings due to affiliates — 2,000 1,902 (3,902 ) — Deferred income taxes — 1,382 19,466 — 20,848 Accrued postemployment costs — 1,754 284 — 2,038 Other liabilities — 424 382 — 806 TOTAL LIABILITIES 39 43,862 30,156 (11,151 ) 62,906 Total shareholders’ equity 57,358 57,358 70,675 (128,033 ) 57,358 Noncontrolling interest — — 216 — 216 TOTAL EQUITY 57,358 57,358 70,891 (128,033 ) 57,574 TOTAL LIABILITIES AND EQUITY $ 57,397 $ 101,220 $ 101,047 $ (139,184 ) $ 120,480 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended April 1, 2017 (in millions) (Unaudited) (As Restated) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 736 $ (304 ) $ (311 ) $ (736 ) $ (615 ) CASH FLOWS FROM INVESTING ACTIVITIES Cash receipts on sold receivables — — 464 — 464 Capital expenditures — (203 ) (165 ) — (368 ) Net proceeds from/(payments on) intercompany lending activities — (4 ) (67 ) 71 — Return of capital 7 — — (7 ) — Other investing activities, net — 44 (6 ) — 38 Net cash provided by/(used for) investing activities 7 (163 ) 226 64 134 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of commercial paper — 2,324 — — 2,324 Repayments of commercial paper — (2,068 ) — — (2,068 ) Net proceeds from/(payments on) intercompany borrowing activities — 67 4 (71 ) — Dividends paid-common stock (736 ) (736 ) — 736 (736 ) Other intercompany capital stock transactions — (7 ) — 7 — Other financing activities, net (7 ) (21 ) 3 — (25 ) Net cash provided by/(used for) financing activities (743 ) (441 ) 7 672 (505 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash — — 13 — 13 Cash, cash equivalents, and restricted cash: Net increase/(decrease) — (908 ) (65 ) — (973 ) Balance at beginning of period — 2,869 1,386 — 4,255 Balance at end of period $ — $ 1,961 $ 1,321 $ — $ 3,282 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended April 3, 2016 (in millions) (Unaudited) (As Restated) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ — $ 166 $ (322 ) $ — $ (156 ) CASH FLOWS FROM INVESTING ACTIVITIES Cash receipts on sold receivables — — 426 — 426 Capital expenditures — (242 ) (61 ) — (303 ) Net proceeds from/(payments on) intercompany lending activities — 423 314 (737 ) — Return of capital 667 — — (667 ) — Other investing activities, net — 13 (3 ) — 10 Net cash provided by/(used for) investing activities 667 194 676 (1,404 ) 133 CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from/(payments on) intercompany borrowing activities — (314 ) (423 ) 737 — Dividends paid-common stock (667 ) (667 ) — 667 (667 ) Other financing activities, net — 25 15 — 40 Net cash provided by/(used for) financing activities (667 ) (956 ) (408 ) 1,404 (627 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash — — 44 — 44 Cash, cash equivalents, and restricted cash: Net increase/(decrease) — (596 ) (10 ) — (606 ) Balance at beginning of period — 3,253 1,659 — 4,912 Balance at end of period $ — $ 2,657 $ 1,649 $ — $ 4,306 The following tables provide a reconciliation of cash and cash equivalents, as reported on our unaudited condensed consolidating balance sheets, to cash, cash equivalents, and restricted cash, as reported on our unaudited condensed consolidating statements of cash flows (in millions): April 1, 2017 Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Cash and cash equivalents $ — $ 1,929 $ 1,313 $ — $ 3,242 Restricted cash included in other assets (current) — 32 4 — 36 Restricted cash included in other assets (noncurrent) — — 4 — 4 Cash, cash equivalents, and restricted cash $ — $ 1,961 $ 1,321 $ — $ 3,282 December 31, 2016 Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Cash and cash equivalents $ — $ 2,830 $ 1,374 $ — $ 4,204 Restricted cash included in other assets (current) — 39 3 — 42 Restricted cash included in other assets (noncurrent) — — 9 — 9 Cash, cash equivalents, and restricted cash $ — $ 2,869 $ 1,386 $ — $ 4,255 |
Background and Basis of Prese24
Background and Basis of Presentation (Policies) | 3 Months Ended |
Apr. 01, 2017 | |
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 December 31, 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 December 31, 2016. The results for interim periods are not necessarily indicative of future or annual results. |
New Accounting Pronouncements | Accounting Standards Adopted in the Current Period: In March 2016, the FASB issued ASU 2016-09 related to equity-based award accounting and presentation. Under this guidance, excess tax benefits upon the exercise of share- based payment awards are recognized in our tax provision rather than within equity. Cash flows related to excess tax benefits are classified as operating activities rather than financing activities. Additionally, cash flows related to employee tax withholdings on restricted share vesting are classified as financing activities. This ASU was effective in the first quarter of 2017. We adopted the guidance related to excess tax benefits on a prospective basis. As a result, we recognized a tax benefit of $8 million in our condensed consolidated statement of income for the three months ended April 1, 2017 related to our excess tax benefits upon the exercise of share-based payment awards. We retrospectively adopted the guidance related to cash flow classification of employee tax withholdings on restricted share vesting. There was no related impact on our statement of cash flows for the three months ended April 3, 2016 . Our equity award compensation cost continues to reflect estimated forfeitures. In August 2016, the FASB issued ASU 2016-15 related to the classification of certain cash payments and cash receipts on the statement of cash flows. This ASU provided guidance on eight specific cash flow classification matters, which must be adopted in the same period using a retrospective transition method. We early adopted this ASU in the first quarter of 2017. We now classify consideration received for beneficial interest obtained for transferring trade receivables in securitization transactions as investing activities instead of operating activities. Accordingly, we reclassified $426 million of cash receipts from the payments on sold receivables (which are cash receipts on the underlying trade receivables that have already been securitized) to cash provided by investing activities (from cash provided by operating activities) for the three months ended April 3, 2016. The related impact of the classification of cash receipts on sold receivables on our consolidated statement of cash flows for the year ended December 31, 2016 was $2.6 billion . Additionally, we now classify cash payments for debt prepayment and debt extinguishment costs as cash outflows from financing activities rather than cash outflows from operating activities, which had no impact on our condensed consolidated statements of cash flows for the three months ended April 3, 2016 or our consolidated statement of cash flows for the year ended December 31, 2016. In November 2016, the FASB issued ASU 2016-18 requiring the statement of cash flows to explain the change in restricted cash and restricted cash equivalents, in addition to cash and cash equivalents. We early adopted this ASU in the first quarter of 2017. Accordingly, we restated our cash and cash equivalents balances in the condensed consolidated statements of cash flows to include restricted cash of $51 million at December 31, 2016 , $108 million at April 3, 2016 , and $75 million at January 3, 2016 . Additionally, cash outflows from investing activities related to dividends paid on our Series A Preferred Stock were reduced to reflect $32 million which was moved to escrow and did not reflect a cash disbursement for the three months ended April 3, 2016. As required by the ASU, we have provided a reconciliation from cash and cash equivalents as presented on our condensed consolidated balance sheets to cash, cash equivalents, and restricted cash as reported on our condensed consolidated statements of cash flows. See Note 3, Restricted Cash , for this reconciliation, as well as a discussion of the nature of our restricted cash balances. Recently Issued Accounting Standards: In May 2014, the FASB issued ASU 2014-09, which 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 using a full retrospective method or a modified retrospective transition method, with a cumulative-effect adjustment as of the date of adoption. While we are still evaluating the impact this ASU will have on our financial statements and related disclosures, we have completed our preliminary scoping reviews and have made progress in our assessment phase. We have focused our reviews on the revenue streams in the U.S., Canada, and Europe as they are our most significant. At this time, we believe the potential impacts on our existing accounting policies may be associated with our consumer incentive and trade promotion programs. We will adopt the new standard on January 1, 2018. We are still evaluating our application method. Our ability to adopt using the full retrospective method is dependent on a number of factors, including system readiness, which may include software procured from third-party providers, and finalizing our assessment of information necessary to restate prior period financial statements. In February 2016, the FASB issued ASU 2016-02, which 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. While we are still evaluating the impact this ASU will have on our financial statements and related disclosures, we have initiated our scoping reviews and have made progress in our assessment phase. Based on our initial reviews, we expect that the adoption will increase the assets and liabilities on our condensed consolidated balance sheets. We are still evaluating our adoption date. In October 2016, the FASB issued ASU 2016-16 related to the income tax accounting impacts of intra-entity transfers of assets other than inventory, such as intellectual property and property, plant and equipment. Under the new accounting guidance, current and deferred income taxes should be recognized upon transfer of the assets. Previously, recognition of current and deferred income taxes was prohibited until the asset was sold to an external third party. This ASU will be effective beginning in the first quarter of our fiscal year 2018. Early adoption is permitted but must be adopted in the first interim period of the annual period for which the ASU is adopted. The new guidance must be adopted on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the adoption period. While we are still evaluating the impact that this ASU will have on our financial statements and related disclosures, we will adopt this ASU in the first quarter of 2018. In January 2017, the FASB issued ASU 2017-04 related to goodwill impairment testing. This ASU eliminates Step 2 from the goodwill impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, the entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. Previously, if the fair value of a reporting unit was lower than its carrying amount (Step 1), an entity was required to calculate any impairment charge by comparing the implied fair value of goodwill with its carrying amount (Step 2). Additionally, under the new standard, entities that have reporting units with zero or negative carrying amounts will no longer be required to perform the qualitative assessment to determine whether to perform Step 2 of the goodwill impairment test. As a result, reporting units with zero or negative carrying amounts will generally be expected to pass the simplified impairment test; however, additional disclosure will be required of those entities. This ASU will be effective in the first quarter of our fiscal year 2020. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The new guidance must be adopted on a prospective basis. While we are still evaluating the timing of adoption, we currently do not expect this ASU to have a material impact on our financial statements and related disclosures. In March 2017, the FASB issued ASU 2017-07 related to the presentation of net periodic benefit cost (pension and postretirement cost). Under the new guidance, the service cost component of net periodic benefit cost must be presented in the same statement of income line item as other employee compensation costs arising from services rendered by employees during the period. Other components of net periodic benefit cost must be disaggregated from the service cost component in the statements of income and must be presented outside the operating income subtotal. Additionally, only the service cost component will be eligible for capitalization in assets. The new guidance must be applied retrospectively for the statement of income presentation of service cost components and other net periodic benefit cost components and prospectively for the capitalization of the service cost components. The ASU will become effective in the first quarter of our fiscal year 2018. Early adoption is permitted but must occur within the first interim period of the annual period adopted. We are currently evaluating the impact that this ASU will have on our financial statements and related disclosures. |
Background and Basis of Prese25
Background and Basis of Presentation (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The effects of the restatement on the net cash provided by/(used for) operating activities and net cash provided by/(used for) investing activities of our unaudited condensed consolidated statements of cash flows for the three months ended April 1, 2017 and April 3, 2016 are as follows (in millions): For the Three Months Ended April 1, April 3, As Reported Adjustment As Restated As Reported Adjustment As Restated Trade receivables $ (118 ) $ (922 ) $ (1,040 ) $ (38 ) $ (648 ) $ (686 ) Sold receivables (458 ) 458 — (222 ) 222 — Net cash provided by/(used for) operating activities (151 ) (464 ) (615 ) 270 (426 ) (156 ) Cash receipts on sold receivables $ — $ 464 $ 464 $ — $ 426 $ 426 Net cash provided by/(used for) investing activities (330 ) 464 134 (293 ) 426 133 |
Integration and Restructuring26
Integration and Restructuring Expenses (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring Costs by Type and Income Statement Location | Total expenses related to our Integration Program and restructuring activities recorded in cost of products sold and selling, general and administrative expenses (“SG&A”) for the years presented were (in millions): For the Three Months Ended April 1, April 3, Severance and employee benefit costs - COGS $ 19 $ 6 Severance and employee benefit costs - SG&A 25 32 Asset-related costs - COGS 75 142 Asset-related costs - SG&A 7 14 Other costs - COGS 9 33 Other costs - SG&A 13 33 $ 148 $ 260 |
Restructuring Costs Excluded from Segments | The pre-tax impact of allocating such expenses to our segments would have been (in millions): For the Three Months Ended April 1, April 3, United States $ 108 $ 199 Canada 10 18 Europe 14 15 Rest of World — — General corporate expenses 16 28 $ 148 $ 260 |
Integration Program | |
Restructuring Cost and Reserve [Line Items] | |
Schedule of Restructuring Reserve by Type of Cost | Our liability balance for Integration Program costs that qualify as U.S. GAAP exit and disposal costs (i.e., severance and employee benefit costs and other exit costs), was (in millions): Severance and Employee Benefit Costs Other Exit Costs (a) Total Balance at December 31, 2016 $ 99 $ 10 $ 109 Charges 34 9 43 Cash payments (22 ) (1 ) (23 ) Non-cash utilization (8 ) (2 ) (10 ) Balance at April 1, 2017 $ 103 $ 16 $ 119 (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 | Our liability balance for restructuring project costs that qualify as U.S. GAAP exit and disposal costs (i.e., severance and employee benefit costs and other exit costs), was (in millions): Severance and Employee Benefit Costs Other Exit Costs (a) Total Balance at December 31, 2016 $ 12 $ 25 $ 37 Charges 10 — 10 Cash payments (12 ) (1 ) (13 ) Non-cash utilization (4 ) — (4 ) Balance at April 1, 2017 $ 6 $ 24 $ 30 (a) Other exit costs primarily represent contract and lease terminations. |
Restricted Cash (Tables)
Restricted Cash (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Reconciliation from Cash and Cash Equivalents to Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash and cash equivalents, as reported on our condensed consolidated balance sheets, to cash, cash equivalents, and restricted cash, as reported on our condensed consolidated statements of cash flows (in millions): April 1, December 31, 2016 Cash and cash equivalents $ 3,242 $ 4,204 Restricted cash included in other assets (current) 36 42 Restricted cash included in other assets (noncurrent) 4 9 Cash, cash equivalents, and restricted cash $ 3,282 $ 4,255 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories at April 1, 2017 and December 31, 2016 were (in millions): April 1, 2017 December 31, 2016 Packaging and ingredients $ 716 $ 542 Work in process 493 388 Finished product 1,942 1,754 Inventories $ 3,151 $ 2,684 |
Goodwill and Intangible Asset29
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying amount of goodwill | Changes in the carrying amount of goodwill from December 31, 2016 to April 1, 2017 , by segment, were (in millions): United States Canada Europe Rest of World Total Balance at December 31, 2016 $ 33,696 $ 4,913 $ 2,778 $ 2,738 $ 44,125 Translation adjustments — 44 51 80 175 Balance at April 1, 2017 $ 33,696 $ 4,957 $ 2,829 $ 2,818 $ 44,300 |
Changes in the carrying amount of indefinite-lived intangible assets | Indefinite-lived intangible assets, which primarily consisted of trademarks, were (in millions): Balance at December 31, 2016 $ 53,307 Translation adjustments 80 Balance at April 1, 2017 $ 53,387 |
Schedule of definite-lived intangible assets by major asset class | Definite-lived intangible assets at April 1, 2017 and December 31, 2016 were (in millions): April 1, 2017 December 31, 2016 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Trademarks $ 2,346 $ (199 ) $ 2,147 $ 2,337 $ (172 ) $ 2,165 Customer-related assets 4,199 (413 ) 3,786 4,184 (369 ) 3,815 Other 13 (3 ) 10 13 (3 ) 10 $ 6,558 $ (615 ) $ 5,943 $ 6,534 $ (544 ) $ 5,990 |
Employees' Stock Incentive Pl30
Employees' Stock Incentive Plans (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
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 Outstanding at December 31, 2016 20,560,140 $ 37.39 Granted 1,170,685 91.40 Forfeited (126,206 ) 44.78 Exercised (1,126,852 ) 34.00 Outstanding at April 1, 2017 20,477,767 40.62 |
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) Outstanding at December 31, 2016 806,744 $ 71.95 Granted 1,640,535 84.97 Forfeited (19,395 ) 76.65 Vested (117,958 ) 72.96 Outstanding at April 1, 2017 2,309,926 81.15 |
Schedule of Compensation Costs Related to Equity Plans | Equity award compensation cost and the related tax benefit was (in millions): For the Three Months Ended April 1, April 3, Pre-tax compensation cost $ 11 $ 13 Tax benefit (3 ) (4 ) After-tax compensation cost $ 8 $ 9 |
Postemployment Benefits (Tables
Postemployment Benefits (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Components of Net Cost/(Benefit) | Net pension cost/(benefit) consisted of the following (in millions): For the Three Months Ended U.S. Plans Non-U.S. Plans April 1, April 3, April 1, April 3, Service cost $ 3 $ 3 $ 4 $ 6 Interest cost 45 53 16 21 Expected return on plan assets (65 ) (74 ) (43 ) (46 ) Settlements — (6 ) — — Special/contractual termination benefits 7 — 6 — Other 2 — (9 ) — Net pension cost/(benefit) $ (8 ) $ (24 ) $ (26 ) $ (19 ) |
Postretirement Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Components of Net Cost/(Benefit) | Net postretirement cost/(benefit) consisted of the following (in millions): For the Three Months Ended April 1, April 3, Service cost $ 2 $ 4 Interest cost 13 16 Amortization of prior service costs/(credits) (90 ) (82 ) Net postretirement cost/(benefit) $ (75 ) $ (62 ) |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Income/(Losses) (Tables) - Accumulated Other Comprehensive Income/(Losses) | 3 Months Ended |
Apr. 01, 2017 | |
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), net of tax, were as follows (in millions): Foreign Currency Translation Adjustments Net Postemployment Benefit Plan Adjustments Net Cash Flow Hedge Adjustments Total Balance as of December 31, 2016 $ (2,412 ) $ 772 $ 12 $ (1,628 ) Foreign currency translation adjustments 309 — — 309 Net deferred gains/(losses) on net investment hedges (51 ) — — (51 ) Net postemployment benefit gains/(losses) arising during the period — (10 ) — (10 ) Reclassification of net postemployment benefit losses/(gains) — (55 ) — (55 ) Net deferred gains/(losses) on cash flow hedges — — (34 ) (34 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income — — 20 20 Total other comprehensive income/(loss) 258 (65 ) (14 ) 179 Balance as of April 1, 2017 $ (2,154 ) $ 707 $ (2 ) $ (1,449 ) |
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) were as follows (in millions): For the Three Months Ended April 1, April 3, Before Tax Amount Tax Net of Tax Amount Before Tax Amount Tax Net of Tax Amount Foreign currency translation adjustments $ 309 $ — $ 309 $ 265 $ — $ 265 Net deferred gains/(losses) on net investment hedges (78 ) 27 (51 ) (84 ) 24 (60 ) Net actuarial gains/(losses) arising during the period (12 ) 2 (10 ) — — — Reclassification of net postemployment benefit losses/(gains) (90 ) 35 (55 ) (88 ) 34 (54 ) Net deferred gains/(losses) on cash flow hedges (39 ) 5 (34 ) (28 ) 10 (18 ) Net deferred losses/(gains) on cash flow hedges reclassified to net income 17 3 20 (26 ) 4 (22 ) |
Amounts Reclassified From Accumulated Other Comprehensive Income/(Losses) | The amounts reclassified from accumulated other comprehensive income/(losses) 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/(Loss) is Presented For the Three Months Ended April 1, April 3, Losses/(gains) on cash flow hedges: Foreign exchange contracts $ — $ (1 ) Net sales Foreign exchange contracts 1 (29 ) Cost of products sold Foreign exchange contracts 15 3 Other expense/(income), net Interest rate contracts 1 1 Interest expense Losses/(gains) on cash flow hedges before income taxes 17 (26 ) Losses/(gains) on cash flow hedges income taxes 3 4 Losses/(gains) on cash flow hedges $ 20 $ (22 ) Losses/(gains) on postemployment benefits: Amortization of unrecognized losses/(gains) $ — $ — (a) Amortization of prior service costs/(credits) (90 ) (82 ) (a) Settlement and curtailments losses/(gains) — (6 ) (a) Losses/(gains) on postemployment benefits before income taxes (90 ) (88 ) Losses/(gains) on postemployment benefits income taxes 35 34 Losses/(gains) on postemployment benefits $ (55 ) $ (54 ) (a) These components are included in the computation of net periodic postemployment benefit costs. See Note 8, Postemployment Benefits , for additional information. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts of outstanding derivative positions | The notional values of our derivative instruments at April 1, 2017 and December 31, 2016 were (in millions): Notional Amount April 1, 2017 December 31, 2016 Commodity contracts $ 641 $ 459 Foreign exchange contracts 3,048 2,997 Cross-currency contracts 3,173 3,173 |
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 consolidated balance sheets at April 1, 2017 and December 31, 2016 were (in millions): April 1, 2017 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 $ — $ — $ 35 $ 23 $ — $ — $ 35 $ 23 Cross-currency contracts — — 549 40 — — 549 40 Derivatives not designated as hedging instruments: Commodity contracts 16 39 2 3 — — 18 42 Foreign exchange contracts — — 37 1 — — 37 1 Cross-currency contracts — — 43 — — — 43 — Total fair value $ 16 $ 39 $ 666 $ 67 $ — $ — $ 682 $ 106 December 31, 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 $ — $ — $ 69 $ 13 $ — $ — $ 69 $ 13 Cross-currency contracts — — 580 36 — — 580 36 Derivatives not designated as hedging instruments: Commodity contracts 28 7 — — — — 28 7 Foreign exchange contracts — — 35 30 — — 35 30 Cross-currency contracts — — 44 — — — 44 — Total fair value $ 28 $ 7 $ 728 $ 79 $ — $ — $ 756 $ 86 |
Schedule of cross-currency swap derivatives | At April 1, 2017 , 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 |
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 consolidated statements of income and statements of comprehensive income: For the Three Months Ended April 1, April 3, Commodity Contracts Foreign Exchange Cross-Currency Contracts Interest Rate Contracts Commodity Contracts Foreign Exchange Cross-Currency Contracts Interest Rate (in millions) Derivatives designated as hedging instruments: Cash flow hedges: Gains/(losses) recognized in other comprehensive income (effective portion) $ — $ (39 ) $ — $ — $ — $ (27 ) $ — $ — Net investment hedges: Gains/(losses) recognized in other comprehensive income (effective portion) — (4 ) (30 ) — — — (65 ) — Total gains/(losses) recognized in other comprehensive income (effective portion) $ — $ (43 ) $ (30 ) $ — $ — $ (27 ) $ (65 ) $ — Cash flow hedges reclassified to net income/(loss): Net sales $ — $ — $ — $ — $ — $ 1 $ — $ — Cost of products sold (effective portion) — (1 ) — — — 29 — — Other expense/(income), net — (15 ) — — — (3 ) — — Interest expense — — — (1 ) — — — (1 ) — (16 ) — (1 ) — 27 — (1 ) Derivatives not designated as hedging instruments: Gains/(losses) on derivatives recognized in cost of products sold (37 ) — — — (18 ) — — — Gains/(losses) on derivatives recognized in other expense/(income), net — 2 (1 ) — — (75 ) (7 ) — (37 ) 2 (1 ) — (18 ) (75 ) (7 ) — Total gains/(losses) recognized in statements of income $ (37 ) $ (14 ) $ (1 ) $ (1 ) $ (18 ) $ (48 ) $ (7 ) $ (1 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Our earnings per common share (“EPS”) were: For the Three Months Ended April 1, April 3, (in millions, except per share amounts) Basic Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 893 $ 896 Weighted average shares of common stock outstanding 1,217 1,215 Net earnings/(loss) $ 0.73 $ 0.74 Diluted Earnings Per Common Share: Net income/(loss) attributable to common shareholders $ 893 $ 896 Weighted average shares of common stock outstanding 1,217 1,215 Effect of dilutive securities: Equity awards 12 10 Weighted average shares of common stock outstanding, including dilutive effect 1,229 1,225 Net earnings/(loss) $ 0.73 $ 0.73 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Segment Reporting [Abstract] | |
Net Sales by Segment | Net sales by segment were (in millions): For the Three Months Ended April 1, April 3, Net sales: United States $ 4,552 $ 4,715 Canada 443 504 Europe 543 583 Rest of World 826 768 Total net sales $ 6,364 $ 6,570 |
Segment Adjusted EBITDA | Segment Adjusted EBITDA was (in millions): For the Three Months Ended April 1, April 3, Segment Adjusted EBITDA: United States $ 1,472 $ 1,493 Canada 126 151 Europe 170 180 Rest of World 146 166 General corporate expenses (29 ) (39 ) Depreciation and amortization (excluding integration and restructuring expenses) (132 ) (161 ) Integration and restructuring expenses (148 ) (260 ) Merger costs — (15 ) Unrealized gains/(losses) on commodity hedges (42 ) 8 Nonmonetary currency devaluation — (1 ) Equity award compensation expense (excluding integration and restructuring expenses) (12 ) (9 ) Operating income 1,551 1,513 Interest expense 313 249 Other expense/(income), net (12 ) (8 ) Income/(loss) before income taxes $ 1,250 $ 1,272 |
Net Sales by Product | Our net sales by product category were (in millions): For the Three Months Ended April 1, April 3, Condiments and sauces $ 1,513 $ 1,564 Cheese and dairy 1,299 1,366 Ambient meals 583 590 Frozen and chilled meals 653 627 Meats and seafood 660 696 Refreshment beverages 372 408 Coffee 350 383 Infant and nutrition 188 190 Desserts, toppings and baking 196 210 Nuts and salted snacks 232 260 Other 318 276 Total net sales $ 6,364 $ 6,570 |
Supplemental Financial Inform36
Supplemental Financial Information (Tables) | 3 Months Ended |
Apr. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Consolidating Statements of Income | The Kraft Heinz Company Condensed Consolidating Statements of Income For the Three Months Ended April 1, 2017 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 4,360 $ 2,166 $ (162 ) $ 6,364 Cost of products sold — 2,714 1,511 (162 ) 4,063 Gross profit — 1,646 655 — 2,301 Selling, general and administrative expenses — 184 566 — 750 Intercompany service fees and other recharges — 1,108 (1,108 ) — — Operating income — 354 1,197 — 1,551 Interest expense — 303 10 — 313 Other expense/(income), net — 17 (29 ) — (12 ) Income/(loss) before income taxes — 34 1,216 — 1,250 Provision for/(benefit from) income taxes — (12 ) 371 — 359 Equity in earnings of subsidiaries 893 847 — (1,740 ) — Net income/(loss) 893 893 845 (1,740 ) 891 Net income/(loss) attributable to noncontrolling interest — — (2 ) — (2 ) Net income/(loss) excluding noncontrolling interest $ 893 $ 893 $ 847 $ (1,740 ) $ 893 Comprehensive income/(loss) excluding noncontrolling interest $ 1,072 $ 1,072 $ 1,842 $ (2,914 ) $ 1,072 The Kraft Heinz Company Condensed Consolidating Statements of Income For the Three Months Ended April 3, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Net sales $ — $ 4,471 $ 2,241 $ (142 ) $ 6,570 Cost of products sold — 2,832 1,502 (142 ) 4,192 Gross profit — 1,639 739 — 2,378 Selling, general and administrative expenses — 277 588 — 865 Intercompany service fees and other recharges — 1,214 (1,214 ) — — Operating income — 148 1,365 — 1,513 Interest expense — 235 14 — 249 Other expense/(income), net — 31 (39 ) — (8 ) Income/(loss) before income taxes — (118 ) 1,390 — 1,272 Provision for/(benefit from) income taxes — (58 ) 430 — 372 Equity in earnings of subsidiaries 896 956 — (1,852 ) — Net income/(loss) 896 896 960 (1,852 ) 900 Net income/(loss) attributable to noncontrolling interest — — 4 — 4 Net income/(loss) excluding noncontrolling interest $ 896 $ 896 $ 956 $ (1,852 ) $ 896 Comprehensive income/(loss) excluding noncontrolling interest $ 1,007 $ 1,007 $ 1,149 $ (2,156 ) $ 1,007 |
Condensed Consolidating Balance Sheets | The Kraft Heinz Company Condensed Consolidating Balance Sheets As of April 1, 2017 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 1,929 $ 1,313 $ — $ 3,242 Trade receivables — 30 856 — 886 Receivables due from affiliates — 808 220 (1,028 ) — Dividends due from affiliates 32 — — (32 ) — Sold receivables — — 588 — 588 Inventories — 2,074 1,077 — 3,151 Short-term lending due from affiliates — 1,792 3,062 (4,854 ) — Other current assets — 2,366 227 (1,585 ) 1,008 Total current assets 32 8,999 7,343 (7,499 ) 8,875 Property, plant and equipment, net — 4,424 2,269 — 6,693 Goodwill — 11,067 33,233 — 44,300 Investments in subsidiaries 57,732 71,474 — (129,206 ) — Intangible assets, net — 3,329 56,001 — 59,330 Long-term lending due from affiliates — 1,700 2,000 (3,700 ) — Other assets — 602 1,002 — 1,604 TOTAL ASSETS $ 57,764 $ 101,595 $ 101,848 $ (140,405 ) $ 120,802 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 900 $ 9 $ — $ 909 Current portion of long-term debt — 2,012 11 — 2,023 Short-term lending due to affiliates — 3,062 1,792 (4,854 ) — Trade payables — 2,366 1,570 — 3,936 Payables due to affiliates — 220 808 (1,028 ) — Accrued marketing — 165 434 — 599 Accrued postemployment costs — 144 13 — 157 Income taxes payable — — 2,009 (1,585 ) 424 Interest payable — 340 6 — 346 Dividends due to affiliates — 32 — (32 ) — Other current liabilities 32 378 579 — 989 Total current liabilities 32 9,619 7,231 (7,499 ) 9,383 Long-term debt — 28,762 986 — 29,748 Long-term borrowings due to affiliates — 2,000 1,917 (3,917 ) — Deferred income taxes — 1,367 19,543 — 20,910 Accrued postemployment costs — 1,728 288 — 2,016 Other liabilities — 387 414 — 801 TOTAL LIABILITIES 32 43,863 30,379 (11,416 ) 62,858 Total shareholders’ equity 57,732 57,732 71,257 (128,989 ) 57,732 Noncontrolling interest — — 212 — 212 TOTAL EQUITY 57,732 57,732 71,469 (128,989 ) 57,944 TOTAL LIABILITIES AND EQUITY $ 57,764 $ 101,595 $ 101,848 $ (140,405 ) $ 120,802 The Kraft Heinz Company Condensed Consolidating Balance Sheets As of December 31, 2016 (in millions) (Unaudited) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Cash and cash equivalents $ — $ 2,830 $ 1,374 $ — $ 4,204 Trade receivables — 12 757 — 769 Receivables due from affiliates — 712 111 (823 ) — Dividends due from affiliates 39 — — (39 ) — Sold receivables — — 129 — 129 Inventories — 1,759 925 — 2,684 Short-term lending due from affiliates — 1,722 2,956 (4,678 ) — Other current assets — 2,229 447 (1,709 ) 967 Total current assets 39 9,264 6,699 (7,249 ) 8,753 Property, plant and equipment, net — 4,447 2,241 — 6,688 Goodwill — 11,067 33,058 — 44,125 Investments in subsidiaries 57,358 70,877 — (128,235 ) — Intangible assets, net — 3,364 55,933 — 59,297 Long-term lending due from affiliates — 1,700 2,000 (3,700 ) — Other assets — 501 1,116 — 1,617 TOTAL ASSETS $ 57,397 $ 101,220 $ 101,047 $ (139,184 ) $ 120,480 LIABILITIES AND EQUITY Commercial paper and other short-term debt $ — $ 642 $ 3 $ — $ 645 Current portion of long-term debt — 2,032 14 — 2,046 Short-term lending due to affiliates — 2,956 1,722 (4,678 ) — Trade payables — 2,376 1,620 — 3,996 Payables due to affiliates — 111 712 (823 ) — Accrued marketing — 277 472 — 749 Accrued postemployment costs — 144 13 — 157 Income taxes payable — — 1,964 (1,709 ) 255 Interest payable — 401 14 — 415 Dividends due to affiliates — 39 — (39 ) — Other current liabilities 39 588 611 — 1,238 Total current liabilities 39 9,566 7,145 (7,249 ) 9,501 Long-term debt — 28,736 977 — 29,713 Long-term borrowings due to affiliates — 2,000 1,902 (3,902 ) — Deferred income taxes — 1,382 19,466 — 20,848 Accrued postemployment costs — 1,754 284 — 2,038 Other liabilities — 424 382 — 806 TOTAL LIABILITIES 39 43,862 30,156 (11,151 ) 62,906 Total shareholders’ equity 57,358 57,358 70,675 (128,033 ) 57,358 Noncontrolling interest — — 216 — 216 TOTAL EQUITY 57,358 57,358 70,891 (128,033 ) 57,574 TOTAL LIABILITIES AND EQUITY $ 57,397 $ 101,220 $ 101,047 $ (139,184 ) $ 120,480 |
Condensed Consolidating Statements of Cash Flows | The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended April 1, 2017 (in millions) (Unaudited) (As Restated) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ 736 $ (304 ) $ (311 ) $ (736 ) $ (615 ) CASH FLOWS FROM INVESTING ACTIVITIES Cash receipts on sold receivables — — 464 — 464 Capital expenditures — (203 ) (165 ) — (368 ) Net proceeds from/(payments on) intercompany lending activities — (4 ) (67 ) 71 — Return of capital 7 — — (7 ) — Other investing activities, net — 44 (6 ) — 38 Net cash provided by/(used for) investing activities 7 (163 ) 226 64 134 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of commercial paper — 2,324 — — 2,324 Repayments of commercial paper — (2,068 ) — — (2,068 ) Net proceeds from/(payments on) intercompany borrowing activities — 67 4 (71 ) — Dividends paid-common stock (736 ) (736 ) — 736 (736 ) Other intercompany capital stock transactions — (7 ) — 7 — Other financing activities, net (7 ) (21 ) 3 — (25 ) Net cash provided by/(used for) financing activities (743 ) (441 ) 7 672 (505 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash — — 13 — 13 Cash, cash equivalents, and restricted cash: Net increase/(decrease) — (908 ) (65 ) — (973 ) Balance at beginning of period — 2,869 1,386 — 4,255 Balance at end of period $ — $ 1,961 $ 1,321 $ — $ 3,282 The Kraft Heinz Company Condensed Consolidating Statements of Cash Flows For the Three Months Ended April 3, 2016 (in millions) (Unaudited) (As Restated) Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Net cash provided by/(used for) operating activities $ — $ 166 $ (322 ) $ — $ (156 ) CASH FLOWS FROM INVESTING ACTIVITIES Cash receipts on sold receivables — — 426 — 426 Capital expenditures — (242 ) (61 ) — (303 ) Net proceeds from/(payments on) intercompany lending activities — 423 314 (737 ) — Return of capital 667 — — (667 ) — Other investing activities, net — 13 (3 ) — 10 Net cash provided by/(used for) investing activities 667 194 676 (1,404 ) 133 CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from/(payments on) intercompany borrowing activities — (314 ) (423 ) 737 — Dividends paid-common stock (667 ) (667 ) — 667 (667 ) Other financing activities, net — 25 15 — 40 Net cash provided by/(used for) financing activities (667 ) (956 ) (408 ) 1,404 (627 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash — — 44 — 44 Cash, cash equivalents, and restricted cash: Net increase/(decrease) — (596 ) (10 ) — (606 ) Balance at beginning of period — 3,253 1,659 — 4,912 Balance at end of period $ — $ 2,657 $ 1,649 $ — $ 4,306 The following tables provide a reconciliation of cash and cash equivalents, as reported on our unaudited condensed consolidating balance sheets, to cash, cash equivalents, and restricted cash, as reported on our unaudited condensed consolidating statements of cash flows (in millions): April 1, 2017 Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Cash and cash equivalents $ — $ 1,929 $ 1,313 $ — $ 3,242 Restricted cash included in other assets (current) — 32 4 — 36 Restricted cash included in other assets (noncurrent) — — 4 — 4 Cash, cash equivalents, and restricted cash $ — $ 1,961 $ 1,321 $ — $ 3,282 December 31, 2016 Parent Guarantor Subsidiary Issuer Non-Guarantor Subsidiaries Eliminations Consolidated Cash and cash equivalents $ — $ 2,830 $ 1,374 $ — $ 4,204 Restricted cash included in other assets (current) — 39 3 — 42 Restricted cash included in other assets (noncurrent) — — 9 — 9 Cash, cash equivalents, and restricted cash $ — $ 2,869 $ 1,386 $ — $ 4,255 |
Background and Basis of Prese37
Background and Basis of Presentation Schedule of Error Corrections and Prior Period Adjustments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Increase/(decrease) in trade receivables | $ (1,040) | $ (686) |
Increase/(decrease) in sold receivables | 0 | 0 |
Net cash provided by/(used for) operating activities | (615) | (156) |
Cash receipts on sold receivables | 464 | 426 |
Net cash provided by/(used for) investing activities | 134 | 133 |
Adjustment | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Increase/(decrease) in trade receivables | (922) | (648) |
Increase/(decrease) in sold receivables | 458 | 222 |
Net cash provided by/(used for) operating activities | (464) | (426) |
Cash receipts on sold receivables | 464 | 426 |
Net cash provided by/(used for) investing activities | 464 | 426 |
As Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Increase/(decrease) in trade receivables | (118) | (38) |
Increase/(decrease) in sold receivables | (458) | (222) |
Net cash provided by/(used for) operating activities | (151) | 270 |
Cash receipts on sold receivables | 0 | 0 |
Net cash provided by/(used for) investing activities | $ (330) | $ (293) |
Background and Basis of Prese38
Background and Basis of Presentation Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Apr. 01, 2017 | Apr. 03, 2016 | Dec. 31, 2016 | Jan. 03, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||
Effective income tax rate reconciliation, share based compensation, excess tax benefit, amount | $ (359) | $ (372) | ||
Net cash provided by/(used for) financing activities | (505) | (627) | ||
Cash receipts on sold receivables | 464 | 426 | ||
Accounting Standards Update 2016-09 | ||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||
Effective income tax rate reconciliation, share based compensation, excess tax benefit, amount | $ 8 | |||
Net cash provided by/(used for) financing activities | 0 | |||
Accounting Standards Update 2016-15 [Member] | ||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||
Cash receipts on sold receivables | 426 | $ 2,600 | ||
Accounting Standards Update 2016-18 | ||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||
Restricted cash | 108 | $ 51 | $ 75 | |
Dividends paid-Series A Preferred Stock | $ 32 |
Integration and Restructuring39
Integration and Restructuring Expenses Additional Information (Details) $ in Millions | 3 Months Ended | 21 Months Ended | |
Apr. 01, 2017USD ($)employeefactory | Apr. 03, 2016USD ($) | Apr. 01, 2017USD ($)employee | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Incurred Cost | $ 148 | $ 260 | |
Integration Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Expected Cost | $ 2,000 | $ 2,000 | |
Restructuring and Related Cost, Expected Cost, Classified as Costs of Products Sold, Percent | 60.00% | 60.00% | |
Restructuring and Related Cost, Expected Number of Positions Eliminated | employee | 5,150 | ||
Restructuring and Related Cost, Number of Positions Eliminated | employee | 3,800 | ||
Restructuring and Related Cost, Incurred Cost | $ 127 | 241 | |
Restructuring and Related Cost, Cost Incurred to Date | $ 1,800 | $ 1,800 | |
Restructuring and Related Cost, Expected Cost, Cash Expenditures, Percent | 60.00% | 60.00% | |
Restructuring Activities | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Incurred Cost | $ 21 | 19 | |
Severance and Employee Benefit Costs | Integration Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Expected Cost | 400 | $ 400 | |
Restructuring and Related Cost, Cost Incurred to Date | 715 | 715 | |
Severance and Employee Benefit Costs | Restructuring Activities | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Incurred Cost | 10 | 10 | |
Asset-Related Costs | Integration Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Expected Cost | $ 1,200 | 1,200 | |
Restructuring and Related Activities, Expected Number of Facilities Eliminated | factory | 6 | ||
Restructuring and Related Cost, Cost Incurred to Date | $ 731 | 731 | |
Asset-Related Costs | Restructuring Activities | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Incurred Cost | 1 | ||
Other Implementation Costs | Integration Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Cost Incurred to Date | 293 | 293 | |
Other Implementation Costs | Restructuring Activities | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Incurred Cost | 10 | 8 | |
Other Exit Costs | Integration Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Expected Cost | 400 | 400 | |
Restructuring and Related Cost, Cost Incurred to Date | $ 104 | $ 104 | |
Other Exit Costs | Restructuring Activities | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and Related Cost, Incurred Cost | $ 1 |
Integration and Restructuring40
Integration and Restructuring Expenses Integration Program Reserve Roll-forward (Details) - Integration Program $ in Millions | 3 Months Ended |
Apr. 01, 2017USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 109 |
Charges | 43 |
Cash payments | (23) |
Non-cash utilization | (10) |
Ending Balance | 119 |
Severance and Employee Benefit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 99 |
Charges | 34 |
Cash payments | (22) |
Non-cash utilization | (8) |
Ending Balance | 103 |
Other Exit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 10 |
Charges | 9 |
Cash payments | (1) |
Non-cash utilization | (2) |
Ending Balance | $ 16 |
Integration and Restructuring41
Integration and Restructuring Expenses Restructuring Reserve Roll-forward (Details) - Restructuring Activities $ in Millions | 3 Months Ended |
Apr. 01, 2017USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 37 |
Charges | 10 |
Cash payments | (13) |
Non-cash utilization | (4) |
Ending Balance | 30 |
Severance and Employee Benefit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 12 |
Charges | 10 |
Cash payments | (12) |
Non-cash utilization | (4) |
Ending Balance | 6 |
Other Exit Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 25 |
Charges | 0 |
Cash payments | (1) |
Non-cash utilization | 0 |
Ending Balance | $ 24 |
Integration and Restructuring42
Integration and Restructuring Expenses Restructuring Costs by Type and Income Statement Location (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | $ 148 | $ 260 |
Severance and Employee Benefit Costs | Cost of products sold | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 19 | 6 |
Severance and Employee Benefit Costs | Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 25 | 32 |
Asset-Related Costs | Cost of products sold | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 75 | 142 |
Asset-Related Costs | Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 7 | 14 |
Other Exit Costs | Cost of products sold | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 9 | 33 |
Other Exit Costs | Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | $ 13 | $ 33 |
Integration and Restructuring43
Integration and Restructuring Expenses Restructuring Costs Excluded from Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Segment Reporting Information [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | $ 148 | $ 260 |
United States | ||
Segment Reporting Information [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 108 | 199 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 10 | 18 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 14 | 15 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 0 | 0 |
Non-Operating | ||
Segment Reporting Information [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | $ 16 | $ 28 |
Restricted Cash Reconciliation
Restricted Cash Reconciliation from Cash and Cash Equivalents to Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions | Apr. 01, 2017 | Dec. 31, 2016 | Apr. 03, 2016 | Jan. 03, 2016 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 3,242 | $ 4,204 | ||
Restricted cash included in other assets (current) | 36 | 42 | ||
Restricted cash included in other assets (noncurrent) | 4 | 9 | ||
Cash, cash equivalents, and restricted cash | $ 3,282 | $ 4,255 | $ 4,306 | $ 4,912 |
Inventories Components of Inven
Inventories Components of Inventories (Details) - USD ($) $ in Millions | Apr. 01, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Packaging and ingredients | $ 716 | $ 542 |
Work in process | 493 | 388 |
Finished product | 1,942 | 1,754 |
Inventories | $ 3,151 | $ 2,684 |
Goodwill and Intangible Asset46
Goodwill and Intangible Assets Goodwill by Segment (Details) $ in Millions | 3 Months Ended |
Apr. 01, 2017USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 44,125 |
Translation adjustments | 175 |
Ending balance | 44,300 |
United States | |
Goodwill [Roll Forward] | |
Beginning balance | 33,696 |
Translation adjustments | 0 |
Ending balance | 33,696 |
Canada | |
Goodwill [Roll Forward] | |
Beginning balance | 4,913 |
Translation adjustments | 44 |
Ending balance | 4,957 |
Europe | |
Goodwill [Roll Forward] | |
Beginning balance | 2,778 |
Translation adjustments | 51 |
Ending balance | 2,829 |
Rest of World | |
Goodwill [Roll Forward] | |
Beginning balance | 2,738 |
Translation adjustments | 80 |
Ending balance | $ 2,818 |
Goodwill and Intangible Asset47
Goodwill and Intangible Assets Goodwill - Additional Information (Details) | Apr. 04, 2016USD ($)reporting_unit | Apr. 01, 2017USD ($)reporting_unit | Dec. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
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 | ||
Number of reporting units | reporting_unit | 18 | ||
Goodwill | $ 44,300,000,000 | $ 44,125,000,000 | |
Goodwill, impaired, accumulated impairment loss | $ 0 |
Goodwill and Intangible Asset48
Goodwill and Intangible Assets Indefinite-Lived Intangible Assets (Details) $ in Millions | 3 Months Ended |
Apr. 01, 2017USD ($) | |
Indefinite-lived Intangible Assets [Roll Forward] | |
Beginning balance | $ 53,307 |
Translation adjustments | 80 |
Ending balance | $ 53,387 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets Indefinite-Lived Intangible Assets - Additional Information (Details) | Apr. 04, 2016USD ($)Brand | Apr. 01, 2017USD ($) | Dec. 31, 2016USD ($) |
Indefinite-lived Intangible Assets [Line Items] | |||
Impairment losses on indefinite-lived intangible assets | $ 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 | $ 53,387,000,000 | $ 53,307,000,000 | |
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 | Apr. 01, 2017 | Dec. 31, 2016 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | $ 6,558 | $ 6,534 |
Accumulated Amortization | (615) | (544) |
Net | 5,943 | 5,990 |
Trademarks | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 2,346 | 2,337 |
Accumulated Amortization | (199) | (172) |
Net | 2,147 | 2,165 |
Customer-related assets | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 4,199 | 4,184 |
Accumulated Amortization | (413) | (369) |
Net | 3,786 | 3,815 |
Other | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross | 13 | 13 |
Accumulated Amortization | (3) | (3) |
Net | $ 10 | $ 10 |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets Definite-Lived Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 67 | $ 66 |
Amortization of intangible assets, next twelve months | 270 | |
Amortization of intangible assets, year two | 270 | |
Amortization of intangible assets, year three | 270 | |
Amortization of intangible assets, year four | 270 | |
Amortization of intangible assets, year five | $ 270 |
Income Taxes Additional Informa
Income Taxes Additional Information (Details) | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 28.70% | 29.20% |
Employees' Stock Incentive Pl53
Employees' Stock Incentive Plans Schedule of Share-Based Compensation, Stock Option Activity (Details) | 3 Months Ended |
Apr. 01, 2017$ / sharesshares | |
Roll-forward of Stock Option Activity (in shares) | |
Beginning balance | shares | 20,560,140 |
Granted | shares | 1,170,685 |
Forfeited | shares | (126,206) |
Exercised | shares | (1,126,852) |
Ending balance | shares | 20,477,767 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Options outstanding at period start, weighted average exercise price (in dollars per share) | $ / shares | $ 37.39 |
Options granted, weighted average exercise price (in dollars per share) | $ / shares | 91.40 |
Options forfeited, weighted average exercise price (in dollars per share) | $ / shares | 44.78 |
Options exercised, weighted average exercise price (in dollars per share) | $ / shares | 34 |
Options outstanding at period end, weighted average exercise price (in dollars per share) | $ / shares | $ 40.62 |
Employees' Stock Incentive Pl54
Employees' Stock Incentive Plans Additional Information (Details) $ in Millions | 3 Months Ended |
Apr. 01, 2017USD ($) | |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options, exercises in period, intrinsic value | $ 65 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity instruments other than options, vested in period, fair value | 11 |
Stock Options and RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Nonvested awards, compensation cost not yet recognized | $ 220 |
Nonvested awards, compensation cost not yet recognized, period for recognition | 4 years |
Employees' Stock Incentive Pl55
Employees' Stock Incentive Plans Schedule of Share-Based Compensation, RSU Activity (Details) - RSUs | 3 Months Ended |
Apr. 01, 2017$ / sharesshares | |
Roll-forward of RSU Activity (in shares) | |
Beginning balance | shares | 806,744 |
Granted | shares | 1,640,535 |
Forfeited | shares | (19,395) |
Vested | shares | (117,958) |
Ending balance | shares | 2,309,926 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
RSUs outstanding at period start, weighted average exercise price (in dollars per share) | $ / shares | $ 71.95 |
Granted, weighted average exercise price (in dollars per share) | $ / shares | 84.97 |
Forfeited, weighted average exercise price (in dollars per share) | $ / shares | 76.65 |
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 | $ 81.15 |
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 | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Pre-tax compensation cost | $ 11 | $ 13 |
Tax benefit | (3) | (4) |
After-tax compensation cost | $ 8 | $ 9 |
Postemployment Benefits Pension
Postemployment Benefits Pension Plans - Components of Net Pension Cost/(Benefit) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 3 | $ 3 |
Interest cost | 45 | 53 |
Expected return on plan assets | (65) | (74) |
Settlements | 0 | (6) |
Special/contractual termination benefits | 7 | 0 |
Other | 2 | 0 |
Net pension cost/(benefit) | (8) | (24) |
Non-U.S. Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 4 | 6 |
Interest cost | 16 | 21 |
Expected return on plan assets | (43) | (46) |
Settlements | 0 | 0 |
Special/contractual termination benefits | 6 | 0 |
Other | (9) | 0 |
Net pension cost/(benefit) | $ (26) | $ (19) |
Postemployment Benefits Postemp
Postemployment Benefits Postemployment Benefit Plans - Additional Information (Details) $ in Millions | 3 Months Ended |
Apr. 01, 2017USD ($) | |
U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer contribution | $ 0 |
Estimated future employer contributions in next fiscal year | 150 |
Non-U.S. Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer contribution | 11 |
Estimated future employer contributions in next fiscal year | $ 45 |
Postemployment Benefits Postret
Postemployment Benefits Postretirement Plans - Components of Net Postretirement Cost/(Benefit) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Amortization of prior service costs/(credits) | $ (82) | $ (50) |
Postretirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 2 | 4 |
Interest cost | 13 | 16 |
Amortization of prior service costs/(credits) | (90) | (82) |
Net pension cost/(benefit) | $ (75) | $ (62) |
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 | |
Apr. 01, 2017 | Apr. 03, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | $ (1,628) | |
Foreign currency translation adjustments | 307 | $ 272 |
Net deferred gains/(losses) on net investment hedges | (51) | (60) |
Reclassification of net postemployment benefit losses/(gains) | (55) | (54) |
Net deferred gains/(losses) on cash flow hedges | (34) | (18) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | 20 | (22) |
Ending Balance | (1,449) | |
Foreign Currency Translation Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (2,412) | |
Foreign currency translation adjustments | 309 | |
Net deferred gains/(losses) on net investment hedges | (51) | |
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) | 258 | |
Ending Balance | (2,154) | |
Net Postemployment Benefit Plan Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | 772 | |
Foreign currency translation adjustments | 0 | |
Net deferred gains/(losses) on net investment hedges | 0 | |
Net postemployment benefit gains/(losses) arising during the period | (10) | |
Reclassification of net postemployment benefit losses/(gains) | (55) | |
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) | (65) | |
Ending Balance | 707 | |
Net Cash Flow Hedge Adjustments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | 12 | |
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 | (34) | |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | 20 | |
Total other comprehensive income/(loss) | (14) | |
Ending Balance | (2) | |
Accumulated Other Comprehensive Income/(Losses) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (1,628) | |
Foreign currency translation adjustments | 309 | 265 |
Net deferred gains/(losses) on net investment hedges | (51) | (60) |
Net postemployment benefit gains/(losses) arising during the period | (10) | |
Reclassification of net postemployment benefit losses/(gains) | (55) | (54) |
Net deferred gains/(losses) on cash flow hedges | (34) | (18) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income | 20 | $ (22) |
Total other comprehensive income/(loss) | 179 | |
Ending Balance | $ (1,449) |
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 | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Foreign currency translation adjustments, net of tax | $ 307 | $ 272 |
Net deferred gains/(losses) on net investment hedges, net of tax | (51) | (60) |
Net actuarial gains/(losses) arising during the period, net of tax | (10) | 0 |
Reclassification of net postemployment benefit losses/(gains), net of tax | (55) | (54) |
Net deferred gains/(losses) on cash flow hedges, net of tax | (34) | (18) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income, net of tax | 20 | (22) |
AOCI Attributable to Parent | ||
Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Foreign currency translation adjustments, before tax | 309 | 265 |
Foreign currency translation adjustments, tax | 0 | 0 |
Foreign currency translation adjustments, net of tax | 309 | 265 |
Net deferred gains/(losses) on net investment hedges, before tax | (78) | (84) |
Net deferred gains/(losses) on net investment hedges, tax | 27 | 24 |
Net deferred gains/(losses) on net investment hedges, net of tax | (51) | (60) |
Net actuarial gains/(losses) arising during the period, before tax | (12) | 0 |
Net actuarial gains/(losses) arising during the period, tax | 2 | 0 |
Net actuarial gains/(losses) arising during the period, net of tax | (10) | 0 |
Reclassification of net postemployment benefit losses/(gains), before tax | (90) | (88) |
Reclassification of net postemployment benefit losses/(gains), tax | 35 | 34 |
Reclassification of net postemployment benefit losses/(gains), net of tax | (55) | (54) |
Net deferred gains/(losses) on cash flow hedges, before tax | (39) | (28) |
Net deferred gains/(losses) on cash flow hedges, tax | 5 | 10 |
Net deferred gains/(losses) on cash flow hedges, net of tax | (34) | (18) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income, before tax | 17 | (26) |
Net deferred losses/(gains) on cash flow hedges reclassified to net income, tax | 3 | 4 |
Net deferred losses/(gains) on cash flow hedges reclassified to net income, net of tax | $ 20 | $ (22) |
Accumulated Other Comprehensi62
Accumulated Other Comprehensive Income/(Losses) Amounts Reclassified from Accumulated Other Comprehensive Income/(Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
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 | $ 20 | $ (22) |
Reclassification of net postemployment benefit losses/(gains), net of tax | (55) | (54) |
AOCI Attributable to Parent | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Losses/(gains) on cash flow hedges before income taxes | 17 | (26) |
Losses/(gains) on cash flow hedges income taxes | 3 | 4 |
Net deferred losses/(gains) on cash flow hedges reclassified to net income, net of tax | 20 | (22) |
Amortization of unrecognized losses/(gains) | 0 | 0 |
Amortization of prior service costs/(credits) | (90) | (82) |
Settlement and curtailments losses/(gains) | 0 | (6) |
Losses/(gains) on postemployment benefits before income taxes | (90) | (88) |
Losses/(gains) on postemployment benefits income taxes | 35 | 34 |
Reclassification of net postemployment benefit losses/(gains), net of tax | (55) | (54) |
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 | (1) |
AOCI Attributable to Parent | Foreign exchange contracts | Cost of products sold | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income/(Losses) [Line Items] | ||
Losses/(gains) on cash flow hedges before income taxes | 1 | (29) |
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 | 15 | 3 |
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 |
Financial Instruments Outstandi
Financial Instruments Outstanding Notional Amounts (Details) - USD ($) $ in Millions | Apr. 01, 2017 | Dec. 31, 2016 |
Commodity contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 641 | $ 459 |
Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | 3,048 | 2,997 |
Cross-currency contracts | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 3,173 | $ 3,173 |
Financial Instruments Fair Valu
Financial Instruments Fair Values (Details) - USD ($) $ in Millions | Apr. 01, 2017 | Dec. 31, 2016 |
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | $ 682 | $ 756 |
Derivative liability, fair value, gross liability | 106 | 86 |
Commodity contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 18 | 28 |
Derivative liability, fair value, gross liability | 42 | 7 |
Foreign exchange contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 35 | 69 |
Derivative liability, fair value, gross liability | 23 | 13 |
Foreign exchange contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 37 | 35 |
Derivative liability, fair value, gross liability | 1 | 30 |
Cross-currency contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 549 | 580 |
Derivative liability, fair value, gross liability | 40 | 36 |
Cross-currency contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 43 | 44 |
Derivative liability, fair value, gross liability | 0 | 0 |
Level 1 | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 16 | 28 |
Derivative liability, fair value, gross liability | 39 | 7 |
Level 1 | Commodity contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 16 | 28 |
Derivative liability, fair value, gross liability | 39 | 7 |
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 | 666 | 728 |
Derivative liability, fair value, gross liability | 67 | 79 |
Level 2 | Commodity contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 2 | 0 |
Derivative liability, fair value, gross liability | 3 | 0 |
Level 2 | Foreign exchange contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 35 | 69 |
Derivative liability, fair value, gross liability | 23 | 13 |
Level 2 | Foreign exchange contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 37 | 35 |
Derivative liability, fair value, gross liability | 1 | 30 |
Level 2 | Cross-currency contracts | Designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 549 | 580 |
Derivative liability, fair value, gross liability | 40 | 36 |
Level 2 | Cross-currency contracts | Not designated as hedging instrument | ||
Derivatives Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 43 | 44 |
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 Additiona
Financial Instruments Additional Information (Details) € in Millions, £ in Millions, $ in Millions | 3 Months Ended | |||||
Apr. 01, 2017USD ($) | Apr. 03, 2016USD ($) | Apr. 01, 2017GBP (£) | Apr. 01, 2017USD ($) | Apr. 01, 2017EUR (€) | Dec. 31, 2016USD ($) | |
Derivative [Line Items] | ||||||
Derivative, collateral, obligation to return cash | $ 69 | $ 67 | ||||
Derivative, collateral, right to reclaim cash | 69 | $ 67 | ||||
Foreign exchange contracts | Designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 14 months | |||||
Foreign exchange contracts | Not designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 11 months | |||||
Cross-currency contracts | Designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 3 years | |||||
Cross-currency contracts | Not designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 2 years | |||||
Commodity contracts | Not designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, term | 18 months | |||||
Net Investment Hedging | Designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative liability, notional amount | $ 120 | |||||
Net deferred gains/(losses) on net investment hedges, before tax | $ (44) | $ (19) | ||||
Euro Member Countries, Euro | Net Investment Hedging | Debt | Designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, amount of hedged item | € | € 2,550 | |||||
United Kingdom, Pounds | Net Investment Hedging | Debt | Designated as hedging instrument | ||||||
Derivative [Line Items] | ||||||
Derivative, amount of hedged item | £ | £ 400 |
Financial Instruments Net Inves
Financial Instruments Net Investment Hedging (Details) - Apr. 01, 2017 € in Millions, £ in Millions, CAD in Billions, $ in Billions | GBP (£) | USD ($) | EUR (€) | CAD |
United Kingdom, Pounds | Cross-currency contracts | ||||
Derivative [Line Items] | ||||
Derivative asset, notional amount | £ 800 | $ 1.4 | ||
Canada, Dollars | Cross-currency contracts | ||||
Derivative [Line Items] | ||||
Derivative asset, notional amount | $ 1.6 | CAD 1.8 | ||
Net Investment Hedging | Designated as hedging instrument | Euro Member Countries, Euro | Debt | ||||
Derivative [Line Items] | ||||
Derivative, amount of hedged item | € | € 2,550 | |||
Net Investment Hedging | Designated as hedging instrument | United Kingdom, Pounds | Debt | ||||
Derivative [Line Items] | ||||
Derivative, amount of hedged item | £ | £ 400 |
Financial Instruments Derivativ
Financial Instruments Derivative Impact on the Statements of Income and Statements of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | $ (37) | $ (18) |
Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | (14) | (48) |
Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | (1) | (7) |
Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | (1) | (1) |
Designated as hedging instrument | Commodity contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Designated as hedging instrument | Foreign exchange contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | (43) | (27) |
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | (16) | 27 |
Designated as hedging instrument | Cross-currency contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | (30) | (65) |
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Designated as hedging instrument | Interest rate contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 |
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | (1) | (1) |
Not designated as hedging instrument | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | (37) | (18) |
Not designated as hedging instrument | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 2 | (75) |
Not designated as hedging instrument | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | (1) | (7) |
Not designated as hedging instrument | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Not designated as hedging instrument | Cost of products sold | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | (37) | (18) |
Not designated as hedging instrument | Cost of products sold | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Not designated as hedging instrument | Cost of products sold | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Not designated as hedging instrument | Cost of products sold | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Not designated as hedging instrument | Other income/(expense), net | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Not designated as hedging instrument | Other income/(expense), net | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 2 | (75) |
Not designated as hedging instrument | Other income/(expense), net | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | (1) | (7) |
Not designated as hedging instrument | Other income/(expense), net | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Commodity contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Foreign exchange contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | (39) | (27) |
Cash Flow Hedging | Designated as hedging instrument | Cross-currency contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest rate contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Net sales | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Net sales | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 1 |
Cash Flow Hedging | Designated as hedging instrument | Net sales | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Net sales | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Commodity contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gain/(loss) recognized in income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Foreign exchange contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gain/(loss) recognized in income (effective portion) | (1) | 29 |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Cross-currency contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gain/(loss) recognized in income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Cost of products sold | Interest rate contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gain/(loss) recognized in income (effective portion) | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | (15) | (3) |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Other income/(expense), net | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Commodity contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Foreign exchange contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Cross-currency contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | 0 | 0 |
Cash Flow Hedging | Designated as hedging instrument | Interest expense | Interest rate contracts | ||
Derivatives not designated as hedging instruments: | ||
Total amount recognized in statements of income | (1) | (1) |
Net Investment Hedging | Designated as hedging instrument | Commodity contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | 0 | 0 |
Net Investment Hedging | Designated as hedging instrument | Foreign exchange contracts | ||
Derivative Instruments Gain Loss [Line Items] | ||
Net gains recognized in other comprehensive loss (effective portion) | (4) | 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) | (30) | (65) |
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 |
Financing Arrangements Addition
Financing Arrangements Additional Information (Details) - USD ($) $ in Millions | Apr. 01, 2017 | Dec. 31, 2016 |
Transfers and Servicing [Abstract] | ||
Receivables derecognized under accounts receivable factoring programs | $ 1,200 | $ 1,000 |
Sold receivables | $ 588 | $ 129 |
Venezuela - Foreign Currency 69
Venezuela - Foreign Currency and Inflation Additional Information (Details) $ in Millions | 3 Months Ended | |
Apr. 01, 2017USD ($)exchange_rateVEF / $ | Mar. 09, 2016VEF / $ | |
Foreign Currency [Line Items] | ||
Number of exchange rates legally available to us in Venezuela | exchange_rate | 2 | |
Outstanding requests for currency settlements at the official exchange rate | $ | $ 26 | |
Foreign currency translation loss/(gain) | $ | $ 8 | |
Official CENCOEX BsF Rate | ||
Foreign Currency [Line Items] | ||
Foreign currency exchange rate, translation | 10 | 6.30 |
Venezuelan BsF on DICOM market, year-to-date average | ||
Foreign Currency [Line Items] | ||
Foreign currency exchange rate, translation | 694 | |
Venezuelan BsF on DICOM market, period end spot | ||
Foreign Currency [Line Items] | ||
Foreign currency exchange rate, translation | 710 | |
Minimum | Venezuelan BsF on DICOM market, period end spot | ||
Foreign Currency [Line Items] | ||
Foreign currency exchange rate, translation | 674 | |
Maximum | Venezuelan BsF on DICOM market, period end spot | ||
Foreign Currency [Line Items] | ||
Foreign currency exchange rate, translation | 710 |
Commitments, Contingencies an70
Commitments, Contingencies and Debt Borrowing Arrangements (Details) - USD ($) $ in Millions | Apr. 01, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Commercial paper | $ 900 | $ 642 |
Commitments, Contingencies an71
Commitments, Contingencies and Debt Fair Value of Debt (Details) - USD ($) $ in Billions | Apr. 01, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Fair value of total debt | $ 33.4 | $ 33.2 |
Carrying value of total debt | $ 32.7 | $ 32.4 |
Commitments, Contingencies an72
Commitments, Contingencies and Debt Series A Preferred Stock (Details) | Jun. 07, 2013 |
Nine point zero zero percent cumulative compounding preferred stock, Series A | Berkshire Hathaway | |
Preferred Units [Line Items] | |
9.00% cumulative compounding preferred stock, Series A, dividend percentage | 9.00% |
Earnings Per Share Basic and Di
Earnings Per Share Basic and Diluted (Loss)/Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Basic EPS | ||
Net income/(loss) attributable to common shareholders | $ 893 | $ 896 |
Weighted average shares of common stock outstanding (in shares) | 1,217 | 1,215 |
Basic earnings/(loss) per share (in dollars per share) | $ 0.73 | $ 0.74 |
Diluted EPS | ||
Net earnings/(loss) attributable to common shareholders | $ 893 | $ 896 |
Effect of dilutive stock options on basic earnings/(loss) per common share (in shares) | 12 | 10 |
Weighted average shares of common stock, including dilutive effect (in shares) | 1,229 | 1,225 |
Diluted earnings/(loss) per share (in dollars per share) | $ 0.73 | $ 0.73 |
Earnings Per Share Additional I
Earnings Per Share Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive shares | 1 | 3 |
Segment Reporting Additional In
Segment Reporting Additional Information (Details) | 3 Months Ended |
Apr. 01, 2017segment | |
Segment Reporting [Abstract] | |
Number of segments | 4 |
Number of reportable segments | 3 |
Number of operating segments in Rest of World reportable segment | 2 |
Segment Reporting Net Sales by
Segment Reporting Net Sales by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 6,364 | $ 6,570 |
United States | ||
Segment Reporting Information [Line Items] | ||
Net sales | 4,552 | 4,715 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Net sales | 443 | 504 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Net sales | 543 | 583 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 826 | $ 768 |
Segment Reporting Segment Adjus
Segment Reporting Segment Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Segment Reporting Information [Line Items] | ||
General corporate expenses | $ (29) | $ (39) |
Depreciation and amortization (excluding integration and restructuring expenses) | (132) | (161) |
Integration and restructuring expenses | (148) | (260) |
Merger costs | 0 | (15) |
Unrealized gains/(losses) on commodity hedges | (42) | 8 |
Nonmonetary currency devaluation | 0 | (1) |
Equity award compensation expense (excluding integration and restructuring expenses) | (12) | (9) |
Operating income | 1,551 | 1,513 |
Interest expense | 313 | 249 |
Other expense/(income), net | (12) | (8) |
Income/(loss) before income taxes | 1,250 | 1,272 |
United States | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA | 1,472 | 1,493 |
Canada | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA | 126 | 151 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA | 170 | 180 |
Rest of World | ||
Segment Reporting Information [Line Items] | ||
Segment Adjusted EBITDA | $ 146 | $ 166 |
Segment Reporting Net Sales b78
Segment Reporting Net Sales by Product (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Revenue from External Customer [Line Items] | ||
Net sales | $ 6,364 | $ 6,570 |
Condiments and sauces | ||
Revenue from External Customer [Line Items] | ||
Net sales | 1,513 | 1,564 |
Cheese and dairy | ||
Revenue from External Customer [Line Items] | ||
Net sales | 1,299 | 1,366 |
Ambient meals | ||
Revenue from External Customer [Line Items] | ||
Net sales | 583 | 590 |
Frozen and chilled meals | ||
Revenue from External Customer [Line Items] | ||
Net sales | 653 | 627 |
Meats and seafood | ||
Revenue from External Customer [Line Items] | ||
Net sales | 660 | 696 |
Refreshment beverages | ||
Revenue from External Customer [Line Items] | ||
Net sales | 372 | 408 |
Coffee | ||
Revenue from External Customer [Line Items] | ||
Net sales | 350 | 383 |
Infant and nutrition | ||
Revenue from External Customer [Line Items] | ||
Net sales | 188 | 190 |
Desserts, toppings and baking | ||
Revenue from External Customer [Line Items] | ||
Net sales | 196 | 210 |
Nuts and salted snacks | ||
Revenue from External Customer [Line Items] | ||
Net sales | 232 | 260 |
Other | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 318 | $ 276 |
Supplemental Financial Inform79
Supplemental Financial Information Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | |
Condensed Income Statements, Captions [Line Items] | ||
Net sales | $ 6,364 | $ 6,570 |
Cost of products sold | 4,063 | 4,192 |
Gross profit | 2,301 | 2,378 |
Selling, general and administrative expenses | 750 | 865 |
Intercompany service fees and other recharges | 0 | 0 |
Operating income | 1,551 | 1,513 |
Interest expense | 313 | 249 |
Other expense/(income), net | (12) | (8) |
Income/(loss) before income taxes | 1,250 | 1,272 |
Provision for/(benefit from) income taxes | 359 | 372 |
Equity in earnings of subsidiaries | 0 | 0 |
Net income/(loss) | 891 | 900 |
Net income/(loss) attributable to noncontrolling interest | (2) | 4 |
Net income/(loss) excluding noncontrolling interest | 893 | 896 |
Comprehensive income/(loss) excluding noncontrolling interest | 1,072 | 1,007 |
Eliminations | ||
Condensed Income Statements, Captions [Line Items] | ||
Net sales | (162) | (142) |
Cost of products sold | (162) | (142) |
Gross profit | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 |
Intercompany service fees and other recharges | 0 | 0 |
Operating income | 0 | 0 |
Interest expense | 0 | 0 |
Other expense/(income), net | 0 | 0 |
Income/(loss) before income taxes | 0 | 0 |
Provision for/(benefit from) income taxes | 0 | 0 |
Equity in earnings of subsidiaries | (1,740) | (1,852) |
Net income/(loss) | (1,740) | (1,852) |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 |
Net income/(loss) excluding noncontrolling interest | (1,740) | (1,852) |
Comprehensive income/(loss) excluding noncontrolling interest | (2,914) | (2,156) |
Parent Guarantor | Reportable Legal Entities | ||
Condensed Income Statements, Captions [Line Items] | ||
Net sales | 0 | 0 |
Cost of products sold | 0 | 0 |
Gross profit | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 |
Intercompany service fees and other recharges | 0 | 0 |
Operating income | 0 | 0 |
Interest expense | 0 | 0 |
Other expense/(income), net | 0 | 0 |
Income/(loss) before income taxes | 0 | 0 |
Provision for/(benefit from) income taxes | 0 | 0 |
Equity in earnings of subsidiaries | 893 | 896 |
Net income/(loss) | 893 | 896 |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 |
Net income/(loss) excluding noncontrolling interest | 893 | 896 |
Comprehensive income/(loss) excluding noncontrolling interest | 1,072 | 1,007 |
Subsidiary Issuer | Reportable Legal Entities | ||
Condensed Income Statements, Captions [Line Items] | ||
Net sales | 4,360 | 4,471 |
Cost of products sold | 2,714 | 2,832 |
Gross profit | 1,646 | 1,639 |
Selling, general and administrative expenses | 184 | 277 |
Intercompany service fees and other recharges | 1,108 | 1,214 |
Operating income | 354 | 148 |
Interest expense | 303 | 235 |
Other expense/(income), net | 17 | 31 |
Income/(loss) before income taxes | 34 | (118) |
Provision for/(benefit from) income taxes | (12) | (58) |
Equity in earnings of subsidiaries | 847 | 956 |
Net income/(loss) | 893 | 896 |
Net income/(loss) attributable to noncontrolling interest | 0 | 0 |
Net income/(loss) excluding noncontrolling interest | 893 | 896 |
Comprehensive income/(loss) excluding noncontrolling interest | 1,072 | 1,007 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Income Statements, Captions [Line Items] | ||
Net sales | 2,166 | 2,241 |
Cost of products sold | 1,511 | 1,502 |
Gross profit | 655 | 739 |
Selling, general and administrative expenses | 566 | 588 |
Intercompany service fees and other recharges | (1,108) | (1,214) |
Operating income | 1,197 | 1,365 |
Interest expense | 10 | 14 |
Other expense/(income), net | (29) | (39) |
Income/(loss) before income taxes | 1,216 | 1,390 |
Provision for/(benefit from) income taxes | 371 | 430 |
Equity in earnings of subsidiaries | 0 | 0 |
Net income/(loss) | 845 | 960 |
Net income/(loss) attributable to noncontrolling interest | (2) | 4 |
Net income/(loss) excluding noncontrolling interest | 847 | 956 |
Comprehensive income/(loss) excluding noncontrolling interest | $ 1,842 | $ 1,149 |
Supplemental Financial Inform80
Supplemental Financial Information Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Apr. 01, 2017 | Dec. 31, 2016 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and cash equivalents | $ 3,242 | $ 4,204 |
Trade receivables | 886 | 769 |
Receivables due from affiliates | 0 | 0 |
Dividends due from affiliates | 0 | 0 |
Sold receivables | 588 | 129 |
Inventories | 3,151 | 2,684 |
Short-term lending due from affiliates | 0 | 0 |
Other current assets | 1,008 | 967 |
Total current assets | 8,875 | 8,753 |
Property, plant and equipment, net | 6,693 | 6,688 |
Goodwill | 44,300 | 44,125 |
Investments in subsidiaries | 0 | 0 |
Intangible assets, net | 59,330 | 59,297 |
Long-term lending due from affiliates | 0 | 0 |
Other assets | 1,604 | 1,617 |
TOTAL ASSETS | 120,802 | 120,480 |
Commercial paper and other short-term debt | 909 | 645 |
Current portion of long-term debt | 2,023 | 2,046 |
Short-term lending due to affiliates | 0 | 0 |
Trade payables | 3,936 | 3,996 |
Payables due to affiliates | 0 | 0 |
Accrued marketing | 599 | 749 |
Accrued postemployment costs | 157 | 157 |
Income taxes payable | 424 | 255 |
Interest payable | 346 | 415 |
Dividends due to affiliates | 0 | 0 |
Other current liabilities | 989 | 1,238 |
Total current liabilities | 9,383 | 9,501 |
Long-term debt | 29,748 | 29,713 |
Long-term borrowings due to affiliates | 0 | 0 |
Deferred income taxes | 20,910 | 20,848 |
Accrued postemployment costs | 2,016 | 2,038 |
Other liabilities | 801 | 806 |
TOTAL LIABILITIES | 62,858 | 62,906 |
Total shareholders' equity | 57,732 | 57,358 |
Noncontrolling interest | 212 | 216 |
TOTAL EQUITY | 57,944 | 57,574 |
TOTAL LIABILITIES AND EQUITY | 120,802 | 120,480 |
Eliminations | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Trade receivables | 0 | 0 |
Receivables due from affiliates | (1,028) | (823) |
Dividends due from affiliates | (32) | (39) |
Sold receivables | 0 | 0 |
Inventories | 0 | 0 |
Short-term lending due from affiliates | (4,854) | (4,678) |
Other current assets | (1,585) | (1,709) |
Total current assets | (7,499) | (7,249) |
Property, plant and equipment, net | 0 | 0 |
Goodwill | 0 | 0 |
Investments in subsidiaries | (129,206) | (128,235) |
Intangible assets, net | 0 | 0 |
Long-term lending due from affiliates | (3,700) | (3,700) |
Other assets | 0 | 0 |
TOTAL ASSETS | (140,405) | (139,184) |
Commercial paper and other short-term debt | 0 | 0 |
Current portion of long-term debt | 0 | 0 |
Short-term lending due to affiliates | (4,854) | (4,678) |
Trade payables | 0 | 0 |
Payables due to affiliates | (1,028) | (823) |
Accrued marketing | 0 | 0 |
Accrued postemployment costs | 0 | 0 |
Income taxes payable | (1,585) | (1,709) |
Interest payable | 0 | 0 |
Dividends due to affiliates | (32) | (39) |
Other current liabilities | 0 | 0 |
Total current liabilities | (7,499) | (7,249) |
Long-term debt | 0 | 0 |
Long-term borrowings due to affiliates | (3,917) | (3,902) |
Deferred income taxes | 0 | 0 |
Accrued postemployment costs | 0 | 0 |
Other liabilities | 0 | 0 |
TOTAL LIABILITIES | (11,416) | (11,151) |
Total shareholders' equity | (128,989) | (128,033) |
Noncontrolling interest | 0 | 0 |
TOTAL EQUITY | (128,989) | (128,033) |
TOTAL LIABILITIES AND EQUITY | (140,405) | (139,184) |
Parent Guarantor | Reportable Legal Entities | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Trade receivables | 0 | 0 |
Receivables due from affiliates | 0 | 0 |
Dividends due from affiliates | 32 | 39 |
Sold receivables | 0 | 0 |
Inventories | 0 | 0 |
Short-term lending due from affiliates | 0 | 0 |
Other current assets | 0 | 0 |
Total current assets | 32 | 39 |
Property, plant and equipment, net | 0 | 0 |
Goodwill | 0 | 0 |
Investments in subsidiaries | 57,732 | 57,358 |
Intangible assets, net | 0 | 0 |
Long-term lending due from affiliates | 0 | 0 |
Other assets | 0 | 0 |
TOTAL ASSETS | 57,764 | 57,397 |
Commercial paper and other short-term debt | 0 | 0 |
Current portion of long-term debt | 0 | 0 |
Short-term lending due to affiliates | 0 | 0 |
Trade payables | 0 | 0 |
Payables due to affiliates | 0 | 0 |
Accrued marketing | 0 | 0 |
Accrued postemployment costs | 0 | 0 |
Income taxes payable | 0 | 0 |
Interest payable | 0 | 0 |
Dividends due to affiliates | 0 | 0 |
Other current liabilities | 32 | 39 |
Total current liabilities | 32 | 39 |
Long-term debt | 0 | 0 |
Long-term borrowings due to affiliates | 0 | 0 |
Deferred income taxes | 0 | 0 |
Accrued postemployment costs | 0 | 0 |
Other liabilities | 0 | 0 |
TOTAL LIABILITIES | 32 | 39 |
Total shareholders' equity | 57,732 | 57,358 |
Noncontrolling interest | 0 | 0 |
TOTAL EQUITY | 57,732 | 57,358 |
TOTAL LIABILITIES AND EQUITY | 57,764 | 57,397 |
Subsidiary Issuer | Reportable Legal Entities | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and cash equivalents | 1,929 | 2,830 |
Trade receivables | 30 | 12 |
Receivables due from affiliates | 808 | 712 |
Dividends due from affiliates | 0 | 0 |
Sold receivables | 0 | 0 |
Inventories | 2,074 | 1,759 |
Short-term lending due from affiliates | 1,792 | 1,722 |
Other current assets | 2,366 | 2,229 |
Total current assets | 8,999 | 9,264 |
Property, plant and equipment, net | 4,424 | 4,447 |
Goodwill | 11,067 | 11,067 |
Investments in subsidiaries | 71,474 | 70,877 |
Intangible assets, net | 3,329 | 3,364 |
Long-term lending due from affiliates | 1,700 | 1,700 |
Other assets | 602 | 501 |
TOTAL ASSETS | 101,595 | 101,220 |
Commercial paper and other short-term debt | 900 | 642 |
Current portion of long-term debt | 2,012 | 2,032 |
Short-term lending due to affiliates | 3,062 | 2,956 |
Trade payables | 2,366 | 2,376 |
Payables due to affiliates | 220 | 111 |
Accrued marketing | 165 | 277 |
Accrued postemployment costs | 144 | 144 |
Income taxes payable | 0 | 0 |
Interest payable | 340 | 401 |
Dividends due to affiliates | 32 | 39 |
Other current liabilities | 378 | 588 |
Total current liabilities | 9,619 | 9,566 |
Long-term debt | 28,762 | 28,736 |
Long-term borrowings due to affiliates | 2,000 | 2,000 |
Deferred income taxes | 1,367 | 1,382 |
Accrued postemployment costs | 1,728 | 1,754 |
Other liabilities | 387 | 424 |
TOTAL LIABILITIES | 43,863 | 43,862 |
Total shareholders' equity | 57,732 | 57,358 |
Noncontrolling interest | 0 | 0 |
TOTAL EQUITY | 57,732 | 57,358 |
TOTAL LIABILITIES AND EQUITY | 101,595 | 101,220 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and cash equivalents | 1,313 | 1,374 |
Trade receivables | 856 | 757 |
Receivables due from affiliates | 220 | 111 |
Dividends due from affiliates | 0 | 0 |
Sold receivables | 588 | 129 |
Inventories | 1,077 | 925 |
Short-term lending due from affiliates | 3,062 | 2,956 |
Other current assets | 227 | 447 |
Total current assets | 7,343 | 6,699 |
Property, plant and equipment, net | 2,269 | 2,241 |
Goodwill | 33,233 | 33,058 |
Investments in subsidiaries | 0 | 0 |
Intangible assets, net | 56,001 | 55,933 |
Long-term lending due from affiliates | 2,000 | 2,000 |
Other assets | 1,002 | 1,116 |
TOTAL ASSETS | 101,848 | 101,047 |
Commercial paper and other short-term debt | 9 | 3 |
Current portion of long-term debt | 11 | 14 |
Short-term lending due to affiliates | 1,792 | 1,722 |
Trade payables | 1,570 | 1,620 |
Payables due to affiliates | 808 | 712 |
Accrued marketing | 434 | 472 |
Accrued postemployment costs | 13 | 13 |
Income taxes payable | 2,009 | 1,964 |
Interest payable | 6 | 14 |
Dividends due to affiliates | 0 | 0 |
Other current liabilities | 579 | 611 |
Total current liabilities | 7,231 | 7,145 |
Long-term debt | 986 | 977 |
Long-term borrowings due to affiliates | 1,917 | 1,902 |
Deferred income taxes | 19,543 | 19,466 |
Accrued postemployment costs | 288 | 284 |
Other liabilities | 414 | 382 |
TOTAL LIABILITIES | 30,379 | 30,156 |
Total shareholders' equity | 71,257 | 70,675 |
Noncontrolling interest | 212 | 216 |
TOTAL EQUITY | 71,469 | 70,891 |
TOTAL LIABILITIES AND EQUITY | $ 101,848 | $ 101,047 |
Supplemental Financial Inform81
Supplemental Financial Information Condensed Consolidating Statements of Cash Flows (As Restated) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Apr. 01, 2017 | Apr. 03, 2016 | Dec. 31, 2016 | |
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash provided by/(used for) operating activities | $ (615) | $ (156) | |
Cash receipts on sold receivables | 464 | 426 | |
Capital expenditures | (368) | (303) | |
Net proceeds from/(payments on) intercompany lending activities | 0 | 0 | |
Return of capital | 0 | 0 | |
Other investing activities, net | 38 | 10 | |
Net cash provided by/(used for) investing activities | 134 | 133 | |
Proceeds from issuance of commercial paper | 2,324 | 0 | |
Repayments of commercial paper | (2,068) | 0 | |
Net proceeds from/(payments on) intercompany borrowing activities | 0 | 0 | |
Dividends paid-common stock | (736) | (667) | |
Other intercompany capital stock transactions | 0 | ||
Other financing activities, net | (25) | 40 | |
Net cash provided by/(used for) financing activities | (505) | (627) | |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 13 | 44 | |
Net increase/(decrease) | (973) | (606) | |
Balance at beginning of period | 4,255 | 4,912 | $ 4,912 |
Balance at end of period | 3,282 | 4,306 | 4,255 |
Eliminations | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash provided by/(used for) operating activities | (736) | 0 | |
Cash receipts on sold receivables | 0 | 0 | |
Capital expenditures | 0 | 0 | |
Net proceeds from/(payments on) intercompany lending activities | 71 | (737) | |
Return of capital | (7) | (667) | |
Other investing activities, net | 0 | 0 | |
Net cash provided by/(used for) investing activities | 64 | (1,404) | |
Proceeds from issuance of commercial paper | 0 | ||
Repayments of commercial paper | 0 | ||
Net proceeds from/(payments on) intercompany borrowing activities | (71) | 737 | |
Dividends paid-common stock | 736 | 667 | |
Other intercompany capital stock transactions | 7 | ||
Other financing activities, net | 0 | 0 | |
Net cash provided by/(used for) financing activities | 672 | 1,404 | |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 0 | 0 | |
Net increase/(decrease) | 0 | 0 | |
Balance at beginning of period | 0 | 0 | 0 |
Balance at end of period | 0 | 0 | 0 |
Parent Guarantor | Reportable Legal Entities | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash provided by/(used for) operating activities | 736 | 0 | |
Cash receipts on sold receivables | 0 | 0 | |
Capital expenditures | 0 | 0 | |
Net proceeds from/(payments on) intercompany lending activities | 0 | 0 | |
Return of capital | 7 | 667 | |
Other investing activities, net | 0 | 0 | |
Net cash provided by/(used for) investing activities | 7 | 667 | |
Proceeds from issuance of commercial paper | 0 | ||
Repayments of commercial paper | 0 | ||
Net proceeds from/(payments on) intercompany borrowing activities | 0 | 0 | |
Dividends paid-common stock | (736) | (667) | |
Other intercompany capital stock transactions | 0 | ||
Other financing activities, net | (7) | 0 | |
Net cash provided by/(used for) financing activities | (743) | (667) | |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 0 | 0 | |
Net increase/(decrease) | 0 | 0 | |
Balance at beginning of period | 0 | 0 | 0 |
Balance at end of period | 0 | 0 | 0 |
Subsidiary Issuer | Reportable Legal Entities | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash provided by/(used for) operating activities | (304) | 166 | |
Cash receipts on sold receivables | 0 | 0 | |
Capital expenditures | (203) | (242) | |
Net proceeds from/(payments on) intercompany lending activities | (4) | 423 | |
Return of capital | 0 | 0 | |
Other investing activities, net | 44 | 13 | |
Net cash provided by/(used for) investing activities | (163) | 194 | |
Proceeds from issuance of commercial paper | 2,324 | ||
Repayments of commercial paper | (2,068) | ||
Net proceeds from/(payments on) intercompany borrowing activities | 67 | (314) | |
Dividends paid-common stock | (736) | (667) | |
Other intercompany capital stock transactions | (7) | ||
Other financing activities, net | (21) | 25 | |
Net cash provided by/(used for) financing activities | (441) | (956) | |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 0 | 0 | |
Net increase/(decrease) | (908) | (596) | |
Balance at beginning of period | 2,869 | 3,253 | 3,253 |
Balance at end of period | 1,961 | 2,657 | 2,869 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash provided by/(used for) operating activities | (311) | (322) | |
Cash receipts on sold receivables | 464 | 426 | |
Capital expenditures | (165) | (61) | |
Net proceeds from/(payments on) intercompany lending activities | (67) | 314 | |
Return of capital | 0 | 0 | |
Other investing activities, net | (6) | (3) | |
Net cash provided by/(used for) investing activities | 226 | 676 | |
Proceeds from issuance of commercial paper | 0 | ||
Repayments of commercial paper | 0 | ||
Net proceeds from/(payments on) intercompany borrowing activities | 4 | (423) | |
Dividends paid-common stock | 0 | 0 | |
Other intercompany capital stock transactions | 0 | ||
Other financing activities, net | 3 | 15 | |
Net cash provided by/(used for) financing activities | 7 | (408) | |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 13 | 44 | |
Net increase/(decrease) | (65) | (10) | |
Balance at beginning of period | 1,386 | 1,659 | 1,659 |
Balance at end of period | $ 1,321 | $ 1,649 | $ 1,386 |
Supplemental Financial Inform82
Supplemental Financial Information Reconciliation From Cash and Cash Equivalents to Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions | Apr. 01, 2017 | Dec. 31, 2016 | Apr. 03, 2016 | Jan. 03, 2016 |
Schedule of Cash, Cash Equivalents, and Restricted Cash [Line Items] | ||||
Cash and cash equivalents | $ 3,242 | $ 4,204 | ||
Restricted cash included in other assets (current) | 36 | 42 | ||
Restricted cash included in other assets (noncurrent) | 4 | 9 | ||
Cash, cash equivalents, and restricted cash | 3,282 | 4,255 | $ 4,306 | $ 4,912 |
Eliminations | ||||
Schedule of Cash, Cash Equivalents, and Restricted Cash [Line Items] | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash included in other assets (current) | 0 | 0 | ||
Restricted cash included in other assets (noncurrent) | 0 | 0 | ||
Cash, cash equivalents, and restricted cash | 0 | 0 | 0 | 0 |
Parent Guarantor | Reportable Legal Entities | ||||
Schedule of Cash, Cash Equivalents, and Restricted Cash [Line Items] | ||||
Cash and cash equivalents | 0 | 0 | ||
Restricted cash included in other assets (current) | 0 | 0 | ||
Restricted cash included in other assets (noncurrent) | 0 | 0 | ||
Cash, cash equivalents, and restricted cash | 0 | 0 | 0 | 0 |
Subsidiary Issuer | Reportable Legal Entities | ||||
Schedule of Cash, Cash Equivalents, and Restricted Cash [Line Items] | ||||
Cash and cash equivalents | 1,929 | 2,830 | ||
Restricted cash included in other assets (current) | 32 | 39 | ||
Restricted cash included in other assets (noncurrent) | 0 | 0 | ||
Cash, cash equivalents, and restricted cash | 1,961 | 2,869 | 2,657 | 3,253 |
Non-Guarantor Subsidiaries | Reportable Legal Entities | ||||
Schedule of Cash, Cash Equivalents, and Restricted Cash [Line Items] | ||||
Cash and cash equivalents | 1,313 | 1,374 | ||
Restricted cash included in other assets (current) | 4 | 3 | ||
Restricted cash included in other assets (noncurrent) | 4 | 9 | ||
Cash, cash equivalents, and restricted cash | $ 1,321 | $ 1,386 | $ 1,649 | $ 1,659 |